G r e a t e c o n o m I s t s

Adam Smith was a great Scottish scientist who made extraordinary contributions to economics.

He was born in 1723 in a small fishing town near Edinburgh, Scotland.

At the age of 28 Adam Smith became a Professor of Logic at the University of Glasgow. It was his first academic appointment. Some time later he became a tutor to a wealthy Scottish duke. Then he received a grant of 300 pounds a year.

With the financial security of his grant Smith devoted 10 years to writing his work which founded economic science. Its full title was: “An Inquiry into the Nature and Causes of the Wealth of Nations”. His book was an analysis of the Industrial Revolution which has taken place in his lifetime. It was published in 1776 with great success.

Adam Smith made economics a science. He is often regarded as the founder of economics and the first modern economist.

According to Adam Smith specialization was the cause of the wealth of nations. He emphasized the competitive nature of the industrial society. He argued that the individual pursuit of self-interest would lead to the maximum public good.

Adam Smith laid certain canons of taxation which are still generally acceptable as basic principles for the system of taxation.

David Ricardo was one of the first of the Classical School of economists who tried to explain the basic ideas of economic theory. In his main book “Principles of Political Economy and Taxation” he showed that international specialization benefits a nation.

Thomas Robert Malthus was an English economist of the Classical School who put forward the theory of overpopulation.

Alfred Marshal developed microeconomic theory in particular and was the first to put forward the idea of consumer’s surplus and elasticity of demand.

Thanks to John M. Keynes we know how to control the worst excesses of the business cycle.

III. Do the following exercises: