Wealth of Nations: Thoughts on the initial few chapters

January 31, 2015 at 1:00 pm (Rant, Thinking) (, , , , )


One of the books I’ve recently been reading is Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. It’s a book first published in the late 1700’s on classifical economics. It’s a very large book that’s divided into sections and chapters, but the first area has been dealing with the division of labour. Essentially it is a discussion on how each household produces commodities and services (food, clothing, carpentry, etc), but also has needs that aren’t fully met by their own production. These needs can be met by other households through the exchange of goods and services that are produced beyond what the originating household consumes.

In simpler terms: People don’t use everything they make, but other people may have a need for that extra “stuff”.

The discussion moves onto the idea of division of labour, where instead of each household trying to produce iron nails for building things, you could have one skilled source that is the expert at producing nails. So, instead of each household producing 20 nails a day, you could have one guy that can put out 1000 a day because that’s all he does. He can then exchange his product with other households to fulfill his needs. This way, he is efficient in his production and doesn’t have to be his own butcher, baker, carpenter, etc.

The way that Smith discusses these things and describes the breakdown of production was actually pretty effective; however, it is something that made me reflect on my own thinking. He took a concept of a product, say, a an article of wool clothing, and broke it down into things like: the shepherd raising the sheep, the guy sheering them, the people washing the wool, and so on. Sometimes these jobs were done by different people, sometimes not. Certainly when you get into the actual production of producing the threads and the cloth itself, it is handled by different outfits.

Getting back to my point, his breakdown of this topic is very similar to my natural line of thinking. It’s possible that somebody who doesn’t think this way could be surprised to otherwise informed about the matter, but to me it was just reading about things that I had already been thinking about (as a side note, I don’t actually have any formal education in economics or wool production).

It then made me think about other well known authors I had been reading lately and my conclusion is that many of them are just writing about common things they think about. Some of them write about topics to simplify the information so it can be processed easier for others, but many are just writing about their final musings. I don’t imply that it didn’t take a considerable amount of effort to process the topic or research it, but just that it doesn’t seem as hard as I would’ve imagined to produce work of interest to others.

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