The Wealth of Nations by Adam Smith

Published in 1776, Adam Smith’s The Wealth of Nations is the foundational text of modern economics. Smith famously challenges the “mercantilist” systems of his time, arguing that a nation’s true wealth is not found in hoards of gold, but in its productive capacity and the goods available to its people.

Key Concepts

• The Invisible Hand: Smith posits that individuals pursuing their own self-interest unintentionally benefit society as a whole by fostering innovation and efficiency.

• Division of Labor: He illustrates how breaking down complex tasks into specialized roles—like his famous pin factory example—massively increases productivity.

• Free Markets: The book advocates for laissez-faire policies, suggesting that markets are most effective when free from heavy-handed government intervention.

Ultimately, Smith provides a comprehensive framework for understanding trade, labor, and capital, cementing his legacy as the “Father of Economics.”