Talk:The Wealth of Nations

"Invisible Hand" Prank Quote and number misquote

Bog4rt - I removed the following quote from the Invisible Hand section because it was nothing more than someones taste-less joke. "The idea behind the Invisible Hand is that a man stands behind you and all ofa sudden, woo there's a hand down your pants!" I replaced the prank quote with the two literal references in Wealth of Nations towards the "invisible hand." This section of the article still needs some serious commentary to flesh it out.

I did the same yesterday with "the masturbating hand" and "boner jams 03" Maybe this article should be protected. --יהושועEric 19:03, 25 September 2006 (UTC)

"Both-Benefit" Transactions Quote

For the life of me I can't find the supposed quote cited in the article that "a voluntary, informed transaction always benefits both parties." I have searched through WN and TMS. Someone either needs to come up with a citation for the quote or it needs to be removed.

Hm, I've done a similar search, and I can't find that exact language, either. However, it is beyond doubt that Smith said something to that effect -- I remember Smith's quotation being more along the lines of "No voluntary transaction will ever take place unless both parties benefit." (http://www.garlikov.com/EPFE/chap10.htm - last italics paragraph). Perhaps, rather than remove the quotation entirely, it'd be better just to remove the quotation marks, as the essence of the quotation is correct.

Also, in future, please post new posts at the BOTTOM of the page, and please sign your talk page posts.RiseAbove 17:59, 10 April 2006 (UTC)

== Outline of the Work == I removed this part because at the bottom there are links to very good online text of the work, and I don't see that this part adds much. It's just a skeleton.

Outline of the Work

• "Introduction and Plan of the Work" - Smith introduces the work.

• Volume One - Covers many subjects relating to the evolution of material wealth in nations and communities.
  • Book One - "Of the Causes of Improvement in the Productive Powers of Labour, and of the Order According to Which its Produce is Naturally Distributed Among the Different Ranks of the People " Covers productivity, commerce, prices and wages
    • I Division of Labor.
    • II On the origens of the division of labor - Smith contends that division of labor came about spontaneously. That is, it was not planned.
    • III Division of Labor is limited by the extent of the Market.

• • Book Two - capital.
    • Capital, as described in the book is basically that which can be accumulated. For example wikipedians labor to produce an enduring work, the wikipedia. Sometimes capital is confused with property and property rights. But regardless of the nature of ownership, or lack thereof, capital constitutes a enduring product of labor which often eases people's lives. - 'Capital' is a modern term, the work constantly uses 'stock'.
  • Book Three - Comparison of the evolution of material wealth in different nations. The policies and practices at heart.

• Volume Two - Covers "Political Economy"
  • Book Four - The policies of Nations and their effect on individuals and the Nation as a whole.
  • Book Five - Revenue of the State.

Evolution within this article

In previous revisions, the outline linked to articles - like "Wealth of Nations: Volume One". At present there isn't enough information to warrent such a structuring. But 'Nations' is a huge work, and as this article grows, will such a structuring make more sense?

The entire content of the linked articles is now in the outline section of this article. Since it was only a few lines per article it wasn't useful to the reader to click the link only to read a single or few sentences that could have been included in the article. The best approach is to let the article grow and only break off into other articles as a section grows too large. Also, a few hints that may make your editing easier. You can use two single quotes ('') before and after text to italicize it and three single quotes (''') to bold it. - Tεxτurε 19:34, 16 Jun 2004 (UTC)

immigration control

Can someone shed some light on how Nations deals with this subject?
On general principle of non-interference/free-markets I agree.
But does Smith make a specific case regarding immigration control? -- Anon

Yes, he does. In Book I Chapter 10 Part 2, Smith devotes a fair amount of discussion to the Poor law of the time and its effect on the free movement of labour between parishes within England. Basically people couldn't move from the parish in which they were settled to another without owning a set amount of property, unless they had the permission of the receiving parishioners since parishioners were directly responsible for supporting the destitute of their parishes. This led to labour shortages in specific trades in specific parishes as well as wide variations in the price of labour between neighbouring parishes since parishioners didn't want to receive an immigrant whose family they might have to support with their taxes when he was out of work. The parallel between this parochial immigration control and modern national immigration control is exact and the consequences identical although on a larger scale. -- Derek Ross | Talk 14:28, 13 Jun 2004 (UTC)

restructuring two sentences in introduction

• Asymmetry: Left-wing writer / right-wing politician - because that is more reflective of common occurance - though less symmetrical.

• re-arangement: merely for flow and clarity

• "pro-business" within quotes - because it is essentially a quote

• italics to emphasize A = B

Removal of material - uncited material from das Kapital

I have removed this from the article:

Karl Marx critiqued Smith's ideas in Das Kapital and decried what he called capitalism on the grounds that powerful men seeking their own good will inevitably victimize the working class.

Ed, where in Kapital does Marx say this? Please provide a citation or even a quote!

To the best of my knowledge, Marx's engagement with Smith is much more specific and subtle. In the preface to the second German edition he describes Kapital as a necessary sequal to Smith's book!

Sometimes Marx's view of Smith is mixed: he praises Smith for calliong attention to labor-power as the source of value of commodities, but faults Smith for not seeing labor as a normal activity. Elsewhere he praises Smith for recognizing that the value of currency is determined byt the relationshi between the currency in circulation and the commodities in circulation, but faults Smith for viewing money (really, gold and silver coin) as any other commodity.

I know of two more basic criticisms of Smith. Marx criticizes Smith (and Ricardo) for assuming that average prices equal the average value of commodities. He also criticizes Smith's theory of primitive accumulation, and suggests that primitive accumulation really comes from the separation of producers from the means of production. This really is a profound criticism (whehter you agree with it or not) but it is not really the same as what you said. And even in this "criticism" (which is NOT a criticism of Smith's claims about the morality of capitalism but rather a criticism of Smith's analysis of capitalist accumulation and economic growth in the 18th century), marx approvingly quotes Smith, who wrote "Whenever the legislature attempts to regulate the differnces between masters and their workmen, its counsellors are always the masters."

Anyway, Ed, please provide the citation and a brief quote if possible of Marx making the criticism of Smith you call attention to, SR

Lighten up, SR. It was just a stub, intended to stimulate a more-knowledgable writer to finish the article. Since you know so much about it, please incorporate your talk into the article while I stand back spellbound with admiration (no sarcasm intended, honest). --Ed

Ed, no sarcasm taken! :-) BUT, the reason I didn't put this in the article is, frankly, I think it is too tangential; it's good to have a stuf on Smith and I bet there could be a very good, and very long, article on Smith without going into the details of Marx's work -- details that I just think are more appropriate to an artricle on Marx. In any event, I wasn't trying to be bitchy in asking for a citation for your characterization of Marx's critique. I assume that if you feel that you can refer to something Marx wrote in Capital in an encyclopedia article, then that is because you read it in Capital. All I am asking for is the citation.

Now, I do not want to presume -- and I apologize if what I am about to say offends you, because what I wreote above was on the assumption that you have read Capital and remember having read this critique. But if you haven't -- if you haven't read Capital -- i simply do not see how you could include a discussion of it, even a very brief on, in an encyclopedia article. I take it for granted that Wikipedians should make contributions on what they know about, and not on what they do not know about. Since you have made this stubb, I assume you have read The Wealth of Nations. Since you cite Marx's Capital, I asume you have read it. If you haven't, I just do not understand how you can risk misrepresenting something (and yourself).

So now I will apologize once more if I am suggesting something wrong and insulting about you. As I said, I do assume you have read these books, and if you remember something I do not, you would be doing many people, and me most of all, a favor if you would find the quote or page citations -- SR

---

Without anybody noticing, The Wealth of Nations became a collection of quotes selected to prove that Smith was against corporations.--AN

Yes, I just noticed that. However when I read the Wealth of Nations, I got the impression that Smith really *was* against corporations, cartels, etc, so I'm not too bothered about that. The real problem is that it unbalances the article since it isn't really about the Wealth of Nations now. It's about Smith's attitude to employers instead. -- Derek Ross

I got the same impression from the book. Isn't Smith's book, in great part, about his attitude to employers? That should be reflected through quotes.Lir 10:36 Oct 23, 2002 (UTC)

I think that it should be reflected but Smith's book was about so much more. Its discussion of how a real day to day economy works is still one of the most readable ones about. At the least this article should contain a summary of the chapters discussed in the book. The discussions of what gives money value, why division of labour is economically efficient, why chambers of commerce are bad and how rents work should be much more widely known and each deserve some discussion in the article. -- Derek Ross

Also the influence this book had on everyone from Marx to Milton Friedmann needs to be mentioned. This was a very influential book -- Derek Ross

---

I removed the folowing from the article until it can be reworked. My reasons are the following:

1) an encyclopedia should present an account of current debates not an author's own views. The following reads as if it is the author's own views. If I am wrong at it really reflects a current and well-known scholarly interpretation of Smith, it should be identified with its proponoents.

2) the passage is mostly a string of quotes from Smith (with no page numbers). This is inappropriate to an encyclopedia article. The article should summarize the work and contribution of Smith, and if there are debates, summarize the debates. It should not itself be argumentative, and it should not just be a colection of quotes. Slrubenstein

As is true with every work that is considered of importance, many interpretations can be made, specially by selecting isolated paragraphs.

The following is one of such interpretations.

Smith against modern economy?

Some argue that Smith was arguing against modern economics due to the proliferation of statements throughout the book which argue against the very notion of a corporation or corporate entity.

In John Micklethwait and Adrian Wooldridge's _The Company -- A Short History of a Revolutionary Idea_, the idea of the limited-liability joint-stock corporation is presented as a development that didn't take off until the mid-19th century. Before then, the preferred kind of operation was owner-operated businesses. Because of scandals like the South Sea Bubble, there was a long standing bias against joint-stock corporations with its separation of onwership and management. (And the problem persists today with Enron, Worldcom, etc.) -- User:EmRick

It should be noted that capitalism is derived from mercantilism rather than something that replaced mercantilism. In that light, one wonders whether Smith really is the "father of capitalism", as is commonly stated.

Smith says, "Is improvement in the circumstance of the lower ranks of people to be regarded as an advantage or as an inconveniency to society? The answer seems plain. Servants, labourers, and workmen make up the far greater part of every society. What improves the circumstances of the greater part can never be regarded as an inconveniency. No society can be flourishing and happy, of which the far greater part of the members are poor and miserable."

Smith notes, "The pretence that corporations are necessary is without any foundation." although at this point he was refering to incorporated guilds and similar monopolistic organisations rather than companies in the modern sense.

Smith adds, "When masters combine they commonly enter into a private agreement not to give more than a certain wage. The complaints of workmen are perfectly well founded. The rent of land is a monopoly. It is not proportioned to the landlord nor his holdings, but to what the renter can afford."

Smith goes on, "Nothing can be more absurd than the doctrine of the balance of trade upon which almost all regulations of commerce are founded. The sneaking arts of tradesman are erected into political maxims for the conduct of an empire. Commerce, which ought to be a bond of union and friendship, has become the most fertile source of discord and animosity. The violence and injustice of the rulers of mankind is an ancient evil. Their interest is directly opposite to that of the great body of people."

Smith explains, "More want employment than can get it. Many are willing to take it upon lower terms than ordinary and thus the wages sink. A considerable number are thrown out of employment each year, who must then bid in order to find work, thus lowering wages to levels of bare subsistence. There are funds in the hands of the employers of industry sufficient to maintain a great number of people."

Smith continues, "The careers of scholar and beggar are nearly synonymous. The public would derive great benefit if the schools and colleges were more reasonable than at present."

Another interesting quote from The Wealth of Nations:

The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatsoever

So Smith certainly disliked monopolies, and believed there was a role for civil government (his glowing descriptions of the parliament of the American colonies is more evidence)--Surturz 01:20, 21 December 2006 (UTC)

---

I don't understand the switch in tense of:

It was written for the average educated individual of the 18th century rather than for other economists and is thus much more useful for those interested in an introduction to economics than many more recent books on the subject.

Should you say "and was thus much more useful"? Or are you saying this book was so well written that the ideas remain relevant today? When you say "recent books" do you mean recent with respect to books in 2004 or with respect to books in 1776? I would imagine there are better introductions to economics today. -- User:EmRick

I meant:

It was written for the average educated individual of the 18th century rather than for other economists and is thus much more useful for the average educated individual of the 21st century interested in an introduction to economics than many of the books written on the subject since 1776.

I maintain that it is so well written that one can forgive the occasional ideas which have been superseded by later research. It may well be the case that there are now many better introductions to economics as far as the technical issues are concerned but there are few, if any, introductions which are such a pleasure to read. -- Derek Ross | Talk

The Famous "Invisible Hand Quote"

The previous version of the article cited the invisible hand and the butcher, baker, and brewer as all coming from Book 1 Chapter 2, when, in fact, the invisible hand quote comes from Book 4 Chapter 2. I inserted the quote so readers would not hunt in Book 1 Chapter 2 and never find it. I hope that is ok with everyone.

Removing "mischaracterized/politicized" quote...

"The Wealth of Nations is often mischaracterized and politicized. Many people are confident in their opinions regarding the author, the work, and the subject matter, yet have never read it."

This can be said of dozens of books, perhaps hundreds. Consider, for instance, the Bible. Are there not many people who are "confident in their opinions" about the Bible yet have never actually read it? The Koran, the Torah, the United States Consitution, the Declaration of Independence, the Gettysburg Address... need I go on? This statement can be applied to just about any work of literature to which there is a modicum of dissent. Putting it here makes the article no more relevant, and it does nothing to engage the reader regarding the work itself. I propose it be removed.

Considering your examples, I would see that these are all widely read documents. Much more widely read than the WoN. Thus it is not surprising that there is "a modicum of dissent" about the interpretation of their contents. However since the number of people who have read them is comparable to the numbers dissenting, it is, by and large, informed dissent. However I take your point that there are a few documents like the WoN for which the number of people who have an opinion about it dwarfs the number who have read it. That is quite unusual and therefore worth noting in the articles of any documents of this type. -- Derek Ross | Talk 06:15, Mar 29, 2005 (UTC)

Division of labor and the invisible hand

I know that the discussion of the "invisible hand" in the article follows the standard interpretation, but given that the phrase is only used once in the book, and given that Smith is pretty vague about the other cases to which it applies, can we really state so confidently that the various examples discussed (e.g. the butcher and the baker) are instances of the invisible hand at work? A more radical interpretation (which I'm not necessarily endorsing) is that Smith was talking about the dangers of British capitalists investing and importing from abroad, and was (rather wishfully) hoping that their patriotism would prevent them from doing so.

Also, there is no mention here of Smith's more negative remarks about the division of labour. He certainly thought it led to greater economic efficiency, but he also had misgivings about the humanitarian consequences of people working highly repetitive and specialised jobs; these aren't discussed in the article. Cadr 14:40, 17 Jun 2005 (UTC)

in response

Commonly quoted 'the invisible hand' is a ubiquitous quote/reference. From articles in the Economist to jokes involving hiding your hand in your sleeve. Therefore, some indication of what it means is appropriate to reference material on Nations.

Some indication of what it is commonly thought to mean. Obviously the article should mention the orthodox interpretation of the phrase, but it shouldn't be stated as a fact.

yes we can How is it not obvious to the reader (as opposed to skimmer) that an invisible hand is an appropriate metaphore for unintentional effect? The use of this metaphore as a rhetorical summary of preceeding points is pretty standard. What would today be called a sound-bite has been a staple of rhetoric for centuries. The invisible hand is the sound-bite for all of Smith's examples of the unintentional beneficial effects of free trade.

Yes it's a metaphor for an unintentional effect, but it's not at all clear precisely which unintentional effects Smith has in mind when he uses the phrase. He doesn't explicitly use it as a metaphor for the unintentional benefits of free trade. If you read the passage in which it appears (for the only time in the entire text) it's actully talking about some of the disadvantages of free trade (i.e. foreign investment/competition destroying the domestic economy). The vague reference to "as in many other cases" is the only possible link between the "invisible hand" and the unitentional beneficial effects of free trade.

what are you talking about Give a specific example of his misgivings. This sentence and the one about patriotism imply a side-POV or significant misunderstanding of the work. Please clarify.

I don't think you've read the book. Smith talks about the possible ill-effects of the division of labour, for example that

The understandings of the greater part of men ... are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations ... has no occasion to exert his understanding... He generally becomes as stupid and ignorant as it is possible for a human creature to become [...] The uniformity of his stationary life naturally corrupts the courage of his mind ... It corrupts even the activity of his body and renders him incapable of exerting his strength with vigour and perseverance in any other employments than that to which he has been bred. His dexterity at his own particular trade seems in this manner to be acquired at the expense of his intellectual, social, and martial virtues. [...] this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall.

I'm afraid I don't have my copy of TWON with me here, so at the moment I can only grovel quotes off the internet. I can go and get it in a few days if you'd like something more. Cadr 4 July 2005 22:06 (UTC)

• BUMP*. The article still makes lots of claims about what Smith meant by "invisible hand" which aren't supported by any textual evidence. He never explicitly (or even implicitly) links the invisible hand to the unintentional benefits of free trade or rational self-interest. I'll edit the article in a day or two to change this unless someone objects again. (Obviously I'm not going to remove the orthodox interpretation from the article, just present it as one POV about what the phrase refers to.) Cadr 21:16, 24 July 2005 (UTC)

in response²

You don't need a physical copy, the whole thing is available in one big text file for easy searching:

• An Inquiry into the Nature and Causes of the Wealth of Nations at Project Gutenberg.

Is you're point that the interpretation is wrong, or that it lacks quotes? You are correct about Smith bringing up unhappy situations. He sheds light on many, many more. However, the work is highly structured rhetorically; your quote is out of place juxtaposed against the invisible hand. This is why I suspected a POV or unfamiliarity; Smith specifically deals with unethical and unconstructive behavior in many parts of the book. And these can be dealt with directly. In fact, one of the weaknesses of this article and in the common conceptions of the work is in missing the fact that Smith does point out the unflattering aspects of human behavior.

It's a cliche that people attack Nations on the basis that it supports the crass upper class, yet it actually attacks the status quo. In "Manufacture of Consent", Noam Chomsky points out that many two-sided arguments are actually one-sided in that both sides make the same erroneous assumptions. Such a thing has happened to Nations. The upper-crass claim it as their own, and then the work is attacked on the erroneous assumption that this claim is true. What an Irony, that the most significant work debunking the pseudo-logic of the upper-crass is claimed by them, and subsequently attacted and/or ignored as though this were true.

The work needs to be reintroduced; and with as little rhetoric as possible. (yes, I used some in this response, I won't in the article.) One of the important feature of the invisible hand is that Smith is giving a common, well known example of people persuing their own interests without compromising others'. It is a tacit refutal of a long used, common advocation; that supplies are essentially imutably limited and therefore acting in one's best interest at the expense of others is entirely reasonable. Smith carefully, slowly paints a vivid counter-example. In fact, Smith consistently specifically attacks the erroneous assumptions that both sides make. He bypasses the whole argument of whether 'zero sum games(modern terminology for brevity)' are ethical and simply says they are irrelevant/unreasonable/counterproductive once division of labor renders the whole greater than the sum of its parts. This is important, because "zero sum games are unethical" always wins on the surface, yet is too often accompanied with "but they're perfectly reasonable/ok/even noble". -- backing up just this paragraph would take a lot of time and effort and hopefully this article eventually will do that (or something completely different if I'm wrong). Yes, I have read the book, the whole thing and several parts more than once. I'm writing all of this in the possibly erroneous belief that you have missed some of the themes of the work. forgive me if I'm wrong.

To use your example, a wikipedia-section on "negative effects of the division of labor" is actually a very good idea. Someone should start it. But don't break the invisible hand without recognizing that it ultimately is an argument against greedy and dishonest behavior though not against selfish behavior. Otherwise the people who think zero-sum games are reasonable and advocated by Smith will go on believing such and pass that belief on to others.

Here is the quote: "But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable 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. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it. "

P.S. there's nothing in there about "foriegn investment destroying the domestic economy". That doesn't mean that such a thing can't happen. I'm just pointing out that it's not there. By the way, the theme in Chapter 3 (division of labor is limited by the extent of the market) is that international trade expands division of labor (up to that point and beyond given a very positive introduction) and is therefore good. The productivity of the domestic economy and all its parts is improved by the increas in options available. He uses the trade between India and London as an example without pointing the Brittish Occupation. Smith denounced subtly and quietly and therefore lived long enough to give away his wealth to charity. A reasonable approach given Scotland's proximity to England. On the other hand, Thomas Paine who denounced loudly and unsubtly went back to europe and died broke in prison. Smith would say that trade with India would be even more profitable if the Indians were free to persue their own interest -- except that might be recieved unfavorably (treasonous) by King George. You can find parts of the book where Smith says that a governing body is unlikely to more competently nor without corruption direct the labor of others. He does not specifically say King George should stay out of America's affairs and likewise with India, but logically they should and Smith makes several less obvious, less pointed attacks on royalty and the details of commerce between England and its colonies.

Woah! 90% of what you say I agree with. However, because Smith includes "preferring the support of domestic to that of foreign industry", the interpretation of the passage is somewhat debatable. It has been interpreted as an instance of wishful thinking on the part of Smith, who apparently thought that even if there was international free trade, people would still refrain from supporting "foreign industry" (hence there would be de facto protectionism of a limited sort). To be sure, he tries to argue that it's rational for self-interested agents to live near to where their capital is invested (e.g. "In the home-trade his capital is never so long out of his sight as it frequently is in the foreign trade of consumption."), but the conclusion of this argument is empirically false, at least in today's world. You could argue that Smith wanted to protect domestic industry, but didn't think protectionism was a necessary (or even effective) means of doing so ("The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority...which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it."). Smith seems reluctant to accept that global free trade might lead to the large scale investment of domestic capital in foreign enterprise (and of course vice versa -- the large scale investment of foreign capital in domestic enterprise). Investment in this sense, must of course be distinguished from simply buying in goods from abroad if this interpretation is to stand up to scrutiny. Smith was clearly in favour of the latter: "If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage."

IIRC, I've been at pains to point out that I don't necessarily agree with this interpretation, but I think it's wrong that the article should give the traditional intepretation of "invisible hand" as entirely undisputed fact. It's a phrase that's been plucked out of a very long text, and perhaps given slightly undue prominence over the years. Smith (you could argue) was much less unambiguously in favour of the global free market than many modern economic liberals who might use Smith's arguments as a justification for "globalisation". 81.79.232.119 00:29, 4 August 2005 (UTC)

The above was written by me, it logged me out while I was typing...Cadr 00:30, 4 August 2005 (UTC)

Just realised we're going off on a tangent to some extent. My original whine was that there wasn't much justification for linking the "invisible hand" to the butcher/baker example. You could perhaps agree with this even if you disagreed with a lot of what I just wrote. I was really bringing up more radical interpretations of Smith's views on global free trade to cast more doubt on the link between the invisible hand and the butcher/baker example, not so much to promote this interpretation in itself. Cadr 00:38, 4 August 2005 (UTC)

Diamond-Water Paradox: out of place, inaccurate/misleading.

• The diamond-water paradox adds more to the diamond-water paradox than to the article.
• it's a little pov: "brilliant" solution - if I know my left from my right, is that "brilliant" and does it even matter if it is?
• Too mathematical a mindset: Smith was none at all confused by the 'paradox'. On the contrary, the book is rhetorically "brilliant" in choosing obvious examples that the average reader will instinctively sympathize with. Water and diamonds along with everything else are priced according to supply and demand along with several other factors. The supply of water far exceeds the demand and visa versa for diamonds. To see this as a 'paradox' rather than recognizing its use as a vivid illustration is a lot like receiving a diatribe from a drill sergeant about your left and your right and deciding he's talking about chirality and its role in astrophysics. It is more likely that astrophysics never crossed the drill sergeants mind, that he doesn't know what 'chirality' means, and that he does think it's obvious to distinguish left from right.

---

The diamond-water paradox adds more to the diamond-water paradox than to the article.

The paradox is an important, if brief, part of Wealth of Nations. Wealth of Nations is one of the few major contemporary works of economics to address it directly. I think it deserves to be here.

it's a little pov: "brilliant" solution - if I know my left from my right, is that "brilliant" and does it even matter if it is?

The only time the word "brilliant" occurs is in the N.B. section. If that's what you're referring to, I hope you're not equating the formulation of the subjective theory of value and/or marginal utility theory with "knowing left from right." The importance of these discoveries to the field of economics cannot possibly be overstated -- the manner in which people value things is at the root of all economic decisions. You might as well say that Newton's formulation of the theory of gravity, or Darwin's formulation of the theory of evolution were as simple as "knowing left from right." However, the word brilliant can be removed, if you feel it's POV.

Smith was none at all confused by the 'paradox'.

He does not solve the problem and employs an erroneous theory of value in an attempt to resolve it. Perhaps he did not state explicitly that he was "confused", but he nevertheless was unable to adequately figure it out... Also, the article does not state anywhere that he was confused by it, only that he addressed it.

the book is rhetorically "brilliant" in choosing obvious examples that the average reader will instinctively sympathize with.

The diamond-water paradox had been laid out before Smith's time. It was already a well-known example when he wrote Wealth of Nations. He purposely chose it because it was well-known. He did not make any "rhetorical" decisions about "obvious" things. It was not his original invention.

Water and diamonds along with everything else are priced according to supply and demand along with several other factors. The supply of water far exceeds the demand and visa versa for diamonds. To see this as a 'paradox' rather than recognizing its use as a vivid illustration is a lot like receiving a diatribe from a drill sergeant about your left and your right and deciding he's talking about chirality and its role in astrophysics. It is more likely that astrophysics never crossed the drill sergeants mind, that he doesn't know what 'chirality' means, and that he does think it's obvious to distinguish left from right.

I don't understand the above. From what I can tell, you're saying that diamonds and water are priced according to their rarity or commonality, which is explicitly refuted not only by the accepted subjective value theory, but also by Wealth of Nations itself! As the article states, if that were the case, why are diamonds worth more than emeralds which are in less supply than diamonds? You're falling back on the labor theory of value, which has been largely discounted for more than 100 years. You're also again disparaging the achievements of Turgot and the Austrians as merely finding "right from left," which strikes me as unfair and more than a little arrogant. As for the example about drill sergeants, I'll admit you lost me. I don't see the relationship.

RiseAbove 4 July 2005 23:36 (UTC)

Before this turns into one of those flame wars, let's clarify the point: that some things are directly relevant to Nations, others are not. You have a great deal of emotion invested in

this diamond-water thing, and maybe that has motivated you to include it where it doesn't necesarily fit well. P.S. I said rarity, demand and several other factors. Here is a quote from nations: (is this the one you are saying explicitly refutes the idea that scarcity plays a role in price?)

"Their highest price, however, seems not to be necessarily determined by any thing but the actual scarcity or plenty of these metals themselves. It is not determined by that of any other commodity, in the same manner as the price of coals is by that of wood, beyond which no scarcity can ever raise it. Increase the scarcity of gold to a certain degree, and the smallest bit of it may become more precious than a diamond, and exchange for a greater quantity of other goods."

In fact the book is repleat with examples of scarcity increasing the prices. For example, protectionism artificially raises the price of services and commodities by reducing the ready supply of the necesary labor and raw materials. This is central to the work, it's why he wrote it. The Diamond-Water 'paradox' is a wonderful thing in its own right. But why not put it somewhere more flattering to it?

All right, you make some good points. However, while the Diamond-Water paradox appears already in the article on Marginalism, I don't think it's misplaced here. It is after all, a feature in TWON. We've edited it down quite a bit, and now it's only a small portion of the article, as it is in the book. I vote for it to stay as is.

Incidentally, I didn't get "emotional" as you put it, because of my investment in the Diamond-Water paradox, but because you accused some of the most important discoveries in the history of economics as nothing more than finding left from right. This, I think, belittles not only the discoveries themselves, but also the men who discovered it; men whom I think deserve respect.

You misunderstand: "obvious examples the the reader will instinctively understand" - like left from right. Smith did not present any paradox here; a paradox implies an unresolved contradiction. He knows why diamonds cost more and he's using this as an extreme example of utility differing form price. He's putting forth something that makes perfect sense not only to him but to the average reader. This is important because the point he's making is that artificial manipulation of supply artificially raise prices. This is not saying that solving some paradox is trivial, this is saying that there is no paradox to solve.

Two of the many ways to increase the price of something; make it more useful or make it more rare. Inventing a better mouse trap or working harder are ethical approaches to improving utility; on the other hand smashing looms or throwing shoes into to machinery increases price in an unethical way. Same with protectionism (domestic and foreign): if some one must get permission from an authority to enter a trade and the conditions of entering are disliked yet irrelevant to the trade, then the number of people entering that trade (like making wagon wheels) ...bla bla bla... apprenticeships are depicted by smith as institutions that reduce the supply of skilled laborers increasing the price and lowering the quality. Greedy, dishonest manipulations/limitations of supply is a major theme of the book. Smith says the consumer is a better judge than the granting authority and that the free market is a better mechanism than an apprenticeship. Smith establishes as a general phenomenon that manipulations in supply affect the price, then uses this as a foundation for undermining protectionist arguments. His message is, look past the rhetoric and ask yourself if what the speaker is advocating artificially constricts supply and if he stands to gain from it; what is the real agenda? Unless the diamond-water paradox is all about the games that people play in "conspiracy to raise prices" ( - Smith), I don't see it's relevance. It seems to me that it is fundamentally different, and of a fundamentally different mindset from Nations. I havn't removed or edited the diamond-water paradox; you've made a case for things outside of Nations but I still don't see the direct and significant relevance. Forget about the merits of the diamond-water paradox by itself, I'm asking is it really in Nations? If you think it is, make a case. P.S. why do you keep accusing me of falling back on or relying on philisophical ad-nasea? I'm falling back on having read the book. Not on interpretations of interpretations, nor of incorporating Nations into a modern framework or any of that. It's a historical text, and I'm relyin on having read the book.

Keep it factual

It is not our place to decide who was right or wrong about what, which author was "brilliant", which theory of value is correct, or which of the later schools of economic thought is closer to the ideas of Adam Smith. The purpose of this article is to briefly present what Adam Smith says in The Wealth of Nations. Nothing more, nothing less. -- Mihnea Tudoreanu 21:09, 24 July 2005 (UTC)

That's a little too brief. It seems to me that we should also record the influence that the book had on later economists and upon the wider world; and the many ways that it has been interpreted by right and left. -- Derek Ross | Talk 02:37, 11 September 2005 (UTC)

Five basic rules

I once read that the Wealth of Nations could be summerized in five basic rules that lead to wealth in a nation, as I can best remember:

1. making of contracts 2. protection of property 3. making a profit 4. inheritance 5. (cannot remember)

Does anyone Know the source and correct

Hmmm, I've never heard that, but that could be a useful inclusion (especially for organizational approach) if anyone does know it. Anyone?

RiseAbove 04:49, 10 August 2005 (UTC)

I believe its relevant

I don't know whether this actually belong here, but I can't think of anything better. My reasoning behind putting it hear is it meantion something that I really admire and never seem to figure out how so many ignore it. Norway seem to be heaven on earth, a country that doesn't preach individualism. Sure, you can argue this is because of oil, but just look at South Africa for a moment or even Saudi Arabia. I even doubt the rich enjoy it in South Africa with the kind of crime they have down there. If they had some social programs to reduce poverty, Aids would be better controlled as Thailand expereince proved. But, fuck it, thats too left. Its better for all of us to live in hell than sharing the NATURAL resources.[1] -- Anon contributor

This page is for discussing how to improve the article. Your comments do not discuss that so they do not belong here. -- Derek Ross | Talk 02:40, 11 September 2005 (UTC)

I really can't understand why you have to purge a talk page. I clearly remember someone arguing talk pages should not be purged unless its insulting. I don't expect you will accept this, so I will attempt to justify the post. The article title is the wealth of a nation. Aids affect the wealth of a nation and even IMF this. This paper suggested that individuality will in the long run benefit the whole country. However, in South Africa, poverty have forced lot of people to be uneducated, so desparate that the result into selling their bodies and in the process, exposing themselves to Aids. Others take people stuff by force since they don't have any means to make it. This destroy the wealth of a nation. In short, I am just voicing most of the complains raised above, but with example. I really hope this shows the connection

The article is about an old book called "The Wealth of Nations". That is why the article title is "The Wealth of Nations". This talk page is supposed to be for comments on how to make the article about that book better. Your comments are about the link between poverty and AIDS in South Africa, so you have just said in your previous note . Thus you have shown that they have nothing to do with improving the article on the 18th century economics text book.

I am happy to admit that there is a tenuous connection between the situation in South Africa and the subject matter of the book. However I can see no connection between improving the situation in South Africa and improving the article on the book. That is why your comments are being removed. We don't just remove insulting text. We also remove irrelevant text. The technical term for this is "refactoring" and it is a normal part of the "wiki" process. There may possibly be some place on Wikipedia for your comments but this is not it. -- Derek Ross | Talk 02:26, 13 September 2005 (UTC)

Hi there, Anonymous Poster. Just wanted to weigh in here for a second, because you seem to be slightly confused. As Derek Ross said, this article is about a book, the title of which is "An Inquiry into the Nature and Causes of the Wealth of Nations." This title is commonly shortened to "The Wealth of Nations" in the Anglophone world. This article is NOT about national wealth or welfare as a general concept. If you are interested in articles on that subject, please see the See Also section at the end of this article. Thanks!

RiseAbove 01:54, 16 September 2005 (UTC)

First modern work in the field of economics.

To my understanding this is completely false. Article Adam Smith mentions that many of his theories had already been introduced by other thinkers. This needs to have a mention of The National Gain. Lapinmies 06:34, 17 January 2006 (UTC)

Nobody is trying to ignore the contribution of Anders Chydenius. However it is a fact that his work was not as widely known or read as that of Adam Smith and that is what the introduction to this article is trying to convey. The situation is a little like that of evolution by natural selection which was described by various writers many years before Darwin's formulation appeared. Yet Darwin is given the credit because it was he that brought natural selection to the attention of the international public. Likewise Smith's book has been much more widely read than The National Gain despite the fact that much of what he wrote had been published by earlier writers and the fact that The National Gain has chronological precedence. There is no doubt that Chydenius, the Physiocrats and others whose work Smith drew on to write the Wealth of Nations should be mentioned in the article. -- Derek Ross | Talk 16:24, 17 January 2006 (UTC)

As usual, Derek Ross is perfectly correct. I have written a new section at the tail of the article, attempting to include a discussion of The National Gain, and Smith's predecessors. I have drawn a distinction between "first" and "founding" works, and I hope this will please all parties. I have also included Derek Ross's apt analogy to Darwin.

RiseAbove 22:02, 17 January 2006 (UTC)

Looks great! A lot more than satisfactory. Lapinmies 08:17, 18 January 2006 (UTC)

Good edits Riseabove. Fair, balanced, and the facts are all I strive for. --Northmeister 00:03, 10 February 2006 (UTC)

I did edit out the word 'attempted' as a POV word, by just eliminating it, since 'argued' is enough. I also changed one words ending. --Northmeister 00:11, 10 February 2006 (UTC)

While I am not familiar with the work "The National Gain," I do know that Richard Cantillion's "Essay on Commerce in General" preceded "The Wealth of Nations," and, being a fairly advanced work, merits mention under this passage as well.--Nate 08:36, 19 December 2006 (UTC)

UK vs. US English

I always dread this happening. The most recent revision has largely standardized the English in the article to UK English. As you can tell from how I just spelled "standardized" I'm not a UK English speaker.

US English is the most widely used English in the world due to the vast proliferation of US culture. However, UK English has (I believe) more users in the strictly numerical sense, so long as we count India and Pakistan. I don't know what relevance those previous two sentences have, but whatever.

Anyway, I ask: why format this page in UK English as opposed to leaving it as US or mixed? "Because the book itself was written by a Scotsman in UK English" does not seem to me to be a good enough reason.

Pending discussion I'll probably revert the edits, although, thinking about it, it hardly seems worth it... RiseAbove 08:56, 18 February 2006 (UTC)

Speaking as a Scotsman and a UK speller, I agree with you that this should not have been done. It is a trivial and pointless change. The perpetrator would have been far better employed adding content to the article than doing this sort of contentious make-work. I would have no objection if you reverted the changes although like you I doubt that it is worth the trouble. -- Derek Ross | Talk 17:33, 18 February 2006 (UTC)

Well, it's a bit late (exactly one year) after your post, however I can sympathise: I have found many of my articles pointlessly transliterated from English into American English. I find this irritating as someone is taking the time and effort to rewrite my articles without adding anything. Thus I have some sympathy. However, macro economics is a worldwide topic (it is, by its very definition, not centred on any one nation), so I am not sure that it really matters.

However, as you have quite rightly pointed out, "UK English" has more users than "US English". In addition, contrary to much that i have heard in the UK, "International English" more closely follows the rules of what might be termed "British English". I suggest you read the splendid articles available on Wikipedia regarding the subject of English dialects across the globe. You will find that US English is not widely used outside of the USA. Thus, by rewriting this article, this Wikipedia phantom is aiming it at a wider audience.

"American Economics"

If anyone sees the page history you will see that a certain user has been editing this page to promote an economic belief he adheres to. We've had alot of pro-LaRouche edits and if you see the page history you can see that there are others who also disapprove of it as well and have been trying to maintain the page as it is.--Jersey Devil 04:10, 14 March 2006 (UTC)

You are reverting my edit and I am not associated with LaRouche. Are you seriously saying the American System of Hamilton and Clay are LaRouche ideas only? You are not assuming good faith with my edits as you have stalked them and proceeded to delete what I contribute. That is not good manners or civil. You have called my edits LaRouche edits constantly and I've asked you to stop and you continue. By what reason do you consider deleting a legitimate economic link to a legitimate policy in American History proper? Your reversion of proper material can be considered POV reverting and your comments above I do consider to be personal attacks upon myself. Name calling and grouping me into some sort of group falsely is not very honorable nor honest. --Northmeister 04:26, 14 March 2006 (UTC)

Publishing History

Does anybody the history of the translation of the book or how many of each edition was made?

Recent deletions

After some serious thinking (over many months) I deleted the following:

"Smith himself, however, would not necessarily have been in favor of laissez faire; he makes no claims to the effect that the free market can always solve economic problems. For example, with regard to regulations, he says,

:Whenever the legislature attempts to regulate the differences between masters and their workmen, its counsellors are always the masters. When the regulation, therefore, is in favour of the workmen, it is always just and equitable; but it is sometimes otherwise when in favour of the masters. (Book 1, Chapter 10).

However, in The Wealth of Nations it is difficult to determine with certainty Smith's actual opinion of government regulation of the private sector. On the one hand, he stated the above, but on the other hand, he also wrote:

:[T]he obvious and simple system of natural liberty establishes itself of its own accord... The sovereign [i.e., politician] is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient: the duty of superintending the industry of private people. (Book 4, Chapter 9)."

There were two main reasons behind this:

1) I feel it provides some unnecessary information outside the scope of the article, and may serve to confuse readers more than it helps them.

2) I feel it provides ammunition for Wikipedia critics who are looking for ways to accuse Wikipedia of left-wing bent and unencyclopedic articles. Here is why: it is patently obvious to anyone who reads his works that Smith was against government regulation of the private sector. However, the above passages seem to suggest that because he felt that a certain type of regulation may not have always been bad, that regulation itself was sometimes appropriate. I think, if readers examine Wealth of Nations and other Smith works closely, they will come to see that he did not believe that regulation was appropriate under any circumstances save emergency and (perhaps) war. The above section contains the clause: "it is difficult to determine with certainty Smith's actual opinion of government regulation of the private sector." This is, I believe, untrue. It is easy to determine Smith's position on regulation. He was against it, vis:

- "[The man of system] seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board; he does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single pieces has a principle of motion of its own, altogether different from that which the legislator might choose to impress upon it." from The Theory of Moral Sentiments, Part VI, Section II, Chapter 2

- "The natural effort of every individual to better his own condition ... is so powerful, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations." from The Wealth of Nations Book IV Chapter V Section IV

- "The real and effectual discipline which is exercised over a workman is ... that of his customers {as opposed to the government}. It is the fear of losing their employment which restrains his frauds and corrects his negligence." from The Wealth of Nations, Book I Chapter X

&c., &c. Therefore, I think we do ourselves and wikipedia a disservice by attempting to be as "neutral" with regard to Smith's policies as this article has been. Therefore, I removed the "offending" section. However, as I said, this was the product of a lot of thought. If you disagree with me and you have a strong argument, I'm willing to be swayed. RiseAbove 21:04, 8 May 2006 (UTC)

Distrust of Tradesmen

I find it awfully interesting that the quote "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." is used as evidence that Smith was against unionization. The specific quote had to do with corporations, not unions, and was critiquing corporate law that not only allowed for collusion on prices, but required it. He mentioned in the same chapter, which was about corporations and their danger, that when the government interferes on the behalf of the workers (who would make up such a guild) that it is always just and fair while it is not always so when on behalf of the owners, because the owners are always the council to the parliament when they make laws to interfere in the market.

I am announcing that I will start reading this and giving accurate quotes to back exactly what Smith was saying in this book. Unfortunately, first I must dig out my copy of the book from my basement, which I recently packed away not thinking I'd need until I moved.

KV 05:24, 17 May 2006 (UTC)

"Feudalism was still dominant"???

Under "anachronisms" this article states that feudalism was still dominant in Europe. In 1776??? Am I missing something or is this simply incorrect? Feudalism says it ended between the 12th and 14th centuries. If no one responds here, I will remove this line from the article. -Halidecyphon 15:37, 17 May 2006 (UTC)

I don't know if it was still dominant, but it surely didnt' disappear yet. France had still had the feudal aristocratic system in place until the French Revolution in the 1790's. England had been in a transitory phase at the time.

KV 15:54, 17 May 2006 (UTC)

I agree that this line may need to be looked at. It depends what we intend by the term "feudalism." Certainly the era of vassalage and serfdom was long over. In England, Holland and most Prussian states, merchants had come to dominate social and economic transactions, rather than agrarian nobility. However, there was still a system of favoritism of nobility, and many gentry were falling over themselves to marry into titled families. Of course, other parts of Europe were still in a strictly feudal system, most notable Russia and Poland. So... the answer to your query is: it depends what we mean by feudal. I know that's no answer, sorry. I wouldn't be against deleting the line, I suppose. RiseAbove 23:50, 17 May 2006 (UTC)

Getting rid of vandalism

I'm no expert on either economics or Adam Smith. However there is some obvious vandalism on this page such as "The Wealth of Nations DOES NOT cover some key economic concepts". I'm changing these obvious statements (when and if I find them) Speedything 09:55, 27 September 2006 (UTC)

• I took a look at the edit summary, and it looks like the article is being vandalized by a couple of users. If it persists, you may want to report it at WP:AIV. Nwwaew 13:13, 28 September 2006 (UTC)