The original book seemed a little too unwieldy for me so I read the cliff notes over at Grade Saver. Here is what I learned…
1. The division of labor increases productivity and therefore increases wealth. Instead of producing all the things you need, produce one in excess and trade for everything else.
2. Human beings are natural traders. They give things they have in abundance for other things they want.
3. “Improvements to art and industry are made only when there is an assurance of a large market that will be able to absorb the products of labor.”
4. A large population is needed to ensure a market for your goods. This is why urban developments have naturally formed.
5. Thriving economies are dependent on people who are motivated by self-interest.
6. “A situation in which the market price of labor is either significantly above or significantly below its natural price will be checked by actions of the laborers, who either devote themselves to a particular employment due to the high wages, or who turn their attention to other employments because wages are too low.”
7. Growth is necessary in all economies. “In a stagnant economy, even a wealthy one, the lowest classes will be desperately poor.”
8. Writers and entertainers are maintained by the annual produce of the productive land and labor of a country. There can’t be a country of only entertainers. “Unproductive labor is not unnecessary or useless, but it does not create economic surpluses. It is funded from labor that does indeed create these surpluses.”
9. Once a society reaches a high level of opulence, resources get diverted to increasing amounts of unproductive labor, leading to decline.
10. “It takes a strong legal system for capitalism to flourish, because those who are prepared to invest must have the confidence that their capital will be protected.”
11. “It is the nature of governments to hold tightly to their power, even if increased freedom would benefit the people and the economy.”
12. “Anything that is self-sustaining may not be defined as unproductive.”
13. “Perfect liberty [is] the only effective way to render the annual production the greatest possible.”
14. “The wealth of nations consists not in money, but in the consumable annual goods annually produced by the labor of the society.”
The book also had insight into the economy of the American colonies right before the revolutionary war.
I read the summary of this book because I’m getting the impression that politicians are bamboozling us when it comes to economics. I wanted to reach back to a source that is untainted with modern capitalist thought.
The more of this type of reading I do, the more I come to the conclusion that liberal economic policies based on a welfare or equality model is incompatible with growing and robust economies where actual wealth is generated. Capitalists take a large risk through investment, and only in societies where they feel that risk will be rewarded will such an investment occur. Understanding the fundamental rules of economics allows you to make sense of government action today and how they will fall far short of their intended purposes.
Read More: The Wealth Of Nations
47 thoughts on “14 Things I Learned From The Wealth Of Nations”
There is a very distinct difference between bailouts for individuals and bailouts for corporations. The later is what we want to avoid. Offering UE for the guy who lost his job at the failed startup is much better than trying to bailout a bad biz or idea.
And any government powerful enough to bail out individual, will by necessity also be powerful enough to bail out corporations. If that government is also up for elections, it will then have to bail out the one who are best able to promote their reelection. Otherwise they will lose out to opponents who are not so stubbornly hung up on principles.
Bailouts of individuals is EXACTLY what we want to avoid if we wish to date slender feminine women. Otherwise, women will immediately go for the tallest and most violent alpha bad boy, pop out kids he won’t support, and dump the rest of us with the bill while getting fat. Her girl friends will get fat too knowing that they don’t need to keep their men happy.
Just look at the anglosphere and scandinavia if you want real life examples.
Good site here for Red Pill Economics
Prof. Antal Fekete
There are a few flaws with The Wealth of Nations, but on the whole it is an incredibly insightful, enjoyable and intelligent book far far ahead of its time. Not to mention he’s one of the few economists who can actually write well from a prose point of view. Von Mises and Hayek? Intelligent men with brilliant ideas for sure, (I’m on the Austrian viewpoint) but very dry reading. Keynes’s General Theory of Money reads like a retarded monkey wrote it and Samuelson isn’t much better, and both are spectacularly wrong as well.
As far as econ that doesn’t make your eyes glaze over, I recommend Sowell’s “Basic Economics” and de Soto’s “Mystery of Capital.” Both make great cases for free markets, are relatively short, and offer great insights. Sowell consciously decided to write the entire book without using a single graph.
How an we take a review seriously that starts with I couldn’t read the book?
Yup, see your point but it’s titled what he learned from it so it’s not necessarily a book review. But seriously, you learn very little by reading a summary and not struggling to read the tome, and wouldn’t be up to speed to critique and make arguments. Me me me instant gratification sound byte generation. He should at least read a modern study edition not cliff notes.
To be fair to him the unabridged editions with all the books included is a tome >1000 pages and doesn’t read like a novel. That’s why it’s assigned over an entire semester. Should be under the big ass book challenge.
Let’s not forget this piece of wisdom from the Father of Capitalism: “A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.” -Adam Smith, Wealth of Nations. Book 5, Chapter 2, Article 1.
Incidentally, the most conservative state in New England, New Hampshire, does not have a income tax, just a very high property tax.
The result is one of the least indebted states in the nation.
A measure of manhood is not what you possess, but what you produce.
Ultimately why bankers are the most powerful people. They are not encumbered by guarding wealth, nor are they encumbered with learning a trade to be productive. It takes a normal person over half their life to be successful in a trade and have access to greater resources. Yet bankers go out the gate with no more than assurances just to get access to their riches.
Truth. This is why Austrian economists, who take from Adam Smith, HATE HATE HATE bankers. When you cut through the bullshit, you know that bankers produce nothing of value for the economy at large.
from one of Roosh’s previous posts:
…poverty is not the result of rapacious financiers exploiting the poor. It has much more to do with the lack of financial institutions, with the absence of banks, not their presence. Only when borrowers have access to efficient credit networks can they escape from the clutches of loan sharks, and only when savers can deposit their money in reliable banks can it be channeled from the idle rich to the industrious poor.
food for thought.
Modern bankers largely do not. Free market banks which are simply deposit boxes for your money sometimes do. When you agree to save your money for a fixed term, a banker can loan that money out at interest, making both you and them money while serving the useful economic purpose of advancing money. Interest is simply the cost of money now, rather than money later. Modern banks, however, are definitely horrible institutions that rob people and produce very little.
The best economics book you will ever read, and it reads easy like a story, is
War Cycles, Peace Cycles
By Richard Kelly Hoskins
It is an amazing book that you will never hear endorsed by the mainstream, which is all the more reason to find yourself a copy and read it. I had to call the author to obtain a copy for myself, and I’m thinking of getting a newer version as I’ve read mine every year for the last 12 years and it is getting rather worn.
That looks good.
When I first started reading Roosh I noticed every so often that he would say things that differed from what I think economically. Its cool that he’s now moving towards becoming a libertarian.
Another book worth reading: How I Found Freedom in an Unfree World: A Handbook for Personal Liberty by Harry Browne
I’m a stern capitalist. However I do believe in one supposedly liberal idea: Businesses cannot be trusted to take care of the natural environment.
Whether that should be up to the free market or government to regulate, I’m not sure. I suppose any population gets what it deserves – either way.
Tort laws and public awareness do help keep corps in check.
Cities only formed when the rural population has a surplus to feed the people in the cities.
Glad to see you’re developing as a writer and looking beyond the pussy game. Looking forward to more of your iconoclastism.
add Hazlitt’s Economics in One Lesson to your list
Dude, you should wikipedia up the definition of classical liberialism a la Locke and classical conservatism a la Edmun Burke. Helps bring perspective.
Summaries don’t do them justice; read up the original text of The Wealth of Nations and other classics in their 18th century speak. Oh and aren’t these books supposed to be mandatory reading in college, what you call “liberal brian washing” institutions?
Ahh ha, but thats the problem; they aren’t. Why would they endorse the exact opposite of what they teach?
The entire book wasn’t mandatory, but extracts of it were in my polsci 101, meant to reach as wide an audience as possible. So much for the manospheres hatred of “traditional” educational institutions.
“10. ”It takes a strong legal system for capitalism to flourish, because those who are prepared to invest must have the confidence that their capital will be protected.””
This is at once both true, and the downfall of so many libertarians. They tend to treat the “legal system”, and by extension policing powers, as some sort of cost free externality. While in reality, it is simply yet another consumer good.
As a result, we end up with many self professed “conservatives” who have seemingly no qualm at all about taxing the entire population their entire income, in order to hire enough cops to ensure not one single errant child is ever able to set foot on some rich guy’s “property.” Or steal a pack of gum from said rich guy’s store.
Or, more appropriate on a blog like this, to ensure that no women ever get “harassed”, no matter if she walks down the street wearing nothing more than a “fuck me” sign on her back.
These kind of utopian “right wing” societies, are just as unfree and dysfunctional as their left wing counterparts, for there is nothing inherently freer about preventing robbery by taxing everyone to death to hire an army of cops to deter would-be thieves, than there is to simply pay the same would-be thieves enough welfare to keep them contently laying about doing nothing.
Hence, over time, society will evolve in the direction of one with very weak police, as well as very little compulsory welfare. Which is how it should be. If someone is worried about having gum stolen, lock it up; or be ready to shoot the bastards stealing it in the first place. You being robbed is your problem. Not mine. Nor “taxpayers”. And ditto for women worried about being harassed. Wear a Burka (with a hair trigger bomb belt under it, if need be), travel in the company of men you trust who are willing and able to defend you. Women worried about their purity already do this in societies without overgrown governments.
I recognize there may (emphasis on may….) well be some optimum level of centralized police power that is superior to complete anarchy, but a major problem amongst libertarians today, is that many of them don’t even recognize the issue; instead preferring to just refer to “property rights” as something assumed a priori.
FFS you can’t be serious. Do you actually think most women in those countries wear burqas and niqabs because they want to? Do you actually believe that it stops harassment? Women get groped even when fully veiled and in front of the kaaba and in those societies even the whores are ‘covered’.
Nothing “stops” harassment, except staying home, or only venturing out surrounded by a Bloomberg like security detail. Wearing less provocative clothing reduces it. If you think Burka wearing women get harassed in “those society”, what do you think would happen to women dressed up like whores?
You lost me mid-way through, but started making sense again by the end. I get where you are coming from and generally agree. My deviation is on the “simply pay the same would-be thieves enough welfare to keep them contently laying about doing nothing” mindset. I believ thats the last thing the government should be doing. Those in poverty need to be uncomfortable in their poverty. If not, they have no incentive to get off their ass and do somthing about it. As for limiting the behavior of those who see crime as a form of escape from poverty; when property owners and society at large has no problem dealing out leathal justice – the appeal of that career path will quickly dry up.
There is a big difference between property owners “dealing out” justice, and “society at large” doing it. If it is “society at large”, you end up with the exact same problem as when “society at large” pays people welfare to keep them from getting too desperate and hard to deal with; there is no incentive for property owners to secure their property properly, nor to not focusing on amassing more property than they can realistically secure themselves.
Point is, if taxing third parties to fund welfare for poor people without property is wrong (which I agree it is), so is taxing third parties to fund security details for rich people and their property.
Roosh, I don’t think you quite understand that #8 means YOU.
You might also want to check out the follow up by David Landes, “The Wealth and Poverty of Nations.” Roosh is sounding like a recent acolyte of alternativeright.com or something.
Not to mention… Jay Hanson, Joseph Tainter, John Ralston Saul
Enjoy the Collapse!
Don’t blame you for not reading the book. You really need to have quite a bit of economics already under your belt to follow it.
Reading it as a n00b is a bit like trying to learn calculus and physics by reading Newton’s original works.
Thats why for polsci philo and econs you start with Plato, the cornerstone of any liberal education an educated man should possess.
Can anyone recommend a book to study for the Foriegn Service Officer’s Exam. Don’t even mention the Barron’s or Cliff Notes Books, they are pure shit. I’d like a some books that sum up all I need to know about Economics, Statististics, world affairs/politics, and management.
I took the exam a few years ago. I don’t know if there’s any one book you can read to prepare yourself. The entire exam seemed to be written under the assumption that the only people who would be taking it are those who went to law school and have an undergrad degree in international studies or some shit like that.
You would also enjoy Ludwig Von Mises and Friedrich Hayek. Check out Mises.org.
Murray Rothbard is a little bit further down the rabbit hole IMHO on some subjects but also very enlightening.
I had a pretty decent education for someone who went to publik skuel, or so I thought.
Then I took Econ 101 while I was stationed in Iceland.
OMG!!! How the fuck did I get this far and NOT KNOW WHO ADAM SMITH WAS! I was so pissed! Why are we discussing who Marx is and his BS? Why?
It was another data point for me. Fucking Blue Pill people can’t be trusted with anything.
Roosh, the most important economics book ever written is arguably Human Action or Man, Economy, and State. The Wealth of Nations is an incredibly important but also a premature economic work. If you want to learn more about how and why free enterprise works so well then you ought to read them.
See Thomas Sowell’s Basic Economics. A nuclear blast of intellectual clarity.
Re #8: Will Durant said it best: ‘Remember, the MeDici always comes before the Michelangelo.’
If you look at actual contemporary evidences you’ll see that welfare states in developed nations often outperform developed free-market countries in economic growth. Economics is by tradition a subject ideologically biased towards classic liberalism so there’s no mantra-answer on why this is the case, but I don’t think it’s very strange really: Even if there’s less profit to be made in investments in a welfare state, more people will *dare* to invest, and the lower and middle classes can and dares to spend more on shopping. It’s not rich peoples luxury goods which drives the economy forwards, but the lower classes and middle classes everyday products. With this said, to create wealth by redistributing wealth, you obviously need to have some wealth to begin with. ”Developing countries” should generally stick to free markets in a much higher degree.
The smartest economists of modern times are Martin Armstrong and Charles Hugh Smith. Read up boys, for these two link most EVERYTHING together in ways that conventional dry economists can not. Very relevant, and I strongly suggest you read their respective blogs daily to keep abreast on the rapid changes taking place at a pace unlike ever before. They will give you insight on how government works, the direction we are headed, how to make better decisions, and most importantly, why they occur. Martin Armstong will scare the pants right off of you if you are not familiar with the decline already. Jim Rickards is great too and I hear his The Death of Money book is great. Doug Casey taught me the most important lesson in that the greatest risk we face, is in fact political risk. I didn’t understand how a few years back, but I am convinced of it now.