History › Age of revolutions › Enlightenment
Adam Smith's Wealth of Nations
1776· Book, artwork, monument or document· Europe
Well documentedSolid records, physical evidence or scientific consensus.
Scottish philosopher Adam Smith's 1776 book explaining how markets, trade and the division of labor create a nation's wealth.
See it on the History map →What happened
An Inquiry into the Nature and Causes of the Wealth of Nations opens with a pin factory: ten workers, each doing one step, make about 48,000 pins a day, where one person alone might not make 20. Smith argued that wealth is what a nation produces, not its stock of gold. People pursuing their own interest in competitive markets are 'led by an invisible hand' to serve others. He attacked monopolies and tariffs but backed public schooling, roads and some regulation.
Why it matters
It founded modern economics and gave the case for free trade and competition that shaped British policy in the 1800s and economic debate ever since.
Think of it like
The pin factory works like a construction crew: framers, electricians and plumbers each specialize, so the building goes up far faster.
How we know
The book itself, revised by Smith through five editions; students' notes of his Glasgow lectures; his letters; and its documented influence on politicians such as Prime Minister William Pitt the Younger.
Still debated
Smith used the phrase 'invisible hand' only once in the book. How central it was to his thinking, compared with his concern for fairness and the poor, is debated.
Connections (2)
▸Adam Smith's Wealth of Nations was a product of the Scottish EnlightenmentWell documented
The connection
Smith belonged to the Scottish Enlightenment, a circle in Edinburgh and Glasgow that included his close friend David Hume. They applied Newton-style reasoning to human society, looking for natural patterns behind trade, morals and history. Wealth of Nations was that approach applied to the economy, explaining prosperity through observed behavior rather than royal decree.
When and how
Glasgow and Edinburgh, 1750s to 1770s; Smith taught moral philosophy at Glasgow University and met French thinkers like François Quesnay on a 1764 to 1766 tour.
How we know
Smith's letters with Hume, his earlier Theory of Moral Sentiments (1759), and his essay on the history of astronomy, which praises Newton's method.
Debates and open questions
How much Smith borrowed from the French Physiocrat economists, versus developing his ideas independently, is debated.
▸Adam Smith's Wealth of Nations was critiqued by Marx and the Communist ManifestoMostly agreed
The connection
Marx studied Smith closely. He took from him the idea that labor creates value and that dividing labor drives productivity. But Marx argued that if workers create value, owners' profits come from unpaid labor, and that endless specialization degrades workers, a danger Smith himself had noted. For Marx, capitalism was a stage to be overcome.
When and how
Marx read Smith in Paris in 1844 and in the British Museum reading room in London from 1850; the critique runs through Das Kapital (1867).
How sure are we?
Marx's 1844 notebooks hold long excerpts from Smith, and Das Kapital, subtitled 'A Critique of Political Economy,' cites him repeatedly.
Debates and open questions
Both men worried about workers' lives. Scholars debate how far apart they really were, and whether Marx read Smith and David Ricardo correctly.