Adam Smith, A Scottish professor, was the first to explain how the free enterprise system works in a book, The Wealth of Nations. He explained how production benefits from the division of labor, in which workers specialize in particular steps of the production process. He also explained how the laws of supply and demand determine prices and production. Inefficient producers go out of business, and only those producers who make the best goods and sell at the best prices survive. In this way, the entire economy benefits. According to Smith, each person pursues his or her own interests in a free enterprise system, but an "invisible hand" guides individual actions so that they actually work for the common good. Smith attacked the restrictive system of British mercantilism, which had led the American colonies to declare their independence. Smith thought mercantilism was a waste of resources, encouraging the inefficient production of goods. Smith favored a government "hands-off," or laissez-faire, policy.