Sunday, May 11, 2008

A Free Download of Adam Smith on the Mercantile System'

I find little gems from all over the Internet and this one looks promising.
Adam Smith, On the Mercantile System, (18 pages) comes from WOWIO Books, of which publisher I know nothing.

The product is described as:

For Adam Smith a nation state was simply the total of the people in it; the state’s wealth was drawn from the labor of its individuals as well as from its natural resources.

In Book IV of his 1776 “Wealth of Nations,” Smith argues for free trade and introduces the notion that many individuals, acting out of their perceived self-interest, are “led by an invisible hand” to promote an end which was not part of their intention. That end generally benefits society as well as individuals, reasons Smith.

This selection shows Smith discrediting the popularly held belief of the 16th-18th centuries that a nation state’s wealth was measured in treasure and bullion and, consequently, state regulation of foreign trade was required to assure a surplus of exports over imports
.”

Comment
WOWIO books are free downloads to readers located in the USA and US citizens in the military or government abroad.

I have not read this product but the extracts appear to be from Book IV of Wealth Of Nations and more people should download this (better still, read the entire original chapter) publication.

Book IV is the core of what Adam Smith was doing in writing Wealth Of Nations, which was not an economics textbook by any stretch of the meaning of the term. It was a critique of ‘mercantile political economy’ – a ‘very violent critique’ was how Adam Smith described it – as practised by Britain since the 16th century.

It wasn’t written for fellow political economists; there were not that many of them around, certainly not enough to justify the number of copies such a group were likely to buy. Smith’s target audience were British legislators and the people who influence them, including those coming to prominence in the British colonies of North America (he regarded the mercantile colonists and shareholders with the East India Company as a lost cause).

I don’t agree with the description that ‘the state’s wealth was drawn from the labor of its individuals as well as from its natural resources’. This ignores the significant multi-factor commercial economy, consisting of the rent charged for the use of land and purchase of natural resources and the crucial factor of the owners of capital-stock who finance the advances to the labourers, and without which there would be no product to count among the annual output of ‘the necessaries, convenience, and amusements of life’.

Restricting it to the ‘labour of its individuals’ and ‘natural resources’, without making clear the roles of the other contributors, the other property owners, detracts from Adam Smith’s analysis. He did not consider that labour was the sole source of product; necessary, yes, but alone, no.

I have the usual problem with the ‘notion that many individuals, acting out of their perceived self-interest, are “led by an invisible hand” to promote an end which was not part of their intention’, as if this is of the significance granted it in the 20th century (and well rehearsed on Lost Legacy).

The ‘invisible hand’ was a metaphor, not a ‘notion’, not a ‘concept’, not a ‘theory’, not a ‘principle’, and nor a ‘paradigm’. He used it only once in Wealth Of Nations and Book IV and not in Books I and II where he discusses the workings of markets, along with his core principles (propensity to truck, barter, and exchange; division of labour and specialisation; self-betterment; natural and market prices’; savings and investment; prodigality and frugality; competition and monopoly; spread of opulence and the liberal wages of labour). But not a sight of the metaphor so strongly associated with his name.

However, if the product from WOWIO Books consists of extracts from Wealth Of Nations and not edited commentaries on them, it would have value for introducing Adam Smith’s ideas to people who may only have heard accounts of them.

As its free, and only 18 pages, readers in the US are advised to invest a few minutes downloading it.

2 Comments:

Blogger marysummer said...

A Free Download of Adam Smith on the Mercantile System'is a very nice post. thanks for giving information.
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Blogger Gavin Kennedy said...

THANK YOU FOR YOUR COMMENT, EVEN IF ITS A TRIFLE LATE ARRIVING IN 2014.
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6:07 pm  

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