Margaret Thatcher, it is said, used to carry a copy of The Wealth of Nations in her handbag. It's an apocryphal story but highlights the fact that the deregulation of the 1980s was often undertaken in Adam Smith's name. Yet reading it today, 229 years after it was published, the most striking feature of the book – after its crystal-clear discursive style and moments of dry wit – is the fact that Smith's major work creates a system by which capitalist society can be examined as much as providing a clear hypothesis on the nature of the society itself. The ostensible task of the book, divided into five parts, is to explain why some nations are rich and some aren't but in doing so, Smith has to first create a whole new grammar of political economy.

Among many other things, Smith posits his hugely influential theory of value, describing wages and profit not as rewards but as compensation for the trouble taken in producing or financing a risky strategy. His historically specific remarks, on the other hand, are overlooked. He describes the British defence of the American colonies as pointless and attacks the self-interest of the land-owning classes. The Wealth of Nations is debated by every generation of economists because it provides a systematic examination of the economic cycle as a whole.

Yet post-Thatcherite commentators such as Andrew Skinner have criticised previous generations for divorcing Smith's economic system from his moral philosophy. Indeed this approach gets closer to the fundamental dilemma at the heart of Smith's work and of capitalist society in general: how can we be protected from being corrupted by the special interests that are an integral part of our political economy? After The Wealth of Nations Smith attempted to answer this question with a history of jurisprudence but he burned the incomplete work just before he died.

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