The Condensed Wealth of Nations and Theory of Moral Sentiments

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important books ever written. Smith recognised that economic specialization and cooperation was the key to improving living standards. He shattered old ways of thinking about trade,
commerce and public policy, and led to the foundation of a
new field of study: economics.
And yet, his book is rarely read today. It is written in a dense and archaic style that is inaccessible to many modern readers. The Condensed Wealth of Nations condenses Smith’s work
and explains the key concepts in The Wealth of Nations
clearly. It is accessible and readable to any intelligent layman. This book also contains a primer on The Theory of Moral
Sentiments, Adam Smith’s other great work that explores the nature of ethics.

ADAM SMITH
INSTITUTE

The Condensed Wealth of Nations | Eamonn Butler

Adam Smith’s The Wealth of Nations is one of the most

The Condensed
Wealth of Nations
and The Incredibly Condensed
Theory of Moral Sentiments
Eamonn Butler

23 Great Smith Street
London SW1P 3BL
www.adamsmith.org

www.adamsmith.org

The Condensed
Wealth of Nations
and The Incredibly Condensed
Theory of Moral Sentiments
Eamonn Butler

The Adam Smith Institute has an open access policy. Copyright remains with the copyright holder, but users may download, save and distribute this work in any format provided: (1) that the Adam Smith Institute is cited; (2) that the web address adamsmith. org is published together with a prominent copy of this notice; (3) the text is used in full without amendment [extracts may be used for criticism or review]; (4) the work is not re–sold; (5) the link for any online use is sent to info@adamsmith.org. The views expressed in this report are those of the author and do not necessarily reflect any views held by the publisher or copyright owner. They are published as a contribution to public debate.

© Adam Smith Research Trust 2011
Published in the UK by ASI (Research) Ltd.
ISBN: 1–902737–77–6
Some rights reserved
Printed in England

Contents
1 Introduction

4

2 The Condensed Wealth of Nations

7

Book I: Economic efficiency and the
factors of production

9

Book II: The accumulation of capital

32

Book III: The progress of economic growth

42

Book IV: Economic theory and policy

47

Book V: The role of government

59

3 The Incredibly Condensed Theory of Moral Sentiments

77

4 Further reading

84

1 Introduction

Adam Smith’s pioneering book on economics, The Wealth of
Nations (1776), is around 950 pages long. Modern readers find it almost impenetrable: its language is flowery, its terminology is outmoded, it wanders into digressions, including one seventy pages in length, and its numerous eighteenth-century examples often puzzle rather than enlighten us today.

And yet, The Wealth of Nations is one of the world’s most important books. It did for economics what Newton did for physics and
Darwin did for biology. It took the outdated, received wisdom about trade, commerce, and public policy, and re-stated them according to completely new principles that we still use fruitfully today. Smith outlined the concept of gross domestic product

as the measurement of national wealth; he identified the huge productivity gains made possible by specialisation; he recognised that both sides benefited from trade, not just the seller; he realised that the market was an automatic mechanism that allocated

resources with great efficiency; he understood the wide and fertile collaboration between different producers that this mechanism made possible. All these ideas remain part of the basic fabric of economic science, over two centuries later.

So The Wealth of Nations is worth reading, but nearly impossible to read. What we need today is a much shorter version: one
that presents Smith’s ideas, not filtered through some modern commentator, but in modern language. This book aims to do
precisely that, updating the language and the technical terms, with just...
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