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sidharthvardhan's review against another edition
5.0
This book made Adam Smith The Father of Economics. He created a whole science in this book. Ironically he is critical of new cult of scholars of his times who used to call themselves 'economist'.
Morality and greed
Most moralists call greed a sin, Smith points out necessity of civilization:
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
This though doesn't mean he is greedy or well capitalist - he believed in free trade because any laws constraining free trade are giving unfair advantage to a part of society at cost of discomfort of whole. Profits he says at point are highest in the countries that are fast going towards ruin. He is against all kinds of coalition among businessmen:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
He condemns businessmen for wanting protection against workers union:
“In regards to the price of commodities, the rise of wages operates as simple interest does, the rise of profit operates like compound interest.
Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”
He is equally critically of governments of his time and specially British empire's approach towards colonies. I guess he must have made a lot of powerful enemies.
The need for a summary book
Of all the books that I have read, Wealth of Nations is the one that needs editing most. The word 'corn' is used about 450 times and this is not including the indirect references. The author goes on rambling about all sorts of things much of which is a trash relevant to his own times but times even more ancient, but amid all this rambling there are gems of great observations - not only only on issues relating to economics but that of general humanity. that make it difficult to skim despite the obvious provocation.
P.J. O'Rourke does a great job summarizing the book and provide a good enough analysis in his much, much smaller book [b:On The Wealth of Nations|44779|On The Wealth of Nations|P.J. O'Rourke|https://d.gr-assets.com/books/1408305634s/44779.jpg|16447039] There are though a few points he fails to point but he compensates for that by saving time and providing an interesting commentary. Rourke points out that Smith had his own reasons for writing so large a book and in a way his summary makes you want to read it all the more. It is only after reading that commentary that I gathered courage to read the big book.
Some more words of wisdom from the great genius:
Virtue is more to be feared than vice, because its excesses are not subject to the regulation of conscience.
Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.
The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education.
Money, says the proverb, makes money. When you have a little, it is often easier to get more. The great difficulty is to get that little.
Wherever there is great property, there is great inequality.
Happiness never lays its finger on its pulse.
..........I could go on but I think you get the idea and anyway they are just one google search away.
Morality and greed
Most moralists call greed a sin, Smith points out necessity of civilization:
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
This though doesn't mean he is greedy or well capitalist - he believed in free trade because any laws constraining free trade are giving unfair advantage to a part of society at cost of discomfort of whole. Profits he says at point are highest in the countries that are fast going towards ruin. He is against all kinds of coalition among businessmen:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
He condemns businessmen for wanting protection against workers union:
“In regards to the price of commodities, the rise of wages operates as simple interest does, the rise of profit operates like compound interest.
Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”
He is equally critically of governments of his time and specially British empire's approach towards colonies. I guess he must have made a lot of powerful enemies.
The need for a summary book
Of all the books that I have read, Wealth of Nations is the one that needs editing most. The word 'corn' is used about 450 times and this is not including the indirect references. The author goes on rambling about all sorts of things much of which is a trash relevant to his own times but times even more ancient, but amid all this rambling there are gems of great observations - not only only on issues relating to economics but that of general humanity. that make it difficult to skim despite the obvious provocation.
P.J. O'Rourke does a great job summarizing the book and provide a good enough analysis in his much, much smaller book [b:On The Wealth of Nations|44779|On The Wealth of Nations|P.J. O'Rourke|https://d.gr-assets.com/books/1408305634s/44779.jpg|16447039] There are though a few points he fails to point but he compensates for that by saving time and providing an interesting commentary. Rourke points out that Smith had his own reasons for writing so large a book and in a way his summary makes you want to read it all the more. It is only after reading that commentary that I gathered courage to read the big book.
Some more words of wisdom from the great genius:
Virtue is more to be feared than vice, because its excesses are not subject to the regulation of conscience.
Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.
The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education.
Money, says the proverb, makes money. When you have a little, it is often easier to get more. The great difficulty is to get that little.
Wherever there is great property, there is great inequality.
Happiness never lays its finger on its pulse.
..........I could go on but I think you get the idea and anyway they are just one google search away.
junyan's review against another edition
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 against another edition
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 against another edition
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.