The Wealth of Nations was a piece of comparative economic history; as its title suggests, Smith sought to determine the root causes of what makes any country wealthy. By wealth, he didn't just mean the upper crust, the aristocracy, the elites. Rather, he sought to discover what determined how all of society could become wealthy, and he was mainly interested in why England in particular had become wealthy.
Adam Smith was a liberal in the classical sense - he helped develop the set of beliefs that came to be known as political and economic liberalism. Though it has been several centuries since he put pen to paper to write down his thoughts, Smith's liberal ideas and the foundation they created carry on through to today, in varying forms such as neoliberalism and libertarianism.
His belief in economic liberalism - free markets, reduced regulation, free trade - helped spur a general trend in Europe that eventually spread around the world to influence the entire industrialized world. Modern libertarians' obsession with the so-called "invisible hand" stems from Smith's economic ideas, though it may surprise them to know that this term was only mentioned once in the book.
One would get a rather different view of the advantages and disadvantages of the free market if one were to actually read The Wealth of Nations or simply hear about it from people who didn't actually read it. The leading economic strain en vogue right now in many countries is neoliberalism, one of whose tenets is a belief that the market is self-regulating because of the actions of the "invisible hand" - that is, in the pursuit of self-interest (profit), businesses' decisions will benefit the rest of society.
Yes, Adam Smith believed that self-interest benefits the rest of society because humans have a unique need to cooperate with each other by bartering or trading; by pursuing self-interested goals, humans tend to specialize in those things that they are good at and thereby tend to offer up services and trades to everyone that would not have been possible without this multiplicity of talents and specialization.
But in contrast, however, to the uncritical, blind faith modern libertarians, neoliberals, and so-called free-market parties (like Germany's FDP, Canada's Conservative Party, and the Republican Party) place in the invisible hand's ability to regulate industry and the market, Smith realized the inherent weaknesses of this ideology.
He posed the question of why England had become so wealthy, while other countries such as Spain had not. England had a national government that had created the institutional frameworks, such as a rule of law and a system of canals, necessary to promote, protect, and sustain the market economy. Smithian liberalism posited that government intervention in the market economy was necessary and vital to keep competition alive, dissuade monopolies, and ensure that the benefits of trade could reach all of society. In other words, the market is not self-regulating and the government is necessary to ensure stability and prosperity for all.
For the "wealth of nations" was just that - the riches accrued by a country should benefit all citizens of that country. For, by enriching everyone, the nation as a whole is better off. In the same manner of thought, Smith believed that the wealth of other nations benefited England; if the United States wanted to trade with France and Spain and not just with England, then all parties would benefit because of it.
It was this mode of thinking that led Adam Smith to his support for the American Revolution, free trade, universal and free public education, and his arguments against imperialism, protectionism, and slavery. Smith would have hated the concept of "Buy American" or the nativist attitude of Americans toward the rising stock of China's economy.
Smith's arguments can be extrapolated in different ways. Indeed, they have been extrapolated by fundamentalist libertarians and conservative political parties to pursue policies that have benefited only a small segment of society while maintaing the status quo for millions of people; that have given multinational corporations free reign to harm the environment, infringe upon human rights, and maintain abhorrent levels of poverty around the world; de-fanged regulations that destabilized the market economy and saw an amassing of financial institutions into fewer and fewer hands; and that have generally led to the economic and social stagnation of the vast majority of society.
This is not to say that Adam Smith was some kind of proto-communist; he firmly believed in free trade, and that the free market was the most efficient and natural way of conducting a nation's economy. The point is that Adam Smith was able to see the innate deficiencies of a market economy and actively promoted ideas that would enhance the prosperity of all citizens while maintaining what he believed to be the liberty of the economic system. This is one of the lessons that Adam Smith can teach us.
The slavish devotion to the "invisible hand", "free-market principles", the belief that markets self-correct, that corporations can regulate themselves, the contradictory promotion of protectionist policies: these all are twisted extrapolations of the classical liberal economic and political doctrines that Adam Smith helped develop that, were they to be followed through to their logical conclusion, would result in devastation for the vast majority of society and the world in which we live.
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