The Wealth of Nations Book V, Chapter 3 Summary

Of Publick Debts

  • Smith knows that in any society, some people will always want to hoard wealth. In other words, some people will always want to have more than other people, even if they have no use for all their stuff.
  • Sometimes, it's clear that a country has to go into debt in order to wage a war. The public money isn't enough to mobilize an army of tens of thousands. Furthermore, countries tend to spend a bunch of money even in times of peace, which means they don't have any savings for when a war comes.
  • A country will also go into debt in order to keep its justice system going during times when public money takes a dip. The country needs to continue functioning one way or another, so they borrow money to keep things running.
  • Smith thinks that one day, public debt will ruin all the great countries of Europe. And if you look at Europe today, he might not be that far off. He also takes another opportunity to remind his readers of how England is currently racking up crazy amounts of debt by trying to keep all its colonies under its control.
  • Adam Smith closes his book on a somewhat sour note, telling his readers that Britain is in a mediocre position as a country, even though everyone seems to think it's the greatest country on Earth. He says it's about time England accepted its circumstances and stopped trying to act more powerful than it actually is.