A Wealth of Nations

Definition

"A Wealth of Nations" is a book written by Adam Smith in 1776 that outlines the principles of free market economics and capitalism.

Analogy

Think of "A Wealth of Nations" as a user manual for running an economy. Just like how you'd refer to a manual to understand how your new gadget works, economists and policymakers refer to this book to understand how economies function.

Related terms

Division of Labor: The assignment of different parts of a manufacturing process or task to different people in order to improve efficiency.

Supply and Demand: An economic model which states that the price at which an item trades depends on both the supply (availability) and demand (desire) for it.

Free Trade: International trade left to its natural course without tariffs, quotas, or other restrictions.