Is it Smith? Facts and Myths about the Life of Adam Smith

Using a trivia game, students explore common myths and less well-known facts about Adam Smith. Background information, questions for discussion, and resources for further exploration are included.

Is it Smith? Facts and Myths about the Life of Adam Smith


Intended Audience

The lesson is written for high school economics students and college principles of economics students. The lesson may also work well in world history and American history courses when Smith’s name comes up in the textbook or other reading. References to Smith generally appear in a textbook chapter on industrialization in the late 19th century.

Objectives

  1. Students draw distinctions between myths and facts regarding the life and ideas of Adam Smith.
  2. By reading several quotes from The Theory of Moral Sentiments and Wealth of Nations, students gain a more in-depth understanding of Smith’s life, economic ideas, morality, happiness, business, the invisible hand, role of government, and slavery.
  3. By working together to read and explain quotations from 18th-century texts, students build confidence in reading difficult material. 

Time Required:

60 minutes    

Materials


Procedure

Step 1

Explain to the students that the purpose of this lesson is to gain a basic understanding of the ideas of Adam Smith, the dominant philosopher of the Scottish Enlightenment of the 18th century, who remains a somewhat controversial and often misunderstood scholar. The class will participate in a true/false game and discuss what they learned.

Step 2

Check the students' background knowledge regarding Adam Smith. Ask:
  • Have you heard of Adam Smith? What do you know about him?
(The students likely know little or nothing about Adam Smith. Some might comment that he was the first economist or is associated with free markets, greed, or capitalism.)

Step 3

Ask the students to conduct a Google search using the search words: “Who is Adam Smith?” They should quickly read over the responses and make a list of ideas and themes they’ve identified. (If you and your students do not have adequate technology to do this in class, perhaps the students could do this before class.)

Step 4

Discuss what the students learned from their Google search. Ask:
  • What words and phrases regarding Adam Smith popped up in your Google search?
(Students most likely came across words and phrases such as Scottish philosopher, economist, invisible hand, Wealth of Nations, father of economics, capitalism, greed, self-interest, and so forth. At the very least, they should be able to conclude that much is written about this philosopher from so long ago.)

Step 5

Divide the class into seven groups. To each group, distribute one set of answer cards and one scorekeeping sheet.

Step 6

  1. Explain how to play the trivia game:
  2. Ask each group to select a student who will be the card keeper, with the True, False, and Definitely cards.
  3. Direct the students to the scorekeeping handout. Explain the directions. 
  4. After each question, the team will have 60 seconds to decide how to respond.
  5. The groups will be asked to simultaneously hold up either the True or the False Card. Each group receives five points for each correct answer and loses five points for each incorrect answer.
  6. Each group may also hold up the Definitely card with their answer to each question. This card indicates that they are confident that they have the correct answer and doubles the stakes. When the Adam Smith Says card is held up in addition to the True or False card, the group will receive 10 points for a correct answer or lose 10 points for an incorrect answer.
    (A perfect score (70 points) can only be earned by answering every question correctly while holding up the Definitely card.)
  7. The team with the most points wins.
  8. The team with the most points gets a replica of a British 20-pound note that features Adam Smith and his famous pin factory. In the case of a tie, hand out multiple replicas. 
  9. Ask the class each question from the Is it Smith? slide deck, found on slides 5, 7, 9, 11, 13, 15, and 17. 
  10. After giving teams 60 seconds to discuss their answer, ask them to submit their answer by holding up answer cards. The card keepers should hold up the cards on your signal, all at once, so students don’t wait to see what others have decided.
  11. Look around the room and note what decisions were made by each team.
  12. Then reveal the answers, found on slides 6, 8, 10, 12, 14, 16, and 18. Ask the students to record their score on their team score cards.
  13. Repeat the process with all seven questions. 
  14. Once all questions have been answered, award the winning team(s) replicas of the  £20 note.
  15. Distribute one copy of the Is it Smith? Facts and Myths About the Life of Adam Smith handout to every student in the class. 
  16. Assign one question to each group. Ask them to review the information about their question, work together to understand any quotations from Adam Smith’s books, and present and explain the background information about their question to the class. 
  17. Distribute one copy of the Is it Smith? Question Sheet handout to every student. You may work through the questions in class discussion or ask the students to answer them themselves as homework. 

Questions for Review/Discussion

Question 1: 

In what ways do you find Adam Smith’s life to be similar to or different from your life today or the lives of those around you?

(Accept a variety of answers. Students might mention that, like Smith, family, friends, and teachers have influenced their lives. Maybe, like Smith at Oxford, they believe some of their schooling has not been not educational. Unlike Smith, they were probably never kidnapped as a baby.)

Question 2:

What do you think might have been the most important influences on Smith’s life, given the context of his later work?

(Again, accept a variety of answers. Margaret, Smith’s mother, was an important part of his life. Growing up in Kirkcaldy had to be important—living there, he saw a bustling seaport and the early days of manufacturing. He wrote favorably regarding his education both at the Kirkcaldy school at the University of Glasgow where he met Francis Hutcheson. No doubt his experiences traveling in Europe with Henry Scott helped shape his ideas about economics. Finally, he interacted with many close friends, of which David Hume was the most influential.)

Question 3: 

What seem to be the main differences and similarities between The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations?

(Both books were very popular. Both books focus on aspects of human behavior. Wealth of Nations focuses on economic behavior and stresses the importance of voluntary trade. The Theory of Moral Sentiments focuses on how people develop their moral beliefs and conscience.)

Question 4:

How do you think Smith could believe that people can be self-interested and benevolent at the same time?

(Smith did not believe that self-interest is the same as selfishness. In fact, he thought self-interest was required if you’re going to be benevolent, because you have to take care of yourself if you are going to take care of others.)

Question 5: 

Does Smith regard selfishness as a virtue? Explain.

(No. Adam Smith believed that selfishness was a vice. He thought that people tended to be drawn to material possessions and power, but that we have to consider others. He believed that “to feel much for others and little for ourselves...constitutes the perfection of human nature”.)

Question 6:

According to Smith, why do people care about the well-being of others?

(Adam Smith believed that we naturally care about the feelings and well-being of others, as he outlined in the opening paragraph of The Theory of Moral Sentiments.)

Question 7: 

Smith argues that to be wealthy, a nation requires little more than “peace, easy taxes, and a tolerable administration of justice.” Why did he believe this? 

(Wars are expensive and create uncertainty that makes it hard to do business. Easy taxes do not discourage people from investing and working and do not encourage them to avoid paying taxes, which allows for good government to be supported. Tolerable administration of justice helps protect people and their possessions in some of the same ways that peace does.)

Question 8: 

According to Smith, what is one solution to encourage business people to be honest?

(Competition from other businesses encourages business people to treat people fairly, because their customers and suppliers can switch to another business, so long as there is competition.)

Question 9:

Why would business people be tempted to raise prices to cheat their customers?

(Smith understood that business people are not perfect. The rules are important to keep them honest, and they will even try to change the rules, if they can, to selfishly gain a financial advantage. In particular, they may try to limit competition so that they can raise prices.)

Question 10:

What is Smith’s invisible hand? 





(Adam Smith uses the idea of the invisible hand to draw attention to how the rules of commercial society can lead to widespread benefits even though people are pursuing their own goals and not societal benefits.)

Question 11:

What are two examples that Smith uses in his work of an invisible hand? In each case, what does the invisible hand lead to? 

(Adam Smith used the invisible hand only once in each book. In Wealth of Nations, a person pursuing his own ends is led to promote the good of society even better than he would be able to if he were to consciously pursue the good of society instead. In The Theory of Moral Sentiments, rich people consuming luxuries indirectly support many people through the market, giving the poor the resources to support themselves.)

Question 12:  

How do profits and losses act as incentives for businesses?

(In a market economy with competition between businesses, businesses earn profits by providing the goods and services that consumers want at a price that they are willing to pay. If they are not providing the right goods and services, or they are providing them at the wrong prices, they will lose money and this encourages them to change how they do business.)

Question 13: 

What is an alternative to using profit and losses to make production and consumption decisions?

(Governments of countries that do not allow market economies must make consumption and production decisions for other (often political) reasons and then use the law to tell businesses what to produce.)

Question 14: 

Did Adam Smith believe there was no role for the government in the economy? 

(Adam Smith believed there was a proper role for government in supporting commercial society, but that once the rules for that society are established things will work best if the government lets those rules do the work.)

Question 15: 

What did Adam Smith think were three proper roles for the government? 



(Students may choose any of the following: Protecting people and their property; providing an impartial court system; ensuring education; infrastructure spending; and military protection.)

Question 16: 

Do you think Adam Smith could have imagined all the things that governments do today? Do you think he would be in favour or opposed to the things the government does today, and why? 

(Answers should demonstrate that the student understands Smith believed that governments should support the rules of commercial society and that markets lead to social goods more effectively than attempts to pursue those goods directly. They may also wish to talk about easy taxes.)

Question 17: 

What are three reasons that Adam Smith opposed slavery? 

(Adam Smith believed that the societies of enslaved people were less developed because of the stage of development of their nation and not because they were fundamentally different; he believed that enslaved peoples had dignity and morality that was often superior to that of their enslavers; he believed that enslaving people was as cruel as killing them; and he believed that slavery was economically inefficient and something enslavers paid for because they love domination over others.)

Question 18:  

What are two arguments in favour of slavery from Smith’s time, and how did Smith argue against them? 

(Pro-slavery arguments from Smith’s time included the argument that slavery was economically efficient because it’s cheaper to own people than to pay them and that the people who were being enslaved were “lesser” than the Europeans who enslaved them, as evidenced by the fact that their societies and economies were less developed, and were better off being governed by enslavers.)

Want More on Adam Smith?

The Essential Adam Smith by James Otteson is a short, accessible book on Adam Smith that can be found at https://www.essentialscholars.org/smith.

Adam Smith Works has published a series of essays on #SmithMyths:

Adam Smith Works has also produced a series of high production value videos on Adam Smith and his ideas. Each video is accompanied by a set of questions for further thought and discussion. Every video in the series is relevant for reinforcing what was taught in this lesson plan.