Perlego book of the month: The Wealth of Nations by Adam Smith

If you want to be a successful entrepreneur, a respected economist or even an influential politician, The Wealth of Nations should provide you with a basic understanding of political and economic issues. The Wealth of Nations was written by the Scottish philosopher and economist Alan Smith and chiefly discusses Political Economy, which includes the relationships between governments, societies, individuals and socio-economic systems.  

The Wealth of Nations is a recommended text for your studies at UNYP, especially in the Communication & MediaBusiness AdministrationPolitical Science and International Relations programs. Although it was published in 1776, The Wealth of Nations is still considered to be the basis of classical economics. Even Elon Musk has put this book on his recommended list! Thanks to UNYP’s partnership with Perlego you can read The Wealth of Nations online for free

 

Use Perlego to read recommended books for your classes at UNYP.  

 

Adam Smith subdivided The Wealth of Nations into 5 books, which we will briefly describe in turn: 

 

Book I: Of the Causes of Improvement in the productive Powers of Labor 

This chapter focuses on the division of labor, which Smith claims is crucial for the development of the state. He also explains the creation of money and describes the relationship between employers and employees.  

 

Book II: Of the Nature, Accumulation, and Employment of Stock 

This section is all about capital and stock. Smith explains that the capital should not be spent, but invested to generate more resources. 

 

Book III: Of the different Progress of Opulence in different Nations 

Smith proposes the notion that in order to generate sufficient economic growth, the countryside and the cities must work together. The countryside should provide materials and resources, and the cities should use those resources to create goods and sell them. A symbiotic relationship is created when both parties can benefit from each other.  

 

Book IV: Of Systems of Political Economy 

In this book, Smith strongly opposes state interventions in the economy. He believes that a free market is the best system, as it is beneficial for all parties. A section of this book is dedicated to colonies; Smith believes that colonies are beneficial as they provide European countries with new and rare commodities, thus enhancing the free market. 

 

Book V: Of the Revenue of the Sovereign or Commonwealth 

In the final book, Smith expresses an ideal or a “maxim” of taxation: proportionality, transparency, convenience, and efficiency. In this book, Smith is also one of the first people to advocate progressive taxation. In general, progressive taxation means that wealthy people will contribute more into the state budget while poor people may pay less, and the tax is derived from the actual wealth of each individual. The role of state and government is further analyzed in this chapter. Smith asserts that the state should create a safe environment for the free market and protect society from inner threats, but that it should not interfere in the free market. Lastly, the topic of war and its financial consequences is discussed.  

 

Published in the late 18th century at the beginning of the industrial revolution, this book continues to be an essential building block of economics, and will remain so for centuries to come. Today’s political economy is still based on principles written in The Wealth of Nations. Every business owner should read this book to understand that a company is not merely a money machine, but an entity that exists within a complex environment with connects to various social and political fields. Unfortunately, some entrepreneurs have failed to grasp this fact until now, when they are facing the effects of a global pandemic. You can read this book now on Perlego for free as a UNYP student.  

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