What do an 18th-century economist and a 21st-century tech billionaire have in common? At first glance, not much. Adam Smith’s The Wealth of Nations (1776) and Peter Thiel’s Zero to One (2014) were written in wildly different eras—one during the rise of industrial factories, the other in the age of Silicon Valley unicorns. Yet, both books tackle the same big questions: How is wealth created? What drives progress? And what’s the best way to build a thriving society?

For entrepreneurs and political minds, these two works offer timeless (and sometimes provocative) insights. Let’s dive into how Smith and Thiel compare, contrast, and—most importantly—how their ideas can shape the way you think about business and policy today.

The Quick Rundown: What Are These Books About?

• The Wealth of Nations by Adam Smith: This is the book that laid the foundation for modern economics. Smith argues that wealth isn’t about hoarding gold but about producing goods and services. His big ideas include the division of labor (breaking work into specialized tasks to boost efficiency) and the invisible hand (the magic of markets, where individuals pursuing their own interests unintentionally benefit society). Smith’s world was one of early factories and global trade, and he believed free markets, with minimal government interference, were the key to prosperity.
• Zero to One by Peter Thiel and Blake Masters: Thiel, co-founder of PayPal and early Facebook investor, isn’t interested in tweaking what already exists. He wants you to create something radically new—something that takes you from “zero to one.” His book is a manifesto for entrepreneurs, urging them to build monopolies through innovation (think Google or Amazon) rather than competing in crowded markets. Thiel’s worldview is shaped by the tech boom, and he’s skeptical of anything that smells like conformity or stagnation.

Where Smith and Thiel Agree: Value Creation and Efficiency

Despite their different contexts, both Adam Smith and Peter Thiel are obsessed with creating value and critiquing inefficiency.

• Creating Value:
  • Smith: Redefined wealth as the production of goods and services, not the accumulation of precious metals. For him, a nation’s prosperity hinges on its ability to produce efficiently.
  • Thiel: Echoes this but with a twist: he wants you to create something so unique that it stands alone. “Don’t just build a better mousetrap,” he might say. “Build something no one knew they needed—like the iPhone.”
• Critiquing Inefficiency:
  • Smith: Railed against mercantilist policies (like tariffs and monopolies) that stifled trade and innovation in his time.
  • Thiel: Takes aim at modern “me-too” businesses that copy others and compete in race-to-the-bottom markets. He sees excessive competition as a waste of resources—why fight over a slice when you can own the whole pie?

Where They Diverge: Competition, Innovation, and the Role of Government

Here’s where things get interesting—and where entrepreneurs and political thinkers might find themselves picking sides.

• Competition: Friend or Foe?
  • Smith: Competition is the hero of his story. It keeps prices fair, quality high, and innovation humming. For Smith, a market with many players is a healthy market.
  • Thiel: Competition is for losers—literally. Thiel argues that competing in existing markets leads to slim profits and burnout. Instead, he wants you to build a monopoly by creating something irreplaceable. (Don’t worry, he’s not talking about the bad kind of monopoly; he means being so good that no one can compete.)
• Innovation: Evolution or Revolution?
  • Smith: Innovation, for Smith, is about gradual improvements. His famous pin factory example shows how breaking tasks into smaller steps can dramatically boost productivity. Think of it as optimizing what’s already there.
  • Thiel: Forget incremental gains. Thiel wants you to make something radically new—something that changes the game entirely. PayPal didn’t just improve banking; it reinvented how we think about money. That’s zero to one.
• The Role of Government:
  • Smith: Government should stay out of the way, mostly. Its job is to enforce contracts, protect property, and provide public goods like infrastructure. Beyond that, let the market work.
  • Thiel: Government barely gets a mention in Zero to One. Thiel’s focus is on private enterprise, and he’s critical of bureaucratic red tape that stifles innovation. That said, he’s not explicitly anti-government—he just doesn’t see it as the main driver of progress.

Real-World Examples: From Pins to PayPal

Let’s bring these ideas to life with some examples:

• Smith’s Pin Factory: In The Wealth of Nations, Smith marvels at how dividing labor in a pin factory—where one worker draws the wire, another straightens it, a third cuts it—can produce tens of thousands of pins a day. This is efficiency through specialization, and it’s the backbone of industrial growth. Today, you see this in assembly lines, from cars to smartphones.
• Thiel’s PayPal: Thiel didn’t just build a better bank; he created a new way to move money online, solving a problem few even knew existed at the time. PayPal’s success came from rejecting competition and carving out a unique space. It’s the epitome of going from zero to one.

The Political Angle: Capitalism, Libertarianism, and Beyond

For political minds, these books aren’t just about business—they’re about ideology.

• Smith’s Legacy: His ideas underpin classical liberalism and free-market capitalism. He’s the intellectual godfather of policies that favor deregulation, open trade, and limited government intervention. If you’re a fan of laissez-faire economics, you’re walking in Smith’s footsteps.
• Thiel’s Influence: Thiel is a Silicon Valley libertarian with a contrarian streak. His disdain for competition and embrace of monopoly power have sparked debates about antitrust laws and the role of big tech. Politically, he challenges both the left’s skepticism of wealth and the right’s love of competition, making him a fascinating (and sometimes polarizing) figure.

So, What Can You Learn from Smith and Thiel?

• For Entrepreneurs:
  • From Smith, take the lesson that efficiency and specialization can scale your business. Break down tasks, optimize processes, and let the market guide you.
  • From Thiel, remember that true success comes from boldness. Don’t just compete—innovate. Build something that can’t be copied, and you’ll own your market.
• For Political Minds:
  • Smith’s vision of free markets and limited government still shapes policy debates today, especially around trade and regulation.
  • Thiel’s ideas push you to think about how innovation policy, antitrust laws, and even education can foster (or hinder) the next big breakthrough.

The Big Takeaway: Optimize or Invent?

Adam Smith and Peter Thiel represent two sides of the same coin. Smith teaches us how to optimize what exists—how to make the machine run smoother. Thiel urges us to invent something entirely new—to break the machine and build a better one.

As an entrepreneur, you need both: the discipline to refine your operations and the audacity to disrupt your industry. As a political thinker, you’re left with a question: How do we create systems that encourage both efficiency and innovation in a world that’s changing faster than ever?

Maybe the answer lies in reading both books—and then writing your own chapter.

Tags: Adam Smith, Peter Thiel, The Wealth of Nations, Zero to One, entrepreneurship, innovation, free markets, wealth creation, political economy