Question

what was the wealth of nations

Answer 1

On March 9, 1776, "An Inquiry into the Nature and Causes of the Wealth of Nations"—commonly referred to simply as "The Wealth of Nations"—was first published. Smith, a Scottish moral philosopher by trade, wrote the book to describe the industrialized capitalist system that was upending the mercantilist system. Mercantilism held that wealth was fixed and finite, and that the only way to prosper was to hoard gold and tariff products from abroad. According to this theory, nations should sell their goods to other countries while buying nothing in return. Predictably, countries fell into rounds of retaliatory tariffs that choked off international trade.

KEY TAKEAWAYS

• The central thesis of Smith's "The Wealth of Nations" is that our individual need to fulfill self-interest results in societal benefit, in what is known as his "invisible hand".
• This, combined with the division of labor in an economy, results in a web of mutual interdepencies that promotes stability and prosperity through the market mechanism.
• Smith rejects government interference in market activities, and instead states governments should serve just 3 functions: protect national borders; enforce civil law; and engage in public works (e.g. education).