The Wealth of Nations

An Inquiry into the Nature and Causes of the Wealth of Nations is a philosophical treatise written by Adam Smith and published in 1776. The book becomes an instant success and is translated into French, German, Danish and Italian. Furthermore it directly influenced the British taxation laws in the 1770s.

The importance of the work lies in its foundation of national economy. Smith discusses the factors which contribute to the constant growth of the wealth of a nation and develops a complex theory of the basic principles of modern economical systems. The improvement of social life is treated from a philosophical perspective which contains a lot of depth. Smith stresses the importance of productive work of the entire population. Hereby he describes the development of human history in four levels:

1. The age of hunters

2. The age of shepherds

3. The age of agriculture

4. The age of commerce

The fourth and final level comprises the perfect market society in which all people share the same ideology about the efficiency of work for the greater good. The view on history expressed in these four levels is decisively shaped by the enlightenment. Smith's conception leads to a free economic system where not only the factory owners but also the simple workers profit from the competition of all. Smith designs an environment which secures good conditions for the workers as a direct reaction to the bad living conditions in urban 18th-century England. In addition to that Smith introduces an organisation to support the workers comparably to a labour union.

But in contrast to that Smith's ideas about an efficient capitalist market society have been re- and misinterpreted many times since 1776 so that the original text has been marginalized over time. Nevertheless it is still relevant today as it introduced many decisive principles of modern economy.

Bibliography:

Beck, Rudolf and Konrad Schröder (eds.). Handbuch der britischen Kulturgeschichte, Paderborn: Wilhelm Fink, 2006.

Skinner, Andrew S. "Economic theory." Broadie, Alexander (ed.). The Cambridge Companion to the Scottish Enlightenment, Cambridge: CUP, 2003. 178-204.