The Other Revolution of ’76 (William H. Peterson, Fall 1973, Modern Age)
For in 1776, between the appearance of Thomas Paine’s Common Sense in January and the Declaration in July, An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith was published. A most remarkable book. This one book reconstituted the industrial revolution and launched the capitalist revolution, at least intellectually. Walter Bagehot said that because of this one book “the life of almost everyone in England—perhaps of everyone—is different and better. . .”1 William Pitt in introducing the budget to Parliament in 1792, echoed Edmund Burke and said this one book furnishes “the best solution to every question connected with the history of commerce, or with the systems of political economy.”2 Henry Thomas Buckle in his History of Civilization in England said:
This solitary Scotchman has by the publication of one single work, contributed more to the happiness of man than has been effected by the united abilities of all the statesmen and legislators of whom history has presented an authentic record.3
Be that as it may, the two revolutions of 1776—American and capitalist—were more than coincidence. Both represented reactions against mercantilism, a system of political economy characterized by aggressive nationalism, central direction and closed economies. Both represented grand endeavors to advance the cause of a free society through the establishment of limited government, although one was mainly political in scope while the other was mainly economic. Both sought, each in its own way, a system of checks and balances, of separation of powers, of freeing the individual—with the ultimate sovereignity of the one residing in the citizen, and with the ultimate sovereignity of the other residing in the consumer. In this article, some of the origins and implications of the capitalist revolution on both sides of the Atlantic are examined, with Smith’s Wealth of Nations as a guide.