NationStates Jolt Archive

I'm reading Adam Smith's "The Wealth of Nations," and so far, I've found it a very good book. However, I've been reading his "Digression on Silver", and I'm going to be honest, I don't really understand what he's trying to get across. If someone could tell me, that would be great.

You probably shouldn't read Smith, for certain reasons. (http://www.mises.org/story/2012) (Among them being plagiarism.) Bastiat and Say, among many others, are far more enlightening.

You probably shouldn't read Smith, for certain reasons. (http://www.mises.org/story/2012) (Among them being plagiarism.) Bastiat and Say, among many others, are far more enlightening.

Just out of curiousity, what do you mean by your sig?

I'm not really sure. I believe it is discussing the effects of changes in metal prices on the purchasing power and inflation of currency, and the corresponding effects on the material well-being of goods producers that rely on payments in nominal currency as opposed to metal value.

So, if the silver value of a shilling falls to 10 pence (1 shilling under the old system of British coinage was worth 12 pence), a person paid that shilling for an amount of corn worth 1 shilling of silver will effectively see a drop in real income of 8.3% if they are paid a shilling with a silver content of only ten pence. This, naturally, will result both in sellers attempting to sell their product as soon as possible to offset the eventual debasement of currency and purchasing power caused by the price differential (resulting in supply gluts and shortages) to maximize the value of their sale.

However, I could be totally wrong.

You probably shouldn't read Smith, for certain reasons. (http://www.mises.org/story/2012) (Among them being plagiarism.) Bastiat and Say, among many others, are far more enlightening.

Well, Smith is considered the founder of modern capitalism (Alongside Locke), so any good Capitalist Ideaocrat has to read it.

Libertarian writings are for the most part reactionary, they started appearing because of the superiority of the statist writings. Imho the best reads are as follows:

Republic & Laws by Plato
Politics by Aristotle
Utopia by Thomas More
On Sovereignty by Jean Bodin
Leviathan by Thomas Hobbes
The Social Contract by Jean-Jacques Rousseau
The Communist Manifesto by Karl Marx
Reflections on Violence by Georges Sorel
History and Class Consciousness by Georg Lukács
Origins and Doctrine of Fascism by Giovanni Gentile

Well, Smith is considered the founder of modern capitalism (Alongside Locke), so any good Capitalist Ideaocrat has to read it.

Unfortunately, he really doesn't deserve it. Bastiat and Say's are far more lucid and correct Smith's mistakes (one of which is the fallacious labor theory of value.) And the founder of modern capitalism are actually the Late Scholastics of Spain.

Just out of curiousity, what do you mean by your sig?

I mean the same thing as William Lloyd Garrison did concerning the Constitution.

Well, Smith is considered the founder of modern capitalism (Alongside Locke), so any good Capitalist Ideaocrat has to read it.

Personally, I see Smith as more of an intermediate step towards capitalism rather than its father; he was a physiocrat, which meant that he saw agriculture as the primary source of national wealth and economic surplus, from which all other output descended. Although this is untrue today, the most important part of physiocrat ideology was the shifting of the source of economic surplus from state accrual of precious metals and repressive tariffs (as under mercantilism) to a free-market system based on productive labor.

As Venndee said, Bastiat and Say are probably more deserving of credit for modern capitalism; however, it's highly unlikely the classical model or modern capitalism would have evolved as quickly as they did without the work of Smith and his contemporaries.

Ironically, you can read The Wealth of Nations on Marxists.org

Keep in mind that this was made in the late 1700's, a better name for our economy is "Corporatism", rather than capitalism, which seeks progress through the rivalry of small business, rather than global economic strength and power of a few companies... Ahem, Wal-Mart.

http://marxists.org/reference/archive/smith-adam/index.htm

I'm not really sure. I believe it is discussing the effects of changes in metal prices on the purchasing power and inflation of currency, and the corresponding effects on the material well-being of goods producers that rely on payments in nominal currency as opposed to metal value.

So, if the silver value of a shilling falls to 10 pence (1 shilling under the old system of British coinage was worth 12 pence), a person paid that shilling for an amount of corn worth 1 shilling of silver will effectively see a drop in real income of 8.3% if they are paid a shilling with a silver content of only ten pence. This, naturally, will result both in sellers attempting to sell their product as soon as possible to offset the eventual debasement of currency and purchasing power caused by the price differential (resulting in supply gluts and shortages) to maximize the value of their sale.

However, I could be totally wrong.

I would say that is probably correct.

Well, Smith is considered the founder of modern capitalism (Alongside Locke), so any good Capitalist Ideaocrat has to read it.

I'm not sure you'd like all the ideas presented by Smith. For starters, he isn't that kind to business, and the government interference he decries is mostly mercantilism. In fact, he even believes intervention to be sometimes necessary if it means protecting the free market from monopolies. It's not as libertarian as some people think.
That being said, Smith is of course the Father of the Free-Market, or at least is considered such. It's certainly worth a read.