"The Wealth of Nations" was published in 1776, a year usually associated with America
Adam Smith was the first modern economist. Thus, his publishing of "The Wealth of Nations" in the year 1776 is often seen as symbolic. Like the American war of independence, "The Wealth of Nations" was a revolution - not in politics or war, but in economic thinking. It is the first modern work on economics, and is rightly respected today for its influence ... and brilliance.
But Adam Smith was a Scotsman, and was thus British
But because the symbolism of the year is associated with America, it's easy to assume that Adam Smith was an American. Actually, he was a Scotsman, and was thus British - a citizen of the very mother country we were at war against. Because of this, you might think that he was unsympathetic to our war of independence. But as someone who has studied "The Wealth of Nations," I can tell you that this is not the case. He actually was sympathetic with the American Revolution, and I can prove this with some quotes from the book.
Nonetheless, he advocated giving the colonies representation in Parliament ...
Adam Smith actually advocated giving the colonies representation in Parliament. This was one of the colonies' chief complaints at this time - that they were being taxed by a Parliament in which they were not represented. (The popular slogan of the time: "No taxation without representation.") Adam Smith was sympathetic to this complaint, and advocated that they be represented in Parliament.
Parliament of Great Britain
Great Britain should allow representatives in proportion to financial "contribut[ions]"
Here are the relevant quotes:
"The parliament of Great Britain insists upon taxing the colonies; and they refuse to be taxed by a parliament in which they are not represented. If to each colony which should detach itself from the general confederacy, Great Britain should allow such a number of representatives as suited the proportion of what it contributed to the public revenue of the empire, in consequence of its being subjected to the same taxes, and in compensation admitted to the same freedom of trade with its fellow-subjects at home; the number of its representatives to be augmented as the proportion of its contribution might afterwards augment; a new method of acquiring importance, a new and more dazzling object of ambition, would be presented to the leading men of each colony." (Source: Book IV, Chapter VII, Part III)
Battle of Bunker Hill, 1775 (the previous year)
It is not very probable that the Americans "will ever voluntarily submit to us"
Later in the paragraph, he continues:
"Unless this or some other method is fallen upon, and there seems to be none more obvious than this, of preserving the importance and of gratifying the ambition of the leading men in America, it is not very probable that they will ever voluntarily submit to us; and we ought to consider, that the blood which must be shed in forcing them to do so, is, every drop of it, the blood either of those who are, or of those whom we wish to have for our fellow citizens. They are very weak who flatter themselves that, in the state to which things have come, our colonies will be easily conquered by force alone. The persons who now govern the resolutions of what they call their continental congress, feel in themselves at this moment a degree of importance which, perhaps, the greatest subjects in Europe scarce feel. From shopkeepers, trades men, and attorneys, they are become statesmen and legislators, and are employed in contriving a new form of government for an extensive empire, which, they flatter themselves, will become, and which, indeed, seems very likely to become, one of the greatest and most formidable that ever was in the world." (Source: Book IV, Chapter VII, Part III)
John Trumbull's Declaration of Independence
But this was not his ideal solution - he wanted to give the colonies their independence
But in the mind of Adam Smith, this was not the ideal solution - just one he thought more likely to be implemented than his preferred solution. What he truly wanted was to give the colonies their independence. The fact that he was a British citizen saying this in 1776 is remarkable, as most British people at that time were sympathetic to crushing the rebellion. But Adam Smith actually advocated giving the colonies their independence.
The British will not "voluntarily give up [their] authority" over the colonies ...
Here are the relevant quotes:
"To propose that Great Britain should voluntarily give up all authority over her colonies, and leave them to elect their own magistrates, to enact their own laws, and to make peace and war, as they might think proper, would be to propose such a measure as never was, and never will be, adopted by any nation in the world. No nation ever voluntarily gave up the dominion of any province, how troublesome soever it might be to govern it, and how small soever the revenue which it afforded might be in proportion to the expense which it occasioned." (Source: Book IV, Chapter VII, Part III)
Independence Hall, Philadelphia
... but it would be to their advantage to do so
Later in the paragraph, he continues:
"If it was adopted, however, Great Britain would not only be immediately freed from the whole annual expense of the peace establishment of the colonies, but might settle with them such a treaty of commerce as would effectually secure to her a free trade, more advantageous to the great body of the people, though less so to the merchants, than the monopoly which she at present enjoys. By thus parting good friends, the natural affection of the colonies to the mother country, which, perhaps, our late dissensions have well nigh extinguished, would quickly revive. It might dispose them not only to respect, for whole centuries together, that treaty of commerce which they had concluded with us at parting, but to favour us in war as well as in trade, and instead of turbulent and factious subjects, to become our most faithful, affectionate, and generous allies; and that same sort of parental affection on the one side, and filial respect on the other, might revive between Great Britain and her colonies, which used to subsist between those of ancient Greece and the mother city from which they descended." (Source: Book IV, Chapter VII, Part III)
Conclusion: Adam Smith was all right with the American Revolution
So in summary, Adam Smith advocated either giving the colonies representation in Parliament, or giving them their independence. He was quite sympathetic to the American Revolution, which says a lot for both his good judgment and his historical reputation.
Why Adam Smith is still relevant today