The Wealth of Nations

A retro review from November 14, 2009 …

Review: An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith, 1776.Wealth of Nations

What more is there to say about a book that’s been around 233 years? That’s considered to be the founding text of modern economics? Written by a man who has organizations and lectures named after him, whose name is synonymous with free markets?

Well, the following is a list of things not generally talked about – in my casual exposure to economics – in regards to this work.

Smith, not surprisingly for a man of the Enlightenment, was a blank slate guy. The philosopher, we’re told, differs from the porter “not so much from nature, as from habit, custom, and education”. Smith’s professional progeny, with less justification and an autistic-like inability to model human nature, has largely kept the notion of people as malleable economic units whose value can simply be altered by some inputs of education.

This is a book on the wealth of nations, not an argument for how trade is going to pacify the world and render borders obsolete as is the gospel sometimes preached – for at least a hundred years – by advocates of globalization. While Smith acknowledges that wealthy countries make great trading partners, he also notes their wealth makes them “dangerous in war and politics”. (He also makes a not entirely unconvincing argument for standing armies being necessary. Part of it rests on the general efficacy of the specialization of labor.) Continue reading