"The greatest improvement in the productive powers of labor, and the

greatest part of the skill, dexterity and judgment with which it is anywhere directed, or applied, seem to have been the effects of the division of labor." -Adam Smith, The Wealth of Nations.

Adam Smith wrote The Wealth of Nations in 1776. In it Smith outlines a new economic system, one distinct from the mercantilist system that prevailed at the time. His idea was that competition and free markets, and not monopoly and centralized decision making, should guide economic behavior. One of his foremost conclusions is that through the ambition of individuals acting in their own self-interest, a "hidden hand’ operates that propels the prosperity of the community as a whole forward. Edward Gibbon called Smith’s book "an extensive science in a single book, and the most profound ideas expressed in the most perspicuous language."

Smith was born in Kirkcaldy, Scotland, in 1723. The idea that an economic system should be decentralized into separate units, and with specialization both within and between the units, and all based on a system of competition, was the genesis of capitalism. E.G.West writes that The Wealth of Nations’ "influence rose like a gradually and inexorably swelling tide."

It took Smith 12 years to write The Wealth of Nations, and many years before that to research and prepare it.