The Wealth of Nations has suffered the fate accorded to most classics: it is more talked about than read.
To the popular mind in the mid-twentieth century, Smith's work is now commonly associated - not always accurately - with observations on economic policy. Though Smith was clearly an opponent of 'the mercantile system' and of the apparatus of privilege and state protection supporting it, one may reasonably doubt whether those who pigeon-hole the man solely as an apologist for unregulated business enterprise have fully appreciated such passages as the following:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices....1
The interest of dealers...
in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public.... The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.2At the same time, Smith saw manufacturers and ‘projectors' as the carriers of progress and he urged that they be afforded more space in which to manoeuvre. Much of his practical message was that institutional restrictions (whether legislated by governments or rooted in parochial traditions) were unhealthy. They cramped the rate at which a new and more productive industrial era could mature. Smith's vision of the 'industrial revolution', however, was still remarkably circumscribed. He wrote more about pin factories than about iron fabrication and failed to appreciate fully the pace at which technological change was occurring during his lifetime.
Despite its impressive impact on popular attitudes (and thus, indirectly, on economic policies) Smith's work still deserves to be remembered as a highly ingenious contribution to economic theory. The Wealth of Nations brought to the foreground the issues that were to dominate the attention of economists for the three quarters of a century and which, for that matter, have never lost their pertinence. This aspect of his thought, set out most fully in the first two of the five books into which his treatise is divided, calls for careful inspection. With a degree of comprehensiveness unrivalled by his predecessors he here formulated the
grand design of an economic order in which all the parts could be seen in relation to one another. His views on policy, however, were derivative and cannot be adequately understood if detached from their theoretical moorings.
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