"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages."
The Wealth of Nations, Book I Chapter II

"The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity and judgement with which it is any where directed, or applied, seem to have been the effects of the division of labour."
The Wealth of Nations, Book I, Chapter I

Adam Smith (1723-1790)

Raised by his widowed mother in Kirkcaldy, Smith won scholarships to Glasgow University and then Balliol College, Oxford. Returning to Glasgow, he was appointed Professor of Logic (1751), then Professor of Moral Philosophy (1752) and lectured on natural theology, ethics, jurisprudence and economics.

At the age of 36 he published The Theory of Moral Sentiments, a groundbreaking work on moral philosophy. His abilities caught the eye of the Duke of Buccleuch, who engaged him as Tutor to his son on the Grand Tour of Europe, where Smith met other eminent thinkers such as Voltaire, Rousseau, and Franklin.

Smith retired back to Kirkcaldy to write An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776.

"An Inquiry into the Nature and Causes of the Wealth of Nations, 1776"

This remarkable book was published in 1776, at a time when the power of free trade and competition as stimulants to innovation and progress was scarcely understood. Governments granted monopolies and gave subsidies to protect their own merchants, farmers and manufacturers against 'unfair' competition. The guilds operated stern local cartels: artisans of one town were prevented from travelling to another to find work. Local and national laws forbade the use of new, labour-saving machinery.

And, not surprisingly to us today, poverty was accepted as the common, natural, and inevitable lot of most people.

Adam Smith railed against this restrictive, regulated, 'mercantilist' system, and showed convincingly how the principles of free trade, competition, and choice would spur economic development, reduce poverty, and precipitate the social and moral improvement of humankind. To illustrate his concepts, he scoured the world for examples that remain just as vivid today: from the diamond mines of Golconda to the price of Chinese silver in Peru; from the fisheries of Holland to the plight of Irish prostitutes in London. And so persuasive were his arguments that they not only provided the world with a new understanding of the wealth-creating process; they laid the intellectual foundation for the great era of free trade and economic expansion that dominated the Nineteenth Century.

The Wealth of Nations changed our understanding of the economic world just as Newton's Principia changed our understanding of the physical world and Darwin's Origin of Species. And now, it is here online, for you to read, and enjoy.

Source of information: Adam Smith Institute