On March 9, 1776, exactly 250 years ago, a handsome book, over 1,000 pages long, priced at one pound sixteen shillings, appeared on the bookshelves in London. Its author, formerly professor of Moral Philosophy at Glasgow, was already well known. An Inquiry into the Nature and Causes of the Wealth of Nations enduringly altered thinking about freedom, power, prosperity, and justice. Like any great work, it defies easy political characterisation: Both left and right have pressed it into their service. It also resists confinement to a single genre. Although it revolutionised political economy, it ranges superabundantly across law, institutions, history, and, characteristically, moral psychology. Much of it is written in clinical, occasionally dry prose. Yet it is vividly thrilling: Unexpected in argument, generous and humane in spirit, alive with irony and paradox.For Economics, the book consolidated a decisive shift: The wealth of nations is measured not by the balance of trade or the accumulation of bullion, but by the total productive capacity of society and its translation into rising standards of living for ordinary people. It moved attention from accumulation by the wealthy and the state to the diffusion of capabilities, democratising the idea of wealth. It then inquired into the conditions of productivity, above all the division of labour, itself a consequence of the extent of the market. Wages, rents, and profits were brought into a single analytic frame. The book’s sensibility is that of undogmatic inquiry, a sustained investigation into why societies prosper or stagnate.AdvertisementBut the deeper thrill lies in how thoroughly it unsettles clichés. The standard caricature casts Smith as a prophet of laissez-faire, invoking the alchemy of the invisible hand to transmute self-interest into public good. Yet, when he analyses self-interest, he does so within a framework of justice. Much of the drama of the book comes from the recognition that human beings act from a bewildering plurality of motives. Self-interest is not an axiom; it is often the effect of institutions and education rather than their cause. A child of the Enlightenment, Smith places imagination, not reason, as the central human faculty, a source of both liberation and absurdity.The book is, at heart, about conflictual forms of sociability. Take its most famous passage: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.” Smith’s concern here is with reciprocity and independence. Market exchange, at its best, allows us to address one another as equals, appealing to each other’s interests rather than supplicating benevolence. In other forms of exchange, we risk dependency or hierarchy. The real question, then, is under what conditions such reciprocal independence can be realised. It is difficult to imagine that promise without a wide and relatively egalitarian diffusion of wealth.The political argument of The Wealth of Nations is still impressive. Smith’s critique of mercantilism was not a simple brief for non-intervention; it was a diagnosis of how states are captured by vested interests. He sought to rescue capitalism from capitalists. He exposed the absurdities of mercantilist restrictions, the depredations of colonial monopolies, and the ways policy becomes an instrument of private gain. One of the book’s monumental ironies is its juxtaposition of the “natural” and rational order of development with the disorderly path actual societies take. Its longest historical chapter shows that development rarely follows the sequence theory prescribes; it proceeds through contingency, power, folly, and accident. The ability to hold ideal theory and actual history in the same frame gives the book its rare intellectual depth.AdvertisementSmith had little that was flattering to say about owners of capital. They often combine against the poor, distort legislation, and pursue narrow interests under the guise of the national good. He offered searing descriptions of two indignities. The first is the indignity of poverty, which not only deprives but renders people invisible, inducing them to internalise their invisibility. The second concerns the division of labour itself. For all its productivity, extreme specialisation, especially in degraded occupations, can stunt the human mind. Hence his insistence on public education as a remedy. The most famous defence of commercial society was acutely aware of its moral costs.you may likeEven the defence of free trade is subtler than is usually supposed. Smith did not deny the force of national pride or rivalry. Protection flatters patriotic vanity, but it entrenches monopolies, taxes consumers, and ultimately impoverishes the society it claims to defend. Free trade, for Smith, was a hard-headed judgement about how to discipline concentrated economic power and enlarge the sphere of reciprocal gain.What stands out in Smith is the fusion of moral clarity with a sceptically raised eyebrow. Smith is hopeful, but knows that progress often emerges from absurd motives: Bad intentions producing tolerable outcomes, noble projects corrupted by circumstance. He trusts liberty, but a liberty that grows from the slow sediment of institutions. Effective change rarely arrives with the trumpet blast of revolution or easy moralism; it comes through the prudent working with materials at hand.1776 also saw the publication of Edward Gibbon’s The History of the Decline and Fall of the Roman Empire. It is also the year of American independence. Smith’s ideas would influence James Madison and Alexander Hamilton, including on institutions and religious liberty, not just economics. At this moment, Decline and Fall may seem the more apposite text for a corrupt empire. But the defining sensibility of The Wealth of Nations is an abiding suspicion of concentrated power, wherever it may exist. This makes it a glorious monument to liberalism.The writer is contributing editor, The Indian Express