My Great Scot - Adam Smith

With all this hoo-hah over the 250th anniversary of the birth of our nation's favourite poet, Mr Rabbie Burns, I thought I'd just present a case for my own personal favourite, Adam Smith.

Sadly many people do not know who he is, but he is "the Father of Modern Economics" and while that may not sound that impressive, trust me it is.

Adam Smith's views on Trade could be found in his famous book published in 1776: "The Wealth of Nations". I am working on a slideshow about Adam Smith and intend to make a video also.

Perhaps this could be a job for Weh TV or HGS Digital?

Anyway back to Adam Smith, who I admit I hadn't really heard much about until I did Economics at University.

He basically is an advocate of laissez-faire or 'hands off' meaning that the Government should not interfere with the nation's economy and let businesses run themselves for profit and thereby creating jobs and providing goods and services. He believed in free trade, free enterprise and free economy.

This is obviously good for the entrepreneur, but it can lead to ethical considerations. Employees have interests that have to be satisfied, with safety obviously being the first port of call. Would Adam Smith approve of firms cutting corners to profiteer? Adam Smith believed that by creating jobs and making a profit the wealthy would put back into society and therefore it would lead to social good. Yet, if we think of Gordon Gecko's infamous line in Wall Street: 'Greed is good'.

He coined the phrase The Invisible Hand, which means that the market guides itself. In other words what we need and want and consume will eventually be found out by firms who will then produce the items needed to satisfy customers/consumers.

He also was an advocate of the division of labour, in other words dividing a product into small stages that workers can work on and then finally assemble the finished product, a bit like the modern assembly line. Again, what would he think of Linn Products and the employee-technician who makes the entire sound system from scratch? Naturally the advantage of division of labour is that you can produce more quantity and volume, which was what was needed back at the onset of the Industrial Revolution.

Linn Products of course are a highly skilled company and aim for a very exclusive niche in the market. High volume products do not, they target a far wider market.

Adam Smith would not have approved for the National Minimum Wage either!

He did however not believe in monopolies which are naturally bad for customers as a monopoly can set their own prices.

I wonder what Adam Smith would make of the recent Government funding of so many failing banks?

So I leave you again with Adam Smith as my Great Scot because without him the world would be very different!