An Inquiry into the Nature and Causes of the Wealth of Nations.

AN INQUIRY INTO THE NATURE AND CAUSES OF

THE WEALTH OF NATIONS.

by Adam Smith

INTRODUCTION AND PLAN OF THE WORK.

The annual labour of every nation is the fund which originally

supplies it with all the necessaries and conveniencies of life which

it annually consumes, and which consist always either in the immediate

produce of that labour, or in what is purchased with that produce from

other nations.

According, therefore, as this produce, or what is purchased with it,

bears a greater or smaller proportion to the number of those who are

to consume it, the nation will be better or worse supplied with all

the necessaries and conveniencies for which it has occasion.

But this proportion must in every nation be regulated by two different

circumstances: first, by the skill, dexterity, and judgment with which

its labour is generally applied; and, secondly, by the proportion

between the number of those who are employed in useful labour, and

that of those who are not so employed. Whatever be the soil, climate,

or extent of territory of any particular nation, the abundance or

scantiness of its annual supply must, in that particular situation,

depend upon those two circumstances.

The abundance or scantiness of this supply, too, seems to depend more

upon the former of those two circumstances than upon the latter. Among

the savage nations of hunters and fishers, every individual who is

able to work is more or less employed in useful labour, and endeavours

to provide, as well as he can, the necessaries and conveniencies of

life, for himself, and such of his family or tribe as are either too

old, or too young, or too infirm, to go a-hunting and fishing. Such

nations, however, are so miserably poor, that, from mere want, they

are frequently reduced, or at least think themselves reduced, to the

necessity sometimes of directly destroying, and sometimes of

abandoning their infants, their old people, and those afflicted with

lingering diseases, to perish with hunger, or to be devoured by wild

beasts. Among civilized and thriving nations, on the contrary, though

a great number of people do not labour at all, many of whom consume

the produce of ten times, frequently of a hundred times, more labour

than the greater part of those who work; yet the produce of the whole

labour of the society is so great, that all are often abundantly

supplied; and a workman, even of the lowest and poorest order, if he

is frugal and industrious, may enjoy a greater share of the

necessaries and conveniencies of life than it is possible for any

savage to acquire.

The causes of this improvement in the productive powers of labour, and

the order according to which its produce is naturally distributed

among the different ranks and conditions of men in the society, make

the subject of the first book of this Inquiry.

Whatever be the actual state of the skill, dexterity, and judgment,

with which labour is applied in any nation, the abundance or

scantiness of its annual supply must depend, during the continuance of

that state, upon the proportion between the number of those who are

annually employed in useful labour, and that of those who are not so

employed. The number of useful and productive labourers, it will

hereafter appear, is everywhere in proportion to the quantity of

capital stock which is employed in setting them to work, and to the

particular way in which it is so employed. The second book, therefore,

treats of the nature of capital stock, of the manner in which it is

gradually accumulated, and of the different quantities of labour which

it puts into motion, according to the different ways in which it is

employed.

Nations tolerably well advanced as to skill, dexterity, and judgment,

in the application of labour, have followed very different plans in

the general conduct or direction of it; and those plans have not all

been equally favourable to the greatness of its produce. The policy of

some nations has given extraordinary encouragement to the industry of

the country; that of others to the industry of towns. Scarce any

nation has dealt equally and impartially with every sort of industry.

Since the down-fall of the Roman empire, the policy of Europe has been

more favourable to arts, manufactures, and commerce, the industry of

towns, than to agriculture, the Industry of the country. The