Adam Smith was a prominent academic in the 1700's. He is considered to be the father of the field of economics. He was a prolific writer and theorist on the subject of wealth and how nations economic policies affect each other.

Wealth of Nations was a book written by Adam Smith in 1776. In it Smith describes the outline for how a nation becomes wealthy and how the division of labor falls within a wealthy vs. non-wealthy society. This book is considered a seminal document in the development of free-market capitalism.

Smith was an advocate of the idea that a nation could only be wealthy by taking advantage of another nation. He said that since wealth is relative, for a nation to be perceived to be wealthy, it must make another nation poor by comparison. Thus he said the colonial system worked to the benefit of the home nation and at the expense of the colony itself.

As the name might suggest, the Industrial Revolution brought industry to the fore as the main economic power. Merchants and traders wealth were no longer the standard to be measured by as the captains of industry amassed more wealth than the world had ever seen before.

The Industrial Revolution brought forth the rise of the corporations. While not a new idea, the corporation had been around for 200 years, there had never been as many corporations before, or ones that proved to be as powerful. Corporations began to dominate the economy and determine the fate of nations.

Cottage Industry practices were against everything the industrial revolution represented. Whereas most manufacturing until the 19th century had occurred in homes or local shops, new technology and urbanization promoted the rise of factories and large companies who manufactured goods cheaply and began trading them around the world.

Western Europe was the first to modernize, nations such as Great Britain and Germany had the natural and financial resources to industrialize while nations such as Spain and Turkey, as well as South America and Africa lacked the resources needed to keep up with the progress of industry.

The United States’ Open Door policy relates to the desire of American businessmen and merchants to have full access to Japanese and Chinese markets. This was achieved in the nineteenth century as the European powers forced access to China and the United States forced access to Japan.

The Treaty of Kanagawa was signed by representatives of the Japanese and American governments in 1854. It opened Japan to trade with western nations, specifically the United States. It also formally ended Japan’s centuries long period of isolationism.

The invention of the cotton gin by Eli Whitney in 1793 dramatically accelerated the productive capabilities of America’s cotton plantations. So much so that by the outbreak of the Civil War, seventy years later, America was producing more than half of the global supply of cotton - approximately sixty-five percent.