“First and greatest classic of modern economic thought”: First Edition of Adam Smith’s Wealth of Nations
American economist and historian Robert L. Heilbroner writes about Adam Smith’s influence on capitalism:
Adam Smith’s enormous authority resides, in the end, in the same property that we discover in Marx: not in any ideology, but in an effort to see the bottom of things.
Scottish economist and moral philosopher, Adam Smith, published his five-part publication, An Inquiry into the Nature and Causes of the Wealth of Nations, later referred to as simply, The Wealth of Nations, during the Scottish Enlightenment in 1776. The work was a result of seventeen years of notes and observations taken from conversations among economists about economical and societal conditions during the beginning of the Industrial Revolution. This is outlined in the book of bibliographical reference, Printing and the Mind of Man:
The history of economic theory up to the end of the nineteenth century consists of two parts: the mercantilist phase which was based not so much on a doctrine as on a system of practice which grew out of social conditions; and the second phase which saw the development of the theory that the individual had the right to be unimpeded in the exercise of economic activity. While it cannot be said that Smith invented the latter theory…his work is the first major expression of it.
It took Smith ten years to produce An Inquiry into the Wealth of Nations. His commentary during such an incremental time, the first years of the Industrial Revolution, sought to reform outdated theories of mercantilist and physiocratic economic thought with broader concepts we’re all familiar with today, such as the division of labour, productivity, and free markets.
He begins with the thought that labour is the source from which a nation derives what is necessary to it. The improvement of the division of labour is the measure of productivity and in it lies the human propensity to barter and exchange…Labour represents the three essential elements-wages, profit and rent-and these three also constitute income. From the working of the economy, Smith passes to its matter-’stock’-which compasses all that man owns either for his own consumption or for the return which it brings him.
Bound in period style full brown calf, with elaborately gilt-decorated spines, the 1776 publication ofAn Inquiry into The Wealth of Nationswas the first of only five editions that were published in Adam Smith’s lifetime. Said to be the birth of what we now know to be modern economic thought, the book has greatly influenced economists and philosophers of his time and those that followed, including Jean-Baptiste Say, Alexander Hamilton, Thomas Malthus, and Ludwig von Misis.
The Wealth of Nations ends with a history of economic development, a definitive onslaught on the mercantile system, and some prophetic speculations on the limits of economic control…The Wealth of Nations is not a system, but as a provisional analysis it is complete convincing. The certainty of its criticism and its grasp of human nature have made it the first and greatest classic of modern economic thought.
Today, An Inquiry into the Wealth of Nations is said to have been as influential in the shift of the field of economics as Isaac Newton’s Mathematical Principles of Natural Philosophy was to the field of physics or Charles Darwin’s On the Origin of Species was to the field of biology.