The Wealth of Nations, Books IV-V (Penguin Classics) [Paperback]

Adam Smith (Author), Andrew Skinner (Editor, Contributor)

Book Description

Series: Penguin Classics | Publication Date: February 28, 2000

Smith's "The Wealth of Nations" was the first comprehensive treatment of political economy. Originally delivered in the form of lectures at Glasgow, the book's publication in 1776 co-incided with America's Declaration of Independence. These volumes include Smith's assessment of the mercantile system, his advocacy of the freedom of commerce and industry, and his famous prophecy that 'America will be one of the foremost nations of the world'.

Editorial Reviews

About the Author

Adam Smith (1723-1790) was born in Glasgow and after being educated in Glasgow and Oxford, he held a number of academic posts before becoming tutor to the young Duke of Buccleuch. This post took him to France where he began writing his political treatise, THE WEALTH OF NATIONS. Andrew S. Skinner is Adam Smith Professor of Political Economy, Emeritus at Glasgow University and has published widely on Adam Smith and is the editor of the first three volumes of THE WEALTH OF NATIONS for Penguin.

Product Details

• Paperback: 672 pages
• Publisher: Penguin Classics; 4th Revised edition edition (February 28, 2000)
• Language: English
• ISBN-10: 0140436154
• ISBN-13: 978-0140436150
• Product Dimensions: 7.8 x 5.1 x 1.2 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.8 out of 5 stars  See all reviews (4 customer reviews)
• Amazon Best Sellers Rank: #385,324 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

12 of 13 people found the following review helpful:

5.0 out of 5 stars Warning for buyers of the Kindle version, January 11, 2009

By 

John P. (Kennett Square, PA USA) - See all my reviews

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This review is from: The Wealth of Nations: Books 1-3: 4&5 (Penguin Classics) (Kindle Edition)

I don't need to point out that "The Wealth of Nations" (TWON) is a landmark work in economics. However, if you're looking for a Kindle version of TWON, be aware that this book (the Penguin edition on Kindle) contains ONLY Books IV and V of TWON. Penguin published Books I-III separately, and for some reason that volume is not yet available in a Kindle format. (At least, I couldn't find it as of Jan. 11, 2009.) I would therefore suggest trying another publisher until Penguin makes all of TWON available in Kindle format.

9 of 13 people found the following review helpful:

4.0 out of 5 stars Don't be misled by the invisible hand, December 7, 2008

By 

Maxim Masiutin (Chisinau, Republic of Moldova) - See all my reviews
(REAL NAME)   

This review is from: The Wealth of Nations, Books IV-V (Penguin Classics) (Paperback)

This book is so widely cited and interpreted contrary to the author's original thought, that every economist should read it completely to avoid being misled by such incorrect interpretations.

First, let us take the "invisible hand" metaphor. When I have studied economy in the University, I was taught that almost the entire book is devoted to the "invisible hand" which means "self-corrective markets", "liberalism", "Laissez-faire" and "state non-intervention". After reading this book, I have found out that Adam Smith did use the term "invisible hand" only once in the entire book, in the discussion of domestic versus foreign trade.

To illustrate the point, let me quote the text where term "invisible hand" is used: "First, every individual endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry, provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock. Thus, upon equal, or nearly equal profits, every wholesale merchant naturally prefers the home trade to the foreign trade of consumption, and the foreign trade of consumption to the carrying trade. In the home trade, his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. [...]Secondly, every individual who employs his capital in the support of domestic industry, necessarily endeavours so to direct that industry, that its produce may be of the greatest possible value. [...]As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it."

After reading this book, I have found out that Adam Smith was influenced by French Physiocrats. The Physiocrats saw the true wealth of a nation as determined by the surplus of agricultural production over and above that needed to support agriculture (by feeding farm labourers and so forth). Other forms of economic activity, such as manufacturing, were viewed as taking this surplus agricultural production and transforming it into new products, by using the surplus agricultural production to feed the workers who produced the extra goods. While these manufacturers and other non agricultural workers may be useful, they were seen as 'sterile' in that their income derives ultimately not from their own work, but from the surplus production of the agricultural sector.

I have found out that this book is not about "invisible hand" or "Laissez-faire". It is quite a complete study that covers almost every basic aspect of the economy, and remains an effective introduction to economics to this day.

This book is so often mischaracterized and politicized that I suggest you to read it completely by yourself. This is a must read for every economist. You can get an audio version of this book to avoid lengthy read.

15 of 23 people found the following review helpful:

5.0 out of 5 stars Prosperity or poverty. Smith vs Marx, November 26, 2001

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A Customer - See all my reviews

This review is from: The Wealth of Nations, Books IV-V (Penguin Classics) (Paperback)

Adam Smith like Marx sees changes in the economic system as a logical, inevitable sequence of events. For example the power of the landed aristocracy declined as a consequence of the increasing importance of the towns. Good government was a result of this decline as people that had worked on the estates in conditions close to slavery moved to cities where they had considerable freedom. The difference between Marx and Smith is that Smith considered all of these changes leading to steady improvements whereas Marx considered the results of capitalism and industrialisation and urbanisation disastrous. Marx living about one hundred years later than Smith. The system had not produced wealth for all as Smith foresaw. Smith believed that if governments would refrain from interfering in the economy prosperity would increase for all. Marx considered that a revolution whereby the capitalist class would be eliminated and private property is abolished a necessary consequence of the exploitation of the workers. Smith believed the opposite in that private property was the main driving force for progress. Their analysis of the historical development looking at it now shows many serious mistakes. However many more of the ideas of Adam Smith are still valid in hindsight than those of Marx. Somewhat surprising both being persons with interest in morality do not ascribe any importance to that subject. Both are imprisoned by the concept that "mechanical" or systemic changes in society can explain changes in the economic system. Many economists to day still fall in the same trap. They do not believe that moral standards can play an important role in the development of economic system. They therefore typically reject new developments such as "socially responsible investing ". Like "Capital" of Marx, the "Wealth of Nations" presents many interesting facts about for example the near slavery conditions in the large agricultural estates throughout Europe. This information is a good antidote to the romantics that believe conditions in the countryside in the past were very pleasant. The Wealth of Nations is lucidly written and shows quite clearly the dependence of wealthy creation on essential but minimal government.