A Must Read For Every Economist
This book is so widely cited and interpreted contrary to the author's original thought, that every economist should read it completely to avoid being misled by such incorrect interpretations.
First, let us take the "invisible hand" metaphor. When I have studied economy in the University, I was taught that almost the entire book is devoted to the "invisible hand" which means "self-corrective markets", "liberalism", "Laissez-faire" and "state non-intervention". After reading this book, I have found out that Adam Smith did use the term "invisible hand" only once in the entire book, in the discussion of domestic versus foreign trade.
To illustrate the point, let me quote the text where term "invisible hand" is used: "First, every individual endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry, provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock. Thus, upon equal, or nearly equal profits, every wholesale merchant naturally prefers the home trade to the foreign trade of consumption, and the foreign trade of consumption to the carrying trade. In the home trade, his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. [...]Secondly, every individual who employs his capital in the support of domestic industry, necessarily endeavours so to direct that industry, that its produce may be of the greatest possible value. [...]As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it."
After reading this book, I have found out that Adam Smith was influenced by French Physiocrats. The Physiocrats saw the true wealth of a nation as determined by the surplus of agricultural production over and above that needed to support agriculture (by feeding farm labourers and so forth). Other forms of economic activity, such as manufacturing, were viewed as taking this surplus agricultural production and transforming it into new products, by using the surplus agricultural production to feed the workers who produced the extra goods. While these manufacturers and other non agricultural workers may be useful, they were seen as 'sterile' in that their income derives ultimately not from their own work, but from the surplus production of the agricultural sector.
I have found out that this book is not about "invisible hand" or "Laissez-faire". It is quite a complete study that covers almost every basic aspect of the economy, and remains an effective introduction to economics to this day.
This book is so often mischaracterized and politicized that I suggest you to read it completely by yourself. This is a must read for every economist. You can get an audio version of this book to avoid lengthy read.
Excellent
This book is filled with great information you will find useful as well as having to find new things you never knew about. I will recommend this book to anyone and everyone.
wealth of nations
pretty much the base for most modern thought on capitalism, while still being surprisingly relevant though it was written over 200 years ago.
Adam Smith: Wealth of nations
This version is just too small for such a great book. No room to write interpretations or other side notes. Bought another one, so it has become my door stop for now; until someone offers me a price or simply asks to borrow it.
Making Wealth, Making Poverty: A Smithian Prometheus
Conquering Scarcity: (Smith's Dialectical Relationship to Marx?)?
Adam Smith is certainly one of the greatest political philosophers in the modern tradition. Our world, as some have argued, is principally the byproduct of the system that Smith outlined in this classic work, together with a judicious mating of John Locke and Thomas Hobbes. The "Wealth of Nations," though the most well known of Smith's writings, is not representative of his entire system of thought, if he has a system: Some authors insist that there is a paradox in Smith's work, when considered in light of "The Theory of Moral Sentiments"? I do not know if this is the case, but the degree to which Smith's ideas have shaped our world cannot be questioned: If it were questioned in this forum, one would only have to point to the existence of this forum to show that Smith was right; the global structure of capitalism today and its development, which has been explored by thinkers after Smith is an undeniable fact. For these reasons, Adam Smith is, in my judgement, one of the most important thinkers in modernity, and he may well have a stake in shaping an arguably post-modern world: But that is not, perhaps, the last word.
(23 reviews)
