Adam Smith

William B. Todd (ed.), The Glasgow Edition of the Works and Correspondence of Adam Smith, Vol. 2: An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1

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1 Link 2THE annual labour of every nation is the fund which originally supplies3it with all the necessaries and conveniences of life which it annually con-4sumes, and which consist always, either in the immediate produce of5that labour, or in what is purchased with that produce from other nations.

2 6According therefore, as this produce, or what is purchased with it,7bears a greater or smaller proportion to the number of those who are to8consume it, the nation will be better or worse supplied with all the neces-9saries and conveniences for which it has occasion.

3 10But this proportion must in every nation be regulated by two different11circumstances; first, by the skill, dexterity, and judgment with which12[2] a,itsa, labour is generally applied b; and, secondly, by the proportion13between the number of those who are employed in useful labour, and that14of those who are not so employed. Whatever be the soil, climate, or ex-15tent of territory of any particular nation, the abundance or scantiness of16its annual supply must, in that particular situation, depend upon those17two circumstances.

4 18The abundance or scantiness of this supply too seems to depend more19upon the former of those two circumstances than upon the latter. Among Link 20the savage nations of hunters and fishers, every individual who is able21to work, is more or less employed in useful labour, and endeavours to22provide, as well as he can, the necessaries and conveniencies of life, for23himself, corc such of his family or tribe as are either too old, or too young,24or too infirm to go a hunting and fishing. Such nations, however, are so25miserably poor, that, from mere want, they are frequently reduced, or,26at least, think themselves reduced, to the necessity sometimes of directly27destroying, and sometimes of abandoning their infants, their old people,28and those afflicted with lingering diseases, to perish with hunger, or to29be devoured by wild beasts. Among civilized and thriving nations, on30the contrary, though a great number of people do not labour at all, many31of whom consume the produce of ten times, frequently of a hundred32times more labour than the greater part of those who work; yet the pro-33duce of the whole labour of the society is so great, that all are often abun-34dantly supplied, and a workman, even of the [3] lowest and poorest35order, if he is frugal and industrious, may enjoy a greater share of the36necessaries and conveniences of life than it is possible for any savage to37acquire.

5 38The causes of this improvement, in the productive powers of labour, pg 111and the order, according to which its produce is naturally distributed2among the different ranks and conditions of men in the society, make the3subject of the First Book of this Inquiry.

6 4Whatever be the actual state of the skill, dexterity, and judgment with5which labour is applied in any nation, the abundance or scantiness of its6annual supply must depend, during the continuance of that state, upon7the proportion between the number of those who are annually employed8in useful labour, and that of those who are not so employed. The number9of useful and productive labourers, it will hereafter appear, is every where10in proportion to the quantity of capital stock which is employed in setting11them to work, and to the particular way in which it is so employed. The12Second Book, therefore, treats of the nature of capital stock, of the man-13ner in which it is gradually accumulated, and of the different quantities14of labour which it puts into motion, according to the different ways in15which it is employed.

7 16Nations tolerably well advanced as to skill, dexterity, and judgment,17in the application of labour, have followed very different plans in the18general conduct or direction of it; and those plans have not all been19equally favourable to the [4] greatness of its produce. The policy of20some nations has given extraordinary encouragement to the industry of21the country; that of others to the industry of towns. Scarce any nation22has dealt equally and impartially with every sort of industry. Since the23downfal of the Roman empire, the policy of Europe has been more24favourable to arts, manufactures, and commerce, the industry of towns;25than to agriculture, the industry of the country. The circumstances which26seem to have introduced and established this policy are explained in the27Third Book.

8 28Though those different plans were, perhaps, first introduced by the29private interests and prejudices of particular orders of men, without any30regard to, or foresight of, their consequences upon the general welfare31of the society; yet they have given occasion to very different theories of32political œconomy; of which some magnify the importance of that indus-33try which is carried on in towns, others of that which is carried on in the34country. Those theories have had a considerable influence, not only35upon the opinions of men of learning, but upon the public conduct of36princes and sovereign states. I have endeavoured, in the Fourth Book, to37explain, as fully and distinctly as I can, those different theories, and the38principal effects which they have produced in different ages and nations.

9 39dTo explaind in what has consisted the revenue of the great body of40the people, or what ehas beene the nature of those funds which, in dif-41ferent ages and nations, have supplied their annual consump-[5]tion, is42fthe object off these Four first Books. The Fifth and last Book treats of pg 121the revenue of the sovereign, or commonwealth. In this Book I have2endeavoured to show ; first, what are the necessary expences of the sove-3reign, or commonwealth; which of those expences ought to be defrayed Link 4by the general contribution of the whole society ; and which of them, by5that of some particular part only, or of some particular members of gitg;6secondly, what are the different methods in which the whole society may Link 7be made to contribute towards defraying the expences incumbent on the8whole society, and what are the principal advantages and inconveniencies9of each of those methods : and, thirdly and lastly, what are the reasons and10causes which have induced almost all modern governments to mortgage11some part of this revenue, or to contract debts, and what have been the12effects of those debts upon the real wealth, the annual produce of the land13and labour of the society.

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