Wealth of Nations

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Overview

An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776, is the founding work of modern economics. Adam Smith asks why some nations grow richer than others and answers that wealth comes chiefly from the productivity of labour, which rises with specialisation and the extent of the market, not from hoarding gold and silver. He attacks monopolies and trade restrictions, and he sets out what a government should and should not do. Its arguments still sit under debates about trade, taxation and the role of the state.

Context

Britain in 1776 was an expanding commercial and imperial power run on mercantilist ideas: exports should exceed imports, colonies should supply raw materials, and chartered monopolies such as the East India Company should be protected. The American colonies were rebelling and the early Industrial Revolution was under way. Smith, a Scottish moral philosopher, spent about a decade on the book after leaving his Glasgow chair.