The purpose of this paper was to show that Adam Smith (1729–90) contributed significantly to the development of language typology and, as a corollary, to demonstrate the connection between Smith’s and the German theory. For this purpose, Coseriu analyzed Smith’s ideas on language typology as he developed them in his Dissertation (1761). There, Smith presented a bipartite system grouping languages into compounded and uncompounded languages. The article evaluates from a contemporary vantage point, Smith’s system and offers the following observations based on three criteria: (1) structural: Smith’s principle is still valid: The simpler the composition, the more complex the case endings, and vice versa; (2) general-evolutionary: Smith does not always presuppose language mixing as a cause for language change; (3) concrete-historical: Regarding language change, Smith believes that periphrasis is the result of imperfect second-language learning. He also believes that structural change in language is a gradual change. In addition, Coseriu analyzes A. W. Schlegel’s ideas on language typology as he developed them in his Observations (1818). Comparing Schlegel’s presentation with that of Smith, the author arrives at the following conclusions: All of Smith’s theories on language typology reappear in Schlegel’s work. Beyond that Schlegel contributed additional insights, such as the assumption that the mixing of two synthetic languages will result in an analytic language; the introduction of new terminology (e.g., the terms synthetic and analytic); and the expansion of the analytic method by adding other parts of speech (articles, for instance). As a result of these findings, the conclusion is made that A. W. Schlegel changed Smith’s theories as follows: (1) The theories become enlarged and better founded. (2) Smith’s typology was reduced to a single language classification; i.e., Smith’s classification now becomes a subdivision of inflected languages into synthetic and analytic.