The period starts with the publication in 1776 of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith . In his book, Smith debunks the myth that treasure or precious metals are the wealth of nations. He explains, instead, how a nation's wealth is its stock of capital and its people and how individuals, pursuing their own self-interest, inadvertently benefit the whole of society. There is no need for government to interfere in material affairs. Otherwise, government should keep its hands off private economic affairs.
Liberal classicism is premised on the idea of an homo economicus , or economic man .
The rational economic man was a theoretical device or concept by which the classical economists endeavored to distill the natural laws of economic behavior. He plays the dominant role in Say's Law and the Quantity Theory of Money , two of the three pillars on which liberal classicism is grounded. The third pillar is the Price-Specie Flow Mechanism enunciated by David Hume before the Quantity Theory was espoused.