An Inquiry into the Nature and Causes of the Wealth of Nations – Adam Smith
1. Full Citation
Smith, A. (1776, reprinted 1976) An Inquiry into the Nature and Causes of the Wealth of Nations. Edited by R.H. Campbell and A.S. Skinner. Oxford: Oxford University Press.
2. Introduction
The Wealth of Nations is widely regarded as the foundational text of modern economics. Published in 1776 by Scottish philosopher Adam Smith, it systematically explores the mechanisms of economic growth, division of labour, free markets, and the role of government. Smith’s work laid the intellectual groundwork for classical economics and continues to influence economic thought, policy, and philosophy. The book’s central thesis is that individual self-interest, guided by competition and markets, drives economic prosperity—a concept famously described as the “invisible hand.”
3. Author Background and Credentials
Adam Smith (1723–1790) was a Scottish moral philosopher and economist, often called the “Father of Economics.” He was a professor at the University of Glasgow and a key figure of the Scottish Enlightenment. Smith’s interdisciplinary approach combined ethics, philosophy, and economics, shaping the study of economic behaviour within social contexts.
4. Summary of Contents
The book is organised into five main books:
- Of the Causes of Improvement in the productive Powers of Labour
- Discusses division of labour, specialisation, and productivity gains.
- Of the Nature, Accumulation, and Employment of Stock
- Explores capital accumulation, investment, and the role of capital in economic growth.
- Of the different Progress of Opulence in different Nations
- Examines factors influencing economic development and wealth disparities.
- Of Systems of political Economy
- Critiques mercantilism and discusses free trade and taxation.
- Of the Revenue of the Sovereign or Commonwealth
- Analyses government’s role in defence, justice, public works, and education.
5. Critical Evaluation
a. Coherence and Argumentation
Smith presents a coherent and systematic analysis of economic principles with persuasive arguments supporting market mechanisms and limited government intervention.
b. Originality and Intellectual Contribution
The book introduced foundational concepts such as the division of labour, productivity, free markets, and the role of self-interest, fundamentally shaping economics as a discipline.
c. Evidence, Sources, and Method
While based on observation and philosophical reasoning rather than empirical data, Smith’s insights are drawn from extensive reflection on contemporary economic practices.
d. Style and Accessibility
The prose is dense and formal, characteristic of 18th-century scholarship, requiring attentive reading but rewarding with profound insights.
e. Limitations and Critiques
Some concepts are outdated by modern standards; Smith’s views on labour and markets do not fully anticipate industrial and financial complexities of later economies.
6. Comparative Context
Compared with:
- Karl Marx’s Das Kapital – Marx critiques capitalism that Smith champions
- John Maynard Keynes’s General Theory – Keynes builds on and challenges classical economics
- Friedrich Hayek’s The Road to Serfdom – Hayek extends Smith’s advocacy for market freedom
The Wealth of Nations remains the touchstone of classical economic thought.
7. Thematic or Disciplinary Relevance
The book is essential to:
- Classical economics
- Political economy
- Economic philosophy and ethics
- Public policy and economic development
8. Reflection or Practical Application
Smith’s analysis provides foundational understanding for policymakers, economists, and business leaders regarding the principles underlying market economies.
9. Conclusion
The Wealth of Nations is a monumental work that established the framework for economic science. Its insights into markets, labour, and capital continue to underpin economic discourse and practice worldwide.
Recommended for: Economists, historians of economic thought, policymakers, and students of economics and philosophy.
10. Other Works by the Same Author
- The Theory of Moral Sentiments (1759)
- Various essays and lectures on economics and philosophy
11. Similar Books by Other Authors
- John Stuart Mill – Principles of Political Economy
- David Ricardo – Principles of Political Economy and Taxation
- Alfred Marshall – Principles of Economics
12. References (only if external works are cited)
- Smith, A. (1776) The Wealth of Nations
- Heilbroner, R.L. (1999) The Worldly Philosophers
- Sraffa, P. (1960) Production of Commodities by Means of Commodities