Prophet of Profit?

The true mark of genius, according to Goethe, is ‘posthumous productivity’. Adam Smith, then, must be considered a genius indeed. His words have entered the lexicon. In 2007, he became the first Scot to feature on a banknote issued by the Bank of England. Quite right, too: it is little exaggeration to say that Smith laid the foundation stone for modern free-market economics.

Like most thinkers, Smith had few original insights of his own. His skills were as an aggregator and expositor. But here his brilliance is beyond doubt. An Inquiry into the Nature and Causes of the Wealth of Nations, his most famous work, opens with a description of how a clear division of labour enhances productivity in a pin factory. Smith provided the metaphor of an ‘invisible hand’ to describe the way free markets coordinate individual activities.

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