The Wealth of Nations, Books 1-3

All my life, I’ve been bombarded with one economist versus another. Each time, Adam Smith always showed up. So, after hearing snippets of his book and his ideas over and over and over again, I thought, “Ah, I know Adam Smith.” Well, I might’ve been a tad premature in thinking that I knew Adam Smith. As you will, too, when you read this book, “An Inquiry into the Nature and Causes of the Wealth of Nations.” Sometimes split into volumes. Some are abridged (avoid these). There are different commentators and editors. I figured that it was finally time to read Adam Smith for myself instead of taking snippets out of context. At first, I began to think that I had made a big mistake. If you read the Constitution of the United States, then you would notice that you are always told the impressive parts as separate statements, and they leave out all the boring details and sometimes important minutiae. Well, it looks like they did the same thing to poor Adam. On the surface, as you start reading this book, you start to wonder what makes Adam Smith so important, as it seems so primitive. Reading on, you realize that he came from an era that was way before the information age. His samples seem primitive and simple. He repeats and repeats and repeats himself. You start to wonder if this is the same Adam Smith that you studied in school. You will want to hang in there, though, as soon as you realize that Adam Smith had to start with the fundamentals of history and primitive economics. After pages of history, he will finally get to his time. Yes, this book is ancient, and the examples are not usually relevant today. However, just as you decide that you made a horrible mistake in reading “An Inquiry into the Nature and Causes of the Wealth of Nations,” small jewels of insight into not only economics and history but life itself reveal themselves in his everyday descriptions and observations. I had to buy a book on the English poor laws as the aforementioned as everybody knew about them. Many other subjects and reference books all of a sudden appeared on my desk as I realized that with all the depth of Adam Smith, this is just the tip of the iceberg. Yes, sometimes Smith can get boring and very redundant. However, whatever you do, do not skip any pages. Just as soon as you know what he is going to say, he comes up with another interesting angle. He not only covers economics from his version of a practical view, but soon he covers the history of education and many other subjects besides commerce. I found that he covers the effect of religions on people and people on religions. He covers schools and how they got started, and their potential for modifying society. He covers the economics of war and other major world-changing phenomena. Just as you think he is talking about his world and his time. You pick up a newspaper and see the very same type of events and economic arguments. For me, of all things, I was able to get a new view of the national debt, and it changed my view from a necessary evil to an excellent opportunity. You, too, will find new insights or views on economics that you were already sure you had under your belt. So, enjoy reading Adam Smith not as a necessity but for the fun of getting new views directly from the author.

If you're a fan of capitalism and want to see the structure of value and the system of it. Here you go. The Bible of Capitalism. It's actually extremely useful and sobering in viewing the world with value dynamics as you can see why things are the way they are. Useful for anyone, entrepreneur, investor, whatever.

Get ready for a long haul on this read. Definitely not for the faint of heart!

If you're wondering which Wealth of Nations to purchase, get the Bantam paperback. This is Smith's complete and unabridged final version of the Wealth of Nations. It provides footnotes on Smith's wording, the historical context, and the differences between Smith's 5th edition and previous editions. In addition, the margin of the pages contain useful notes which summarize Smith's writing. For the price, this is clearly the superior choice. Now, if you're wondering whether you should undertake such an endeavor, let me just say that Adam Smith was a professor of rhetoric. He explains everything so precisely, yet so comprehensible. Smith's writing is by no means difficult; I actually found it a surprisingly easy read given its antique nature. Once you get through the first chapter, you get quite used to Smith's writing style. If you put adequate time and energy into it, it's not hard at all.

A classic... mandatory but pleasant reading if you are into Economics... not boring despite the size. Read with a pencil handy to highlight the too many good quotes. Get the Bantam Classics edition--cheap, small and unabridged (doesn't get much better than this). Mind boggling how good Adam Smith is.

Just as some editions of The Wealth of Nations should be avoided because of undisclosed abridgement (see reviewers below), other editions ought to be sought out and preferred. Look for versions involving Edwin Cannan as editor. These include the University of Chicago edition (1976) in paperback and the Modern Library edition (1994) in hardcover. (To my knowledge, neither of these editions is abridged.) In 1904, Cannan, a professor at the London School of Economics, did two things that greatly add to the value of Smith's book. First, Cannan prepared a detailed index. For example, "invisible hand" appears in it. Just try to find the one (and only one) appearance of that phrase without an index. Most of the non-Cannan editions I've looked at lack an index. Second, Cannan wrote and added brief marginalia. His words facilitate skimming, something most readers of this thousand page book are apt to do. His words and phrases are also easily ignored. They don't get in your way once you've found the pages you want to read. (Reviewer T. Grimes comments on the marginalia as well.) Finally, reading The Wealth of Nations shows Smith to be different from his usual portrayal. He can be wickedly satirical. Anyone who has been to college will recognize much that is familiar in his thoughts (in Book V) on "Education of Youth". And he also frankly addresses the downsides of capitalism. The book begins with the division of labor as a powerful means of adding productivity. But later (pp. 839-41 in my Modern Library edition), he recognizes the destructive effects of division of labor and, in response, recommends government investment in public education. As one who once earned a good living as a computer programmer, and who is now retraining, I am finding perennial relevance in The Wealth of Nations.

This book has an abundance of profound observations of both praise and constructive criticism of the American political system, delivered in a richly eloquent and distinctly objective manner by a young Nineteenth Century French aristocrat/lawyer with a very impressive grasp of enduring political reality. The heart of Tocqueville's message is twofold: (1) his praise of Americans' voluntary associations as prime examples of what results from individuals pursuing enlightened self-interest, and (2) his warning that American democracy has the potential to devolve into pervasive majoritarian tyranny by an all-powerful central government covering the surface of society with a network of small complicated rules and treating citizens like children or timid and industrious animals, in perpetuity. In other words, he accurately predicted the out-of-control bureaucracy and rule by opinion poll which is now inflicting its hypnotic popular tyranny upon us. END