The Wealth of Nations, Books 1-3 (2024)

Three things happened in 1776.

1. The Revolutionary war started (Declaration of Independence).

2. Watt's first steam engine powered Wilkinson's
iron foundry blowers.

3. Adam Smith published "The Wealth of Nations".

The Wealth of Nations is not an easy read, but it is the best, most truthful look at industrial and geopolitical finance, capitalism and free-market functionality ever written.

If you have ever wondered why something that occurs in some far off land can have an economic impact felt round the world, then the answer can be found in this book.

В началото бе ... Адам Смит. (Не Адам и Ева)

Какво да дадеш на бащата на модерната икономика - даваш му 5 шилинга ... така де, 5 звезди.
Също като Дарвин, наричан бащата на еволюцията, нито икономиката започва с единия, нито еволюцията с другия, а по-скоро и двамата систематизират умело наблюденията си и в крайна сметка са първите доложили ги върху хартия структурирано. И в двата случая има и други съвременници, които са наблюдавали и разсъждавали върху същото, но - кой превари, той остава в историята! Това е силата на книгата.

Друга прилика е, че magnum opus-ът и на двамата е известен с някакво съкратено име. По онова време не са били такива фенове на съкращенията, каквито сме ние днес. Цялото наименование на книгата е "An Inquiry into the Nature and Causes of the Wealth of Nations". Съставена е от лекции, които Смит е преподавал в Глазгоу. Публикуването ѝ съвпада с Декларацията за Независимостта на САЩ, така че в самата книга ще четете за Северна Америка като за колонии на Великата майка Британия. XVIII век Британия наистина е в епогея си и освен, че контролира половината свят, флагмен е на индустриалната революция, това може да се разбере и по издадените в това време книги - две вече споменати в това ревю. Лондон, разбира се е топ локацията на планетата - всичко интересно се случва там, но виждаме и че в Шотландия се мисли по глобалните теми. Имате шанс да Ви преподават такива хора като Смит.

Книгата е разделена на 3 книги. Има издания и с различна подредба и дължина, това специално е 3 книги:

1-вата е основно за разделението на труда и как то е позволило да се произвежда много повече, съответно да се потребява повече. Като говорим за разделение на труда, не го мислете като в съвременните фабрики, или дори тези от 19-20 век. Примерите са за ковач, който прави само и единствено пирони. Той не е истински ковач дори, но може да прави много повече на брой пирони от пълнокръвен опитен ковач. Защото прави по цял ден само това. Говори се и за заплатите. Дават се интересно примери с колониите в Северна Америка и паралел със застиналата във времето Китай, обвзета от безгранична бедност и затворена в себе си. Сведенията на пътешественици не се различавали от тези на Марко Поло отпреди 500 г. - страната един вид е 'замръзнала" в развитието си. Кажете как после хитрият англичанин да не се възползва от това положение ...

2-рата част винаги ми е била най-скучна. Тук си е нещо като "Основи на икономиката" - цени, капитал, видове капитал, монополи ... сещате се. Учебникарската част.

3-тата книга е основно за международната търговия. Прави се исторически и социален преглед на нациите ... само че имайте предвид, че за британец от XVII век нациите са: Тази на острова, Франция, Холандия, Португалия ... общо взето това са. Да, споменават се Отоманите и Китай като пример за изостанали, поради външнотърговската си изолираност. Затворени в себе си, се обричат. Русия е спомената само май само в едно изречение, че Китай им отказвал търговия. Исторически се говори за нациите по Средиземно море, за Египет и с някакво непознато за мен наименование на Индия. Колониите и ... Това е светът за британеца :) Вероятно е бил прав. Поне за себе си и сънародниците. Като притежаваш и черпиш ресурси от половината свят, признаваш за нация само, който държи останалата половина. Именно изброените малко по-горе.

Трябва да призная, че книгата е по-интересна от днешните учебници по Икономика. По-философска и социална. Имайте предвид също, че по това време за оценк�� на стоки, блага, търговия и капитали се визира добивът от мините, от земеделието и труда на занаятчиите. Това е производството. Не говорим за автомобили, а за карети. Няма развит бърз транспорт, има корабна навигация. Дори само това пренасяне в духа на онова време си заслужава прочита. Прелиствал съм я като студент, но определено ми беше интересно да се върна в началото на модерния свят. Толкова, че я изгълтах за ден и половина - два.
Ако сте я пропуснали - не я пропускайте. Тя е като да се върнеш назад във времето и да гледаш как се излива бетонът за къщата, в която живееш от малък.

В същото време, дебатът днес е дали още важат принципите, описани от Смит? Привидно - да. Обаче започват и да буксуват, икономиките не могат да поддържат вечен ръст, или дори цикличност. Да не говорим за ръст с бързи темпове - няма нови земи и безчет колонии, които да бачкат за теб. Дошло е време за друго мислене. Много хора го наблюдаваме, така че неизбежно някой ще седне да го систематизира върху хартия. Без значение кой ще е първият, макар и той да остане в историята.

П.С. Да кажеш, че Адам Смит е икономист е малко като да кежеш, че Исус Христос е християнин.

"The Wealth of Nations" by Adam Smith is a collection of three books on different subjects in economic theory, marketing philosophy and economics. All of these books contain numerous subjects. The first book is titled "Of the Causes of Improvement in the productive Powers of Labour". This book talks about the division of labor and how certain professions buy and sell more and have a greater output in a market. This book also talks about the importance of stock and wages in a company. The second book is titled "Of the Nature, Accumulation, and Employment of Stock". This talks about stock accumulation and interest. The third and final book is titled " Of the different Progress of Opulence in different Nations". This book describes the importance of markets in growing infrastructure of a nation.

There are no main characters in this book. It is a compilation of multiple theories and writings, written by Adam Smith and other famous economist at the time.

The settings takes place in England and Scotland during the Scottish Enlightenment in 1776. This was a time of great economic growth throughout Britannia. Smith also compares the economy of England to countries such as France and Brussels during the same time period.

Smith's theme is that good markets and trade, lead to a greater world and a better growing nations. This is evident by his comparisons of the Scottish and English people and their standard of living.

I thought this was a great book to read if you are interested in business or economics. I would recommend this to a college reading level who are majoring in business or financing.

"Wealth of Nations - Book 1 to 3" by "Adam Smith" is one of the most popular treatise on economics,I have read and maybe that I ever will read. Adam Smith has been considered as the father of Modern Economics. Well, in the first 3 books which I have read now, there is a myriad knowledge on Economics which is quite relatable to the present day world. Although, this book has been written around 1770's but still much of it's principles are applicable even today. The reason I conclude for this is maybe because with time the prime businesses change but the way of handling a business never changes, whether it's the 18th century or the 21st century it always remains the same. This book sure can develop good business sense among beginners. Where on contrary I never wish to be a business person or ever get involved in business activity. *smile*

Now coming to some of the information regarding economics I have gained from this book. Ah.. its quite a bit difficult to start. There was so much in this book that I don't know where to begin from.

So, the first three books of Wealth of Nations deal about the division of labor and how it has reduced the pressure, simplified life and has enabled man to produce more goods in the same period of time with the same amount of workforce.

Division of labor has indeed simplified life a human in a society. Firstly, there is lesser work pressure on a single person which gives him the opportunity to improve on his skills. Secondly when there was no division of labor like in the case of single weaver, spinner or the tailor, there was wastage of time and there was lesser productivity.

Now, coming to why states where there are more people into primary activities are still developing and states where more people are into secondary and tertiary activities are developed. Well, its because in agriculture, the same farmer ploughs the field, harrows it and does all the work on it. But lets take for example in garment industry, there is division of labour where there is a weaver, a spinner, a tailor and more divisions. There is more productivity and more revenue is generated. Although, this view might be wrong in some cases, but it fits with most.
Now, how does division of labour increases the efficiency. A single nail maker can produce maximum, thousand nails in a day. But ten nail makers when they divide the work can produce four Pounds of nails in a day. A Pound is equivalent to 12000 nails. Hence total production would be 48000 nails. Per person efficiency would calculate to 48000 divided by 10, which is equals to 4800 nails per person.

There are three main parts which make up the total selling price of an item. They are: the profit, the rent and the wages of the labour.

Now, the real cost that is, the price at which an item is prepared is known as its Natural price. The price at which an item is sold is known as its Actual or Market price.

The market price depends on competition in the market. If there is more need of products in the market than the products, then automatically, the market price would be higher than the natural price. If there is lesser need of products in the market than the products, then automatically, the market price would go below the natural price of the commodity.
But if the supply and demand are at level, then market price would be equal to the natural price.
But in either of the last two situations, the businessperson would be a loser in the trade. Only in the first situation would he will make profit.

Well, there is a very renowned phrase of this book:
"It is not from the benevolance of brewer, baker or butcher that we expect our dinner but from their regard to their own interest"
Smith says that we address ourselves not to their humanity but to their self-love and never talk to them of our own necessities but of their own advantages.

The profit on a commodity depends on the following:
1) variation of price in the basic materials required to make the finished commodity.
2) good or bad fortune of both his rivals and his customers.
3) accidents or happenings ( this is more to be left in god's hands )

Then Smith describes the circulating capital and the fixed capital. The circulating capital of a person is one which he further invests in the trade while the fixed capital is the one which a person buys and is valuable to him but he doesn't sells it or doesn't further trade it.

Then comes the gross revenue and net revenue. The gross revenue is the whole of produce of the land and labour. The net revenue is the profit gained out of a transaction and can also be called the real wealth of a person. My definition of real wealth would be some thing different. *smile*

The gross rent is the rent given by farmer to the landlord and the net rent is the profit that the landlord has really gained after giving all the maintenance and wear and tear of the property.

There was so much in the book that I don't even remember right now. But surely, very interesting, but a little too long. Anyways, very educating and worth the time for someone interested to understand Commerce & economics. *smile*

Nandini Goel

I feel like I’m incredibly upset by modern day capitalism. I’ve had a number of jobs where I am competent and able to accomplish the responsibilities given to me, but then a company hires someone above me who generally feels insecure and begins calling me names. I can’t tell you the number of times I’ve been bluntly called stupid before someone even met me.

All I want is an 8 to 4 job where I can work on my personal projects and not be called stupid while working, and I’m now working upwards of 60 hours per week trying to turn that into a reality because, while I love my current job and my boss (who is one of the coolest people I’ve ever met), I know when we start to make more revenue, another insecure person who is charismatic will be hired and call me stupid.

I had to read this book to understand why this keeps happening to me and those around me. Where does the basis come from? Where does the pure audacity come from to call someone stupid? Solidarity doesn’t have to be a dirty word. We can make a f*ck ton of money together however you think we should, but it’s just standard in my field to cull former teams to gain authority and put new people in the department who won’t question you.

I watched a new boss only months ago fire and entire team because of this and claim no one was as smart as he was.

I’m sorry, but this book explains exactly why this is. There are moments where it gets a bit boring like why countries use one metal in coins over others and why they couldn’t bring those coins out of the country, but in other parts he describes how to providing the working class with more or less food to control population growth and how education helps separating the working from the ruling class. It’s everything I hate about capitalism explained by someone who worships it.

One day, I’d love to have my own small business and make enough money to provide everyone with enough to live on. I want it to be a safe haven from people thinking they’re good enough to call me an idiot, because, in the end, we’re both working class. Middle class is a lie and doesn’t exist, so it doesn’t make sense that we can’t work together to stabilise our market conditions together.

Some might read Adam Smith for guidance on the economics of today, and that would be a poor idea. It's more interesting, especially in this condensed form, as a record of an eighteenth century worldview, and an opportunity to reflect upon the way old worldviews insinuate themselves into the baseline assumptions of later perspectives.

Smith's economics are primarily concerned with the production and consumption of stuff, which is as good a place to begin as any, since we humans do require certain amounts of stuff to live, and to live comfortably, and to live ostentatiously. Naturally, all economics is about more than just stuff; but it is interesting to see how easily Smith moves between talking about raw quantities of goods and the quantity of humans that can be "maintained" by them. One can almost feel how, getting too deep into the mathematics, an economist might forget there's a qualitative difference between the two sides of an equal sign.

Smith has a great many thoughts about how to make more stuff, and what kind of stuff contributes most to prosperity. He wonders at what the social and political changes of (his) recent history have made possible, and while his capitalism is not the same thing as the monster that presently stalks our livelihoods, he seems to think that the merchants of his day had stumbled into something marvelous. His best known observation, the role of the invisible hand, illustrates something fundamental about his worldview: that Europe was prospering due to forces it had not consciously arranged, but which they were uniquely positioned to harness in unprecedented fashion. It's a version of the Providence mythology European and American intellectuals were so fond of in the good old days, and it works better the less you really know about non-European cultures - especially those of indigenous America.

It's too much to expect a contemporary writer to really grasp everything going on in their own time. It's also somewhat presumptuous for a reader from over two hundred years in the future to second guess them, but we have in fact learned a few things in the meantime.

Completely outdated reading. This book is only interesting from a historical perspective. Most of the economic concepts presented in this book are very elementary and generally well known to most people, such as supply and demand, the free market, the use of capital, etc. Adam Smith spends a lot of time analyzing archaic topics like the price of a bushel of corn relative to other commodities, and complains about governments borrowing amounts of money that are laughable when compared to what governments borrow today.

This book was written in the 1700's, so most of today's economic system wasn't even dreamed about yet. No stock markets, floating currencies, home mortgages, etc., etc. Manufacturing was relatively new, so a lot of this book is focused on agriculture, which is now a small part of most economies. And the writing is relatively preachy and tedious. This book just isn't worth the time it takes to read it.

The first few chapters are great. Smith grapples with many of the issues economists still talk about today. He lost me in his meticulous attempt at measuring the price of silver and corn over the centuries. Worth a read for the historical significance, but be prepared to skim heavily!

i dislike ducks

Sweeping in scope, excruciating in detail. There is something for everyone, but everything for no one. Who indeed could have equal interest in the changing price of corn, the theory of political economy, the principles of economics, trade policy, and the advice for support of state for church? A magisterial work no doubt, but not one for the modern reader. Why I read it myself is not perfectly clear.

What is this book about?
This book is basically about the fundamentals of what we today call capitalism, the free market economy and ‘the invisible hand’.

It is a very long and boring book. However the way Smith uses mathematical examples as well as anecdotes makes the reading bearable.

In the 18th century employers had the understanding that underpaying laborers was good for business but the writer refuted this practice saying:
We have pay the workers more than their basic needs, so that they can spend on the goods thus increasing the consumer base for goods sold by the employers. Also the workers being paid more could educate their children thus creating a better pool of employees in the future.

Adam Smith was on the side of less or negligible government interventions in prices and interest rates, introducing the readers with the ‘free market forces’ or the ‘invisible hands’ that would bring them under a dynamic equilibrium.

In contrast Karl Marx’s ‘Das Kapital’ which is the basis of communism, strongly advocates that the government intervenes in everything about the economy.

Key takeaways
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The central thesis of Smith's "The Wealth of Nations" is that our individual need to fulfill self-interest results in societal benefit, in what is known as his "invisible hand".

This, combined with the division of labor in an economy, results in a web of mutual interdepencies that promotes stability and prosperity through the market mechanism.

Smith rejects government interference in market activities, and instead states governments should serve just 3 functions: protect national borders; enforce civil law; and engage in public works (e.g. education). When governments grant subsidies or monopolies to favoured producers, or shelter them behind tariff walls, they can charge higher prices. In essence the governments job is to create a secure environment to do business.

The radical thinker
The prevailing concept of how nations become rich was:
Hord as much gold and silver as possible
Increase export as much as possible
Resiste imports as much as possible

Adam Smith prescribed:
To allow free flow of exports and imports
The measure of wealth is not gold or silver but the flow of goods and service that we later called gross domestic product (GDP). Thus Adam Smith was the founder of GDP as a concept.

Now just think about it. How revolutionary his thought was!

Specialization and competitive advantage
Although it sounds common sense today, in those days self-sufficiency was the norm, meaning someone grew vegetables and everything himself , even making pins. But Adam Smith with a funny story of a pin maker illustrates how he by specializing in this particular trade, he can benefit more as well as the economy.

Countries should do what they are best at, and trade their products. Restrictions on international trade inevitably make both sides poorer.

To drive home the damaging nature of tariffs, Smith used the example of making wine in Scotland. He pointed out that good grapes could be grown in Scotland in hothouses, but the extra costs of heating would make Scottish wine 30 times more expensive than French wines. Far better, he reasoned, would be to trade something Scotland had an abundance of such as wool, in return for French wine
Investing
Adam Smith recommends that people should invest part of their earnings back to grow their business instead of spending it all. Again to that end the government must make a secure environment where businessmen have the confidence that they will be able to enjoy the fruits of their sacrifice or investment in the distant future. Also the governement should ease on taxation to allow investing.

Enlightened Self-Interest
In his famous example, a butcher does not supply meat based on good-hearted intentions, but because he profits by selling meat. If the meat he sells is poor, he will not have repeat customers and, thus, no profit. Therefore, it's in the butcher's interest to sell good meat at a price that customers are willing to pay, so that both parties benefit in every transaction. Smith believed the ability to think long-term would curb most businesses from abusing customers. When that wasn't enough, he looked to the government to enforce laws.

Solid Currency and Free-Market Economy
The third element Smith proposed was a solid currency twinned with free-market principles. By backing currency with hard metals, Smith hoped to curtail the government's ability to depreciate currency by circulating more of it to pay for wars or other wasteful expenditures.

However this concept of the ‘gold standard is’ not currently used by any government. Britain stopped using the gold standard in 1931, and the U.S. followed suit in 1933, finally abandoning the remnants of the system in 1973.

Conclusion
Adam Smith overturned the miserly view of mercantilism or protectionism (using tariffs) and gave us a vision of plenty and freedom for all. The free market he envisioned, though not yet fully realized, may have done more to raise the global standard of living than any single idea in history.

How is it useful to you in your :
Life
x

Business
x

Careers
The knowledge of this book is so common knoweldge today that we don’t ask where it came from. However if you have read this review it will help you a lot in your career because you will be able to impress people with your knowledge of the fundamentals of capitalism and thus economics.

Conclusion

Frankly I could not complete reading this book. I think I left it half way or 2/3rd. The old long winded English of those days gets on your nerves. But even reading this much I got a good idea of the greatness of this book and the writer. Such minds and such works are rare.
However I am very happy with this book review because I wrote it for myself in order to but a cap on my incomplete contact with this great man’s work. I am happy now that I understood and remember all the main points from this book.

I hope you too found this review succinct and useful.

My life

As for my business and work life, this week I just realized that I had become distinctively older in my strategies that is I am more tolerant, thinking more long term.

Whereas before work was a dopamine game now it is more for endorphin. Let me explain. Before like a driven ambitious young man work was to get a kick through higher pay, more challenges, more kick. But now I think like a older man wiser, slower, having forsaken ambition and embraced usefulness to others. In this way now my motivation is to leave a legacy behind even if it means less or even no pay. It also means I am willing to get bored, wrong, fail, change if it is required for the greater good. Gee. I am getting old.

Ég hef nokkuð blendnar tilfinningar í garð þessarar bókar því hún er samtímis mjög áhugaverð og ein leiðinlegasta bók sem ég hef lesið. Margar af kenningunum sem koma hér fram eru auðskiljanlegar og fylgir þeim góð og ýtarleg röksemdafærsla. Hinsvegar vantar upp á alla ritstýringu þar sem sömu röksemdafærslunum er kastað upp aftur og aftur án þess að neitt nýtt komi fram, þá má einnig nefna hinn stórgóða kafla "útúrdúr um verð silfurs síðastliðin 400 ár" sem spannar heilar 80 blaðsíður og er með öllu óskiljanlegur ef maður hefur ekki fullan skilning á mælieiningum endurreisnar Bretlands en sá vandi er á fleiri stöðum en í þessum langa kafla.

Veit ekki alveg af hverju nokkur maður myndi lesa þetta nema af einskærri forvitni eða í leit að götu orðstír.

It’s not an easy read, language being of 18th century and due to no availability of infographics at that time. Dr. Smith does wonderful job of creating lectures to tell you what factors help grow economy and how nations are differing in their progress.
When you read it, you find the collective wisdom on economy in the pages of the book. It is the book which will resolve your doubts and ready your fundamentals. Read it once! Read it twice!

even the ming novel dream of red chamber has a more sophisticated theory of economics, human nature, and property than this sh*t.

A historic and classic work, of course. However, quite boring in parts.

Would recommend reading the first 6 or 7 chapters in book 1 along with books 2 and 3 to glean what you may from the most famous, well-known, and practical sections. The last half of book 1 (about 100 pages) merely concerns the historical value/ price of silver, rent of land, and various types of produce; books 4 and 5 detail many aspects of the mercantile system; interesting, I suppose, if you are the right type of person.

Whereas I was originally hesitant to engage with this text, although Noam Chomsky, that genius among the rabble, encouraged me to do so at age 19, less than a year prior to my traumatic brain-injury, I found that this book made progressively more sense to me the further I delved into it. In this respect I found The Wealth of Nations to be similar to Karl Marx's Capital, which in my view resembles the symbolic production of evolutionary history or the mirror-stage of Adam Smith's economic treatise. After reading this book, all I can be sure of is that, personally, I come from a time where there was a synonymity between scholarship and beggary, where people had the wealth of Christ in their lives rather than the overabundant plenitude of exchange credits, and where society was regulated by the great chain of Being rather than shaped by the explosive catalepsies of production of consumption. Yes, I'm still here, posting directly on Goodreads most of the time. Mike Rothbaum, this one's for you!

una de las obras mas relevantes de la economia clasica, la piedra donde se basan varias ideologias economicas. smith explica varios conceptos basicos de como funcionan los mercados, como funciona el dinero y como este se mueve dentro de la economia.

I'm not going to rate this edition because I didn't read it. I only read from Book One of this Adam Smith book. It seems like old-fashioned economics, but I'm sure many of its principles are relevant today.

Biography of the Author:

Adam Smith was a Scottish economist and philosopher during the Scottish Enlightenment and is considered a pioneer in political economy. He is often called "The Father of Economics" or "The Father of Capitalism". He authored two influential works - The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776) - with the latter being regarded as his magnum opus. It was the first comprehensive and modern work that treated economics as an academic discipline and provided insights into various economic theories, including Smith's idea of absolute advantage.

Smith believed that the distribution of wealth and power should be explained through natural, political, social, economic, and technological factors and the interactions between them rather than by God's will. He studied social philosophy at the University of Glasgow and Balliol College, Oxford, where he was one of the first students to receive scholarships established by fellow Scot John Snell. Smith went on to deliver a successful series of public lectures at the University of Edinburgh and collaborated with David Hume.

Smith later became a professor of moral philosophy at the University of Glasgow, where he wrote and published The Theory of Moral Sentiments. In his later life, he took a tutoring position that enabled him to travel throughout Europe, where he met other intellectual leaders of his time.

Book Format:

Publisher: Alfred A. Knopf
Copyright © 1991 by Everyman's Library
Pages: 620 Pages
This book contains four book

Book Report:

Adam Smith's ideas have had a profound impact on the world. His philosophy of the capitalist financial system has influenced how countries govern their economies and has led to the development of academic courses ranging from secondary school to post-secondary education. During the Industrial Revolution, factory owners embraced Smith's ideas, which promised to help them make a profit and spurred the growth of capitalism.

Karl Marx witnessed the 1848 Revolution and experienced the Industrial Revolution. He developed the theory of communism as a countermeasure against capitalism.

Smith's economic philosophy clashed with Marx's economic philosophy and post-World War II, dividing the world between capitalism and communism.

This paper discusses Smith's economic philosophy on managing a nation's economy.

On page 12, Smith says, "Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its gestures and natural cries signify to another that this is mine, that yours; I am willing to give it for that. When an animal wants to obtain something either of a man or another animal, it has no other means of persuasion but to gain the favour of those whose service it requires."

On page 13, the author says, "It is not from the benevolence of the butcher, or the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but their advantages."

On page 25, the author says, "Value in use the other value in exchange. The things with the greatest value in use frequently have little or no value in exchange; on the contrary, those with the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water, but it will purchase scarce anything; scarce anything can be exchanged for it. A diamond, on the contrary, has scarce value in use, but a very great quantity of other goods may frequently be had in exchange for it."

On pages 25-6, the author says, "Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusem*nts of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man's labour can supply them."

On page 26, the author says, "Therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which us enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities."

On page 27, the author says, "The butcher seldom carries his beef or his mutton to the baker in order to exchange them for bread or for beer; but they carries them to the market, where he exchanges them for money, and afterwards exchange that money for bread and for beer. The quantity of money which he gets for them regulates, too, the quantity of bread and beer which he can afterwards purchase. It is more natural and obvious to him, therefore, to estimate their value by the quantity of money, the commodity for which he immediately exchanges them, than by that of bread and beer, the commodities for which he can exchange them only by the intervention of another commodity."

On page 44, the author says, "Labour measures the value not only of that part of price which resolves itself into labour, but of that which resolves itself into rent, and of that which resolve itself into profit." Karl Marx says the owner of the means of production exploits workers' labour power by means of price."

On page 57, the author says, "As soon as land becomes private property, the landlord demands a share of all the produce which the labour can either raise, or collect from it. His rent makes the first deduction from the produce of the labour which is employed upon land." Jean Jacques Rousseau says private property is the source of inequality and creates a system of class in society.

On page 65, the author says, "The maintenance of the labouring poor is fast decaying. The difference between the genius of the British constitution which protects and governs North America, and that of the mercantile company which oppresses and domineers in the East Indies, cannot perhaps be better illustrated than by the different state of those countries. The liberal reward of labour, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth. The scanty maintenance of the labouring poor, on the other hand, is the natural symptom that things are at a stand, and their starving condition that they are going fast backwards."

When I read Smith's statement, it brought a chill to my bones that England and other Western countries deem non-European countries that they cannot become developed nations like Western countries. For example, Mohammad Reza Shah Pahlavi I wanted to make Iran a first-class nation. In 1979, England, France, West Germany, and the U.S. plotted a plan to topple the Pahlavi Dynasty and replace it with the Islamic Republic of Iran of Khomeini. As a result of the plot of the Western countries, Iran turned into the Stone Age.

On page 119, the author says, "if an equal proportion of people were educated at the public expense, the competition would soon be so great as to sink very much their pecuniary reward. It might then not be worth any man's while to educate his son to either of those profession at his own expense. They would be entirely abandoned to such as had been educated by those public charities."

Another factor that reduces social inequality in society and causes a society to move toward an egalitarian society. It is the power of education. Max Weber says that higher education causes people to move from one class to another.

On page 120, the author says, "That unprosperous race of men commonly called men of letters are pretty much in the situation which lawyers and physicians probably would be in upon the foregoing supposition...They have generally, therefore, been educated at the public expense, and their numbers are everywhere so great as common to reduce the price of their labour to a very paltry recompense."

In his book "United States of Socialism," author Dinesh D'Souza made a statement similar to that of Adam Smith, claiming that during the American Revolution of 1776, people of letters had no role to play in the United States and that many of them fled to Canada.

Adam Smith is often associated with conservative values, which some individuals who share his views believe oppose higher education. However, the reality is that acquiring higher education provides individuals with knowledge, and knowledge is power that can be used to improve the lives of everyone in their communities. Contrary to what Smith and Dinesh may advocate, it is better to live in intellectual communities where reason and logic guide decisions that are in harmony with others rather than promoting ignorance.

On page 120, Smith asserts, "yet more indigent men of letters who write for bread was not taken out of the market. Before the invention of the art of printing, a scholar and a beggar seem to have been terms very nearly synonymous. The different governors of the universities before that time appear to have often granted licences to their scholars to beg."

On page 327, the author says, "It has been the principal cause of the rapid progress of our American colonies towards wealth and greatness that almost their whole capitals have hitherto been employed in agriculture."

Smith advocates for the slavery system because white people gain wealth from slavery.

In conclusion, I have never seen such a racist and evil person as Adam Smith, who uses tools of economics to exploit other powerless individuals and countries and justify it using economic progress for England. Smith was not any different than Hitler. The only difference between Hitler and Smith is that Hitler believed the Aryan race was destined to dominate other races. In contrast, Smith believed white people were destined to dominate other races by building economic empires worldwide.

Adam Smith's Groundbreaking Mercantile Disquisition Effectively Sets The 'Price Of Monopoly' For Capitalist Economics.

Born in 1723, Adam Smith was a Scottish economist & philosopher who studied both at the University of Glasgow as well as Balliol College in Oxford. He was well-acclimated in many different subjects, among them Rhetoric, political philosophy, ethics & economics, but it is in the field of economics that Smith leaves to us his most profound legacy; more specifically, in Capitalism, where he is considered to be amongst its original progenitors. Throughout his life, the philosopher/economist rubbed shoulders with various, esteemed men of learning, all of whom left lasting legacies of their own. Most of them were French : Claude Adrien Helvétius, François Quesnay, Anne-Robert-Jacques Turgot, & Voltaire. Along with Smith himself, all of these men lived during the great 'Age of Enlightenment' which dominated the better part of two entire centuries of European philosophy.

Throughout Adam Smith's career he researched & composed two political & economic treatises which proved to be tremendously significant both in his own time & throughout history in the years following his death. The first, published in 1759, 'The Theory of Moral Sentiments', explores man's motivation in precipitating benevolent actions that are construed to be morally virtuous, unselfish behavior. While I've not read 'Moral Sentiments' myself quite yet, what I've read of it describes what I felt was an inverse perspective to that of the archetypical capitalist whose sole motive is ensuring his capital generates a profit. This edition includes an analytical introduction written by Andrew S. Skinner, who was an authority on Adam Smith throughout the course of his career. The introduction complements the main text fantastically & I learned a considerable degree about Smith's work & his life upon going through it. It's quite plain to see that there's a great deal of effort that goes into a historical work's introduction, & there's plenty of useful information in this one to reference when reading the main text.

Smith's second & most famous work is 'The Wealth of Nations'. Its initial publication was in the year of our country's Declaration of Independence in 1776. The book served as the harbinger to what eventually became known as capitalism. Smith divided the material in 'Nations' into five separate books, all of varying length. The edition published by Penguin Classics is divided into two separate groupings of the five books, I-III & IV-V. I'm reviewing the first installment, books I-III. There are so many different topics covered within these pages it's difficult to decide what to discuss first.

I don't consider my knowledge in any given field to be at a professional level, not by any means. Most assuredly not in the field of economics, whether in capitalism or otherwise. 'Wealth of Nations' was for me, the first book of its kind I had ever actually sat down & read from beginning to end so I wasn't quite sure what to expect. Though for me a very difficult read I nonetheless found it an immensely enjoyable experience. Smith discusses so many disparate concepts & introduces such a staggering array of terms pertaining to them that it's more than enough to make the reader's head spin like a top in confusion at certain points in the text. Let me provide some examples. Before reading 'Wealth' I was familiar with terms appurtenant to the economy such as 'Capital', 'Wages', 'Rent', 'Profit', 'Interest' & 'Labour' (Americans spell it 'Labor') only in the most basic, general way. I knew what they meant, & little more than that. I had never taken the time to actually sit down & contemplate their specific definitions. Like the word 'Interest'; anyone can grasp the concept of interest charges on your credit card bill, but when it's woven into series of ideas & defined as, 'Revenue derived from the use of money by the person who does not employ it himself, but lends it to another' it suddenly becomes a bit more approachable for me, particularly when presented in a historical context such as it is here.

'The Wealth of Nations' as I touched upon earlier was not an easy read for me. Many of the verbs & expressions Smith uses are decidedly Old English in origin & the dialect is from the eighteenth century, making the sentence structure extremely archaic & at times difficult to understand. Yet I still found this book thrilling to go through because I have always been fond of that region's history, & the language & expressions the people who live there use.

Overall, in my opinion 'The Wealth of Nations' is composed in a style I felt to be detached & dispassionate, probably due to the nature of the treatise's content. Everything is written in a very cut-and-dry manner, matter-of-fact. Smith goes into great detail when comparing concepts such as 'Market Price' & 'Mint Price', or when he delineates on the 'Price of Monopoly'. He was very tactful in the manner he worded his sentences, in my own layman's estimation. What I was very impressed by is the fact that supporting the majority of Smith's arguments are a formidable array of examples from history, which are all annotated with notes at the bottom of the page. Midway through book III there is a three-page section on gardening where Smith cites the work of Democritus, when he advised against constructing an enclosure around a kitchen garden. Democritus believed the cost of the materials rendered the entire enterprise unprofitable. He also provides examples from Britain's history, such as in 1262 the 'Assize of Bread & Ale', where the price of bread was regulated relative to the price of wheat. There are so many different works he references there's no way I could possibly list them all. He does reference Pliny the Elder's 'Naturalis Historia' when discussing various exotic animals presented to the Roman empress Agrippina as gifts which I enjoyed reading, as I've read that particular title.

I doubt that 'The Wealth of Nations' was written with the intention of achieving streamlined linguistic efficiency; quite the contrary. The arguments are relentlessly presented to the reader, utilizing as many words as Smith requires to get the job done. If I had to find two words to describe Adam Smith's composition style in this work, they would be 'brutally methodical'. Terms, phrases, or ideas relative to the subject being discussed are explained in blunt, delineatory fashion which to my eyes makes abundantly clear that the author wanted absolutely no room for interpretation of any kind as to their definitions. He often will explain a concept in the way that I would think only an academic professional would be capable of doing the way it's done in 'Wealth of Nations'. Yet at the same time Smith also possesses a finesse to his language which makes the otherwise dry area of focus in a 500-page economic treatise flow a bit smoother.

Adam Smith strongly believed in the way his era's society was structured as being comprised of three major groups, each earning their livelihood in a different way : rent, wages or profits. He believed all forms of revenue were irrevocably related with these three classifications. Much of 'The Wealth of Nations' entire text is founded on those three guiding principles & the reader will be intimately familiar with them by the time he or she has finished it. Book I is mainly concerned with the different forms of labor, Book II discusses stock, capital, & banking, & Book III explains opulence & also is a brief history lesson on how civilization progressed following the fall of the Western Roman Empire.

Overall, I'd highly recommend Adam Smith's 'The Wealth of Nations : Books I-III' to anyone interested in economics, capitalism, history, or the 'Age of Enlightenment'. The technical nature of the wording used can be a challenge but I'd not say that to ward anyone off, I'm most assuredly not a scholarly authority on historical literature, just a reader who enjoys experiencing different periods in our world's past. Were I to suggest a couple of books to maybe enhance your experience if & when you try 'The Wealth of Nations', I'd first recommend 'Naturalis Historia' by Pliny the Elder as well as 'Cicero : Selected Works' to provide some background for the Roman history Smith incorporates into his exposition.

The outstanding assert “Wealth of nations” address the needs of an individual and the Labor struggle in the different class of society. Social imbalance reciprocated with the slice of wages. The bargaining power of an individual decision based on the amount of money in the hand, spending money inherited with earning capacity that also decides for tomorrow's demand. In my point of view, demand creates an individual’s needs and wants, and these two paradoxical attributes are hidden behind the individual, social, and national wealth to establish the market potential for the consumers. Consumer behavior cycle roles in terms of money compounding through various sources such as daily wage, small and medium investment, money lending process, credit, etc. The possibility of standard competitive demand can be upward sloping and violate the law of the general principle of economics, which incorporates both income and price effects as the price of the good rises and consumers purchase more of substitute goods (Giffen paradox).

The struggle of labor is very uncertain and earning extra or make surplus money for savings or new investment or buying asserts is a dark side of the labor force, labor exploitation by the capitalist class fully hide the surplus earnings of labor. Capitalism expects to earn more income and fails to create demand constrain and allow the other classes to spend money. Gold and silver are not the real measures of a nation's wealth. The stagnation of demand and barrier of bargaining power can be solved by the labor’s real income and wealth and this will lead to the stability and prosperity of the market mechanism.

A very challenging but rewarding read. I did start it before but found this edition much easier to stick with. I read a lot about economic history already but the genius of Adam Smith is his passive explications of every day trade in its influencing conditions. The book can be numbingly in-depth, porridge for the mind but there in lies its goodness, its intellectual nourishment. So many economics books are just reactions to the zietgeist of the times in which they're published but Smiths work is unsentimental and unsparing in its dissection of the factors which inspire and retard trade. The conclusions arrived at by meticulous examination read like eternal truths. The only downside to this work is having to fixate on the different measurement conventions of the late 18th century. However that effort sharpens the mind so sections that in modern prose could have been passively rushed through end up being more thoroughly understood from having to be reread.
This is not a joyous entertainment but if you suspect that life is an everyday trade then it is an essential read that can only enrich your understanding.

Don't. Read excerpts.
It's a dull book – not a criticisms of its ideas, what it's led to, or anything like that, but to read it today, without a direct interest, is tedious. Good start, nice bit about banking in book 2, some interesting history in book 3, but overall it's longwinded. Areas where it comes to point in a succinct manner are the exception and the style is nothing remarkable.

Classic liberal economics at its finest

economics is sh*t

At 48.93271% into The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor by Adam Smith, I gave up. The book was just dragging on, nothing new I didn't get from business/commerce lessons in high school and from micro- and macro-economics units at the university. While it would have been the best economic book ever written in the 1700s, it is irrelevant (to some degree) to the 21st century concepts.

The book aims to create a 'new' understanding of economics. Smith writes largely against the mercantile system that existed at the time of writing, but, along the way, gives a complicated but brilliant account of an economic system based in human nature and deeply rooted social dynamics.

The issues of the division of labor, how division adds to the opulence of a given society by creating enormous surpluses, which can be exchanged among members. The division of labor also fuels technological innovation, by giving intense focus to certain tasks, and allowing workers to brainstorm ways to make these tasks more efficient. This, again, adds to efficiency and grows surpluses. Surpluses, Smith writes, may be either traded or re-invested. In the latter case, technologies are likely to improve, leading to even greater efficiencies.

That is the far I went, and I am quitting (though I sometimes claims I ain't no quitter).

Read this with a commentary putting this in the 18th century context of the Scottish Enlightenment (think Joseph Black, Adam Ferguson and David Hume), Mercantilism, and the French Enlightenment.

What a fascinating read.

Really interesting to see the original in the 18th century context. These ideas are so fundamental to modern day economic theory and I often see these ideas referenced in current political and economic analysis.

I was especially interested to read the theories about natural prices and eliminating protectionism in order to let the market set the 'natural' rates for goods.

This reminds me of the mishna in Baba Metziah (4:12) that says: "Rabbi Yehuda says: A storekeeper may not hand out toasted grain and nuts to children (who patronize his store,) due to (the fact) that he (thereby) accustoms them to come to him (at the expense of competing storekeepers). And the Rabbis permit (doing so). And one may not reduce (the price of sale items below) the (market) rate. And the Rabbis say: (If he wishes to do so, he should be) remembered positively.

About 1500 years before Smith, the Rabbis had a concept of a market rate and they encouraged fair competition among shopkeepers to reduce the rates as much as possible, since this would benefit consumers. Implicit in this understanding, are some of the themes for the Wealth of Nations, such as the purpose of all production is consumption and fair competition will benefit shoppers, which will ultimately increase the wealth of the entire society.

Great read, very thought provoking.

In our days of late capitalism, having had Adam Smith's "invisible hand" foisted upon us by so many right wing free market politicians, it's all too easy to dismiss The Wealth of Nations as more free-market dogma.

Don't do that. Secret #1: Many of the politicians who quote Smith have never actually read his work. The Wealth of Nations is not a brief work. (Books I-III clock in at 500 pages, though the introduction is nearly 100; Books IV-V are another 500 in a second volume.)

I am not going to lie, it's not the easiest thing you'll ever read (my eyes nearly crossed at a lengthy section on the value of grain in shillings per quarter for some length of time). However, Smith is generally a clear and at times witty writer, and (with the aid of modernized spelling and punctuation) quite readable.

He is, of course, not right about everything, but this was written by an eighteenth-century Scot, so it's creditable how much he does get right, and even when he doesn't, it's extremely useful to understand where classical economic ideas originated. Smith's market is not the magical political free market that always comes up with the right solution; his market simply says that he believes factors X, Y, and Z influence the market to come up with specific outcomes and why. It certainly isn't the right-wing fantasy of a capitalism that allows endless exploitation of workers (a thing Smith actually speaks against), and Smith's market has conditions that our own markets often fail to meet.

I read this during a time when I wanted to see for myself what was said in the original sources of ideas that have taken hold as standards in western culture.

I wrote a more expansive review here.

But the short form is that the famous pin factory allegory is over with in the first few pages, and then after that most of the book is mind numbing details about specific prices and markets in Smith's time. On top of that, Smith's writing style is incredibly dull. Everything is in lists embedded in lists, and it's tiresome.

However, if you struggle through it, you learn that Smith is not a cheerleader for capitalism as he's assumed to be. He was highly critical of how the accumulation of capital in the hands of the few leads to exploitation of the many. The book is not a treatise on how capitalism should happen, but just an exploration of how markets worked in his day, for both good and bad.