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A review by rick2
An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith
5.0
First up, Adam Smith is brilliant.
In 1776 he wrote an amazingly accurate and prescient book on trade and capitalism. His analysis of manufacturing and trade is badass and should be recognized as the foundation for basic supply and demand curves. As it is. Reading his thoughts it seems like the veil of propaganda has lifted around a lot of these economic concepts. Smith calls things as he sees them. His language can be obtuse, but once understood his points make pretty straightforward sense. He describes effects and counter effects well, and his reasoning and logical flow is sound. This book is tough but I ultimately felt it rewarded the effort.
That being said, people need to shut the fuck up about Adam Smith. In 1800 the most popular medical procedure was to bleed people to balance their biles. We don’t do that anymore because it’s outdated and as medicine has progressed, so have our ways of understanding and treating disease. We don’t read Plato’s Republic and go “yeah this guy probably has some good ideas about how we should regulate airplane safety” We shouldn’t do the same with Adam Smith.
To add some context around this, in the early 1900s people said “Adam Smith is canceled” not because of questionable beliefs about women (although if you read his biography you’ll see he had those) But because Everyone was trying to come up with reasons to justify monopolies. “Monopolies are good” they said “ monopolies are the logical end product of a capitalist system“ and that theory seems to be right if you look at our current economy.
But then, out of the blue, an event no one could’ve foreseen, mysterious and powerful like a fat unicorn, something happened to the economy from the result of these monopolies. It was called the Great Depression. Alowing businesses to do whatever the fuck they wanted turned out to be not a great thing. Dust bowl, bread lines, bad hobo harmonica music. Steinbeck wrote a book about it.
Because of that fiasco. people started saying “Adam Smith was actually right, wow.” We go a few years further into trust busting, Roosevelt, and eventually (fast forward over 40 years of important American history) Reagan. Fast forward again. and now we have assholes like John Bolton saying “I’m with Adam Smith on economics” which to me is just the most mind-boggling sentence someone who could consider themselves in charge of any sort of economic policy could say. We have essentially come full circle on a philosophy and theory of trade that we discarded in the 1900's. Happy day.
As we don’t use sextants for navigation, animal labor to plow fields, or bleed people for medical necessity, Smith likewise also describes a world that no longer exists. His comparisons between Poland, France and England's agricultural production sound dated because they are. His discussion of education sounds insane because there was a total of like 10 literate people in Scotland when he wrote this.
Most of his trade analogies are to corn. When he gets real wild, he describes silk our wool as a complex good. Labor seems to mostly apply to actual physical work. Currency is literally talking about gold and silver. Service work is nonexistent. For the first of the 5 books, Smiths ultimate point is that everything is based on edible food. If people produce goods that are worth more than edible food they eventually will exchanged for edible food. It’s impressive in its simplicity. And while the examples sound dated (because they are) I think fundamentally, this hasn’t changed. You can reduce most things to food still today. The part that gets super wacky, is that the agricultural labor required in Smith’s day is so different than what we produce today. In America there’s not a single agricultural good produced without a massive government subsidy. We essentially have outsourced a ton our agricultural work to South America and Mexico. Less than 5% of the population work in agriculture. Technology, massive conglomerates (looking at you Tyson and Monsanto), genetic modification, and jet fuel fertilizer have changed the game more than Serena Williams in a high school tennis match.
There’s no accounting for marketing, General public education, planned obsolescence, R&D, HR, financial products, complex debt obligations and other modern inventions that I believe have come to fundamentally change the character of modern capitalism. I imagine Smith would struggle with the supply chain of an iPhone, Tesla, or possibly even Coca-Cola. I’m pretty sure he would shit his brain out through his ear trying to map his thinking onto a company like Dropbox, Google or AWS. I think our economic system once fit the model Smith presented, but the complexity of global commerce and trade has increased in magnitude to the point where the map Smith describes no longer refers to the territory.
The same seems true when smith describes labor and wages. Journeymen, masons, tailors. “The high wages seems to be due to the hardship and disagreeableness of the work.” That's a lark today where the top paying jobs for the majority of people involve spreadsheets or power point presentations. I mean, conference calls ARE disagreeable, but I’d rather do that than clean port-o-potties. Not to mention the layers in layers of bureaucracy that seem to have bubbled and curdled around the capitalist system that we now see. Smith acts like there are only two or three layers any manufacturing organization. What does it mean when you work at a corporate bank where the teller is 10 to 20 layers of management below the CEO.
We have this wildly bloated system people seem to misrepresent “as an efficient machine.” Whereas Smith describes a system where people are efficiently engaged in their highest productivity labor at a given time. I’m quite frankly not smart enough to understand what the gulf between what Smith describes and the world I see around me means. But I'm damn sick of people misrepresenting and twisting the actual thoughts of Adam here in order to justify their malfeasance.
In 1776 he wrote an amazingly accurate and prescient book on trade and capitalism. His analysis of manufacturing and trade is badass and should be recognized as the foundation for basic supply and demand curves. As it is. Reading his thoughts it seems like the veil of propaganda has lifted around a lot of these economic concepts. Smith calls things as he sees them. His language can be obtuse, but once understood his points make pretty straightforward sense. He describes effects and counter effects well, and his reasoning and logical flow is sound. This book is tough but I ultimately felt it rewarded the effort.
That being said, people need to shut the fuck up about Adam Smith. In 1800 the most popular medical procedure was to bleed people to balance their biles. We don’t do that anymore because it’s outdated and as medicine has progressed, so have our ways of understanding and treating disease. We don’t read Plato’s Republic and go “yeah this guy probably has some good ideas about how we should regulate airplane safety” We shouldn’t do the same with Adam Smith.
To add some context around this, in the early 1900s people said “Adam Smith is canceled” not because of questionable beliefs about women (although if you read his biography you’ll see he had those) But because Everyone was trying to come up with reasons to justify monopolies. “Monopolies are good” they said “ monopolies are the logical end product of a capitalist system“ and that theory seems to be right if you look at our current economy.
But then, out of the blue, an event no one could’ve foreseen, mysterious and powerful like a fat unicorn, something happened to the economy from the result of these monopolies. It was called the Great Depression. Alowing businesses to do whatever the fuck they wanted turned out to be not a great thing. Dust bowl, bread lines, bad hobo harmonica music. Steinbeck wrote a book about it.
Because of that fiasco. people started saying “Adam Smith was actually right, wow.” We go a few years further into trust busting, Roosevelt, and eventually (fast forward over 40 years of important American history) Reagan. Fast forward again. and now we have assholes like John Bolton saying “I’m with Adam Smith on economics” which to me is just the most mind-boggling sentence someone who could consider themselves in charge of any sort of economic policy could say. We have essentially come full circle on a philosophy and theory of trade that we discarded in the 1900's. Happy day.
As we don’t use sextants for navigation, animal labor to plow fields, or bleed people for medical necessity, Smith likewise also describes a world that no longer exists. His comparisons between Poland, France and England's agricultural production sound dated because they are. His discussion of education sounds insane because there was a total of like 10 literate people in Scotland when he wrote this.
Most of his trade analogies are to corn. When he gets real wild, he describes silk our wool as a complex good. Labor seems to mostly apply to actual physical work. Currency is literally talking about gold and silver. Service work is nonexistent. For the first of the 5 books, Smiths ultimate point is that everything is based on edible food. If people produce goods that are worth more than edible food they eventually will exchanged for edible food. It’s impressive in its simplicity. And while the examples sound dated (because they are) I think fundamentally, this hasn’t changed. You can reduce most things to food still today. The part that gets super wacky, is that the agricultural labor required in Smith’s day is so different than what we produce today. In America there’s not a single agricultural good produced without a massive government subsidy. We essentially have outsourced a ton our agricultural work to South America and Mexico. Less than 5% of the population work in agriculture. Technology, massive conglomerates (looking at you Tyson and Monsanto), genetic modification, and jet fuel fertilizer have changed the game more than Serena Williams in a high school tennis match.
There’s no accounting for marketing, General public education, planned obsolescence, R&D, HR, financial products, complex debt obligations and other modern inventions that I believe have come to fundamentally change the character of modern capitalism. I imagine Smith would struggle with the supply chain of an iPhone, Tesla, or possibly even Coca-Cola. I’m pretty sure he would shit his brain out through his ear trying to map his thinking onto a company like Dropbox, Google or AWS. I think our economic system once fit the model Smith presented, but the complexity of global commerce and trade has increased in magnitude to the point where the map Smith describes no longer refers to the territory.
The same seems true when smith describes labor and wages. Journeymen, masons, tailors. “The high wages seems to be due to the hardship and disagreeableness of the work.” That's a lark today where the top paying jobs for the majority of people involve spreadsheets or power point presentations. I mean, conference calls ARE disagreeable, but I’d rather do that than clean port-o-potties. Not to mention the layers in layers of bureaucracy that seem to have bubbled and curdled around the capitalist system that we now see. Smith acts like there are only two or three layers any manufacturing organization. What does it mean when you work at a corporate bank where the teller is 10 to 20 layers of management below the CEO.
We have this wildly bloated system people seem to misrepresent “as an efficient machine.” Whereas Smith describes a system where people are efficiently engaged in their highest productivity labor at a given time. I’m quite frankly not smart enough to understand what the gulf between what Smith describes and the world I see around me means. But I'm damn sick of people misrepresenting and twisting the actual thoughts of Adam here in order to justify their malfeasance.