and spent the next 10 years alone, writing his most famous
work.
An Inquiry into the Nature and Causes of the Wealth of Nations
was published in 1776. His contributions in this book (generally
known as The Wealth of Nations) were revolutionary, and the
text became the foundation for much of modern economics. It
continues to be reprinted today. Smith rejected the notion that
a country’s supply of gold and silver was the measure of its
wealth—rather, it was the real incomes of the people that
determined national wealth. Growth in the real incomes of the
country’s citizens—that is, economic growth—would result
from specialization in production, the division of labour, and
the use of money to facilitate trade. Smith provided a
framework for analyzing the questions of income growth, value,
and distribution.
Smith’s work marked the beginning of what is called the
Classical period in economic thought, which continued for the
next 75 years. This school of thought was centred on the
principles of natural liberty (laissez-faire) and the importance of
economic growth as a means of bettering the conditions of
human existence.