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| An Inquiry into the Nature and Causes of the Wealth of Nations: Volume 1 | 
 enlarge | Author: Adam Smith
Publisher: BookSurge Publishing
Category: Book
Buy New: $19.99
New (1) Used (2) from $19.99
Avg. Customer Rating:  2 reviews
Sales Rank: 521303
Media: Paperback
Pages: 510
Shipping Weight (lbs): 1.5
Dimensions (in): 8.1 x 5.3 x 1.4
ISBN: 0543947963
Dewey Decimal Number: 382
EAN: 9780543947963
ASIN: 0543947963
Publication Date: October 4, 2000
Shipping: Eligible for Super Saver Shipping
Availability: Usually ships in 24 hours
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| Customer Reviews:
 Invisble Hand December 7, 2008
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 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.
 basis of the economic principal thought and exercise August 6, 2007
2 out of 9 found this review helpful
In order to understand any economic study as a whole,one should read these volumes to excecute decision making flawnessly by knowing exactely the morel consequences and economic effects this may have on those involved by it for the well being of all.
Therefore,one can not look or exercise the difficult art of business decision making in the future without knowing the historical past of the
economic foundations on which the modern art of guiding any type of decision making is based.
Christiaan Winkel
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