Economic Ideas In Adam Smith's The Wealth Of Nations

1645 Words 7 Pages
The Wealth of Nations (WN) was a pioneering book exploring economic ideas which contradicted those that were in place at the time it was written. Many of the theories outlined are still relevant today. Adam Smith published the WN in 1776, by this time he already had gained a reputation as a notable writer following the publication of The Theory of Moral Sentiments in 1759. The plan of the work is logically structured and provides good summaries of the main themes which follow. The first four paragraphs introduce the reader to the main themes which are subsequently developed. The chapter order is very logical starting with economic principles such as the division and application of labour and building up to the bigger picture focusing on government …show more content…
The book considers improving the productive powers of labour. The summary of this book is very short and only mentions the productive powers of labour. The productive powers of labour is a core idea of the book as the nature of wealth is annual labour and the cause of this wealth comes from improvements in labour productivity. Ideas such as the use of money, how people value good and the three factors of production are not included in the plan of the work. Paragraph five could benefit from the inclusion of the other main concepts of book one, however, the summary does succeed in highlighting the main themes of the book and it also builds upon the ideas outlined in the introduction in paragraphs one to four. The first chapter of book one focuses on the division of labour ‘the greatest improvement in the productive power of labour, and the greater part of the skill, dexterity, and judgement with which it is anywhere directed, or applied, seems to be the effects of the division of labour’ (Smith, 1976, Book 1, Chapter 1, Section 1). Here Adam Smith considers specialisation and the division of labour and uses a pin factory as his main example. This aspect of the book is probably the most famous. In the second chapter Smith builds on the concept of the division of labour and indicates that ‘self-love’ is the reason that specialisation arises. Here Smith means a concern for one’s own …show more content…
Adam Smith does not reference literature in the book, but critiques instead the policy. In the Plan of the Work Smith indicates that the mercantile system seeks to enrich a nation through a particular policy regime. Smith believed that instead a nation enriches itself better without any such regulation. Smith believes that these theories have not only influenced policy, but also education and also the conduct of sovereign states. Book four is in fact the only book with a reference to ‘the invisible hand’. The invisible hand refers to god and the theory is often mistaken for the market mechanism and the formation of prices. Paragraph eight covers the main themes of book four. The invisible hand is not mentioned in the plan of the work as it is not a major theme that runs throughout the

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