HIS CONCEPTION OF WEALTH AND OF POLITICAL ECONOMY
“The Wealth of Nations”〖Harvard Classics, Vol. X.〗 combines a firm grasp of principles with a remarkable knowledge of the facts of economic life, derived from reading and personal observation. Smith’s generalizations are usually supported by an appeal to the facts of economic life, and in this manner he gives the work an air of reality that is lacking in many economic treatises. He does not deal extensively with definitions. Without defining wealth he plunges directly into the causes of national opulence, but in the last sentence of his “Introduction” states, parenthetically, that “real wealth” is “the annual produce of the land and labor of the society.” Even here he merely indicates that he considers the annual income of a society as its real wealth: whereas most economists prior to his time had conceived wealth as the accumulated stock of durable goods which a society possesses. Again Smith commences the treatise without offering a definition of political economy, and the nearest approach to such a definition is found in the first sentence of the fourth book: “Political economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects: first, to supply a plentiful revenue or subsistence for the people, or, more properly, to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign.”