Book Review: The Wealth of Nations by Adam Smith

Book Review: The Wealth of Nations by Adam Smith

The Wealth of Nations is—far and away—the most difficult book I’ve read.  The writing is dense and the ideas are complex. The book is a behemoth…a paragon in the Libraries of History.

Smith is a legendary thinker. He covers a wide array of topics, from the Chinese economy to the barter system of Ancient Peru. During the process, we realize that we’re in the presence of a GREAT MAN. He’s an economist, a historian, a philosopher…in short, he’s the Age of Enlightenment personified.

Here’s what I took away from the book:

Agriculture is a Vital Part of a Country’s Economy

Smith believed in agriculture. He points out that a country must—first and foremost—be able to feed itself. It needs to produce bread, rice, etc. And when a country cannot feed itself, it’s an economic liability.

The examples are numerous—just look at the Irish Potato famine. Once they lost the ability to feed themselves, a tragedy ensued. Another example can be seen in modern-day Venezuela, which did away with much of its agriculture. When a financial crisis occurred, the people were lacking in basic food commodities. Just look at how many supermarkets were raided in downtown Caracas.

Paper Money Should Be Connected to a Precious Money

According to Smith, paper money needs to be tied to a precious metal: gold, silver, etc. This prevents the country from printing paper money at will, which leads to inflation. Smith provides numerous examples, going as far back as the Roman Empire’s use of bronze as a way to stabilize its currency.

Needless to say, the United States is currently in this dilemma. Since it left the gold standard, the inflation has slowly been rising. This accounts for the fact that a dinner that once was worth five cents (such as in 1920) is now worth fifteen dollars. If the situation spirals out of control—such as in Venezuela—then the paper money can become pointless. Note how in Caracas, you need a backpack full of money to buy a lunch.

Every Armed Conflict Has an Economic Story

The Wealth of Nations was written in 1776…the year of American independence. Smith goes into great detail about the war. He points to the economic underpinnings of the battle, explaining an angle that’s rarely talked about. Through this lens, the American War of Independence was more than a fight for sovereignty—it’s was an economic battle.

How many wars are fought over money? What’s the real story behind any armed conflict? What about the Syrian battle? The Iraqi invasion? Money plays a huge role in these conflicts. Smith reminds us about the “unspoken cause of war” the conflict that’s always at play—the battle between a creditor and a debtor.

Conclusion

I highly recommend The Wealth of Nations. Regardless of your major, you should read this book. It will bring you up to speed with “the best in what’s been thought and said.” Adam Smith should be on the bookshelf of any self-respecting bibliophile.

Adam Smith on Bourgeois Ladies

Adam Smith on Bourgeois Ladies

 

In 1776, Adam Smith commented on the tendency of rich women (bourgeois ladies) to have less children than poor ones. (The Wealth of Nations):

“Poverty though it no doubt discourages, does not always prevent marriage,  It seems even to be favorable to generation. A half-starved Highland woman frequently bears more than twenty children, while a pampered fine lady is often incapable of bearing any, and is generally exhausted by two or three.” (p. 75)

250 years ago, rich women had less children than poor ones. But things have changed. England, and vis-a-vis America, no longer has a bourgeois class. However, we do have a replacement for the bourgeoisie. Today’s the rich girl, or “pampered fine lady” as Smith calls it, is equivalent to the modern woman.

The bourgeois lady and the modern one are different in several ways. Whereas the bourgeois lady was concerned with dinner parties, the modern one is obsessed with PHD papers. While the bourgeois lady is concerned with powdering her nose, the modern one is fretting over a job interview. And while the bourgeois lady stared out the window of an estate, the modern one gazes into a cubicle.

Yet for all these differences, the bourgeois lady and the modern one are similar in one way…

They’re both less likely to have children.

I imagine that the bourgeois lady was happier. For one, she had servants to clean the house, get her dressed, etc. And her life was spent between dinner parties and social events. How bad could it be?

But most importantly, the bourgeois lady was not exposed to 24/7 feminism (like today’s modern woman is). That fact, in and of itself, was worth a million pounds.

See Related Article: Adam Smith: On Sending Your Adolescent Abroad

Adam Smith on the Economic Difference Between Europe and Pre-Colombian America

Adam Smith on the Economic Difference Between Europe and Pre-Colombian America

Adam Smith explains why Europe was economically stronger than the Pre-Colombian peoples of America.

All the ancient arts of Mexico and Peru have never furnished one single manufacture to Europe (p. 162).

Good point. Pre-Colombian America had a wealth of architectural achievements: Machu Pichu, Tikal, etc. Yet when it came to trade, they manufactured nothing. Their wealth came from the land, via gold and tropical fruits. And they were able to expand their empires via war. Yet they never created a notable product that was bought and sold in foreign markets.

Today, we can see the wealth of nations in a similar way. What nations are manufacturing items? America, Japan, Germany…these are the wealthy countries. Conversely, most of the poor nations—like Haiti or Bolivia—manufacture nothing. Have you ever seen a Haitian or Bolivian car for sale? What about a refrigerator?  Or a stereo? You get my point.

Manufacturing requires great skill. It indicates a society that, at its base, is highly developed:

  • Intellectual skill: the ability to create a new item: car, refrigerator, etc.
  • Organizational skill: the ability to create many of the items in question via factories
  • Distribution skill: the ability to disseminate the item throughout the culture and world

Manufacture is more than a word – it shows the greatness of a people. It highlights a nation that’s dreaming bigger, that’s pushing farther. It requires the genius of the inventor and the integrity of a people. And make no mistake about it…the eyes of the world are centered on the nations that manufacture goods.

For a link to the book, see the following:  Wealth of Nations PDF

Adam Smith: On Sending Your Adolescent Abroad

Adam Smith: On Sending Your Adolescent Abroad

Adam Smith discussed many things in The Wealth of Nations, not just economics. One interesting topic revolves around a father sending his son abroad for schooling. Smith frowned upon the idea, stating that it often produced a horrible result:

“He [the son] returns home more conceited, more dissipated, more unprincipled, and more incapable of any serious application….”

“By sending his son abroad, a father delivers himself…a son unemployed, neglected, and going to ruin before his eyes.”

Smith hits on an important point—adolescents are sometimes worse off when they leave home for college. As he points out they are more “conceited” and prone to “ruin.”

I’d say that Smith is generally right. In the United States, we do not send our children “abroad,” per se. However, the United States is large enough that adolescents can travel far away when going to college: from California to Wisconsin, from Florida to New York, etc. In these college years, adolescents can fall under the sway of different individuals: they can engage in drug use, premarital sex, etc. They can ruin themselves for life.

Would you send your daughter to a “party school”? Would you send your soon to a college that you knew was ripe with leftist indoctrination?

Parents should think twice…and tread carefully. Sending your child away for college is not an automatic recipe for success.