Adam Smith: Wealth of Nations - Book IV, Chaper II - Essay Example

Smith then retired to Kirkcaldy with his life pension and worked on Inquiring into the Nature and Causes of the Wealth of Nations, which was published in 1776, after almost twelve years of endeavor. In 1778, Smith was appointed Commissioner of Customs in Scotland. In this post, he settled down with his mother, friends and books in Edinburgh, until his death in 1790. Adam Smith’s seminal work has rightly been acknowledged to be the single most important book on political economy to ever be written.

Its’ basic premise is that rational self-interest, rooted in a free-market economy, leads to the economic well-being of the individual and this in turn contributes to the economic prosperity of the society and the nation. Many crucial concepts of economic theory, such as the division of labor, equality of returns, human capital, job safety, retaliatory tariff and the so-called modern issues, such as school choice programs, owe their origins to Smith, who can quite justifiably be hailed as “the alpha and omega of economic science” (The Concise Encyclopedia of Economics).

The Wealth of Nations was a strong dissenting voice in the prevalent climate of trade restrictions in eighteenth century England. The new industrialized group of capitalist manufacturers in England formed an influential power center to block any legislation designed to lift trade restrictions with France. Both France and England had, as a matter of foreign policy and as a perception of each other as ‘natural enemies,’ resorted to policies and legislation aimed at creating a virtual monopoly of their home markets, by imposing high tariffs on imports.

Smith’s work contributed to the ongoing debate as to the expediency of revising commercial terms with France and undertaking tariff revisions. In this context, The Wealth of Nations sets forth strong, irrefutable arguments in favor of free trade and demonstrates that