Wealth of Nations

[Nice Squirrel]

I would also discourage the idea that there is a bible for economics, a book that explains all or even a book that provides the basis of mainstream economics.

Don't tell the Freakonomics worshipers.

 

[ksen]

ksen,

Am I safe in assuming you aren't trying to get your PhD and you aren't looking for the perfect economics theory that explains all?

You just wanted to read a book, a book that talking heads claim to quote from and wave around on the screen like Ven Helsing trying to keep back Dracula, right?

Then just read the book. If you like the topic, read more about it. Some very good books have been suggested.

Happy reading

Yeah, I just wanted to read it to read it.

I took econ courses up to the 300 level while in college and while I had to read excerpts from Wealth of Nations I never had to read it cover to cover and I want to do that 1) because I want to and 2) because so many conservatives like to throw Smith quotes around I want to see how out of context they are taking him, if at all.

 

[AthenaAwakened]

ksen,

Am I safe in assuming you aren't trying to get your PhD and you aren't looking for the perfect economics theory that explains all?

You just wanted to read a book, a book that talking heads claim to quote from and wave around on the screen like Ven Helsing trying to keep back Dracula, right?

Then just read the book. If you like the topic, read more about it. Some very good books have been suggested.

Happy reading

Yeah, I just wanted to read it to read it.

I took econ courses up to the 300 level while in college and while I had to read excerpts from Wealth of Nations I never had to read it cover to cover and I want to do that 1) because I want to and 2) because so many conservatives like to throw Smith quotes around I want to see how out of context they are taking him, if at all.

oh you are going to laugh a lot.

Shake your head a lot

And a lot of "so what he really said is the opposite of the guy on the news last night."

 

[ksen]

I suspect it's going to be like: conservatives are to Wealth of Nations as American Christians are to the New Testament.

 

[Nice Squirrel]

You mean WON will rail against welfare moochers?

 

[SimpleDon]

An Inquiry in the Nature and Causes of the Wealth of Nations is worth the read if one has the time. Smith was an excellent observer of life during his time, and there are many fascinating asides liberally sprinkled throughout the text. I really cannot imagine any educated economist trying to dissuade anyone from reading this seminal work in the history of human thought.

It would be an exercise in understanding the history of economics, which is important, it tells us how we got from A to what we have now. But it is not necessary to learning current economic theory.

 

[SimpleDon]

Economics was my minor in college so I feel ok with the week one Econ 101 arguments you keep busting out.

Ah, then perhaps you should read Smith. An amazing amount of his work does hold up, the famous "invisible hand” is only mentioned once, most of the book is an argument against mercantilism and warns against the "rentiers," the necessary mechanism of capitalism, the banks, the large landowners, the financial sector taking all of the wealth. Not unlike what is happening now.

 

[SimpleDon]

I would also discourage the idea that there is a bible for economics, a book that explains all or even a book that provides the basis of mainstream economics.

Don't tell the Freakonomics worshipers.

I liked freakonomics. The idea that the tools of economics can be applied to solve the small problems. It is an intoxicating idea. Even if most of the problems that were solved in the original book have since been shown to be wrong.

 

[laughing dog]

An Inquiry in the Nature and Causes of the Wealth of Nations is worth the read if one has the time. Smith was an excellent observer of life during his time, and there are many fascinating asides liberally sprinkled throughout the text. I really cannot imagine any educated economist trying to dissuade anyone from reading this seminal work in the history of human thought.

It would be an exercise in understanding the history of economics, which is important, it tells us how we got from A to what we have now. But it is not necessary to learning current economic theory.

While it is not necessary, it is useful for a different reason. It illustrates how good economics can be when it is not divorced from reality (even if the world is different now than in Smith's time). People tend to (mis)apply economic theory or its results because the reality of the situation does not meet the limiting assumptions of the theory.

 

[SimpleDon]

It would be an exercise in understanding the history of economics, which is important, it tells us how we got from A to what we have now. But it is not necessary to learning current economic theory.

While it is not necessary, it is useful for a different reason. It illustrates how good economics can be when it is not divorced from reality (even if the world is different now than in Smith's time). People tend to (mis)apply economic theory or its results because the reality of the situation does not meet the limiting assumptions of the theory.

True.

I don't know about you but I feel that economic theory has been intentionally detached from reality. That everyone seems to be arguing how to change our current system and ignoring that the system we have right now which has evolved over centuries into a system that works pretty well. But which doesn't fit very powerful people's idea of how the economy should operate.

 

[arkirk]

While it is not necessary, it is useful for a different reason. It illustrates how good economics can be when it is not divorced from reality (even if the world is different now than in Smith's time). People tend to (mis)apply economic theory or its results because the reality of the situation does not meet the limiting assumptions of the theory.

True.

I don't know about you but I feel that economic theory has been intentionally detached from reality. That everyone seems to be arguing how to change our current system and ignoring that the system we have right now which has evolved over centuries into a system that works pretty well. But which doesn't fit very powerful people's idea of how the economy should operate.

I don't think WON was addressed to these times and as such I do not see any reason to pursue it other than rebuttal of arguments based on it. It was written in an age that had a lot more vestiges of the age of feudalism than we see in today's modern society. Most of his issues were addressed in some part in the period that followed and new issues have arisen...like a congress that is owned by corporate America, massive worldwide pollution, nuclear weapons, and a need on the part of certain producers (everything from weapons to food) to maintain things as they are or go broke.

 

[bilby]

I would also discourage the idea that there is a bible for economics, a book that explains all or even a book that provides the basis of mainstream economics.

You mean, apart from The Fountainhead, of course?

 

[SimpleDon]

True.

I don't know about you but I feel that economic theory has been intentionally detached from reality. That everyone seems to be arguing how to change our current system and ignoring that the system we have right now which has evolved over centuries into a system that works pretty well. But which doesn't fit very powerful people's idea of how the economy should operate.

I don't think WON was addressed to these times and as such I do not see any reason to pursue it other than rebuttal of arguments based on it. It was written in an age that had a lot more vestiges of the age of feudalism than we see in today's modern society. Most of his issues were addressed in some part in the period that followed and new issues have arisen...like a congress that is owned by corporate America, massive worldwide pollution, nuclear weapons, and a need on the part of certain producers (everything from weapons to food) to maintain things as they are or go broke.

I think that the Wealth of Nations is a brilliant book of philosophy. There is a lot of truth in the book about the nature of man, truths that easily span the centuries. But as an economics book it doesn't come off as well. How could it? It was a largely agrarian economy, the industrial revolution was just starting and had yet to have any meaningful impact. The The Wealth of Nations was the start of the social science of economics, it laid the groundwork, the nature of man related to the economy. But it was a critique of mercantilism, the complete government control of the economy, the ultimate crony economy. The one who pays the largest bribe wins.

I have seen "quote" battles where people try to prove that Adam Smith would support their own pet economics theories, ones that always seem to support their own political ideology. But it is fruitless, Smith was writing about two completely different economies, neither of which would even be possible to have today.

 

[SimpleDon]

There are annotations of the The Wealth of Nations. They are worthwhile if you get bogged down in Adam Smith's somewhat archaic language. I speed read, but I can't speed read Adam Smith because of the language used. I speak and read German fine, except that I can't speed read it either. Anything longer than a tweet and I search for an English translation or I translate it. I don't know if this is a common problem but if it is others would benefit from an annotation in modern English.

Here is the one that I use. It is more like a 'cliff notes' book and chapter summary than a line by line annotation and the editor has a definite agenda to push but if you are are aware of it and also reading the original along with it, these things shouldn't matter.

And the US Kindle version is only $12, a bargain when economics books often sell for a hundred dollars or more. If you have an amazon UK account, requiring a UK VPN to set up and a different email account than you use in your non-UK amazon account, you can buy the Kindle version for only £4.75, about $7. I buy a lot of things from the Europe in general and the UK. I have never had a problem.

 

[ksen]

I read the first three chapters last night which explained the division of labor and how it arose.

Smith says that it is our singular ability to want to, in fact need to, trade with others that allowed division of labor to rise and that the size of the market determines how finely labor can realistically be divided.

Division of labor breaks tasks down into simple and repetitive tasks. And yes, the individual tasks do not require people of great skill but it does make their labor more valuable since they are able to churn out more product than a fewer number of laborers performing more tasks.

Which tells me that what we call today "unskilled labor" is actually quite valuable to the firm employing them and we've been sold a bill of goods that their labor is not worth much. "Unskilled" does not mean "unvaluable".

 

[ZiprHead]

I read the first three chapters last night which explained the division of labor and how it arose.

Smith says that it is our singular ability to want to, in fact need to, trade with others that allowed division of labor to rise and that the size of the market determines how finely labor can realistically be divided.

Division of labor breaks tasks down into simple and repetitive tasks. And yes, the individual tasks do not require people of great skill but it does make their labor more valuable since they are able to churn out more product than a fewer number of laborers performing more tasks.

Which tells me that what we call today "unskilled labor" is actually quite valuable to the firm employing them and we've been sold a bill of goods that their labor is not worth much. "Unskilled" does not mean "unvaluable".

This is absolutely true. I use the example of the people who keep the Walmarts clean. Many people say these people are practically worthless. Yet they are absolutely essential to the corporation. People will not shop in a dirty store. The job the janitorial staff does is extremely valuable to Walmart.

 

[coloradoatheist]

I read the first three chapters last night which explained the division of labor and how it arose.

Smith says that it is our singular ability to want to, in fact need to, trade with others that allowed division of labor to rise and that the size of the market determines how finely labor can realistically be divided.

Division of labor breaks tasks down into simple and repetitive tasks. And yes, the individual tasks do not require people of great skill but it does make their labor more valuable since they are able to churn out more product than a fewer number of laborers performing more tasks.

Which tells me that what we call today "unskilled labor" is actually quite valuable to the firm employing them and we've been sold a bill of goods that their labor is not worth much. "Unskilled" does not mean "unvaluable".

This is absolutely true. I use the example of the people who keep the Walmarts clean. Many people say these people are practically worthless. Yet they are absolutely essential to the corporation. People will not shop in a dirty store. The job the janitorial staff does is extremely valuable to Walmart.

Then you get into the diamond/water paradox with the janitorial staff. Since its a skill anybody can do, but people want to delegate it but it can't be too costly or Wal-Mart will just have their own staff do it.

 

[ksen]

"Too costly" according to whom?

 

[ZiprHead]

I've said it before and I'll say it again, people are not paid based upon the value of the job they do but on how easily they can be replaced.

 

[Harry Bosch]

I've said it before and I'll say it again, people are not paid based upon the value of the job they do but on how easily they can be replaced.

Another way to think of it is that people are paid a market wage.