Adam Smith - His Life Adam Smith was born in Kirkcaldy Scotland in 1723.

When he was 17 years old he went to Oxford and in 1951 he became a professor of Logic at Glasgow. The next year he took the Chair of Moral Philosophy. In 1759, he published his Theory of Moral Sentiments. It 1776 he published his masterpiece: An Inquiry into the Nature and Causes of the Wealth of Nations. After living in both France and London Adam Smith returned to Scotland in 1778 when he was appointed commissioner of customs for Edinburgh. Adam Smith died on July 17th, 1790 in Edinburgh. He was buried in the Canongate churchyard. Adam Smith - His Work Adam Smith is often described as the "founding father of economics". A great deal of what is now considered standard theory about the theory about markets was developed by Adam Smith. Two books, Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations are of great importance. Adam Smith - Theory of Moral Sentiments (1759) In Theory of Moral Sentiments Adam Smith developed the foundation for a general system of morals. It is a very important text in the history of moral and political thought. It provides the ethical, philosophical, psychological and methodological underpinnings to Smith's later works. In Theory of Moral Sentiment Smith states that man as self-interested and self-commanded. Individual freedom, according to Smith, is rooted in self reliance, the ability of an individual to pursue his selfinterest while commanding himself based on the principles of natural law. Adam Smith - An Inquiry into the Nature and Causes of the Wealth of Nations (1776) The Wealth of Nations is a five book series and considered to be the first modern work in the field of economics. Using very detailed examples Adam Smith attempted to reveal the nature and cause of a nation's prosperity. Through his examination he developed a critique of the economic system. Most commonly known are Smith's critique of mercantilism and his concept of the Invisible Hand. Adam Smith's arguments are still used and cited today in debates. Not everyone agrees with Smith's ideas. Many see Smith as an advocate of ruthless individualism. Regardless of how Smith's ideas are viewed An Inquiry into the Nature and Causes of the Wealth of Nations is considered to be and is arguably the most important book on the subject ever published. Without a doubt, it is the most seminal text in the field of free-market capitalism. Adam Smith Adam Smith was a philosopher, political economist, and is generally considered to bethe father of modern economics. He was born in Kirkcaldy, Scotland. His date of birth is unknown, but he was baptized in June 1723. His father died a few months before his birth, and his mother raised him and encouraged him to pursue an academic career. At fourteen, he went to the University of Glasgow, where he studied moral philosophy. It was during that time that Smith took an interest in theories and concepts pertaining to reason and free speech. At seventeen, he received a scholarship and studied in Oxford. Though it was reported that he was very unhappy due to the restrictive intellectual atmosphere in Oxford, he was able to teach himself many subjects because of the large and extensive library at Oxford. It was also in Oxford that Smith read the work of David Hume, another Scottish philosopher. Humes work was entitled Treatise on Human Nature. Smiths interest in Humes work caused conflict between Smith and the authorities at Oxford. So, in 1746, Smith left Oxford before finishing his scholarship and returned to Scotland. At the age of 28, he became a professor of logic at the University of Glasgow, and then one year later was appointed as Chair of Moral Philosophy. He gave lectures on a variety of topics including ethics, jurisprudence, rhetoric, and political economy. In 1759, Smith published The Theory of Moral Sentiments in which he bases the whole moral nature of man on a single primitive emotion, namely sympathy. Sentiments are feelings or emotions. Moral sentiments are feelings or emotions of approval, disapproval, gratitude, etc. Adam Smiths main argument is that judging whether an action is wrong or right is based on these moral feelings. How does one know what these feelings are? Smiths answer is that by imagining yourself in the other persons situation, if you would react in the same way, then you approve of the action. Imagining what your reaction would be to a situation and understanding the persons motives for taking such an action is what Smith calls sympathizing, which literally means to feel with someone else. Sympathy not only includes bad and hurtful situations, but also happy and pleasant ones. Therefore, Smiths point is that we make moral judgments based on our sympathizing, or our understanding of the motives that made the person act in a certain manner, and not based on a set of rational standards.In 1764, Smith resigned from the University of Glasgow and went to France to tutor the son of a Scottish nobleman. It was during his travels as a tutor that Smith came to know many of his intellectual peers, such as Benjamin Franklin, Voltaire, and Franois Quesnay. In 1776, he published a book called An Inquiry into the Nature and Causes of the Wealth of Nations. It is usually called The Wealth of Nations for short. This book covered in detail concepts of economic freedom, the role of self-interest and division of labor. Smith believed that the success of a country lied in letting the members of society develop their own specific gifts and pursue what they liked doing and could do well. He believed that this freedom would result in a great variety of trade and the nation would become wealthy. He also supported a laissez faire economy, which means that the government or state should interfere as little as possible in the trading activities between people, as that would only harm trade. The expression the invisible hand is mainly associated with Adam Smith. According to Smith, in a laissez faire economy, each member will try to pursue and maximize his own self-interest. It is the interaction and exchange between the different members in terms of goods and services traded that will make each member better off than simply producing for himself. He believed that in a free market, no kind of regulation would be needed to ensure that a mutually beneficial exchange of goods and services took place, because this "invisible hand" would guide the different members to trade in the most mutually beneficial way.

Q: What do you think Adam Smith's impression would be of the current formal academic study of behavioral economics? A: I think he'd probably be thrilled! Smith's two main worksThe Wealth of Nations (WN) and The Theory of Moral Sentiments (TMS)show him to be a brilliant economist and arguably a brilliant psychologist, but he was never fully able to bring the economics and psychology together. In TMS, he describes the psychological factors that underlie human decision making, motivation, and interaction, which of course have strong implications for what drives consumption and savings decisions, worker productivity and effort, and market exchange. Only rarely did he make deep links to this work in WN. Smith's advice to business leaders would likely be that they should weigh carefully the costs of breaking trust and of risking reputation. The formal study of behavioral economics exactly relates psychological factors to economic behavior, and even more recently has been exploring the market-level implications of consumers and firms who may be subject to varying levels of psychological influences. Although the importance of psychological factors may be something that business leaders have long understood, the field of economics has only relatively recently been equipped with the tools to be able to study such phenomena rigorously andimportantlyto be able to make predictions about where such factors may be more or less important, when market forces can diminish or exacerbate these factors, etc. Q: According to your article, Smith's Theory of Moral Sentiments argues that behavior is determined by a struggle between "passions" and the "impartial spectator." What did he mean by this? A: Smith believed that much of human behavior was under the influence of the "passions"emotions such as fear and anger, and drives such as hunger and sexbut these passions were moderated by an internal "voice of reason," which he called an "impartial spectator." The impartial spectator allows one to see one's own feelings and the pulls of immediate gratification from the perspective of an external observer. In the area of self-control and self-governance, the impartial spectator takes the form of a long-term interest (i.e., I won't have that cookie today because I can see that I will regret it down the road). In the area of social interaction, the impartial spectator allows us to see things from another's perspective rather than to be blinded by our own needs. The conflict between the passions and the impartial spectator is the most fascinating part of Smith's TMS for me. The conflict is particularly important when studying savings decisions, since savings is exactly a decision to delay immediate gratification for a long-term interest, to stay the voice of a short-term pull for the voice of the impartial spectator. With my coauthors I applied this framework to designing a savings product for a bank in the Philippines that helps clients act in line with their long-term interests. In this "commitment savings product," clients sign a contract with the bank that doesn't let them withdraw their own money until a certain amount or date has been reached. It gives their control over to the bank to help them overcome short-term impulses to spend. The product had a large and significant effect on clients' total savings, helping clients to buy land, improve their businesses, pay for large educational expenses, etc. Q: Why has it taken so long for the field of economics to incorporate Adam Smith's insights, and why are so many of the ideas Smith developed yet to be pursued for academic research? A: Economics has had success as a field of scientific inquiry because it's been able to develop tractable models with strong predictive capacity; in other words, it simplifies the complex phenomena of human decision-making, interaction, and exchange into its barest form and makes predictions based on those. Of course, this has meant that economists have often had to sacrifice realism for tractability. Only recently has the field of economics advanced enough to have the tools to reincorporate the factors that Smith and others had always felt were important in human interaction: our caring about each other and about fairness, our difficulties with aligning our long-term interests with short-term pulls, etc. One of the most unexplored areas, which we are only now beginning to be able to measure, is the degree to which people are motivated by the "aerial coin of praise" and social status, something Smith thought was a crucial motivation for economic activity. Q: What do you think Adam Smith's advice to business leaders would be concerning corporate ethics given what he writes about trust? A: This is a great question. Smith believed that there were certain virtues, such as trust and a concern for fairness, that were vital for the functioning of a market economy. He wrote about trust and reciprocity as critical foundations of the early beginnings of the market, allowing reciprocal gift exchange to emerge, and leading to trade. One might think that the need for trust and trustworthiness diminishes as a market develops, but if anything the opposite is true. For example, we trust managers to carry out the interests of shareholders: We can build contracts to align manager incentives with those of shareholders, but we are never able to completely contract on all the things we care about and want to enforce. Implicitly, then, we hold a belief that managers have internalized the values we care about, and trust them to act on those, particularly when they might come in conflict with their own interests. There are similarly other professions where individuals are entrusted to serve, like doctors, teachers, auditors, but cannot be monitored fully. We thus rely on these individuals' professionalism and honor (or "enlightened self interest") to carry out their occupations. Across organizations, in the marketplace, factors like brand reputation and warranties help facilitate transactions without requiring complete trust. Within organizations, the issue of trust and trustworthinessof employees to their bosses, of managers to each other and to shareholdersbecomes even more important, and even more difficult to replace by market forces or better incentives and contracts. Thus, Smith's advice to business leaders would likely be that they should weigh carefully the costs of breaking trust and of risking reputation. The costs of sacrificing ethical standards of conduct are much larger than any individual might imagine, precisely because they decrease trust and can strongly affect organizational and market functioning as a whole.

Later years of Adam Smith In 1778 Smith was appointed to a post as commissioner of customs in Scotland and went to live with his mother in Edinburgh. In 1783 he became one of the founding members of the Royal Society of Edinburgh and from 1787 to 1789 he occupied the honorary position of Lord Rector of the University of Glasgow. He died in Edinburgh on July 17, 1790, after a painful illness and was buried in the Canongate Kirkyard. Smith's literary executors were two old friends from the Scottish academic world; the physicist and chemist Joseph Black, and the pioneering geologist James Hutton. Smith left behind many notes and some unpublished material, but gave instructions to destroy anything that was not fit for publication. He mentioned an early unpublished History of Astronomy as probably suitable, and it duly appeared in 1795, along with other material, as Essays on Philosophical Subjects. Contemporary followers of Adam Smith include John Millar. Personal character and views of Adam Smith Not much is known about Smith's personal views beyond what can be deduced from his published works. All of his personal papers were destroyed after his death. He never married and seems to have maintained a close relationship with his mother, with whom he lived after his return from France and who predeceased him by only six years. Contemporary accounts describe Smith as an eccentric but benevolent intellectual, comically absent minded, with peculiar habits of speech and gait and a smile of "inexpressible benignity." His patience and tact are said to have been valuable to his work as a university administrator at Glasgow. After his death it was discovered that much of his income had been devoted to secret acts of charity. There has been considerable scholarly debate about the nature of Adam Smith's religious views. Smith's father had a strong interest in Christianity and belonged to the moderate wing of the Church of Scotland (the national church of Scotland since 1690). Smith may have gone to England with the intention of a career in the Church of England: this is controversial and depends on the status of the Snell Exhibition. At Oxford, Smith rejected Christianity and it is generally believed that he returned to Scotland as a Deist. Economist Ronald Coase, however, has challenged the view that Smith was a Deist, stating that, whilst Smith may have referred to the "Great Architect of the Universe", other scholars have "very much exaggerated the extent to which Adam Smith was committed to a belief in a personal God". He based this on analysis of a remark in The Wealth of Nations where Smith writes that the curiosity of mankind about the "great phenomena of nature" such as "the generation, the life, growth and dissolution of plants and animals" has led men to "enquire into their causes". Coase notes Smith's observation that: "Superstition first attempted to satisfy this curiosity, by referring all those wonderful appearances to the immediate agency of the gods." Smith's close friend and colleague David Hume, with whom he agreed on most matters, is usually described as an Atheist, rather than a Deist. Works of Adam Smith Shortly before his death, Smith had nearly all his manuscripts destroyed. In his last years he seemed to have been planning two major treatises, one on the theory and history of law and one on the sciences and arts. The posthumously published Essays on Philosophical Subjects (1795) probably contain parts of what would have been the latter treatise. Wealth of Nations The Wealth of Nations was Smith's most influential work, and is considered to be very important in the creation of the field of economics and its development into an autonomous systematic discipline. In the Western world, it is considered one of the most influential books on the subject ever published. The work is also the first comprehensive defense of free market policies. When the book, which has become a classic manifesto against mercantilism (the theory that large reserves of bullion are essential for economic success), appeared in 1776, there was a strong sentiment for free trade in both Britain and America. This new feeling had been born out of the economic hardships and poverty caused by the American War of Independence. However, at the time of publication, not everybody was immediately convinced of the advantages of free trade: the British public and Parliament still clung to mercantilism for many years to come. The Wealth of Nations also rejects the Physiocratic school's emphasis on the importance of land; instead, Smith believed labour was paramount, and that a division of labour would effect a great increase in production. One example he used was the making of pins. One worker could probably make only twenty pins per day. But if ten people divided up the eighteen steps required to make a pin, they could make a combined amount of 48,000 pins in one day. However, Smith also concluded that excessive division of labor would negatively affect worker's intellect through the carrying out of monotonous and repetetive tasks and hence he called for the establishment of a public education system. Nations was so successful, in fact, that it led to the abandonment of earlier economic schools, and later economists, such as Thomas Malthus and David Ricardo, focused on refining Smith's theory into what is now known as classical economics. Both Modern economics and, separately, Marxian economics owe significantly to classical economics. Malthus expanded Smith's ruminations on overpopulation, while Ricardo believed in the "iron law of wages"that overpopulation would prevent wages from topping the subsistence level. Smith postulated an increase of wages with an increase in production, a view considered more accurate today. One of the main points of The Wealth of Nations is that the free market, while appearing chaotic and unrestrained, is actually guided to produce the right amount and variety of goods by a so-called "invisible hand". The image of the invisible hand was previously employed by Smith in Theory of Moral Sentiments, but it has its original use in his essay, "The History of Astronomy". If a product shortage occurs, for instance, its price rises, creating a profit margin that creates an incentive for others to enter production, eventually curing the shortage. If too many producers enter the market, the increased competition among manufacturers and increased supply would lower the price of the product to its production cost, the "natural price". Even as profits are zeroed out at the "natural price", there would be incentives to produce goods and services, as all costs of production, including compensation for the owner's labour, are also built into the price of the goods. If prices dip below a zero profit, producers would drop out of the market; if they were above a zero profit, producers would enter the market. Smith believed that while human motives are often selfishness and greed, the competition in the free market would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and argued against the formation of monopolies. Smith vigorously attacked the antiquated government restrictions which he thought were hindering industrial expansion. In fact, he attacked most forms of government interference in the economic process, including tariffs, arguing that this creates inefficiency and high prices in the long run. It is believed that this theory influenced government legislation in later years, especially during the 19th century. (However this was not an anarchistic opposition to government. Smith advocated a Government that was active in sectors other than the economy: he advocated public education of poor adults; institutional systems that were not profitable for private industries; a judiciary; and a standing army.) Two of the most famous and often-quoted passages in The Wealth of Nations are: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

"As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual value of society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it." Another favorite quote, usually recited by economists, also from The Wealth of Nations is: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary." Smith postulated four "maxims" of taxation: proportionality, transparency, convenience and efficiency. Smith is credited by economists as one of the first to advocate a progressive tax. Smith wrote, "It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more in proportion." In another quote he supported taxation in proportion to the revenue (income) of the individual: "The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate. In the observation or neglect of this maxim consists what is called the equality or inequality of taxation." The "Adam Smith-Problem" In the Wealth of Nations Smith claims that self-interest alone (in a proper institutional setting) can lead to socially beneficial results. But in his Theory of Moral Sentiments Smith argues that sympathy is required to achieve socially beneficial results. On the surface it appears that a contradiction exists. Economist August Oncken referred to this as 'the Adam-Smith-Problem'. Austrian economist Joseph Schumpeter also emphasized this apparent contradiction in his commentary on Smith's work. Adam Smith himself cannot have seen any contradiction, since he produced a revised edition of Moral Sentiments after the publication of Wealth of Nations. Both sets of ideas are to be found in his Lectures on Jurisprudence. In recent years most students of Adam Smith's work have argued that no contradiction exists. In the Theory of Moral Sentiments, Smith develops a theory of psychology in which individuals in society find it in their self-interest to develop sympathy as they seek approval of what he calls the "impartial spectator." The self-interest he speaks of is not a narrow selfishness but something that involves sympathy. Some readers of The Wealth of Nations have assumed that when Smith speaks of "self-interest" he is referring to selfishness. Although in some contexts, such as buying and selling, sympathy generally need not be considered, Smith makes it clear that he regards selfishness as inappropriate, if not immoral, and that the self-interested actor has sympathy for others. In The Theory of Moral Sentiments Smith argues that the self-interest of any actor includes the interest of the rest of society, since the socially-defined notions of appropriate and inappropriate actions necessarily affect the interests of the individual as a member of society. Context is also useful as Adam Smith was against the idea of corporations, or "joint stock companies." In any case, Adam Smith apparently believed that moral sentiments and self-interest would always add up to the same thing. One possible line of reasoning he might have employed in reaching this conclusion is as follows: the invisible hand cannot operate if there is no society, for precluding a societal construct precludes division of labor, and thus, the efficiency which comes with its manifestation. Now for society to exist, justice is a necessary condition (as pointed out in Smith's Theory of Moral Sentiments). For justice to exist in any social setting, individuals must harbor the passions of gratitude and resentment governed by a sense of 'merit' and 'demerit' (again from Smith's Theory of Moral Sentiments). And finally, as Smith himself would have so vehemently argued, the sense of 'merit' and 'demerit' is almost exclusively engendered by human sympathy. In conclusion, the invisible hand of the market is, at some level, contingent upon the ability of humans to sympathize: Smith's self-interest is indeed in consonance with the notion of sympathy. Influence of Adam Smith The Wealth of Nations, one of the earliest attempts to study the rise of industry and commercial development in Europe, was a precursor to the modern academic discipline of economics. It provided one of the best-known intellectual rationales for free trade and capitalism, greatly influencing the writings of later economists. David Ricardo and Karl Marx were influenced by economic theories of Adam Smith. Smith was ranked #30 in Michael H. Hart's list of the most influential figures in history. From 13 March 2007 onwards Smith's portrait appeared in the UK on new 20 notes. He is the first Scotsman to feature on a currency issued by the Bank of England. A picture of the note is available on the Bank of England website. However, many actors in academia and in the real world have and are acknowledging that they or others have misinterpreted the works of Adam Smith, with some arguing that Adam Smith's legacy has been "lost". In a journal article, "The Rise of Adam Smith: Articles and Citations, 1970-1997", economist Jonathan B. Wight reports that only two articles on Adam Smith or his works were published the year before 1971. In 2002 Wight, the author of this paper and of other books and articles on Adam Smith and his works, reports that six hundred articles and thirty books were published in the twenty seven years between 1970 and 1997. A heightened interest in Adam Smith and his works has been sustained. And, this trend Wight writes is more than a "speculative bubble" in a 2004 conference paper titled "Is There a Speculative Bubble in Scholarship on Adam Smith?", presented at the Eleventh World Congress of Social Economics, Albertville, France. The bicentennial anniversary of the publication of the Wealth of Nations was celebrated in 1976. Results of this celebration has been increased interest in Smith's first book, The Theory of Moral Sentiments, and in his other works, throughout academia. This heightened interest in his book on moral philosophy has also been sustained. Or, as some say, in 1976 there was a break with the earlier emphasis on an Adam Smith problem. After 1976 Adam Smith was more likely to be represented as the author of both the Wealth of Nations and The Theory of Moral Sentiments and thereby as the founder of a moral philosophy and the science of economics. His "economic man" or actor was also more often represented as a moral person. Finally, also pointed to was his opposition to slavery, colonialism, and empire or his statements about high wages for the poor, his views that a common street porter was not intellectually inferior to a philosopher (Levy,Peart). And, more than one author refer to a need to recover "Adam Smith's lost legacy" (Kennedy, West).

In line with such trends, on January 24, 2008 Bill Gates said the following at the world economic forum in Davos Switzerland "Adam Smith, the very father of capitalism and the author of Wealth of Nations, who believed strongly in the value of self-interest for society, opened his first book with the following lines: "How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it." Expressing his interest in reducing poverty in 2008, he spoke about a "creative" rather than an "unfettered" or laissez faire, capitalism. "Creative capitalism takes this interest in the fortunes of others and ties it to our interest in our own fortunes in ways that help advance both. This hybrid engine of self-interest and concern for others can serve a much wider circle of people than can be reached by self-interest or caring alone." Nearly two years before, Gates' interest in Adam Smith was also evident. On June 25, 2006, Gates presented a copy of Adam Smith's Wealth of Nations to Warren Buffett after Buffett announced that he would donate his wealth to The Bill and Melinda Gates Foundation,. There, in addition, has been a controversy over the extent of Smith's originality in The Wealth of Nations. Some argue that the work added only modestly to the already established ideas of thinkers such as Anders Chydenius (The National Gain 1765), David Hume and the Baron de Montesquieu. Indeed, many of the theories Smith set out simply described historical trends away from mercantilism and towards free trade that had been developing for many decades and had already had significant influence on governmental policy. Nevertheless, Smith's work organized their ideas comprehensively, and so remains one of the most influential and important books in the field today. Herbert Stein, in a frequently-quoted article, "Adam Smith did not wear an Adam Smith necktie," wrote that the people who wear the Adam Smith tie do it "to make a statement of their devotion to the idea of free markets and limited government. What stands out in the Wealth of Nations, however, is that their patron saint was not pure or doctrinaire about this idea. He viewed government intervention in the market with great skepticism. He regarded his exposition of the virtues of the free market as his main contribution to policy, and the purpose for which his economic analysis was developed. "Yet he was prepared to accept or propose qualifications to that policy in the specific cases where he judged that their net effect would be beneficial and would not undermine the basically free character of the system," wrote Stein. "He did not wear the Adam Smith necktie." In Stein's reading, The Wealth of Nations could justify the Food and Drug Administration, The Consumer Product Safety Commission, mandatory employer health benefits, environmentalism, and "discriminatory taxation to deter improper or luxurious behavior." Interpreting Adam Smith Vivienne Brown has alleged that in the 20th century USA, Reaganomics supporters, The Wall Street Journal and other similar sources, have spread among the general public, a partial and misleading vision of Adam Smith, portrayed as an "extreme dogmatic defender of laissez-faire capitalism and supply-side economics". According to Brown and Pack, Smith's position was very close to what is currently perceived in the USA as a "liberal democrat,". In The Wealth of Nations Smith advocates government economic intervention with the allocation of many economic functions, they say. In this analysis, Smith instead attacked the corrupted favoritism made by the governments in favor of the rich and powerful and against the poor. Matthew Watson has proposed what he sees as the true meaning of Smith works, espcially with regards to the phrase "Invisible Hand". (Watson, M, 2005, Foundations of International Political Economy,Basingtoke: Palgrave, pp.100-119) Major works of Adam Smith The Theory of Moral Sentiments (1759) An Inquiry Into the Nature and Causes of the Wealth of Nations (1776) Essays on Philosophical Subjects (published posthumously 1795) Lectures on Jurisprudence (published posthumously 1776) Lectures on Rhetoric and Belles Lettres