All in all, Smith’s economics provides a critical backdrop for understanding the economic world that game theory conquered in the 20th century. His influence on today’s world stemmed from a life spent gathering unusual insights into his own world.
Born in Scotland in 1723, Smith was a sickly weakling as a child (today we’d probably call him athletically challenged). At the age of 3, he was kidnapped from his uncle’s front porch by some gypsylike vagrants known as tinkers. Apparently the uncle rescued the toddler shortly thereafter. Growing up, Adam was a bright kid, earning a reputation as a bookworm with a spectacular memory. At 14 he entered the University of Glasgow (in those days, that was not unusually young). At 17 he went to Oxford, at first with the intention of entering the clergy. But after seven years there he returned to Scotland in search of a different kind of life. His interests destined him to the academic world, as he had no acumen for business and, as one biographer noted, “a strong preference for the life of learning and literature over the professional or political life.”3
After a time, Smith got the job that fit his interests and talents—professor of logic at the University of Glasgow. Soon he was also appointed to a professorship in “moral philosophy,” providing a fitting combination of duties for someone planning to forge a rational understanding of human behavior. It was, in fact, moral philosophy that Smith seized on for his first significant treatise. And in it he outlined a very different view of life and government than what he is generally known for today. His book on morals won him the confidence of Charles Townsend, who employed Smith to tutor his stepson, the young Duke of Buccleuch. Smith left Glasgow for London in 1764 to assume his tutorial task. He and the duke traveled much during this tutorship, spending a lot of time in France, where Smith familiarized himself with the new economic ideas of a group known as the physiocrats.
Smith was especially taken with one François Quesnay, a fascinating character who deserves to be much better known than he is.