The Wealth of Nations: Representative Selections (Dover Value Editions) [Abridged] [Paperback]

Adam Smith (Author)

Book Description

Series: Dover Value Editions | Publication Date: January 20, 2003

One of the great classics of economics, this influential work by the noted 18th-century philosopher and political economist was the first systematic formulation of classical English economics. Smith emphasizes that labor is the only source of wealth, and that its accumulation is the result of every individual's effort to improve his situation in life.

Product Details

• Paperback: 320 pages
• Publisher: Dover Publications; Abridged edition (January 20, 2003)
• Language: English
• ISBN-10: 0486425134
• ISBN-13: 978-0486425139
• Product Dimensions: 8.2 x 5.4 x 0.7 inches
• Shipping Weight: 10.9 ounces (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #715,370 in Books (See Top 100 in Books)
  • #24 in Books > 4-for-3 Books > Business & Investing > Economics > General

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4 of 4 people found the following review helpful:

4.0 out of 5 stars Don't get this abridged edition, December 7, 2008

By 

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

This review is from: The Wealth of Nations: Representative Selections (Dover Value Editions) (Paperback)

Don't get this abridged edition. Get the full eidition instead, and that's why:

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. Just don't start reading economic books from this book. It would be hard to understand. It assumes that you already have economics background, i.e. have studied economics for a few years.

This book is so often mischaracterized and politicized that I suggest you to read the complete edition (not an abridged one) by yourself. This is a must read for every economist. You can get an audio version of this book to avoid lengthy read.