When Scottish moral philosopher and economist Adam Smith finished his opus, most probably he didn’t realise that it would become a landmark examination of political economy. Published in 1776, The Wealth of Nations details the benefits, interconnections and consequences of a free-market economy that paved the way for modern capitalism. Smith believed that there could be no market for anything unless someone, somewhere, was willing to pay for it. He was convinced of the merits of a laissez-faire (let-the-market-decide) approach because he believed competition, not intervention, would naturally regulate the market and thus some ‘invisible hand’ would ensure justice and equality for all.

For example, Smith was of the view that a free market would make monopoly impossible and therefore workers and consumers could not be exploited. If over-demand for a certain product existed, then that demand would naturally encourage others to compete in the same market and prices would fall. By default, this competitive environment would also improve innovation and quality.

Smith offers a thorough exposé of business from an economic and social perspective and it is clear that he has also given a great deal of thought to the ethics of business, although his most detailed work on the subject was contained in The Theory of Moral Sentiment, published seventeen years earlier. It is perhaps this consideration for such topics that makes his study so special: he doesn’t just offer an incisive look at finance, economics and politics - he does so within the context of ethics, philosophy and historical fact. As a consequence, The Wealth of Nations has become a classic and Smith is still widely referenced today.

There are five separate books that make up The Wealth of Nations. The first three explore the division of labour, origins of money and the importance of wages, profit, rent and stocks. Book four examines the mercantile system, looking specifically at the British Colonies, while book five develops the case for restricted state involvement and describes how to fund education, transport, justice and defence.

To settle on just 52 key points from such a breadth of information was difficult; it would have been just as easy to choose three times as many. Consequently this is by no means a substitute to the original work. It is, however, a useful addendum as it brings many of Smith’s thoughts to life through modern-day examples, events and financial stories. In narrowing down my focus, I have therefore chosen to concentrate on getting key ideas across while also offering insights that have a particular, if not somewhat ironic relevance today.

Adam Smith is considered the father of ‘classical’ economics and his contribution to the subject is similar to what Darwin did for science. In many ways Smith’s famous book is an evolution of industry and explains how commerce emerged and incrementally improved over time. The ideas are solid, sensible and logical, and yet as time has progressed way beyond his death in 1790, the execution of that theory, as is so often the case, would probably make the canny Scot spin in his grave. In its purest sense, his capitalist vision does have advantages and has produced many great and noble consequences, but I can’t help but wonder what Mr Smith would make of the excesses of capitalism we’ve witnessed in the twenty-first century. My guess is that he might wish that he had added a little more emphasis on the importance of a strong moral and ethical compass, if the benefits of a free economy are to be reaped without making room for the exploitation and evil that has been such an unfortunate by-product.