
The Wealth of Nations, Book 4
by Adam Smith
'The Wealth of Nations, Book 4' Summary
Book IV: Of Systems of political Economy
Smith vigorously attacked the antiquated government restrictions he thought hindered industrial expansion. In fact, he attacked most forms of government interference in the economic process, including tariffs, arguing that this creates inefficiency and high prices in the long run. It is believed that this theory influenced government legislation in later years, especially during the 19th century.
Smith advocated a government that was active in sectors other than the economy. He advocated public education for poor adults, a judiciary, and a standing army—institutional systems not directly profitable for private industries.
Of the Principle of the Commercial or Mercantile System: The book has sometimes been described as a critique of mercantilism and a synthesis of the emerging economic thinking of Smith's time. Specifically, The Wealth of Nations attacks, inter alia, two major tenets of mercantilism:
- The idea that protectionist tariffs serve the economic interests of a nation (or indeed any purpose whatsoever) and
- The idea that large reserves of gold bullion or other precious metals are necessary for a country's economic success. This critique of mercantilism was later used by David Ricardo when he laid out his Theory of Comparative Advantage.
Of Restraints upon the Importation: Chapter 2's full title is "Of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home". The "invisible hand" is a frequently referenced theme from the book, although it is specifically mentioned only once.
"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 may be 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. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." (Book 4, Chapter 2)
The metaphor of the "invisible hand" has been widely used out of context. In the passage above Smith is referring to "the support of domestic industry" and contrasting that support with the importation of goods. Neoclassical economic theory has expanded the metaphor beyond the domestic/foreign manufacture argument to encompass nearly all aspects of economics.
Of the extraordinary Restraints: Chapter 3's long title is "Of the extraordinary Restraints upon the Importation of Goods of almost all Kinds, from those Countries with which the Balance is supposed to be Disadvantageous".
Book Details
Language
EnglishOriginal Language
EnglishPublished In
1776Authors

Adam Smith
Scotland
Adam Smith was a Scottish economist, philosopher as well as a moral philosopher, a pioneer of political economy, and a key figure during the Scottish Enlightenment, also known as ''The Father of Econo...
Books by Adam SmithDownload eBooks
Listen/Download Audiobook
- Select Speed
Related books

Creators: A Comedy by May Sinclair
May Sinclair's 'Creators' delves into the complexities of artistic genius and the societal constraints faced, particularly by women. The story center...

Sätze aus der höhern Welt- und Menschenkunde by François VI. de La Rochefoucauld
This book, originally published in 1678, presents a collection of aphorisms and maxims by the French writer François VI. de La Rochefoucauld. The work...

Struggles and Triumphs, or Forty Years' of Recollections of P.T. Barnum, written by Himself by P. T. Barnum
This autobiography details the life and business endeavors of P.T. Barnum, the founder of the "Greatest Show on Earth." Barnum, a multifaceted figure,...

War and Peace Vol. 3 (Dole Translation) by Leo Tolstoy
Volume 3 of Leo Tolstoy's *War and Peace* continues to follow the lives of several Russian families during the tumultuous period of Napoleon's invasio...

Tact by Ralph Waldo Emerson
Tact is a collection of essays by Ralph Waldo Emerson, an American essayist, lecturer, and poet who led the Transcendentalist movement of the mid-19th...

Fables de La Fontaine, livre 11 by Jean de La Fontaine
Ce onzième livre des fables de Jean de La Fontaine est celui qui contient le plus petit nombre de fables: 10. Toutefois, les textes de ces fables sont...

Good Sense by Paul Henri Thiry (Baron d'Holbach)
"Good Sense" is a thought-provoking and insightful book written by Paul Eldridge. Published in the early 20th century, this classic work explores the...

Idiot (Part 03 and 04) by Fyodor Dostoyevsky
The Idiot is a profound and moving exploration of the human condition. Dostoyevsky delves into the depths of the human psyche, exposing the fragility...

A General View of Positivism by Auguste Comte
A General View of Positivism was an 1844 book by a French philosopher Auguste Comte, first published in English in 1865. A founding text in the develo...

Return by H. Beam Piper
Two-hundred years after a global nuclear war, two explorers from a research outpost, that largely survived the cataclysm, discover a settlement of hum...
Reviews for The Wealth of Nations, Book 4
No reviews posted or approved, yet...