Adam Smith’s The Wealth of Nations suffers from a familiarity bias in the modern world. It is difficult to get people excited about a book that explains how the division of labor leads to specialization and trade which then creates immense wealth. The shocking nature of the work is hidden from us because we all see this every day and thus think of it as nothing particularly revolutionary.
A good comparison is provided by Isaac Newton’s Principia. In that book Newton demonstrated that the same force that causes apples to fall from trees to the ground can explain planetary movements around the sun. The shocking nature of this is hard to underestimate. As Alexander Pope described it: “Nature, and Nature’s laws lay hid in night./ God said, Let Newton be! and all was light.” Newton had turned the entire solar system into a giant machine, following regular laws of behavior. Yet, because everything in it seems so obvious now, few people today are rushing out to read Newton’s work.
In exactly the same way, Smith turned the idea of economic society into a giant machine. It may seem like uncoordinated specialization would lead to total chaos, but there is something akin to an invisible force which induces all the parts to work together into a harmonious whole. Society is not nearly as fractured and disorganized as it first appears.
The reason it is hard for us to see the revolutionary nature of Smith’s insight is that we do not always appreciate how the world looked to people before Adam Smith wrote. In other words, we can all profit from spending some time with Laurence Sterne’s The Life and Opinions of Tristram Shandy, Gentleman, published in nine volumes between 1760 and 1767.
Read the rest at AdamSmithWorks
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