KNTV PHILOSOPHY

ADAM SMITH (1723-1790)

Brilliant Scotsman Adam Smith came up with the concept of the free market economy, which is as important now as it was back in the 18th century.

PROGRAMME OUTLINE

00:00 – 03:59

Smith's idea of a free market economy has played a big part in the booming global economy.

04:00 – 07:12
WHAT was Smith's big idea?

Adam Smith wanted a free market, regulated and balanced by the laws of supply and demand, with prices kept within reach for the majority of people. Fair competition was crucial, and Smith thought that if the government interfered the market would be restricted and individuals would not achieve their full potential.

Hyperinflation can happen when there's a political upheaval. Prices soar as money loses its value. This happened in Germany in the 1920s.

07:13 – 12:35
WHO was Adam Smith?

Smith was born in rural Scotland. As a small child he was whisked away by tinkers and rescued by his uncle. At Oxford he was an idle scholar, but back in Scotland in 1751 he became a professor at Glasgow University. Later, in his travels to France, Smith mixed with great philosophers of the era. Although a great conversationalist, he found writing an agonising process, and The Wealth of Nations took him years to finish. Smith never married and spent many years living with his mother, following her to the grave just six years after her death.

12:36 – 16:26
WHEN Smith was alive, what else was going on?

The United Kingdom was created with the Act of Union between Scotland and England in 1707. The Scots' education system was the best in Europe, but Edinburgh was known as 'Auld Reekie' because of the sewage that flowed through the streets. George II became King in 1727, and in 1745 Bonnie Prince Charlie led the unsuccessful Jacobite Rebellion against the throne. The Clans controlled the Scottish Highlands, but many people were evicted in the Highland Clearances. In 1768 Captain Cook claimed Australia for the UK, and convicts were shipped out to the colonies to ease overflowing prisons.

16:27 – 19:57
WHY did Smith's ideas happen?

Smith was inspired by the great Scots intellectuals of the Scottish Enlightenment. His university mentor Francis Hutcheson (1694-1746) inspired Smith with his idea that society should bring good to as many of its citizens as possible. David Hume (1711-1776) agreed with Smith's view that greed and selfishness had dominated society for too long. Hume was an empiricist, and believed that knowledge was only meaningful if supported by experience.

19:58 – 24:00
WHERE have Smith's ideas left us today?

Smaller businesses can't compete with the giants in industries such as car manufacture, which counters Smith's idea of a level economic playing field. The free market has brought wealth to many but increased the gulf between rich and poor. His principles led to the rise of the entrepreneur and opportunities for self-advancement, but although consumers have greater choice, there's also too much greed. Free market principles are used worldwide, and Adam Smith is regarded as the father of modern economics.