The Wealth of Nations

What It's About

Published in 1776, this is widely regarded as the founding work of modern economics. Smith sets out to explain how nations generate and grow wealth, rejecting the prevailing mercantilist view that a country's prosperity depends on hoarding gold and restricting trade. Instead, he argues that wealth arises from productive labour, and that free markets, competition, and the freedom of individuals to pursue their own self-interest naturally lead to broader social benefit. The work ranges widely, covering labour, wages, capital, taxation, colonies, and the proper role of government.

Key Concepts

Central to the book is the idea of the division of labour, illustrated by Smith's famous example of a pin factory, showing how specialisation dramatically increases productivity. He introduces the concept of the "invisible hand," the notion that individuals pursuing their own gain in a competitive market inadvertently benefit society as a whole. Smith also argues strongly against mercantilism and government-granted monopolies, advocating instead for free trade and limited state interference in markets, while still identifying legitimate roles for government in areas such as defence, justice, and public infrastructure.

About the Author

Adam Smith was a Scottish moral philosopher and economist, and a leading figure of the Scottish Enlightenment. He held the position of Professor of Moral Philosophy at the University of Glasgow before devoting himself to the study of political economy.