Two documents were published in 1776 which had profound effects on the social, political and economic future. The first, and the more brief of the two, outlined the reasons that the American colonies were willing to go to war to gain their independence from England. Forming the basis for a new type of government, The Declaration of Independence is the more famous of the two works. The other document, the 900-page tome, An Inquiry into the Nature and Causes of the Wealth of Nations, was written by a Scottish philosopher and was no less influential on determining the economic path of the American colonies than the Declaration was influential on determining its political path. This research examines Wealth of Nations and Smith's underlying principles and examines them in light of their historical context, the role they have played in shaping the world's economies, contrasts them with another economic theorist, Karl Marx, and considers the relevance of Smith in the dynamic economic environment of more than 200 years after his work first appeared.
Adam Smith was born in 1723 and educated as Glasgow and Oxford. Elected to the chair of logic in 1751, he exchanged that for the chair of moral philosophy in 1752. He published his Theory of Moral Sentiments in 1759 and gained recognition as a leading contemporary writer. Theory of Moral Sentiments outlined Smith's ethical views. Wealth of Nations, published in 1776, was the first systematic formulation of classical English economics. Smith also intended a work on the justice system, but was unable to produce the text before his death in 1790.
To fully appreciate Smith's contribution to economic thought, it must be remembered that he wrote before the industrial revolution, when manufacturing was still limited and when many people lived on farms and led self-sufficient, albeit subsistence, lives. Clothing for most people was largely homemade, food was homegrown in many cases, and re...