It is in Books IV and V of The Wealth of Nations that Adam Smith offers his considered response to the French Physiocrats, perhaps the first great school of ecomic theorists, and assesses the nature of the mercantile system, particularly the colonial relationship with America, whose achievements could have been even more spectacular if conditions of free trade and ecomic union had existed. Even on the eve of the Declaration of Independence, Smith famously predicted that America will be one of the foremost nations of the world. It is also here that he develops the case for a limited state role in ecomic planning, tably to combat market failure and induce efficiency in areas such as education, public works, justice, and defense. His pioneering analysis still provides many subtle and penetrating insights into one of today's most vital and controversial policy debates.
Adam Smith (1723-1790) was born in Scotland and educated at Glasgow and Oxford universities. He became tutor to the Duke of Buccleuch and traveled extensively, meeting many of the leading thinkers of the day.