On this day in 1759, Adam Smith published The Theory of Moral Sentiments. It is argubly his greatest book.

It was not the later Wealth of Nations, but this work on ethics and human nature, which made Adam Smith's career. The sensation of its age, it sold out in weeks. The prominent politician Charles Townshend was "so taken with the performance" (says David Hume) that he hired Smith as tutor to his stepson, the Duke of Buccleuch, luring Smith away from his professorship at Glasgow with the princely offer of £300 a year for life.

What is the basis on which we approve some actions and condemn others? The accepted wisdom was that our rulers should decide. But there was a growing view that moral principles could be worked out rationally, like the theorems of mathematics. Smith, however, took a completely new direction, holding that people are born with a moral sense, just as they have inborn ideas of beauty or harmony. Our conscience tells us what is right and wrong: and that is something innate, not something given us by kings or rationalists. And we also have a natural fellow-feeling, which Smith calls "sympathy". Between them, these natural senses ensure that human beings can and do live together in orderly and beneficial social orders.

So our morality is the product of our nature, not our reason. And Smith would go on to argue that the same 'invisible hand' created beneficial social patterns out of our economic actions too. The Theory of Moral Sentiments established a new liberalism, in which social organization is seen as the outcome of human action but not necessarily of human design – a point which socialists forget, to their cost.

Another prominent politician of the age, James Oswald, reported that he did not know whether he had "reaped more instruction or entertainment" from The Theory of Moral Sentiments. So open it up. You might well be instructed... but immerse yourself into Smith's elegant prose and you will certainly be entertained.