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  • The Wealth of Nations

    An Inquiry into the Nature and Causes of the Wealth of Nations, usually known as The Wealth of Nations, is the most influential work of Adam Smith. Published in 1776, it can be considered the first major treatise on economics.

    Table of Contents

    VOLUME I
    Preface v
    Editor's Introduction xiii
    Introduction and Plan of the Work 1
    BOOK I Of the Causes of Improvement in the productive Powers of Labour, and of the Order according to which its Produce is naturally distributed among the different Ranks of the People 5
    CHAP. I Of the Division of Labour ibid.
    CHAP. II Of the Principle which gives Occasion to the Division of Labour 15
    CHAP. III That the Division of Labour is Limited by the Extent of the Market 19
    CHAP. IV Of the Origin and Use of Money 24
    CHAP. V Of the real and nominal Price of Commodities, or of their Price in Labour, and their Price in Money 32
    CHAP. VI Of the component Parts of the Price of Commodities 49
    CHAP. VII Of the natural and market Price of Commodities 57
    CHAP. VIII Of the Wages of Labour 66
    CHAP. IX Of the Profits of Stock 89
    CHAP. X Of Wages and Profit in the different Employments of Labour and Stock 101
    Part I. Inequalities arising from the Nature of the Employments themselves 102
    Part II. Inequalities occasioned by the Policy of Europe 120
    CHAP. XI Of the Rent of Land 145
    Part I. Of the Produce of Land which always affords Rent 147
    Part II. Of the Produce of Land which sometimes does, and sometimes does not, afford Rent 162
    Part III. Of the Variations in the Proportion between the respective Values of that Sort of Produce which always affords Rent, and of that which sometimes does and sometimes does not afford Rent 175
    Digression concerning the Variations in the Value of Silver during the Course of the Four last Centuries
    First Period 177
    Second Period 191
    Third Period 192
    Variations in the Proportion between the respective Values of Gold and Silver 210
    Grounds of the Suspicion that the Value of Silver still continues to decrease 216
    Different Effects of the Progress of Improvement upon the real Price of three different Sorts of rude Produce ibid.
    First Sort 217
    Second Sort 219
    Third Sort 228
    Conclusion of the Digression concerning the Variations in the Value of Silver 237
    Effects of the Progress of Improvement upon the real Price of Manufactures 242
    Conclusion of the Chapter 247
    BOOK II Of the Nature, Accumulation, and Employment of Stock
    Introduction 258
    CHAP. I Of the Division of Stock 261
    CHAP. II Of Money considered as a particular Branch of the general Stock of the Society, or of the Expense of maintaining the National Capital 269
    CHAP. III Of the Accumulation of Capital, or of productive and unproductive Labour 313
    CHAP. IV Of Stock lent at Interest 332
    CHAP. V Of the different Employment of Capitals 340
    BOOK III Of the different Progress of Opulence in different Nations
    CHAP. I Of the Natural Progress of Opulence 355
    CHAP. II Of the Discouragement of Agriculture in the ancient State of Europe after the Fall of the Roman Empire 360
    CHAP. III Of the Rise and Progress of Cities and Towns, after the Fall of the Roman Empire 371
    CHAP. IV How the Commerce of the Towns contributed to the Improvement of the Country 382
    BOOK IV Of Systems of political Œconomy
    Introduction 395
    CHAP. I Of the Principle of the commercial, or mercantile System 396
    CHAP. II Of Restraints upon the importation from foreign Countries of such Goods as can be produced at Home 418
    CHAP. III Of the extraordinary Restraints upon the Importation of Goods of almost all Kinds, from those Countries with which the Balance is supposed to be disadvantageous 437
    Part I. Of the Unreasonableness of those Restraints even upon the Principles of the Commercial System ibid.
    Digression concerning Banks of Deposit, particularly concerning that of Amsterdam 443
    Part II. Of the Unreasonableness of those extraordinary Restraints upon other Principles 452
    VOLUME II
    BOOK IV _
    CHAP. IV Of Drawbacks 2
    CHAP. V Of Bounties 7
    Digression concerning the Corn Trade and Corn Laws 25
    CHAP. VI Of Treaties of Commerce 46
    CHAP. VII Of Colonies 58
    Part I. Of the Motives for establishing new Colonies ibid.
    Part II. Causes of the Prosperity of New Colonies 66
    Part III. Of the Advantages which Europe has derived from the Discovery of America, and from that of a Passage to the East Indies by the Cape of Good Hope 91
    CHAP. VIII Conclusion of the Mercantile System 141
    CHAP. IX Of the Agricultural Systems, or of those Systems of Political Œconomy, which Represent the Produce of Land, as either the sole or the principal Source of the Revenue and Wealth of every Country 161
    BOOK V Of the Revenue of the Sovereign or Commonwealth
    CHAP. I Of the Expences of the Sovereign or Commonwealth 186
    Part I. Of the Expence of Defence ibid.
    Part II. Of the Expence of Justice 202
    Part III. Of the Expence of Public Works and Public Institutions 214
    Article 1st. Of the Public Works and Institutions for facilitating the Commerce of Society
    1st, For facilitating the general Commerce of the Society 215
    2dly, For facilitating particular Branches of Commerce 223
    Article 2d. Of the Expence of the Institutions for the Education of Youth 249
    Article 3d. Of the Expence of the Institutions for the Instruction of People of all Ages 273
    Part IV. Of the Expence of supporting the Dignity of the Sovereign 299
    Conclusion of the Chapter 300
    CHAP. II Of the Sources of the general or public Revenue of the Society 302
    Part I. Of the Funds or Sources of Revenue which may peculiarly belong to the Sovereign or Commonwealth ibid.
    Part II. Of Taxes 310
    Article 1st. Taxes upon Rent: Taxes upon the Rent of Land 312
    Taxes which are proportioned, not to the Rent, but to the Produce of Land 321
    Taxes upon the Rent of Houses 324
    Article 2d. Taxes upon Profit, or upon the Revenue arising from Stock 331
    Taxes upon the Profit of particular Employments 336
    Appendix to Articles 1st and 2d. Taxes upon the Capital Value of Lands, Houses, and Stock 342
    Article 3d. Taxes upon the Wages of Labour 348
    Article 4th. Taxes which, it is intended, should fall indifferently upon every different Species of Revenue 351
    Capitation Taxes ibid.
    Taxes upon consumable Commodities 354
    CHAP. III Of public Debts 392
    Appendix on the Herring Bounty 435
    Index I. Subjects 439
    Index II. Authorities 501

    Events of Interest

    9 Mar 1776, published, in London

    Articles

    Adam Smith Needs a Paper Clip: The pin factory, re-examined, by Virginia Postrel, Reason, May 2017
    A short history of pins as fasteners from Adam Smith in the late 18th century to the invention of the paper clip at the turn of the 19th century
    Adam Smith famously used a pin factory to illustrate the advantages of specialization ... : "One man draws out the wire, another straights it, a third cuts it, a fourth points it ... and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands ..." ... [T]he division of labor leads to miraculous productivity gains. Even a small and ill-equipped manufacturer, Smith wrote in The Wealth of Nations, could boost each worker's output from a handful of pins a day to nearly 5,000.
    Related Topics: Adam Smith, Trade
    Classical Liberalism in Argentina: A Lesson for the World, by Jacob G. Hornberger, Freedom Daily, Jul 1994
    Highlights Argentine history from the 1810 revolution to the late 20th century, arguing that the period from 1852 to 1930 demonstrated the validity of Adam Smith's writings, also discussing 1958 visits by Leonard Read and Ludwig von Mises
    In his great treatise—An Inquiry into the Nature and Causes of the Wealth of Nations—Smith asked, what have been the traditional means of combating poverty throughout history? The answer, of course, was government. People had always believed that governmental policies were necessary to ensure that people did not starve to death or suffer lives of impoverishment. Yet, despite the best efforts of governmental officials throughout the ages—such as with the English Poor Laws, the Corn Laws, price controls, and antispeculation laws—people had continued to suffer deep privation.
    The Early History of FEE, by Henry Hazlitt, The Freeman, Mar 1984
    Excerpted from Hazlitt's remarks at the Leonard E. Read Memorial Conference on Freedom, November 1983; reprinted in the May 2006 issue, including photos of early FEE senior staff
    [Read]'s first move was to publish an outline of the aims of the Foundation ... I condense them here: ... (6) books: the abridgment, publication, and distribution of classical works such as, for instance, The Wealth of Nations and The Federalist Papers ...
    On the surface ... this seems dreadfully disheartening. But it must be acknowledged that the American ideological situation is much better than if FEE had never come into being ... Even Adam Smith's Wealth of Nations, let us remember, did not begin to change actual legislation until many years after its original appearance.
    The Invisible Gnomes and the Invisible Hand: South Park and Libertarian Philosophy, by Paul Cantor, 4 Dec 2006
    General discussion of South Park with more detailed review and discussion of the season 2 "Gnomes" episode
    The "invisible hand" passage of Smith's Wealth of Nations reads like a gloss on the "Gnomes" episode ...:
    ... [E]very individual ... neither intends to promote the publick interest, nor knows how much he is promoting it ... [B]y directing [domestick] industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this ... led by an invisible hand to promote an end which was no part of his intention ... By pursuing his own interest he frequently promotes that of the society more effectively than when he really intends to promote it ...
    Libertarianism: The Moral and the Practical, by Sheldon Richman, Future of Freedom, May 2014
    Explores whether libertarian policies should distinguish between moral and practical concerns; revised version of "The Goal Is Freedom" column of 27 Dec 2013
    Look at this passage from The Wealth of Nations:
    ... In the ancient philosophy, the perfection of virtue was represented as necessarily productive, to the person who possessed it, of the most perfect happiness in this life. In the modern philosophy, it was frequently represented as generally, or rather as almost always, inconsistent with any degree of happiness in this life; and heaven was to be earned only by penance and mortification, by the austerities and abasement of a monk, not by the liberal, generous, and spirited conduct of a man ...
    The Market Is a Beautiful Thing, by Sheldon Richman, Future of Freedom, Jul 2013
    Explores whether most people's aversion to the market is aesthetic and explains the beauty in the dynamics of the (freed) market, with quotes from Bastiat and Adam Smith
    Indulge me as I quote from The Wealth of Nations (book 1, chapter 7):
    The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market, and the demand of those who are willing to pay the natural price of the commodity, or the whole value of the rent, labour, and profit, which must be paid in order to bring it thither ... The quantity brought thither will soon be sufficient to supply the effectual demand. All the different parts of its price will soon sink to their natural rate, and the whole price to its natural price.
    The Moral Case for Freedom Is the Practical Case for Freedom, by Sheldon Richman, The Goal Is Freedom, 27 Dec 2013
    Considers whether it is reasonable to draw distinctions between moral and practical arguments for freedom
    Look at this passage from The Wealth of Nations:
    The happiness and perfection of a man, considered not only as an individual, but as the member of a family, of a state, and of ... mankind, was the object which the ancient moral philosophy proposed to investigate. In that philosophy the duties of human life were treated of as subservient to the happiness and perfection of human life. But when moral, as well as natural philosophy, came to be taught only as subservient to theology, the duties of human life were treated of as chiefly subservient to the happiness of a life to come ...
    National Servitude, by Sheldon Richman, The Goal Is Freedom, 21 Jun 2013
    Discusses calls for "national service", contrasts them to insights from Frédéric Bastiat and Adam Smith, and counters possible objections
    In the first chapter of The Wealth of Nations, [Adam Smith] wrote,
    In civilized society [the individual] stands at all times in need of the co-operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons ... It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

    Books

    The Wealth of Nations, by Adam Smith, Mar 1776
    Full title: An Inquiry into the Nature and Causes of the Wealth of Nations
    Partial contents: Of the Causes of Improvement in the productive... - Of the Nature, Accumulation, and Employment of Stock - Of the different Progress of Opulence in different Nations - Of Systems of political Œconomy - Of the Revenue of the Sovereign...
    Related Topic: Economics