Who is Known As the Father of Capitalism?

You might have witnessed shops competing with each other, offering you better prices or trying to launch offers to gain you as a consumer. Similarly the companies around the world keep on making new products, refine their services to attract more customers. Well this is all part of a system known as capitalism. In simple words capitalism is a system where people are free to start businesses, earn money, and compete with each other. 

In this system the government doesn’t control everything but people do. However, this system didn’t appear on its own as it was the mind of one man who sat down, thought deeply and after coming to a conclusion he explained to the world how free trade and competition can make societies better. 

This man lived around 250 years ago in a small town in Scotland and earned the title of the father of capitalism. Let’s understand who he is and his contributions. 

Who is Known As Father of Capitalism?

Adam Smith is known as the father of capitalism. He was a Scottish economist and philosopher who excelled in the field of political economy. He is majorly known for his two works which are The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).

Why Was this Title Given to Adam Smith?

Before Adam’s aid, the governments around the world believed in controlling trade and keeping wealth locked inside their own countries. Adam challenged this idea and he was an advocate of laissez faire, a French term that means "let go" or "hands off.".

It is a theory which simply means that there should be little to no interference from the government when it comes to business. He argued that the free market of supply and demand should drive economies.

He also introduced the concept of “invisible hand”. This means that when people work so that they earn money for themselves, they also end up helping society as a whole without even trying. 

Major Contributions of Adam Smith

He is known majorly for his book The Wealth of Nations which was published in the year 1776. He is also known as the father of economics too. 

He also explained that when workers divide their tasks then they can produce more goods in less time. This is called the division of labour and is used in every factory and business in the world today.

His book The Theory of Moral Sentiments argued that people’s interests are self driven first however they naturally like to help others too. This showed that Smith was not just an economist but also a deep thinker about human nature.

Achievements of Adam Smith

Adam was elected as a member of the Philosophical Society of Edinburgh in 1752. He was also an elected fellow of the Royal Society of London. 

Moreover in the year 2007 the Bank of England placed his image on the 20-Pound note which is a great honour for any thinker. His image stayed on the note till the paper 20 Pound note was officially demonetized and withdrawn from circulation on September 30, 2022.