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The Wealth of Nations, Books 4-5
It is in Books IV and V of The Wealth of Nations that Adam Smith offers his considered response to the French Physiocrats, perhaps the first great school of economic theorists, and assesses the nature of the mercantile system, particularly the coloniaL relationship with America, whose achievements could have been even more spectacular if conditions of free trade and economic union had existed. Even on the eve of the Declaration of Independence, Smith famously predicted that America "will be one of the foremost nations of the world." It is also here that he develops the case for a limited state role in economic planning, notably to combat market failure and induce efficiency in areas such as education, public works, justice, and defense. His pioneering analysis still provides many subtle and penetrating insights into one of today's most vital and controversial policy debates.
672 pages, Paperback
First published January 1, 1776
About the author
Adam Smith
1,467 books2,407 followersFor other authors of this name, see Adam Smith.
Adam Smith FRSA FRS FRSE was a Scottish philosopher and economist who was a pioneer in thinking on political economy and a key figure during the Scottish Enlightenment. He wrote two classic works, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The latter, often abbreviated as The Wealth of Nations , is considered his magnum opus and the first modern work that treats economics as a comprehensive system and as an academic discipline.
Authorities recorded his baptism on 16 June 1723 at Kirkcaldy.
https://en.wikipedia.org/wiki/Adam_Smith
Adam Smith FRSA FRS FRSE was a Scottish philosopher and economist who was a pioneer in thinking on political economy and a key figure during the Scottish Enlightenment. He wrote two classic works, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The latter, often abbreviated as The Wealth of Nations , is considered his magnum opus and the first modern work that treats economics as a comprehensive system and as an academic discipline.
Authorities recorded his baptism on 16 June 1723 at Kirkcaldy.
https://en.wikipedia.org/wiki/Adam_Smith
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July 7, 2026
Volume II Of Adam Smith's Landmark Economic Treatise Covers Mercantilism, Colonialism, & A Political State's Principal Forms Of Revenue.
Volume II of Adam Smith's The Wealth of Nations expands considerably upon Volume I's concepts of supply and demand, rent, wages and profit, the divisions of labor and stock, and the progress of opulence throughout history. Viewed collectively, Book IV - Of Systems of Political Economy and Book V - Of the Revenue of the Sovereign or Commonwealth address Smith's two proposed purposes for the existence of the political economy, those being the generation of revenue for the people and for the government of a kingdom or commonwealth. Book IV focuses upon colonialism and the systems of mercantilism and agriculture, while Book V concentrates on a kingdom or commonwealth's tax revenue and other forms of income, and its primary expenses, which include education, justice, public works, and defense.
Andrew S. Skinner's introduction addresses a variety of topics, but initially focuses on the economic models that were developed in the writings of two of Adam Smith's contemporaries, François Quesnay's Tableau économique, and the Baron de l'Aulne, Anne Robert Jacques Turgot's Reflections on the Formation and Distribution of Riches, both of which influenced Smith's own work in The Wealth of Nations and his Lectures on Jurisprudence. Skinner posits that Quesnay's theories are fairly simple and straightforward, and he explains them by employing an idealistic scenario involving 3 classes - farmers, proprietors, and manufacturers, which between them circulate 2 million livres and produce or manufacture goods "in a process of continuous replacement", and by touching upon such concepts as fixed and circulating capital, respectively defined as avances primitives and avances annuelles, but he also maintains that this model does not analyze price determination or the distribution of labor, nor does it make allowances for profits.
Skinner explains that Anne Robert Jacques Turgot further developed Quesnay's theories by expanding upon his 3-party economic model for the division of labor into cultivators, the classe disponible, or landowners, and the classe stipendiée class, which was subdivided into entrepreneurs and manufacturers, and artisans. This talented French economist introduced the 4 aspects of production (land, labor, capital, and entrepreneurship), the 3 kinds of returns (rent, wages, and profit), and the 5 interrelational ways to administer capital - by "purchase of land, commerce, manufactures, agriculture, or lent at interest", and Smith expanded considerably on all these concepts, incorporating new premises such as the division of the cultivator class into farmers and country laborers, and the avances foncières, or interest due to the proprietor for the maintenance and improvement of his rented lands.
The editor reinforces the fact that Adam Smith was influenced by Quesnay and Turgot's school of economics, a branch known as physiocracy which emphasizes and values labor as the sole item of worth in business models. Agricultural toil produced agricultural goods, and a physiocrat believed it was not the product itself, but the process involved in its creation that was the key to a nation's prosperity, and a society's most valued commodity. It should be noted that physiocratic economics were developed during the pre-industrial period in France, and they do not necessarily value manufactured commodities with the same importance as those goods which are strictly "the fruits of the land".
Skinner's discussion expands to encompass Smith's views on economic issues such as England's colonial relationship with the United States, at the time a relevant topic, particularly in regard to the Revolutionary War's outbreak in 1775. An example of this can be found in his remarks on the Navigation Acts of 1651-96, which restricted British colonial trade to English vessels and tightly controlled the flow of goods between the American Colonies and the British Isles. Cash crops such as tobacco, sugar and coffee were regulated so British merchants could buy low and sell high to foreign countries, and while these regulations may have benefited both parties in the short-term, in the long run they adversely effected America's rate of expansion. Smith lauded the Navigation Acts in The Wealth of Nations' second chapter, but later acknowledged their shortcomings in the labor and resources required for Great Britain to maintain its colonial trade monopoly, decisions he felt changed the flow of British trade so as to render it contingent upon a distant, albeit large, indirect market in America, as opposed to a near, direct market with the rest of Europe.
Smith devotes Chapter I, On the Principle of the Mercantile, or Commercial System towards establishing his basic concepts of import/export as they relate to moveable goods and gold and silver currencies, bullion, and plate, also covering effectual demand and sources of wealth, but most importantly, he outlines, "..the six principal means by which the commercial system proposes to increase the quantity of gold and silver in any country by turning the balance of trade in its favour." These constitute restrictions on the import of locally-produced consumable goods, and also on the import of goods from those foreign countries with whom a disadvantageous trade balance exists; and the final four are essentially practices intended to stimulate export - drawbacks, bounties, advantageous treaties of commerce, and the establishment of colonies in remote lands.
The author utilizes illustrative examples to explain how foreign military campaigns could have a catastrophic effect on a nation's economy, such as Great Britain's enormous war debt of £90,000,000 after the Seven Years' War of 1756-63, and he cites the teachings of philosophers and economists such as the esteemed John Locke and Sir Thomas Mun, comparing their ideas with his own arguments. Time and again he reiterates that a nation importing more gold and silver than it exports is a country with the balance of trade weighted against it. He compares a national market's resilience with the merchant's vulnerability to an overabundance of product, maintaining that while a merchant may be forced into bankruptcy due to an inability to sell a fully stocked warehouse, a political state would simply consume the product for its own use and generate revenue from another source.
Chapter II, Of Restraints Upon the Importation from Foreign Countries of Such Goods as Can Be Produced at Home uses the scenario of an Amsterdam merchant engaged in the carrying trade of transporting corn and wine between Konnigsberg and Lisbon to demonstrate how that business venture's capital divides itself evenly amongst the two destinations, unless the merchant decides, out of unease for want of having his merchandise close to home, to offload portions of both cargoes in Amsterdam for the added security this would provide, in which case he would pay additional duty fees, on top of those he already pays. Despite having paid additional taxes in this particular instance, this merchant has already illustrated the advantage of local trafficking in lieu of foreign transport, and would benefit greatly in future by trading exclusively within a home market.
Smith continues his discussion of import regulations by relating what he viewed to be one of the British Navigation Acts' few beneficial aspects, as a deterrent strategy against Holland, which was at that time a prolific carrier in all manner of goods throughout Europe. The Dutch were England's major naval rival during that period, so the British levied a heavy tax upon all ships carrying cargo from any nation save their own in an effort to limit Dutch naval growth by requiring their vessels to pay exorbitant duty fees which the British hoped would reduce that nation's available revenue, and ultimately, its ability to construct more ships. Contrarily, in Chapter III Smith utilizes a simile which likens Britain's potential profits from trafficking in French wines to Holland's East India trade, summarizing that the Dutch nation generated more revenue from the distribution abroad of East Indies merchandise than the total cost of the venture itself.
Also discussed in Chapter III, while larger kingdoms such as England and France had their own currency, smaller republics such as Genoa, Hamburg, and Nuremberg often had their own coinage mixed with the clipped, worn, or devalued international coins, making currency reform expensive and impractical for these smaller, less-wealthy city-states. Their banks had occasion to mint their own bank currency, which included a markup in value called an agio (i.e. during Smith's era, the bank of Hamburg's agio was ~14%), so it was to the private citizen's advantage to deposit their clipped and worn foreign specie, as their debts would be repaid at a premium while the devalued currency was carted away and melted down. Drawbacks were measures employed to encourage the import/export of a given commodity by providing reduced or waived duty fees, so as to stimulate the carrying trade, while bounties were utilized as an incentive to increase a nation's production of a given resource by offering farmers and fishermen higher prices for their yields, in the hopes that they would proportionally step up their production efforts to generate a greater profit.
Smith's expertise as a writer and a linguist can be immediately perceived in his deft, accomplished prose, and complex, nuanced sentence structure - indicative of the fact that economics were not the sole area in which he excelled. While he speaks of the seemingly mundane matters of profit and loss, of labor and capital, he absolutely infuses his work with an energetic sense of life and a brimming excitement for his subject matter, rendering his writing equally as compelling as any narrative thriller. He most assuredly favored a formal, old-fashioned form of expression, which puts one in mind of such concepts as courtesy, respect, and the common good - virtuous ideals that the writer of The Wealth of Nations likely believed in, as to which his Theory of Moral Sentiments will no doubt attest.
The author's lengthy digression outlining the corn trade's different bills, components, and involved parties which include inland dealers, importers for purposes of home consumption, exporters for foreign consumption, and merchant carriers, although it may sound uninteresting and repetitive, was both fascinating and educational in equal measure. In the early portion he emphasizes the people's and the inland corn merchants' mutual shared interests, likening their relationship to an experienced captain guiding the crew of a ship as he prognosticates any impending corn scarcities and adjusts his prices in accordance with his customers' needs and with the total corn supply. He does acknowledge the possibility of a rapacious seller potentially taking advantage of the populace, but maintains that in the grand design it is to the merchant's ultimate detriment the resulting distrust and ire for him which arise from this scenario.
Smith commences Chapter VII, Of Colonies with another interesting digression, one which concerns the progression of colonialism throughout history as he contrasts the necessity- and utility-driven expansionism of classical Greece and Rome with the profit-driven imperialism of Venice and Portugal during the fourteenth and fifteenth centuries, also addressing the Genoese navigator Christopher Columbus' endeavors in the New World as he discovered rare minerals and plentiful resources while in service to the crown of Spain. The author cites the rise of the exclusive company as a new colony's primary source of economic discomfiture, whose sole purpose and interests were dependent upon buying cheap and selling expensive to the prosperous colonists, just as it encouraged low quantities and diminished demand for colonial exports. He also delineates between enumerated and non-enumerated colonial commodities, the former of which had to be exported and confined to the parent country's market, while the latter was permissible for colonialist-supervised foreign export.
Smith maintained that the European colonies' exclusive traffic with their parent nations caused serious financial consequences for Europe's balance of trade, as these enumerated commodities were initially confined to a single market before being resold to other countries in a manner which was to those kingdoms' great profit, but to all others' detriment. His discussion shifts to the relationship between the American colonies and Great Britain, utilizing the examples of sugar and tobacco to illustrate how these policies disrupted foreign industry and stagnated the colonies' growth by denying them access to free trade, also differentiating between direct and roundabout forms of trade by explaining that England funneled more labor and capital through its colonial trade monopoly by buying from America only to sell again on a foreign market, hence the term roundabout, than it would have by employing those resources in a foreign trade of consumption, which is the cultivation of local produce for foreign export. He later posits that the mercantile economic system's primary goal was to ultimately position manufacture as a nation's dominant form of enrichment, and to divert focus from rural land development while emphasizing urban production.
Due to the reviewer's extremely limited scope of knowledge in the field of economics, this review merely scratches the surface of what Adam Smith's magnum opus has to offer. There are so many facets to this book, it's difficult to choose a specific section, but I think I enjoyed Smith's historical examples the most, as they afford a unique perspective of how economics worked, both during the classical period and the Age of Enlightenment, and because it was interesting to learn how antiquity was perceived by someone from another era. My overall impression of the book was extremely positive - I still marvel that a single man could have conceived of a work as complex and nuanced as The Wealth of Nations, and would recommend to anyone at all interested in this entry to begin with Volume I, as Smith takes Books I-III's established concepts and builds upon them considerably for Books IV-V. Nonetheless, it is still certainly possible to enjoy Volume II without having read the previous entry. While some portions were quite beyond the reviewer's scope of knowledge, it was nonetheless a wonderful reading experience. I hope that you enjoyed the review, thank you so very much for reading!
Volume II of Adam Smith's The Wealth of Nations expands considerably upon Volume I's concepts of supply and demand, rent, wages and profit, the divisions of labor and stock, and the progress of opulence throughout history. Viewed collectively, Book IV - Of Systems of Political Economy and Book V - Of the Revenue of the Sovereign or Commonwealth address Smith's two proposed purposes for the existence of the political economy, those being the generation of revenue for the people and for the government of a kingdom or commonwealth. Book IV focuses upon colonialism and the systems of mercantilism and agriculture, while Book V concentrates on a kingdom or commonwealth's tax revenue and other forms of income, and its primary expenses, which include education, justice, public works, and defense.
Andrew S. Skinner's introduction addresses a variety of topics, but initially focuses on the economic models that were developed in the writings of two of Adam Smith's contemporaries, François Quesnay's Tableau économique, and the Baron de l'Aulne, Anne Robert Jacques Turgot's Reflections on the Formation and Distribution of Riches, both of which influenced Smith's own work in The Wealth of Nations and his Lectures on Jurisprudence. Skinner posits that Quesnay's theories are fairly simple and straightforward, and he explains them by employing an idealistic scenario involving 3 classes - farmers, proprietors, and manufacturers, which between them circulate 2 million livres and produce or manufacture goods "in a process of continuous replacement", and by touching upon such concepts as fixed and circulating capital, respectively defined as avances primitives and avances annuelles, but he also maintains that this model does not analyze price determination or the distribution of labor, nor does it make allowances for profits.
Skinner explains that Anne Robert Jacques Turgot further developed Quesnay's theories by expanding upon his 3-party economic model for the division of labor into cultivators, the classe disponible, or landowners, and the classe stipendiée class, which was subdivided into entrepreneurs and manufacturers, and artisans. This talented French economist introduced the 4 aspects of production (land, labor, capital, and entrepreneurship), the 3 kinds of returns (rent, wages, and profit), and the 5 interrelational ways to administer capital - by "purchase of land, commerce, manufactures, agriculture, or lent at interest", and Smith expanded considerably on all these concepts, incorporating new premises such as the division of the cultivator class into farmers and country laborers, and the avances foncières, or interest due to the proprietor for the maintenance and improvement of his rented lands.
The editor reinforces the fact that Adam Smith was influenced by Quesnay and Turgot's school of economics, a branch known as physiocracy which emphasizes and values labor as the sole item of worth in business models. Agricultural toil produced agricultural goods, and a physiocrat believed it was not the product itself, but the process involved in its creation that was the key to a nation's prosperity, and a society's most valued commodity. It should be noted that physiocratic economics were developed during the pre-industrial period in France, and they do not necessarily value manufactured commodities with the same importance as those goods which are strictly "the fruits of the land".
Skinner's discussion expands to encompass Smith's views on economic issues such as England's colonial relationship with the United States, at the time a relevant topic, particularly in regard to the Revolutionary War's outbreak in 1775. An example of this can be found in his remarks on the Navigation Acts of 1651-96, which restricted British colonial trade to English vessels and tightly controlled the flow of goods between the American Colonies and the British Isles. Cash crops such as tobacco, sugar and coffee were regulated so British merchants could buy low and sell high to foreign countries, and while these regulations may have benefited both parties in the short-term, in the long run they adversely effected America's rate of expansion. Smith lauded the Navigation Acts in The Wealth of Nations' second chapter, but later acknowledged their shortcomings in the labor and resources required for Great Britain to maintain its colonial trade monopoly, decisions he felt changed the flow of British trade so as to render it contingent upon a distant, albeit large, indirect market in America, as opposed to a near, direct market with the rest of Europe.
Smith devotes Chapter I, On the Principle of the Mercantile, or Commercial System towards establishing his basic concepts of import/export as they relate to moveable goods and gold and silver currencies, bullion, and plate, also covering effectual demand and sources of wealth, but most importantly, he outlines, "..the six principal means by which the commercial system proposes to increase the quantity of gold and silver in any country by turning the balance of trade in its favour." These constitute restrictions on the import of locally-produced consumable goods, and also on the import of goods from those foreign countries with whom a disadvantageous trade balance exists; and the final four are essentially practices intended to stimulate export - drawbacks, bounties, advantageous treaties of commerce, and the establishment of colonies in remote lands.
The author utilizes illustrative examples to explain how foreign military campaigns could have a catastrophic effect on a nation's economy, such as Great Britain's enormous war debt of £90,000,000 after the Seven Years' War of 1756-63, and he cites the teachings of philosophers and economists such as the esteemed John Locke and Sir Thomas Mun, comparing their ideas with his own arguments. Time and again he reiterates that a nation importing more gold and silver than it exports is a country with the balance of trade weighted against it. He compares a national market's resilience with the merchant's vulnerability to an overabundance of product, maintaining that while a merchant may be forced into bankruptcy due to an inability to sell a fully stocked warehouse, a political state would simply consume the product for its own use and generate revenue from another source.
Chapter II, Of Restraints Upon the Importation from Foreign Countries of Such Goods as Can Be Produced at Home uses the scenario of an Amsterdam merchant engaged in the carrying trade of transporting corn and wine between Konnigsberg and Lisbon to demonstrate how that business venture's capital divides itself evenly amongst the two destinations, unless the merchant decides, out of unease for want of having his merchandise close to home, to offload portions of both cargoes in Amsterdam for the added security this would provide, in which case he would pay additional duty fees, on top of those he already pays. Despite having paid additional taxes in this particular instance, this merchant has already illustrated the advantage of local trafficking in lieu of foreign transport, and would benefit greatly in future by trading exclusively within a home market.
Smith continues his discussion of import regulations by relating what he viewed to be one of the British Navigation Acts' few beneficial aspects, as a deterrent strategy against Holland, which was at that time a prolific carrier in all manner of goods throughout Europe. The Dutch were England's major naval rival during that period, so the British levied a heavy tax upon all ships carrying cargo from any nation save their own in an effort to limit Dutch naval growth by requiring their vessels to pay exorbitant duty fees which the British hoped would reduce that nation's available revenue, and ultimately, its ability to construct more ships. Contrarily, in Chapter III Smith utilizes a simile which likens Britain's potential profits from trafficking in French wines to Holland's East India trade, summarizing that the Dutch nation generated more revenue from the distribution abroad of East Indies merchandise than the total cost of the venture itself.
Also discussed in Chapter III, while larger kingdoms such as England and France had their own currency, smaller republics such as Genoa, Hamburg, and Nuremberg often had their own coinage mixed with the clipped, worn, or devalued international coins, making currency reform expensive and impractical for these smaller, less-wealthy city-states. Their banks had occasion to mint their own bank currency, which included a markup in value called an agio (i.e. during Smith's era, the bank of Hamburg's agio was ~14%), so it was to the private citizen's advantage to deposit their clipped and worn foreign specie, as their debts would be repaid at a premium while the devalued currency was carted away and melted down. Drawbacks were measures employed to encourage the import/export of a given commodity by providing reduced or waived duty fees, so as to stimulate the carrying trade, while bounties were utilized as an incentive to increase a nation's production of a given resource by offering farmers and fishermen higher prices for their yields, in the hopes that they would proportionally step up their production efforts to generate a greater profit.
Smith's expertise as a writer and a linguist can be immediately perceived in his deft, accomplished prose, and complex, nuanced sentence structure - indicative of the fact that economics were not the sole area in which he excelled. While he speaks of the seemingly mundane matters of profit and loss, of labor and capital, he absolutely infuses his work with an energetic sense of life and a brimming excitement for his subject matter, rendering his writing equally as compelling as any narrative thriller. He most assuredly favored a formal, old-fashioned form of expression, which puts one in mind of such concepts as courtesy, respect, and the common good - virtuous ideals that the writer of The Wealth of Nations likely believed in, as to which his Theory of Moral Sentiments will no doubt attest.
The author's lengthy digression outlining the corn trade's different bills, components, and involved parties which include inland dealers, importers for purposes of home consumption, exporters for foreign consumption, and merchant carriers, although it may sound uninteresting and repetitive, was both fascinating and educational in equal measure. In the early portion he emphasizes the people's and the inland corn merchants' mutual shared interests, likening their relationship to an experienced captain guiding the crew of a ship as he prognosticates any impending corn scarcities and adjusts his prices in accordance with his customers' needs and with the total corn supply. He does acknowledge the possibility of a rapacious seller potentially taking advantage of the populace, but maintains that in the grand design it is to the merchant's ultimate detriment the resulting distrust and ire for him which arise from this scenario.
Smith commences Chapter VII, Of Colonies with another interesting digression, one which concerns the progression of colonialism throughout history as he contrasts the necessity- and utility-driven expansionism of classical Greece and Rome with the profit-driven imperialism of Venice and Portugal during the fourteenth and fifteenth centuries, also addressing the Genoese navigator Christopher Columbus' endeavors in the New World as he discovered rare minerals and plentiful resources while in service to the crown of Spain. The author cites the rise of the exclusive company as a new colony's primary source of economic discomfiture, whose sole purpose and interests were dependent upon buying cheap and selling expensive to the prosperous colonists, just as it encouraged low quantities and diminished demand for colonial exports. He also delineates between enumerated and non-enumerated colonial commodities, the former of which had to be exported and confined to the parent country's market, while the latter was permissible for colonialist-supervised foreign export.
Smith maintained that the European colonies' exclusive traffic with their parent nations caused serious financial consequences for Europe's balance of trade, as these enumerated commodities were initially confined to a single market before being resold to other countries in a manner which was to those kingdoms' great profit, but to all others' detriment. His discussion shifts to the relationship between the American colonies and Great Britain, utilizing the examples of sugar and tobacco to illustrate how these policies disrupted foreign industry and stagnated the colonies' growth by denying them access to free trade, also differentiating between direct and roundabout forms of trade by explaining that England funneled more labor and capital through its colonial trade monopoly by buying from America only to sell again on a foreign market, hence the term roundabout, than it would have by employing those resources in a foreign trade of consumption, which is the cultivation of local produce for foreign export. He later posits that the mercantile economic system's primary goal was to ultimately position manufacture as a nation's dominant form of enrichment, and to divert focus from rural land development while emphasizing urban production.
Due to the reviewer's extremely limited scope of knowledge in the field of economics, this review merely scratches the surface of what Adam Smith's magnum opus has to offer. There are so many facets to this book, it's difficult to choose a specific section, but I think I enjoyed Smith's historical examples the most, as they afford a unique perspective of how economics worked, both during the classical period and the Age of Enlightenment, and because it was interesting to learn how antiquity was perceived by someone from another era. My overall impression of the book was extremely positive - I still marvel that a single man could have conceived of a work as complex and nuanced as The Wealth of Nations, and would recommend to anyone at all interested in this entry to begin with Volume I, as Smith takes Books I-III's established concepts and builds upon them considerably for Books IV-V. Nonetheless, it is still certainly possible to enjoy Volume II without having read the previous entry. While some portions were quite beyond the reviewer's scope of knowledge, it was nonetheless a wonderful reading experience. I hope that you enjoyed the review, thank you so very much for reading!
July 2, 2020
This second volume of The Wealth of Nations contain Smith's acute critics about the mercantile economic system which focus on balance of trade between country as a factor that determine the wealth if nation. Smith think that the balance of trade is not proper things to determine the wealth state of nation. The critique serve as a pillar for Smith's advocate to the free market between country. This section clearly describe the Smith's position as the advocater of free market economic system.
Then, Smith continue the volume with discussing the source and expense of government fund. Although Smith often seen as a supporter of free market economy, he still consider the government role to provide service that market can't provide. He think things as a defence and elementary education must be provide by government with full contribution of society. Other things like justice, infrastructure, and higher education can subsist itself with contribution from people that using their service.
4 of 5 stars for his argument and critics with mercantile economic system, and his comprehensive description about government fund. Little deficiency with this volume is Smith often digress to the other topic field when he discussing particular thing.
Then, Smith continue the volume with discussing the source and expense of government fund. Although Smith often seen as a supporter of free market economy, he still consider the government role to provide service that market can't provide. He think things as a defence and elementary education must be provide by government with full contribution of society. Other things like justice, infrastructure, and higher education can subsist itself with contribution from people that using their service.
4 of 5 stars for his argument and critics with mercantile economic system, and his comprehensive description about government fund. Little deficiency with this volume is Smith often digress to the other topic field when he discussing particular thing.
June 24, 2024
Throughout, I was perplexed by one thing: he describes "uncivilized" nations as being egalitarian, healthy for the majority of people, happy, having fewer worries, having greater freedoms, having a greater abundance of wealth both in food and in metals, and yet concludes that "the progress of civilization" should be admired. I was not perplexed that peoples not counted among the civilized should be more prosperous or happy that the civilized. I have read and seen proofs of this in abundance. But I don't understand why one should strive blindly toward "progress and civilization", which invariably today means classism, capitalism, the concentraion of power, the inequality of the agency civilization allots to people based on such things as heredity and social status. It seems foolish to discount other ways of living as it hinders one's ability to adapt.
May 31, 2021
Interesting history of economics. Informative.
September 30, 2025
A masterful work, unrivaled in the field.
The Wealth of Nations is the most important work in economics ever produced. It is a masterpiece of history, psychology, finance, sociology, and a plethora of other subjects.
The melding of subjects, awesomely orchestrated by the author, gives the reader a deep and almost complete view of both the history of production and the most sensible guidelines on how to foment it. The author displays an incredible (and sometimes overwhelming) amount of information and data to support conclusions that are unbelievably current.
The most impressive aspect of this work is that it gives the reader a better understanding of economics than most university courses do. Although it lacks the statistical part of the subject, which can be helpful (and sometimes misleading), the theory exposed in it is almost complete, even containing well formulated arguments against theories that would be published hundreds of years later.
If you want to read one economics book in your life, this is it. The amount of data can sometimes be dull, but it is worth going through. Summaries and critiques do not do it justice, reducing the arguments so much that they become straw men versions of themselves, which gives my theory, that almost no one reads the original work, a lot of credence.
The Wealth of Nations is the most important work in economics ever produced. It is a masterpiece of history, psychology, finance, sociology, and a plethora of other subjects.
The melding of subjects, awesomely orchestrated by the author, gives the reader a deep and almost complete view of both the history of production and the most sensible guidelines on how to foment it. The author displays an incredible (and sometimes overwhelming) amount of information and data to support conclusions that are unbelievably current.
The most impressive aspect of this work is that it gives the reader a better understanding of economics than most university courses do. Although it lacks the statistical part of the subject, which can be helpful (and sometimes misleading), the theory exposed in it is almost complete, even containing well formulated arguments against theories that would be published hundreds of years later.
If you want to read one economics book in your life, this is it. The amount of data can sometimes be dull, but it is worth going through. Summaries and critiques do not do it justice, reducing the arguments so much that they become straw men versions of themselves, which gives my theory, that almost no one reads the original work, a lot of credence.
February 24, 2016
Adam Smith has hijacked by the free market right. And that's a shame. Because his views don't fit into the simple left/right narrative that people often feel the need to pull people into.
He was writing in the 18th Century. In the hayday of the British Empire. When slavery was legal. When vast monopolies trading from the City of London screwed over other countries (and other parts of the UK). You can't really read this book and be in any doubt where the wealth of the UK has come from.
And although it's hard to read his views on slavery (he was anti-slavery but he wasn't a very progressive voice on this) he was progressive on issues such as regulation of the financial sector, and the mercantile class. He really slags off the East India Company, the British Empire, and said the interests of the City of London were in conflict with the long term economic future of the UK.
It's a shame that so much of what he said is still so relevant today. This is what he said about banking regulation, just as our government reduces regulation to pander to the needs of HSBC:
‘though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules. To depart upon any occasion from those rules, in consequence of some flattering speculation of extraordinary gain, is almost always extremely dangerous, and frequently fatal, to the banking company which attempts it.'
He is also pretty good on equality
‘No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable."
And has interesting stuff to say about labour value, land taxes (which he was in favour of), role of the state, the dangers of boards of directors looking after other people's money, and loads of other stuff.
I couldn't recommend reading this because it is such a slog but I absolutely cannot recommend reading the edited version the think tank the 'Adam Smith' Institute produced. They cut out a lot of key content, and where they have to include something put comments in afterwards like this:
"At best his words are misleading, at worst they are mistaken". So, that's the Adam Smith Institute there saying how they feel that, um, Adam Smith is mistaken.
He was writing in the 18th Century. In the hayday of the British Empire. When slavery was legal. When vast monopolies trading from the City of London screwed over other countries (and other parts of the UK). You can't really read this book and be in any doubt where the wealth of the UK has come from.
And although it's hard to read his views on slavery (he was anti-slavery but he wasn't a very progressive voice on this) he was progressive on issues such as regulation of the financial sector, and the mercantile class. He really slags off the East India Company, the British Empire, and said the interests of the City of London were in conflict with the long term economic future of the UK.
It's a shame that so much of what he said is still so relevant today. This is what he said about banking regulation, just as our government reduces regulation to pander to the needs of HSBC:
‘though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules. To depart upon any occasion from those rules, in consequence of some flattering speculation of extraordinary gain, is almost always extremely dangerous, and frequently fatal, to the banking company which attempts it.'
He is also pretty good on equality
‘No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable."
And has interesting stuff to say about labour value, land taxes (which he was in favour of), role of the state, the dangers of boards of directors looking after other people's money, and loads of other stuff.
I couldn't recommend reading this because it is such a slog but I absolutely cannot recommend reading the edited version the think tank the 'Adam Smith' Institute produced. They cut out a lot of key content, and where they have to include something put comments in afterwards like this:
"At best his words are misleading, at worst they are mistaken". So, that's the Adam Smith Institute there saying how they feel that, um, Adam Smith is mistaken.
August 14, 2021
The book whilst well written is devoid of economic theory and only holds value as a way of understanding market history and Smith's views. Extremely overrated.
He starts off making the case for international trade and explaining the historical barriers. Then he moves on to how colonialism mainly by the British changed the market, especially due to the influx of gold and how the standard limits the amount of currency in circulation. Then he makes some ridiculous arguments for privatising the roads, bridges, canals, and schools and like the rest of his opinions doesn't back it up with evidence and then moans about tax for a bit.
I did however find it funny when he called the Capitalists and landlords "the unproductive class" even if he did make excuses for them, adding that "It can never be the interest of the proprietors and cultivators to restrain or to discourage in any respect the industry of merchants, artificers, and manufacturers. The greater the liberty which this unproductive class enjoys, the greater will be the competition in all the different trades which compose it, and the cheaper will the other two classes be supplied, both with foreign goods and with the manufactured produce of their own country.".
I also liked the honesty about the actual function of the government when he said that "Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all".
He starts off making the case for international trade and explaining the historical barriers. Then he moves on to how colonialism mainly by the British changed the market, especially due to the influx of gold and how the standard limits the amount of currency in circulation. Then he makes some ridiculous arguments for privatising the roads, bridges, canals, and schools and like the rest of his opinions doesn't back it up with evidence and then moans about tax for a bit.
I did however find it funny when he called the Capitalists and landlords "the unproductive class" even if he did make excuses for them, adding that "It can never be the interest of the proprietors and cultivators to restrain or to discourage in any respect the industry of merchants, artificers, and manufacturers. The greater the liberty which this unproductive class enjoys, the greater will be the competition in all the different trades which compose it, and the cheaper will the other two classes be supplied, both with foreign goods and with the manufactured produce of their own country.".
I also liked the honesty about the actual function of the government when he said that "Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all".
September 28, 2025
Dalam jilid ini, pembaca diajak menelusuri bagaimana gagasan ekonomi klasik lahir dari kritik tajam terhadap sistem merkantilisme yang kala itu mendominasi Eropa. Smith menguraikan mengapa pembatasan impor, subsidi ekspor, dan monopoli dagang justru sering merugikan masyarakat, lalu menawarkan perdagangan bebas sebagai jalan menuju kemakmuran bersama. Ia juga membahas peran penting negara—mulai dari pertahanan, penegakan hukum, hingga pembangunan jalan dan sekolah—namun dengan pesan agar pemerintah tidak terlalu ikut campur dalam urusan pasar. Pandangannya soal pajak pun terasa relevan hingga kini: harus adil, sederhana, dan tidak memberatkan rakyat. Di bagian akhir, ia menyinggung bahwa pertanian memang penting, tetapi bukan satu-satunya sumber kekayaan bangsa. Melalui bahasa yang lugas namun penuh pemikiran mendalam, karya ini tetap menjadi pijakan utama dalam memahami ekonomi, politik, dan peran negara di tengah masyarakat. Buku ini cocok bagi mahasiswa, pembuat kebijakan, pecinta sejarah, maupun pembaca umum yang ingin mengenal akar gagasan tentang pasar bebas dan negara modehttps://blog.periplus.com/2025/09/22/....
December 21, 2023
Amazingly in front and informative is one way of putting it - so much I could add but I don't know where to begin...
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To Our Continued Success!
Seemy
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If you found this review helpful - I’d like to invite you to discover more on our blog. Where the community share some of our most important insights to level up each others knowledge 💡- from experience in studying books like this, training programs, podcasts and much more - visit the blog link above to find out more.
P.P.S 😅 - You probably noticed from my profile that I’ve reviewed a LOT of books over many years now - if you love seeking knowledge like me I’d love to connect with you further as a like minded person (send me a friend invite! 😀) - Also if you are curious - here is my preferred and recommended resource for seeking timeless wisdom - Check it out via the website invite link below 👇🏼 (You’ll be able to claim some awesome books for free 📚)
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December 19, 2015
I finally completed all 5 books of this collection. I have to say, so much of it was difficult to really apply since I think this was more about pointing out the economic principles that would benefit the times of Adam Smith. There are of course many principles that can and should be applied today, but one would need to dissect much of what was written and modernized for applying to today. Still, a book for anyone wanting to better understand economics by looking back into the past - what worked, what didn't. It is well worth anyone's time and effort to complete, unless you're a socialist. In your case, economic principles aren't really guiding you anyway; since your goal is to steal from those you deem rich, to give to those you deem poor.
December 8, 2020
It is by no accident that this book has become a cornerstone of human history.
This collection of books is so much more than simply an outline of economic activity, I view it as a thorough analysis of human behaviour itself.
Within the final two instalments of this collection, Adam Smith expands upon his analysis of economic activity based on an understanding of human nature by exploring the origins & role government plays within society & its potential implications.
Once again providing a well deduced logical depiction of what the construct of government is, how it may behave & the implications of its behaviour.
This collection of books is so much more than simply an outline of economic activity, I view it as a thorough analysis of human behaviour itself.
Within the final two instalments of this collection, Adam Smith expands upon his analysis of economic activity based on an understanding of human nature by exploring the origins & role government plays within society & its potential implications.
Once again providing a well deduced logical depiction of what the construct of government is, how it may behave & the implications of its behaviour.
March 28, 2014
A fairly quaint addendum to volume one. Smith's attention to detail is mind numbing and oddly endearing. From the price of seigniorage (which is not as majestic as it sounds), to the benefits of a general tax on malt, books IV-V are less capitalist credo, more politico-historical navel gazing; but not by much.
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