The wealth of nations

Book Report

“

The Wealth of Nations

”

by Adam Smith

1.

Introduction.

In this paper I will analyze and investigate the book

“

The Wealth of Nations

”

by

Adam

Smith

in

detail.

I

will

discuss

the

core

of

Smith's

thesis

——

man's

natural

tendency

toward

self-interest

and

the

three

elements

that

a

nation

needed for its universal prosperity. And I will also point out Adam Smith

’

s theory

of the division of labor

. At last, I will give a brief statement about the limitation

of

“

The Wealth of Nations

”

and its broad influence on the world.

2.

Brief overview of

“

The Wealth of Nations

”

If you want to know the most important document published in 1776, maybe I

can give you the answer

. The Declaration of Independence is the easy answer

for Americans, but I would argue that Adam Smith's The Wealth of Nations had

a more important global impact both in economy and politics.

Adam Smith, a Scottish philosopher by trade, was considered the father of the

modern free market theory. He combines the knowledge of geography, history,

industry

and

economics

in

his

book.

I

really

appreciate

the

amount

of

information that

Adam

Smith

integrated

in

this book and the

intelligence

he

showed

in

his

work.

He

gave

us

a

firm

understanding

of

many

of

the

fundamentals in economy but it’s easy to understand beca

use he used many

simile

and

analogy

in

his

theory.

And

that’s

why

he

was

called

the

great

synthesizer

, great observer

, and great storyteller

.

The Wealth Of Nations, also called An Inquiry into the Nature and Causes of the

Wealth of Nations, is divided into five chapters: the Causes of Improvement in

the Productive Powers of Labor

, the Nature, Accumulation, and Employment of

Stock,

the

Different

Progress

of

Opulence

in

Different

Nations,

Systems

of

political Economy and the Revenue of the Sovereign or Commonwealth.

Adam Smith’s intention of writing this book is to upend the mercantilism system.

Because he found that mercantilism held that wealth was fixed and finite, and

its

only way to prosper was to hoard gold and tariff products from abroad. This

means

that

nations

should

sell

their

goods

to

other

countries

while

buying

nothing in return. As a result, nations will fall into the rounds of retaliatory tariffs

which will destroy the international trade or even causes wars.

After reading this book, I think t

he core of Smith's thesis is that human’s natural

tendency toward self-

interest, which in today’s modern society is looked out for

number one by our human beings. Just like Adam Smith said in his book, “ There

is no art which one government sooner learns of another than that of draining

money from the pockets of the people”, by giving everyone freedom to produce

and exchange goods as they pleased and opening all markets to competition in

international as well as domestic, and people's natural self-interest would bring

about universal opulence with very little effort from a nation's government. This

is what we call the “invisible hand” nowadays. But it also need support if a nation