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junyan's review
Unable to rate. It’s classic, it’s torturous to read, it’s also outdated.
joyceontheroad's review against another edition
3.0
Interesting, but didn’t really love nor enjoy it.
orsuros's review
3.0
I thought the book was quite interesting back when I read it in high school. Some of the specific examples seemed quite irrelevant for how dated they were but the principles were fascinating.
spitzig's review
3.0
Most classic economic text. I don't really think I learned much from it. I already understood the concept of supply and demand. This had some applications more complex than I'd known. Some too complicated for me to understand.
richardiporter's review against another edition
3.0
Who should read this? Serious students of economics and politics and history. People willing to do the work to get to the gems.
My most important key insights from this book:
0 Self interest is the best guide to productivity
1 A person understands their self interest better than anyone else can
2 as much as possible people should be free to pursue their economic self interest as long as they dont impose on others
3 it is impossible to rely on altruism for benefit, because in a modern economy with specialization you cant know how many contribute to your benefit, nor can they
4 Smith was likely trying to describe how best to provide the most wealth for the most people, this isnt a get rich quick book, or a take care of your friends book, this is a "how do we really do the most good for the most people - based on observed evidence" book
1. Specialization results from self interest and leads to most gains in any society
1 When people own their time, output, business as much as possible they will come up with better ways to get more for less
2 More output for less input (time, attention, materials) benefits everyone
3 Then trade lets these gains be cascaded across society
2. All revenue breaks down to one of three categories:
1 rent due to an owner of a property (rent to a landlord)
2 profit due to a holder of "Stock" (aka Capital)
3 wages due to a laborer (for their time, attention, work)
4 All revenues can be broken into their parts that will consist of these
5 a product reaches its natural price when it is sold as low as it can be, but additional units can still pay the profit the rent and the wages each actor needs to stay in business, or they will exit business
3. Monopolies are bad and people (especially merchants) try to form them
1 If people that control a resource or trade can fit in a room, they’ll try to do so and when they do
2 people will try to restrict others’ ability to compete with them and
3 capture government force to protect their monopoly against competition
4 Giving a monopoly on trade should be done very rarely and only briefly to prove out a high risk market, then it should be removed, its owners compensated and competition as open as possible
5 A very few “natural” monopolies exist like: water supply for a city, heavy infrastructure at key terrains (ports, bridges, highways and in the modern era electricity, sewer, internet etc)
4. Governments exist to protect, they can be good at that, and only good at that
1 Governments that try to raise money through trade or banking or farming often do it poorly
2 They should tax, and should do it in a way that minimally distorts the markets, and raises needed funds
3 Taxes on labor, and on necessaries of life (which laborers must consume) have multiplicative effects
4 On transfer of property from a dead to a living person very small effects
5 On unnecessary consumption, distortion only to consumption of unnecessary products
6 Bodies of farmers, laborers, merchants, church persons should not be government, and vice versa - people that come from these lines of work can become government officials, but they should never “dual hat”
6. Everything has a cost, you may have to look closely and trace it to find it, but someone is paying for it
1 the people who pay for a thing are usually mostly the consumers
2 sometimes it may be the seller (seller of land for instance is almost always motivated, buyers only sometimes so)
7. Colonies: include them in government, representation and try to equalize tax once there represented, or cut them loose (this is an especially interesting insight to me as Smith was writing during the American rebellion and he essentially laid out a plan for how that could have been avoided and possibly amicably solved, or wars stopped.)
1 Its bad and also bad business to mistreat people (killing and oppressing natives, and enslaving people - though people would likely want more and more strident emphasis on this than they will find)
2 methods of colony management - greek vs Roman examples
8 War: try not to. If absolutely necessary try to win quickly not go onto too much debt and pay it off quick.
9. Government debt: potentially ruinous, and in his day and carrying forward increasingly a scheme (ponzi scheme we would call it now) in which new debt finances old debt and can never truly be paid out.
1 Smith couldnt know but future governments would continue this practice and do so even more subtly as they progressed.
2 coinage and currency and the debasement of currency and inflation of its value, while difficult to do in eras of metal money area already observed by smith, and get much worse later due to hidden ability to inflate and debase when no longer convertible.
There are some real diamonds in the rough of this book (some key insights I took away are above) . But there is a LOT of rough. 36 hours as an audiobook. And much of the rough is precise (to the fraction of a penny) measurements of prices and national debts and their changes over years. No doubt this discipline was important at the time and likely lends credence to more of Smith's sweeping generalizations but it is those sweeping generalizations and big picture observations that hold the carry-forward value into the present day.
Many surface level students interact with Smith's ideas through several levels of interpretation seem to imagine its all about “free markets” and the “invisible hand” and “government stay out of everything” or maybe even “no government” but that as definitely not the case. He believes in contract law enforcement, in taxes and national defense. In order and protection for normal people, in less imposition on the laborer. He opposes monopoly powerfully
The invisible hand is much less spooky than most think. It is merely a simple metaphor for what happens when markets are structured on self interest, specialization, and freedom from monopolies or other excess market distortions.
3 Star reviews mean this was a solid book. I probably won’t read it again but I could. I do recommend it to people interested in this sort of topic. No argument from me if you love this book.
My most important key insights from this book:
0 Self interest is the best guide to productivity
1 A person understands their self interest better than anyone else can
2 as much as possible people should be free to pursue their economic self interest as long as they dont impose on others
3 it is impossible to rely on altruism for benefit, because in a modern economy with specialization you cant know how many contribute to your benefit, nor can they
4 Smith was likely trying to describe how best to provide the most wealth for the most people, this isnt a get rich quick book, or a take care of your friends book, this is a "how do we really do the most good for the most people - based on observed evidence" book
1. Specialization results from self interest and leads to most gains in any society
1 When people own their time, output, business as much as possible they will come up with better ways to get more for less
2 More output for less input (time, attention, materials) benefits everyone
3 Then trade lets these gains be cascaded across society
2. All revenue breaks down to one of three categories:
1 rent due to an owner of a property (rent to a landlord)
2 profit due to a holder of "Stock" (aka Capital)
3 wages due to a laborer (for their time, attention, work)
4 All revenues can be broken into their parts that will consist of these
5 a product reaches its natural price when it is sold as low as it can be, but additional units can still pay the profit the rent and the wages each actor needs to stay in business, or they will exit business
3. Monopolies are bad and people (especially merchants) try to form them
1 If people that control a resource or trade can fit in a room, they’ll try to do so and when they do
2 people will try to restrict others’ ability to compete with them and
3 capture government force to protect their monopoly against competition
4 Giving a monopoly on trade should be done very rarely and only briefly to prove out a high risk market, then it should be removed, its owners compensated and competition as open as possible
5 A very few “natural” monopolies exist like: water supply for a city, heavy infrastructure at key terrains (ports, bridges, highways and in the modern era electricity, sewer, internet etc)
4. Governments exist to protect, they can be good at that, and only good at that
1 Governments that try to raise money through trade or banking or farming often do it poorly
2 They should tax, and should do it in a way that minimally distorts the markets, and raises needed funds
3 Taxes on labor, and on necessaries of life (which laborers must consume) have multiplicative effects
4 On transfer of property from a dead to a living person very small effects
5 On unnecessary consumption, distortion only to consumption of unnecessary products
6 Bodies of farmers, laborers, merchants, church persons should not be government, and vice versa - people that come from these lines of work can become government officials, but they should never “dual hat”
6. Everything has a cost, you may have to look closely and trace it to find it, but someone is paying for it
1 the people who pay for a thing are usually mostly the consumers
2 sometimes it may be the seller (seller of land for instance is almost always motivated, buyers only sometimes so)
7. Colonies: include them in government, representation and try to equalize tax once there represented, or cut them loose (this is an especially interesting insight to me as Smith was writing during the American rebellion and he essentially laid out a plan for how that could have been avoided and possibly amicably solved, or wars stopped.)
1 Its bad and also bad business to mistreat people (killing and oppressing natives, and enslaving people - though people would likely want more and more strident emphasis on this than they will find)
2 methods of colony management - greek vs Roman examples
8 War: try not to. If absolutely necessary try to win quickly not go onto too much debt and pay it off quick.
9. Government debt: potentially ruinous, and in his day and carrying forward increasingly a scheme (ponzi scheme we would call it now) in which new debt finances old debt and can never truly be paid out.
1 Smith couldnt know but future governments would continue this practice and do so even more subtly as they progressed.
2 coinage and currency and the debasement of currency and inflation of its value, while difficult to do in eras of metal money area already observed by smith, and get much worse later due to hidden ability to inflate and debase when no longer convertible.
There are some real diamonds in the rough of this book (some key insights I took away are above) . But there is a LOT of rough. 36 hours as an audiobook. And much of the rough is precise (to the fraction of a penny) measurements of prices and national debts and their changes over years. No doubt this discipline was important at the time and likely lends credence to more of Smith's sweeping generalizations but it is those sweeping generalizations and big picture observations that hold the carry-forward value into the present day.
Many surface level students interact with Smith's ideas through several levels of interpretation seem to imagine its all about “free markets” and the “invisible hand” and “government stay out of everything” or maybe even “no government” but that as definitely not the case. He believes in contract law enforcement, in taxes and national defense. In order and protection for normal people, in less imposition on the laborer. He opposes monopoly powerfully
The invisible hand is much less spooky than most think. It is merely a simple metaphor for what happens when markets are structured on self interest, specialization, and freedom from monopolies or other excess market distortions.
3 Star reviews mean this was a solid book. I probably won’t read it again but I could. I do recommend it to people interested in this sort of topic. No argument from me if you love this book.
anotherpath's review
4.0
Years ago I came across an article where Mark Cuban told a bunch of monetary skeptics that they need to go and read Smith and other economists before blabbing about the state of the world. I agreed. Having now read many modern economists AND the foundation of the science in Smith, I haven't changed my opinions much. I haven't read Marx at all, and I've steered clear of anything that I feel like I agree with on sentiment alone.
It doesn't matter what I think.
I will say that Smith is bastardized like all works.
Any reference to him IMMEDIATELY will use his "Invisible Hand" more times than he does, which is once in nine hundred pages. And if they bother to expound more than that, they'll reference his first chapter, where Smith shows that people engaged in a specific task will specialize the work to increase output. All innovation comes from the bottom, from the lay people.
His suggestion to personal selfishness has been so widely abused and distorted, that Smith would not recognize or approve of his modern contemporaries. Smith describes most of the ills of capitalism, and we see them compounded at their worst today and expounded by capitalists as if they are virtues. He would call out the last fifty years of economic policy among civilized nations for what it is, a grift of the managerial class on society at large, and the sign of decay and a need for a new enlightenment.
It doesn't matter what I think.
I will say that Smith is bastardized like all works.
Any reference to him IMMEDIATELY will use his "Invisible Hand" more times than he does, which is once in nine hundred pages. And if they bother to expound more than that, they'll reference his first chapter, where Smith shows that people engaged in a specific task will specialize the work to increase output. All innovation comes from the bottom, from the lay people.
His suggestion to personal selfishness has been so widely abused and distorted, that Smith would not recognize or approve of his modern contemporaries. Smith describes most of the ills of capitalism, and we see them compounded at their worst today and expounded by capitalists as if they are virtues. He would call out the last fifty years of economic policy among civilized nations for what it is, a grift of the managerial class on society at large, and the sign of decay and a need for a new enlightenment.