Adam Smith

You don't have to have a photographic memory for dates to know that 1776 was a significant year in history. In that year, as we all know, the Declaration of Independence was signed in Philadelphia. Fewer people probably know that also in that year, a Scottish professor of philosophy published a book entitled An Inquiry into the Nature and Causes of the Wealth of Nations. (This work is known universally as The Wealth of Nations.) This event represented a watershed in the development of intellectual thought on economic issues and problems. Although many of the ideas in the book weren't entirely new at the time, the philosophy professor, whose name was Adam Smith, is generally credited with being the father of the discipline of economics.

At that time the field of economics was a branch of the discipline of philosophy. The branch of philosophy that included economics in the eighteenth century was called "political economy".

At the time Smith wrote his monumental work, the affluence of a nation was measured by many politicians in terms of the gold and silver accumulated in national treasuries. Smith pointed out that the wealth of nations was chiefly determined by people conducting their daily business rather than by the amount of gold and silver in a government treasury. He believed that the accumulation of capital equipment, such as machines and structures used by factories, was a vital determinant of wealth because it enhanced the division of labor.

Smith believed that rational behavior is biologically determined and that people have an innate tendency to pursue their self-interest.

Smith can justly be credited with establishing economics as a separate social science. He firmly established the individual as the main object of study and provided the first attempt to systematically analyze how the economy functions.

Answer the following questions to the text:

1. What important historical events took place in 1776 ?

2. What can you say about the role of Smith's book “The Wealth of Nations”?

3. Explain the meaning of the term 'political economy'.

4. How was the wealth of nations determined by Adam Smith?

5. Why can Adam Smith be credited with establishing economics as a separate science?

Translate into English

1. Шотландский профессор Адам Смит опубликовал свою книгу “Богатство наций” в 1776 году.

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2. Это событие представляет собой водораздел в развитии экономической мысли.

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3. Адам Смит признан отцом науки экономики.

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4. Ученый указывал, что богатство наций определяется людьми, ведущими повседневный бизнес, а не количеством золота и серебра в государственной казне.

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5. Смит полагал, что поведение людей биологически обосновано, и они всегда преследуют личные интересы.

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6. Имя Адама Смита можно справедливо ассоциировать с рождением экономики, как самостоятельной науки.

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7. Он утверждал, что человек является основным объектом исследования.

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B-level

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