Nations in the Wealth of Nations

Most of Adam Smith’s writings in An Inquiry into the Nature and Causes of the Wealth of Nations (WN) concrete. He examines contemporary and ancient economic, political, religious, and military examples to better understand the world in which he lived. As a result, his comments affected the economic conditions of many nations.

Smith did not issue examples from all countries equally. Below is a chart showing the number of times Smith mentions the country of Europe or its people WN. He always talked about other nations, and others he didn’t mention. The frequency with which a nation or its people are mentioned has almost nothing to do with a nation’s economic, political, or military power.

Prevalence statistics for a number of modern European countries that I thought would be relevant WN. The count was based on a combination of the name of each country, the names given to the people of that country, and the various spellings of each country. For example, the enumeration of “Spain” includes “Spain”, “Spanish”, and “Spanish”; Portugal includes “Portugal”, “Portuguese”, and “Portuguese”; Holland includes “Holland”, “United Provinces”, and “Dutch”—Smith uses “Netherlands” only once, in the name “United Provinces of the Netherlands,” so there was no need to count separately as it was taken by “united provinces.” I use “Holland” instead of “Netherlands” throughout this article to stay consistent with Smith’s language.

My approach to searching for ethnic names ignores Smith’s discussion of cities. For example, Smith mentions Amsterdam 11 times in Chapter II of Book IV in Decline concerning the Depository Banks, especially concerning that of Amsterdambut only the terms used are captured in the search results above twice.

Unsurprisingly, England, Britain, and Scotland are mentioned most often. WN it was more than just a book dealing with some economic principles. It served as an extended political pamphlet, opposing certain laws and programs as well as others. Because Smith’s primary audience was British, he focused on British laws and regulations. He praised free banking in Scotland, the practice of students paying their teachers, and encouraged religious freedom. He opposed British mercantilist policies with the American colonies, criticized the corn laws, and identified problems with the herring buss bounty.

Not surprisingly, France is also mentioned frequently. France was Britain’s biggest rival in the world at the time Smith wrote WNit had a large economy, and had great military and political power. However, Spain, Holland, and Portugal are mentioned more often than Russia, Prussia, and Austria, even though Spain, Holland, and Portugal were no longer political powers and Russia, Prussia, and Austria were the other major powers in Europe besides Britain and France.

Despite their place as second-tier powers in Europe at the time of Smith’s writing, Spain, Portugal, and Holland provided relevant examples when discussing financial economics, colonization, international trade, and banking. The references to Spain and Portugal are concentrated in the sections on financial economics and colonization, and the Dutch references are prominent in the sections on trade and banking.

Spain and Portugal are almost always mentioned in reference to their colonization efforts and especially the economic impact of silver and gold mining in their colonial territories. References to Spain in Book I focus on the decline of silver in Chapter XI of Book I (36/83) and Of Bounties in Chapter V of Book IV (14/83). The references to Spain in those two sections make up 60% (50/83) of the references to Spain in Volume I, which only takes up 16% of the pages in Volume I. ^{References to Of Bounties they appear in several passages where Smith mentions the supply of silver to explain price trends in his criticism of Britain’s corn export bounty. The references to Spain in Volume II are concentrated in Chapter VII of Book IV, In the Colonies. About 57% (52/91) of the references to Spain in Volume II appear In the Colonies.}

More than half (53%) of the referrals to Portugal and Portugal are from silver diversions (14/53) and Of Bounties (14/53) in Volume I. Almost all (70/72) of the references to Portugal and Portuguese in Volume II appear of Trade Agreements (25/72) or In the Colonies (45/72) because Smith uses the famous Methuen Treaty between England and Portugal as his main example of a trade agreement.

Dutch indicators are less concentrated than Spanish and Portuguese indicators. Of the Dutch references, 78% (108/139) are in Book IV, of Political Economy Systems(84/139) and Chapter II of Book V, Of the Corporation’s general or public sources of income(24/139).

Smith’s comments in Dutch are almost always good. He generally places them as a trading nation in the past, describing the country as rich and trading (p. 209). He often notices and admires their entrepreneurial attitude and commitment to trade. Another area where he criticizes the Dutch is their use of a special company in their colonial activities—a departure from their liberal status. Smith is optimistic about Dutch deposit banks and seems to believe that they represent a good example of Dutch entrepreneurship in the banking sector.

Smith drew from a variety of empirical evidence in the form of concrete, real-world examples in the WN. His examples came from events that were useful in illuminating the issues and ideas he discussed. He did not refer to rich and powerful countries. Russia, Prussia, and Austria were great powers in Europe and yet they were rarely mentioned. Rather than focusing on economic or political power, Smith’s examples come from countries with specific economic characteristics that provide insight into the issues and ideas he discusses—such as precious metals in Spain and Portugal and trade in Holland. Smith’s strong examples help to do WN it is fascinating and fascinating to this day.