The modern discipline of economics began with the work of Adam Smith. Smith was a Scottish philosopher and social scientist who lectured at the University of Glasgow. In 1776 he published his great work, An Inquiry into the Nature and Causes of the Wealth of Nations. As the title suggests, Smith’s objective was to explain the dynamic factors that made nations grow in terms of material wealth. He wanted to account for economic growth (a sustained increase in the total real output of an economy — what economists today call its gross domestic product).
In his investigation of the factors encouraging growth, Smith developed the concept of a market economy. His understanding of the operation of the market process has shaped nearly all economic analysis since, and it remains at the centre of our thinking about the way economies work today.
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