Whose Economic Theory Shaped Modern Capitalism?

Scottish philosopher Adam Smith (1723-1790) published "An Inquiry into the Nature and Causes of the Wealth of Nations" on 9 March 1776, the same year as American independence. His central insight was that when individuals freely pursue their own economic self-interest — buying, selling, investing, producing — the aggregate effect (the "invisible hand") tends to produce outcomes beneficial to society as a whole, without central planning. He championed the division of labour (using his famous pin factory example to show how specialisation multiplied productivity by a factor of 200), free trade between nations (comparative advantage), and limited government intervention in markets. He was not, however, a pure laissez-faire advocate: he argued for public education, infrastructure, and regulation of banks. Smith ideas influenced the Industrial Revolution, the repeal of protectionist Corn Laws, and free-trade policies that shaped the modern global economy. His work also provoked counter-movements: Karl Marx "Das Kapital" (1867) was a direct response to the inequalities capitalism produced.