Adam Smith 250 years after writing The Wealth of Nations

By: Beatrice E. Rangel - 18/03/2026

The 250th anniversary of the publication of Adam Smith's book, The Wealth of Nations, has just passed. And given the current chaos in the global economy, many are wondering whether Smith's theories would apply to these times of inevitable turbulence.

The answer is a resounding yes. Because development occurs within a global economy that is capitalist, even though mercantilist elements exist and rent-seeking occurs in many places. Because what Smith proposes in his magnum opus is the workings of the human mind. Smith starts from the premise that all human beings aspire to a better life, and to achieve this end, they dedicate all the resources at their disposal, including their capacity to create objects to which human beings assign value. As other human beings acquire their creations, they provide the means for them to continue creating and providing for their families. When all members of a community are free to participate in the process of wealth creation, the entire community sees its material wealth grow, and that is what we call development.

It turns out that in the 21st century, when many predicted that technology would liberate humanity from the chains of servitude and bring freedom, the opposite is happening. We are becoming less free every day. From the perspective of the production of technological goods and services, a handful of companies supply the markets. This handful of companies decides where to pay taxes, how much to charge for their products and services, and establishes levels of social pressure to acquire these goods, forcing many consumers into debt to purchase them. From the perspective of consumption, spending is favored over saving, and debt is made into a virtue. We are thus beginning to turn back the clock, returning to the mercantilism that characterized the Middle Ages.

This was one of Smith's battlegrounds, as he believed that a healthy society requires that the majority of its citizens be able to live with dignity. His observations on the workings of capitalism included warnings about the need to prevent the decline of wages in manual labor, which leads to stagnant consumption, the concentration of wealth, and the political influence of elites. One of his most famous warnings stated, "People of the same trade seldom meet together... But when they do, the conversation ends in conspiracy against the public."

Smith also vehemently criticized mercantilism, arguing that countries benefit from free trade rather than hoarding gold or protecting domestic industries.

He also warned about market failures, which he summarized as the extinction of competition leading to artificially inflated prices, reductions in the quality of goods and services, and the stifling of innovation. He further emphasized the role the state should play in economic management as a provider of public goods and services not being supplied by the private sector. He was referring to infrastructure, healthcare, and education, the provision of which, according to Smith, should adhere to strict standards of quality and relevance.

In short, Adam Smith intuited that the advancement of the capitalist system depended on constant attention to the formation of monopolies, which should be eradicated like weeds, lest they devour its very foundations: freedom, competition, and innovation. Unfortunately, his wise counsel seems to have vanished from the minds of 21st-century leaders, who celebrate Silicon Valley monopolies, restrict trade, and collude with elites.

«The opinions published herein are the sole responsibility of its author».