The book that changed the world
Ahead of the 300th anniversary of the birth of Adam Smith, renowned economist and UofG Principal Professor Sir Anton Muscatelli, and Adam Smith Senior Lecturer in the Scottish Enlightenment Dr Craig Smith, share their views on the impact Smith’s magnum opus, The Wealth of Nations, has had on the world.
Adam Smith was a student and professor at the University of Glasgow during the flourishing of learning that marked the Scottish Enlightenment. He is a truly global figure whose work changed the world. His most famous book, An Inquiry into the Nature and Causes of the Wealth of Nations, was published in 1776 and remains in print to this day.
It is easy to regard The Wealth of Nations as a landmark in thinking about economics and society. While Smith was not the first to write about economic themes, he was the first to do so in a self-consciously scientific and systematic way.
His analysis of the new commercial society that he saw developing in 18th century Glasgow helped to shape the modern discipline of economics, giving us many of the core concepts that we still use to make sense of the economic world.
At the heart of the book is a new conception of wealth. Smith attacked those who thought the nature of wealth lay in the hoarding of gold or in the profits of merchants. Instead, he helped reframe our understanding of the nature of wealth, tracing it to the living standards enjoyed by the whole of the population.
Smith demonstrated how trade and the division of labour could transform productivity and benefit the whole of society.
The Wealth of Nations is also a deeply political, indeed a radical, book. Smith attacked the vested interests who advocated protectionism and who were driving forward Britain’s colonial and slave trades. He did so by demonstrating the faulty arguments used to support such positions. He was also deeply aware of the problems that came with this new form of society and advocated for public education as a means to improve the lives of workers.
Smith was more than an economist. He was a professor of moral philosophy who saw that our understanding of the economy involved understanding a range of political, legal, social and historical factors that impact on our lives. Smith’s commitment to understanding the world in an evidence-based and systematic fashion inspired future generations of social scientists and changed the way that we think about the modern world.
It was Adam Smith who, in book IV of The Wealth of Nations, wrote of his suspicion of merchants and manufacturers and what he called their ‘interested sophistry’. He tells us to beware ‘speculative physicians’ with simple answers to complex problems.
As Smith was a ‘political economist’ he might have encouraged us not just to focus on the economic forces at play, but to ensure that the fundamental institutions in our society are cohesive, fair and resilient.
As we face some of the greatest and most complex intergenerational and transnational challenges of our time, be it the climate emergency, rising inequality, or post-pandemic recovery, there is much we can apply from Smith’s writings to today’s society.
In our opinion, Adam Smith’s ideas changed the world beyond anything he could have anticipated, but his scholarly and optimistically humane outlook are as relevant today as they were 300 years ago.
This article was first published September 2022.