People would save and invest for the future because of the inherent desire of individuals to better their own condition. Finally, he sharply criticized the mercantilist writers of his day, who advocated state intervention in international trade to achieve an inflow of foreign treasure. Mercantilist thinking was based on the assumption that the volume of trade was limited and that countries could expand their trade only at the expense of others. Smith claimed, perhaps somewhat unfairly, that .
mercantilism confused money and wealth, ignoring the fact that the only real purpose of money is to purchase goods. He .
maintained that "free trade" increased the wealth of nations while restrictions on trade diminished wealth. .
Virtues of Enlightenment.
Counter to the popular impression that Smith was a champion of selfishness and greed, Smith hoped to promote the welfare of society as a whole, and that he wrote the Wealth of Nations to warn of the dangers to the common good posed by organized mercantile interests. Contrary to those who believe that the naked pursuit of self-interest always leads to socially beneficial results, Smith maintained that government must intervene to counter act its negative effects. Smith's analysis went beyond economics to embrace a larger "civilizing project" designed to create a more decent society. The freedom made possible by a commercial society, Smith thought, would only be desirable when coupled with supporting institutions, including the law, family, and religion, which fostered the virtues of self-control and altruism that people need to manage their new liberty. He also explained how human passions could be harnessed to that goal. In doing so, he laid the ground for much of modern social science, as he explored the unanticipated consequences of social action, the social formation of conscience, and the linkages between social, political, and economic institutions.
