Posted by: erichosemann | December 8, 2009

An Inquiry into the Nature and Causes of The Wealth of Nations

I’ve started reading it.  I will offer summaries of what I’ve read, in installments, here.  I’m reading the Bantam Classic paperback edition. I’ll indicate summarized text with book number, chapter number, and page numbers, followed by paragraph number, not as numbered through each section but on the page.

I’ve wanted to read The Wealth of Nations for a long time, and put it off because I was intimidated by it.  Dan Klein and Russ Roberts helped me overcome this apprehension with a wonderful six-part discussion of Smith’s Theory of Moral Sentiments.

I don’t plan to turn this summary into one of those “paragraph by the master, followed by cranky paragraph by the student” type of things that annoy me so.  That’s too time consuming for me anyhow.   I will simply do my best to repeat what Smith writes in my own words, so that I may understand him better.  If this sort of thing appeals to you, or if you find errors in my interpretation, please comment.  But don’t expect me to engage in a lively debate over Smith’s relevance to our current economic situation, or the hermeneutics of Smith, or any horsepucky of that nature.  A preemptive declaration: I find Smith supremely relevant in all sorts of ways.  By the end of my summary, I hope to better articulate why.

Ahem.  Let’s begin.  To start, my summary of the Introduction and Plan of the Work:

page 1, paragraph 1: “The annual labour of every nation…” What a nation produces is what a nation consumes.  Production supplies consumption.

1, 2-3: A nation’s wealth depends more on its productive members and the proportion of those members to the whole of society than it does on endowments of natural resources.  The larger the proportion of productive citizens in a nation’s population, the more prosperous the nation.

2, 1: Those nations in which all able-bodied persons must work to provide the basic necessities of food and shelter are poorest; those in which even “a great number do not labor at all” allow their poorest members “a greater share of the necessaries and conveniences of life.”  This difference will be explained in the first book.

3, 1: Book 2 will address “the nature of the capital stock,” that regulator of a nation’s productivity.

3,2: Nations with similar levels of productivity have followed different developmental plans; some favor urban industry, others rural enterprise.  Book three will address how these plans were generated.

4,1: Book four will discuss the extent to which such plans affected the opinions of the leaders and academics of the countries that implemented them.

4,2: Book five will address government expenditure: who benefits from it and who will pay for it, as well as why governments go into debt, and the effect of this debt on a nation’s wealth.

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