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This is the founding book in the entire history of economics. Just as the entire history of Philosophy has been described as a series of footnotes to Socrates, and the entire history of Literature as a series of footnotes to Homer, so too, pretty much all the rest of the field of Economics can been seen as a series of footnotes to Smith. Not that he got everything correct, but he did cover the entire field, with chapters on every subject, and every work since has consisted of arguing that he was wrong on one or more points, or extending his treatment of certain areas.
It was first published in 1776, along with such other breakthrough works as "The American Declaration of Independence" "The Rights of Man" "Swiss Family Robinson" and "The Encyclopedia Britanica". (1776 was obviously a very good year.) Of course a lot of crap was also published in that year, or that century for that matter, but these are the works that have stood the test of time, the reason being that they are very good indeed.
Quite simply Smith started from scratch, there was hardly anything written before that time on the subject of economics, and he constructed a masterpiece that included the entire field. From the basic accounting practices of small businesses to international finance. From the rise of the Egyptian Empire to the role of traders in the development of Democracy from Feudalism. From guidelines on Tax reform to the effect of land prices on nutrition. This is one book that ties the entire area into one seamless whole.
And don't be put off by the prospect of a heavy read either. Although long, the work is very well written (though in the quaint 18th Century style). The areas of theory always start with the simplest of premises, and show that even the most complex economic arguements are at bottom very simple. They are then illustrated with a range of examples, both from contempory (1770s) and historical times. Read this book and in addition to economics you'll get a big dose of historical education too.
Smith's arguement is that economics is about, when you get down to it, individuals trying to make a living. Whether they are in palaces, hovels, or apartment buildings, individuals want to obtain food, shelter, clothing and some luxuries for themselves and their families. So they provide other people with what they have, in exchange for what they want. It is the interactions that this results in on a grand scale that makes the world go round.
Reading Smith's original work also exposes a lot of common fallacies in modern beliefs about him. It is often claimed that he argued that Governments should let business do whatever they want, and all will be right with the world. In fact, he actually claimed that businessmen and merchants were not to be trusted and must be stopped from sewing up markets into Monopolies and Oligarchies.
He argues against what he called the practise of Merchantilism, where business interests lobby governments through populism or bribery to grant favours or special laws. This is allegedly for "the good of the country" but invariably turn out to be for the good of the businesses concerned. The only way for nations to avoid this is to never give any business any legal advantage over a competitor, no matter how many politicians were convinced it would help society.
He also critisises big businesses and the practice of corporatisation. The company owned by absentee shareholders and managed by a CEO and board of directors would, he claims, never be as efficient as one managed by the owner. The directors and mangers would always line their own pockets, in preference to serving the owners best long term interests. It is only in the long term that the owner, the employees and the customers all benefit from a well run business. So the owner/manager gives the best result for society as well.
Lastly, Smith gives the fundamental assumptions that underlie economic rationalism. With latter writers these assumptions are so deeply ingrained that they are never stated or even noticed. One important one is that of timescales. Slashing government spending will increase overall employment EVENTUALLY. The reduced taxes result in greater private growth and so the unemployment rate drops. But it can take a decade or two for this to occur. Most later economists neglect to mention this sort of detail, which can make a very big difference to a human (lifespan 80 years), rather than a tree (lifespan 800 years).
In summary, The Wealth of Nations is the one book that has the entire field of economics in one readable package. It is widely regarded as THE classic text, and many still consider it to be the most accurate. By reading this one book you'll will now understand, if not agree with, everything that is ever said by economists on TV, in Newspapers, or in books of their own. And you will see that the classic errors that were proven wrong in the 1770s are still being promoted by the politicians and chattering classes around us today. Order The Wealth of Nations
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