This paper is designed to examine Smith’s view of colonial relationship and
policy in respect of economic progress. Smith applies to colonial problems in
the 18th century his theories of economic development, which have three
dimensions of society, polity and economy. In Smith’s view of development,
political, legal and cultural factors as well as economic forces such as the
division of labor and technical advance affect economic progress and interact
over time. In this vein Smith stresses that the moral and social principles of
justice, liberty, security and equality are critically fundamental in
understanding the secular performance of an economy, and that social and
economic welfare of a nation increases in case a set of laws based on those
principles is properly set up and enforced. This story may provide significant
implications for a historical study of Japanese colonial rule over Korea.