The Wealth of Nations Book Announcement
- Kevin Giammalva
- Jun 1
- 4 min read
My next read will be a segment of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. Smith shares the following example in his introduction. Thinking chiefly of the native tribes in North America prior to the American founding, he writes that “every individual who is able to work is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniencies of life, for himself, and such of his family or tribe as are either too old, or too young, or too infirm, to go hunting and fishing. Such nations, however, are so miserably poor, that, from mere want, they are frequently reduced, or at least think themselves reduced, to the necessity sometimes of directly destroying, and sometimes of abandoning their infants, their old people, and those afflicted with lingering diseases, to perish with hunger, or to be devoured by wild beasts.”
In other words, everybody works hard all day, and yet they often barely have enough to survive.
Smith contrasts this with more economically developed countries: “Among civilized and thriving nations, on the contrary, though a great number of people do not labour at all, many of whom consume the produce of ten times, frequently of a hundred times, more labour than the greater part of those who work; yet the produce of the whole labour of the society is so great, that all are often abundantly supplied; and a workman, even of the lowest and poorest order, if he is frugal and industrious, may enjoy a greater share of the necessaries and conveniencies of life than it is possible for any savage to acquire.”
In other words, many don’t work at all but still consume very much, and yet there is still plenty to go around.
Why are some peoples/nations wealthier? How do we create even greater wealth both for ourselves and others so that nobody needs to go without necessities or other conveniences? These are the questions Smith explores, and through his text we will keep an eye toward both the financial markets we invest in, as well as some personal implications for how we live.
If you would like to get your own copy and read along with me, please let me know! (I will be reading this affordable $1 Kindle version, thanks in part to the division of labor 😉).
Smith’s work is broken up into 5 books. Our focus will be Book 1, titled “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”, chiefly the first nine chapters.
To get an idea of what’s to come, here’s a list of those nine chapters.
Of the Division of Labour
Of the Principle which gives occasion to the Division of Labour
That the Division of Labour is limited by the Extent of the Market
Of the Origin and Use of Money
Of the Real and Nominal Price of Commodities, or of their Price in Labour, and their Price in Money
Of the Component Parts of the Price of Commodities
Of the Natural and Market Price of Commodities
Of the Wages of Labour
Of the Profits of Stock
Let us know
How would you answer, “Why are some nations wealthier than others?”
A note on the selection of this text, which was published in London 250 years ago in 1776.
As many of you know, prior to joining Tim and working in financial advising, I was a teacher at a classical school. While there are a few distinctives of classical education, one is that we read old books. Although no longer in classical education, I nevertheless endeavor to continue to read old books. There is a famous set of books known as the Great Books of the Western World, and this set includes a reading list of key passages from these great books in order to help a reader get an introduction without reading each book in its entirety. I am working my way through this reading list with another financial advisor, and we discuss the implications to our work in light of each text. We recently read and discussed Smith’s Wealth of Nations, and as it is more directly applicable to finance and economics than most, I wanted to share it here with you.
Although the reading list is just segments of each text, it still takes 10 years to get through (imagine how long it would take to read through the entire set!). Year 1 comprises easier texts to read, and moves to more difficult texts as the years go along. Each year also moves chronologically, starting typically with ancient Greek texts from roughly 2,500 years ago (Homer, Plato, Aristotle, etc.), moving to modern texts like Smith’s Wealth of Nations. Meaning the book we’re reading now together, written 250 years ago, is close to the newest book on the list!
For those interested in a broader defense of reading old books, this might be of interest.
Until next time, happy reading!
