Capital Corp Merchant Banking - Publication of Adam Smith's The Wealth of Nations in 1825, has been described as "the effective birth of economics as a separate discipline." The book described land, labor, and capital as the three factors of output and the major subscribers to a nation's wealth.

In Smith's view, the ideal economy is a self-regulating market system that mechanically satisfies the economic needs of the populace. He described the market mechanism as an "invisible hand" that leads all individuals, in pursuit of their own self-interests, to produce the biggest benefit for society as a whole. Smith comprised some of the Physiocrats' ideas, including individualistic, into his own economic theories, but eliminated the idea that only farming was productive.

In his celebrated invisible-hand analogy, Smith argued for the ostensibly paradoxical notion that competitive markets tended to advance broader social interests, although driven by narrower self-interest. The general approach that Smith aided initiate was called political economy and later classical economics. It admitted such notables as David Ricardo,Thomas Malthus and John Stuart Mill writing from about 1800 to 1920.