The Nations in Wealth of Nations

Much of Adam Smith’s writing in An Inquiry into the Nature and Causes of the Wealth of Nations (WN) is concrete. He explores examples of contemporary and ancient economic, political, religious, and military situations to better understand the world he lived in. As a result, his commentary touched on the economic situations of many nations.

Smith did not pull examples from all countries equally. Below is a chart that shows the number of times Smith mentions a European country or its people in WN. He commented on some nations frequently, while others he barely mentioned. The frequency that a nation or its people are mentioned has almost no relation to the economic, political, or military power of the nation.

Frequency counts for a number of modern European countries I thought could have been important in WN. Counts were for a combination of each country’s name, the names given to the people of that country, and multiple spellings of each. For example, the count for “Spain” includes “Spain”, “Spanish”, and “Spaniard”; Portugal includes “Portugal”, “Portuguese”, and “Portugueze”; Holland includes “Holland”, “United Provinces”, and “Dutch”—Smith only uses “Netherlands” once, in the phrase “United Provinces of the Netherlands,” so there was no need to count it separately since it was captured by “United Provinces.” I use “Holland” instead of “Netherlands” throughout this article to stay consistent with Smith’s language.

My method of searching for national identifying words neglects Smith’s discussion of cities. For example, Smith mentions Amsterdam 11 times in Chapter II of Book IV in the Digression concerning Banks of Deposit, particularly concerning that of Amsterdam, but only used terms captured in the search results above twice.

Unsurprisingly, England, Britain, and Scotland are frequently mentioned. WN was more than just a book working out some principles of economics. It served as an extended political tract, arguing in favor of certain laws and systems and against others. Because Smith’s primary audience was British, he focused on British laws and regulations. He praised Scottish free-banking, the practice of students paying their teachers, and advocated for freedom of religion. He argued against Britain’s mercantilist policies with the American colonies, lambasted the corn laws, and identified problems with the herring buss bounty.

It is unsurprising that France is also mentioned quite frequently. France was Britain’s greatest rival on the world stage at the time Smith wrote WN, had a massive economy, and was a major military and political power. However, Spain, Holland, and Portugal are mentioned considerably more frequently than Russia, Prussia, and Austria, even though Spain, Holland, and Portugal were lapsed political powers and Russia, Prussia, and Austria were the other major powers in Europe beside Britain and France.

Despite their place as second-rate powers in Europe at the time of Smith’s writing, Spain, Portugal, and Holland provided pertinent examples when he discussed monetary economics, colonization, international trade, and banking. References to Spain and Portugal are concentrated in sections on monetary economics and colonization, and references to the Dutch are prominent in sections on trade and banking.

Spain and Portugal are almost always mentioned to reference their colonization efforts and in particular the economic effect of the silver and gold mines in their colonial holdings. References to Spain in Volume I are concentrated in the digression on 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 take up only 16% of the pages in Volume I. The references in Of Bounties come from a few paragraphs where Smith addresses the supply of silver to explain price trends in his critique of the British export bounty on corn. References to Spain in Volume II are concentrated in Chapter VII of Book IV, Of Colonies. About 57% (52/91) of the references to Spain in Volume II come from Of Colonies.

Over half (53%) of the references to Portugal and the Portuguese come from the digression on silver (14/53) and Of Bounties (14/53) in Volume I. Nearly all (70/72) of the references to Portugal and the Portuguese in Volume II come from Of Treaties of Commerce (25/72) or Of Colonies (45/72) because Smith uses the famous Methuen Treaty between England and Portugal as his primary example of a commercial treaty.

The references to the Dutch are less concentrated than the references to the Spanish and Portuguese. Of the references to the Dutch, 78% (108/139) are in Book IV, Of Systems of Political Oeconomy, (84/139) and Chapter II of Book V, Of the Sources of the general or publick Revenue of the Society, (24/139).

Smith’s commentary on the Dutch is almost always positive. He typically frames them as the archetypical trading nation, describing the country as wealthy and commercial (p. 209). He frequently recognizes and praises their commercial attitude and commitment to trade. One area where he does criticize the Dutch is for their use of an exclusive company in their colonial ventures—a departure from their otherwise exceptionally liberal disposition. Smith is quite positive about Dutch banks of deposit and seems to believe they reflect well on Dutch entrepreneurship in the banking sector.

Smith drew from a wide variety of empirical evidence in the form of concrete, real-world examples in WN. His examples came from events that were useful for illuminating the issues and ideas he discussed. He did not necessarily reference rich and powerful countries. Russia, Prussia, and Austria were major powers in Europe and yet rarely get mentioned. Rather than focusing on economic or political power, Smith’s examples come from countries with particular economic characteristics that offered insight into the issues and ideas he discussed—such as precious metals in Spain and Portugal and trade in Holland. Smith’s concrete and compelling examples help make WN interesting and engaging to this day.