I just wanted to make sure that I understand The Wealth of Nations by Adam Smith.

I've never read The Wealth of Nations by Adam Smith. (I'm currently reading it). I just want to make sure that I understand it correctly through the prism of a modern day person.<br><br>I do understand that Smith wrote this book in 1776 and much has happened since then. But his writings still seem to greatly influence modern concepts of economics. I figured it would be important to read his works even if they don't apply today.<br><br>Here is my understanding so far:<br><br>1.) **Economic Specialization is more productive than self sufficiency:** The division of labor increases productivity and efficiency in that a single person can specialize in a certain job rather than try to do a little of everything.<br><br>2.) **Markets regulate themselves through Supply and Demand:** Smith seemed to indicate that the markets can more or less regulate themselves. In his view this is a good thing as regulation leads to crony capitalism.<br><br>3.) **Free Markets produce the Socially Optimal Outcome:** Smith seemed to indicate that free markets always produce the socially optimal outcome for society. Businesses should be left alone as long as the market is otherwise free. <br><br>4.) **Profit Motive is Good:** Smith was a strong proponent of the profit motive in that the profit motive drives free markets and competition. THe profit motive is what pushes innovation and competition. <br><br>5.) **Free Markets produce the Greatest Consumer Surplus:** Smith also seemed to indicate that free markets are best for consumers. That unregulated free markets produce the greatest consumer surplus. <br><br>6.) **Free Markets produce the Greatest Producer Surplus:** Smith also seemed to indicate that free markets are best for producers. <br><br>7.) **Free Markets produce Economic Growth:** Smith seemed to indicate that free markets produce the greatest economic growth as opposed to regulated markets.<br><br>8.) **Taxes Inhibit Economic Growth:** Smith was strongly against taxes and believed that most taxes inhibit economic growth.<br><br>9.) **Free Markets produce Unemployment:** Smith seemed to indicate that free markets inevitably produce unemployment. He didn't seem to consider this a bad thing.<br><br>10.) **Free Markets produce Inequality:** Smith also indicated that Free Markets inevitably produce inequality. He also didn't see this as a bad thing.<br><br>11.) **Free Markets produce Migration:** Smith also seemed to indicate that free markets produce migration. He saw migration as a natural outcome of free markets. <br><br>Now I am only 4 chapters in out of 26. But it seems to me that much of what he has written does not hold up to modern scrutiny. I understand that he lived in a different era and that his views have been modified or updated by others. I also can't imagine anybody wants to go back to the pre industrialized world of 1776.<br><br>So what are your thoughts?<br><br>TLDR: Adam Smith seemed to argue in favor of Free Markets in 1776. But the wealth of nations was written in 1776 and much has happened since then. Most economists agree that most of The Wealth of Nations has been discredited. Smith does not account for externalities and his arguments in favor of free markets are not applicable today.