How Adam Smith Founded Economics on Enlightenment Values

ABSTRACT In 1776 a modest Scottish scholar, Adam Smith, published the world's most famous treatise on economics, the Wealth of Nations . Smith revolutionized the way people understood society. He brought Enlightenment values of reason and compassion to the analysis of human affairs, notably relations between groups of people: landowners and peasants, manufacturers and workers, merchants and customers, masters and slaves, government and taxpayers. He held poor and rich to be equally worthy and spoke for workers' welfare. He advocated free and fair markets to curb monopoly and broaden opportunity. He favored taxes exclusively on land, a system far more progressive than modern taxation. Were he alive today, Smith would be considered a leftist. Yet a willful misreading of his book has transformed him into an avatar of “greed is good.” How could that happen?