Introduction and Plan of the Work
Volume One
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, or 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 every where 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 of which it is gradually accumulated, and of the different quantities in 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 downfal 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 circumstances which seem to have introduced and established this policy are explained in the Third Book.
Though those different plans were, perhaps, first introduced by the private interests and prejudices of particular orders of men, without any regard to, or foresight of, their consequences upon the general welfare of the society; yet they have given occasion to very different theories of political œconomy; of which some magnify the importance of that industry which is carried on in towns, others of that which is carried on in the country. Those theories have had a considerable influence, not only upon the opinions of men of learning, but upon the public conduct of princes and sovereign states. I have endeavoured, in the Fourth Book, to explain, as fully and distinctly as I can, those different theories, and the principal effects which they have produced in different ages and nations.
To explain in what has consisted the revenue of the great body of the people, or what has been the nature of those funds, which, in different ages and nations, have supplied their annual consumption, is the object of these Four first Books. The Fifth and last Book treats of the revenue of the sovereign, or commonwealth. In this book I have endeavoured to show; first, what are the necessary expences of the sovereign, or commonwealth; which of those expences ought to be defrayed by the general contribution of the whole society; and which of them, by that of some particular part only, or of some particular members of it: secondly, what are the different methods in which the whole society may be made to contribute towards defraying the expences incumbent on the whole society, and what are the principal advantages and inconveniencies of each of those methods: and, thirdly and lastly, what are the reasons and causes which have induced almost all modern governments to mortgage some part of this revenue, or to contract debts, and what have been the effects of those debts upon the real wealth, the annual produce of the land and labour of the society.
[This word, with ‘annually’ just below, at once marks the transition from the older British economists’ ordinary practice of regarding the wealth of a nation as an accumulated fund. Following the physiocrats, Smith sees that the important thing is how much can be produced in a given time.]
[Cp. with this phrase Locke, Some Considerations of the Consequences of the Lowering of Interest and Raising the Value of Money, ed. of 1696, p. 66, ‘the intrinsic natural worth of anything consists in its fitness to supply the necessities or serve the conveniencies of human life.’]
[The implication that the nation’s welfare is to be reckoned by the average welfare of its members, not by the aggregate, is to be noticed.]
[Ed. 1 reads ‘ with which labour is generally applied in it’.]
[This second circumstance may be stretched so as to include the duration and intensity of the labour of those who are usefully employed, but another important circumstance, the quantity and quality of the accumulated instruments of production, is altogether omitted.]
[Only one cause, the division of labour, is actually treated.]
[For the physiocratic origin of the technical use of the terms ‘distribute’ and ‘distribution’ see the Editor’s Introduction.]
[This word slips in here as an apparently unimportant synonym of ‘useful,’ but subsequently ousts ‘useful’ altogether, and is explained in such a way that unproductive labour may be useful; see esp. below
II.3.2.]
[See the index for the examples of the use of this term.]
[Ed. 1 does not contain ‘to explain’.]
[Ed. 1 reads ‘ what is the nature’.]
[Ed. 1 reads ‘is treated of in’.]
[Ed. 1 reads ‘of the society’.]
[Read in conjunction with the first two paragraphs, this sentence makes it clear that the wealth of a nation is to be reckoned by its per capita income. But this view is often temporarily departed from in the course of the work: see the index, s.v. Wealth.]
[This phrase, if used at all before this time, was not a familiar one. Its presence here is probably due to a passage in Mandeville, Fable of the Bees, pt. ii. (1729), dial. vi., p. 335: ‘CLEO…. When once men come to be governed by written laws, all the rest comes on apace…No number of men, when once they enjoy quiet, and no man needs to fear his neighbour, will be long without learning to divide and subdivide their labour. HOR. I don’t understand you. CLEO. Man, as I have hinted before, naturally loves to imitate what he sees others do, which is the reason that savage people all do the same thing: this hinders them from meliorating their condition, though they are always wishing for it: but if one will wholly apply himself to the making of bows and arrows, whilst another provides food, a third builds huts, a fourth makes garments, and fifth utensils, they not only become useful to one another, but the callings and employments themselves will, in the same number of years, receive much greater improvements, than if all had been promiscuously followed by every one of the five. HOR. I believe you are perfectly right there; and the truth of what you say is in nothing so conspicuous as it is in watch-making, which is come to a higher degree of perfection than it would have been arrived at yet, if the whole had always remained the employment of one person; and I am persuaded that even the plenty we have of clocks and watches, as well as the exactness and beauty they may be made of, are chiefly owing to the division that has been made of that art into many branches. The index contains, ‘Labour, The usefulness of dividing and subdividing it’. Joseph Harris, Essay upon Money and Coins, 1757, pt. i. § 12, treats of the ‘usefulness of distinct trades,’ or ‘the advantages accruing to mankind from their betaking themselves severally to different occupations,’ but does not use the phrase ‘division of labour’.]
[Ed. 1 reads ‘improvements’.]
[Ed. 1 reads ‘Though in them’.]
[Another and perhaps more important reason for taking an example like that which follows is the possibility of exhibiting the advantage, of division of labour in statistical form.]
[This parenthesis would alone be sufficient to show that those are wrong who believe Smith did not include the separation of employments in ‘division of labour’.]
[In Adam Smith’s Lectures p. 164, the business is as here, divided into eighteen; operations. This number is doubtless taken from the Encyclopédie, tom. v. (published in 1755) , s.v. Épingle. The article is ascribed to M. Delaire, ‘qui décrivait la fabrication de l’épingle dans les ateliers même des ouvriers,’ p. 807. In some factories the division was carried further. E. Chambers, Cyclopædia, vol. ii., 2nd ed., 1738, and 4th ed., 1741, s.v. Pin, makes the number of separate operations twenty-five.]
[Ed. 1 reads ‘the lands’ here and line preceding.]
[Ed. 1 reads ‘because the silk manufacture does not suit the climate of England’.]
[In Lectures, p. 164, the comparison is between English and French ‘toys,’ i.e., small metal articles.]
[Ed. 1 places ‘in consequence of the division of labour’ here instead of in the line above.]
[‘Pour la célérite du travail et la perfection de l’ouvrage, elles dépendent entièrement de la multitude des ouvriers rassemblés. Lorsqu’une manufacture est nombreuse, chaque opération occupe un homme différent. Tel ouvrier ne fait et ne fera de sa vie qu’une seule et unique chose; tel autre une autre chose: d’o� il arrive que chacune s’exécute bien et promptement, et que l’ouvrage le mieux fait est encore celui qu’on a à meilleur marché. D’ailleurs le goût et la façon se perfectionnent nécessairement entre un grand nombre d’ouvriers, parce qu’il est difficile qu’il ne s’en rencontre quelquesuns capables de réfléchir, de combiner, et de trouver enfin le seal moyen qui puisse les mettre audessus de leurs semblables; le moyen ou d’épargner la matière, ou d’allonger le temps, ou de surfaire l’industrie, soit par une machine nouvelle, soit par une manœuvre plus commode.’—Encydopédie, tom. i. (1751), p. 717, s.v. Art. All three advantages mentioned in the text above are included here.]
[In Lectures, p. 166, ‘a country smith not accustomed to make nails will work very hard for three or four hundred a day and those too very bad’.]
[In
Lectures, p. 166, ‘a boy used to it will easily make two thousand and those incomparably better’.]
[In Lectures, p. 255, it is implied that the labour of making a button was divided among eighty persons.]
[The same example occurs in Lectures, p. 166.]
[Examples are given in Lectures, p. 167: ‘Two men and three horses will do more in a day with the plough than twenty men without it. The miller and his servant will do more with the water mill than a dozen with the hand mill, though it too be a machine.’]
[Ed. 1 reads ‘I shall, therefore, only observe’.]
[Ed. 1 reads ‘machines employed’.]
[Ed. 1 reads ‘of common’.]
[This pretty story is largely, at any rate mythical. It appears to have grown out of a misreading (not necessarily by Smith) of the following passage: ‘They used before to work with a buoy in the cylinder enclosed in a pipe, which buoy rose when the steam was strong, and opened the injection, and made a stroke; thereby they were capable of only giving six, eight or ten strokes in a minute, till a boy, Humphry Potter, who attended the engine, added (what he called scoggan) a catch that the beam Q always opened; and then it would go fifteen or sixteen strokes in a minute. But this being perplexed with catches and strings, Mr. Henry Beighton, in an engine he had built at Newcastle-on-Tyne in 1718, took them all away, the beam itself simply supplying all much better.’—J. T. Desaguliers, Course of Experimental Philosophy, vol. ii., 1744, p. 533. From pp. 469, 471, it appears that hand labour was originally used before the ‘buoy’ was devised.]
[In Lectures, p. 167, the invention of the plough is conjecturally attributed to farmer and that of the hand-mill to a slave, while the invention of the water-wheel and the steam engine is credited to philosophers. Mandeville is very much less favourable to the claims of the philosophers: ‘They are very seldom the same sort of people, those that invent arts and improvements in them and those that inquire into the reason things: this latter is most commonly practised by such as are idle and indolent, that a fond of retirement, hate business and take delight in speculation; whereas none succeed oftener in the first than active, stirring and laborious men, such as will put their hand to the plough, try experiments and give all their attention to what they are about.—Fable of the Bees, pt. ii. (1729), dial. iii., p. 151. He goes on to give as examples the improvements in soap-boiling, grain-dyeing, etc.]
[The advantage of producing particular commodities wholly or chiefly in the countries most naturally fitted for their production is recognised below,
IV.2.15, but the fact that division of labour is necessary for its attainment is not noticed. The fact that division of labour allows different workers to be put exclusively to the kind of work for which they are best fitted by qualities not acquired by education and practice, such as age, sex, size and strength, is in part ignored and in part denied below,
I.2.3-4,5. The disadvantage of division of labour of specialisation is dealt with below, vol. ii.,
V.1.175-180.]
[This paragraph was probably taken bodily from the MS. of the author’s lectures. It appears to be founded on Mun, England’s Treasure by Forraign Trade, chap. iii., at end; Locke, Civil Government, § 43; Mandeville, Fable of the Bees, pt. i., Remark P, 2nd ed. 1723, p. 182, and perhaps Harris, Essay upon Money and Coins, pt. i., § 12. See Lectures, pp. 161-162 and notes.]
[
I.e., it is not the effect of any conscious regulation by the state or society, like the ‘law of Sesotris,’ that every man should follow the employment of his father, referred to in the corresponding passage in
Lectures, p. 168. The denial that it is the effect of individual wisdom recognising the advantage of exercising special natural talents comes lower down,
I.2.3-4.]
[It is by no means clear what object there could be in exchanging one bone for for another.]
[Misprinted ‘intirely’ in eds. 1-5. ‘Entirely’ occurs a little lower down in all eds.]
[The paragraph is repeated from Lectures, p. 169. It is founded on Mandeville, Fable of the Bees, pt. ii. (1729), dial. vi., pp. 421, 422.]
[This is apparently directed against Harris, Money and Coins, pt. i., § 11, and is in accordance with the view of Hume, who asks readers to ‘consider how nearly equal all men are in their bodily force, and even in their mental powers and faculties, ere cultivated by education’.—’Of the Original Contract,’ in Essays, Moral and Political, 1748, p. 291.]
[‘Perhaps’ is omitted in eds. 2 and 3, and restored in the errata to ed. 4.)
[The superiority of carriage by sea is here considerably less than in Lectures, p. 172, but is still probably exaggerated. W. Playfair, ed. of Wealth of Nations, 1805, vol. i., p. 29, says a waggon of the kind described could carry eight tons, but, of course, some allowance must be made for thirty years of road improvement.]
[Ed. 1 reads ‘ which is at present carried on’.]
[Playfair, op. cit., p. 30 says that equalising the out and home voyages goods were carried from London to Calcutta by sea at the same price (12 s. per cwt.) as from London to Leeds by land.]
[Ed. 1 reads ‘carry on together a very considerable commerce’.]
[This shows a curious belief in the wave-producing capacity of the tides.]
[It is only in recent times that this word has become applicable especially to artificial channels; see Murray, Oxford English Dictionary, s.v.]
[Ed. 1 reads ‘break themselves into many canals’.]
[The real difficulty is that the mouths of the rivers are in the Arctic Sea, so that they are separated. One of the objects of the Siberian railway is to connect them.]
[Ed. 1 reads ‘any one’ here.]
[The passage corresponding to this chapter is comprised in one paragraph in Lectures, p. 172.]
[The paragraph has a close resemblance to Harris, Money and Coins, pt. i., §§ 19, 20.]
[Iliad, vi. 236; quoted with the same object in Pliny, Hist. Nat., lib. xxxiii., cap. i.; Pufendorf, De jure naturæ et gentium, lib. v., cap. v., § 1; Martin-Leake, Historical Account of English Money, 2nd ed., 1745 p. 4 and elsewhere.]
[Montesquieu, Esprit des lois, liv. xxii., chap i., note.]
[W. Douglass, A Summary Historical and Political of the First Planting, Progressive Improvements and Present State of the British Settlements in North America, 1760, vol. ii., p. 364. Certain law officers’ fees in Washington were still computed in tobacco in 1888.—J. J. Lalor, Cyclopædia of Political Science, 1888, s.v. Money, p. 879.]
[Playfair, ed. of Wealth of Nations, 1805, vol. i., p. 36, says the explanation of this is that factors furnish the nailers with materials and during the time they are working give them a credit for bread, cheese and chandlery goods, which they pay for in nails when the iron is worked up. The fact that nails are metal is forgotten at the beginning of the next paragraph in the text above.]
[For earlier theories as to these reasons see Grotius, De jure belli et pacis, lib. ii., cap. xii., § 17; Pufendorf, De jure naturæ et gentium, lib. v., cap. i., § 13; Locke, Some Considerations 2nd ed., 1696, p. 31; Law, Money and Trade, 1705, ch. i.; Hutcheson, System of Moral Philosophy, 1755, vol. ii., pp. 55, 56; Montesquieu, Esprit des lois, liv. xxii., ch. ii.; Cantillon, Essai sur la Nature du Commerce en général, 1755, pp. 153, p. 355-357; Harris, Money and Coins, pt. i., §§ 22-27, and cp. Lectures, pp. 182-185.]
Plin. Hist. Nat. lib. 33. cap. 3. [‘Servius rex primus signavit aes. Antea rudi usos Romæ: Timæus tradit.’ Ed. 1 reads ‘authority of one Remeus, an ancient author,’ Remeus being the reading in the edition of Pliny in Smith’s library, cp. Bonar’s Catalogue of the Library of Adam Smith, 1894, p. 87. Ed. 1 does not contain the note.]
[Ed. 1 reads ‘ weighing them’.]
[Ed. 1 reads ‘ with the trouble’.]
[Aristotle, Politics, 1257a, 38-41; quoted by Pufendorf, De jure naturæ et gentium, lib. v. cap. 1., § 12.]
[The aulnager measured woollen cloth in England under 25 Ed. III., st. 4, c. 1. See John Smith, Chronicon Rusticum-Commerciale or Memoirs of Wool, 1747, vol. i., p. 37. The stampmasters of linen cloth in the linen districts of Scotland were appointed under 10 Ann., c. 21, to prevent ‘divers abuses and deceits’ which ‘have of late years been used in the manufactories of linen cloth. . . with respect to the lengths, breadths and unequal sorting of yarn, which leads to the great debasing and undervaluing of the said linen cloth both at home and in foreign parts.’—Statutes of the Realm, vol. ix., p. 682.]
[‘King William the First, for the better pay of his warriors caused the firmes which till his time had for the most part been answered in victuals, to be converted in pecuniam numeratam.’—Lowndes, Report containing an Essay for the Amendment of the Silver Coins, 1695, p. 4. Hume, whom Adam Smith often follows, makes no such absurd statement, History, ed. of 1773, vol. i., pp. 225, 226.]
[The Assize of Bread and Ale, 51 Hen. III., contains an elaborate scale beginning, ‘When a quarter of wheat is sold for xii
d. then wastel bread of a farthing shall weigh vi
l. and xvi
s.‘ and goes on to the figures quoted in the text above. The statute is quoted at second-hand from Martin Folkes’
Table of English Silver Coins with the same object by Harris,
Essay upon Money and Coins, pt. i., § 29, but Harris does not go far enough in the scale to bring in the penny as a weight. As to this scale see below,
I.11.100, 114-116.]
[Ed. 1 reads ‘twenty, forty and forty-eight pennies’. Gamier,
Recherches sur la nature et les causes de la richesse des nations, par Adam Smith, 1802 tom. v., p. 55, in a note on this passage says that the sou was always twelve deniers.]
[Hume, History of England, ed. of 1773, i. p. 226. Fleetwood, Chronicon Preciosum, 1707, p. 30. These authorities say there were 48 shillings in the pound, so that 240 pence would still make £1.]
[Harris Money and Coins, pt. i., § 29.]
[‘It is thought that soon after the Conquest a pound sterling was divided into twenty shillings.’—Hume, History of England, ed. of 1773, vol. i., p. 227.]
[Pliny, Hist. Nat., lib. xxxiii., cap. iii.; see below, vol. ii., pp. 468, 469.]
[Harris, Money and Coins, pt. i., § 30, note, makes the French livre about one seventieth part of its original value.]
[The subject of debased and depreciated coinage occurs again below,
I.5.11-13,I.11.143-144; vol. ii.,
IV.6.16-32,V.3.61-65. One of the reasons why gold and silver became the most usual forms of money is dealt with below,
I.11.79-83. See Coin and Money in the index.]
[In Lectures, pp. 182-190, where much of this chapter is to be found, money is considered ‘first as the measure of value and then as the medium of permutation or exchange’. Money is said to have had its origin in the fact that men naturally fell upon one commodity with which to compare the value of all other commodities. When this commodity was once selected it became the medium of exchange. In this chapter money comes into use from the first as a medium of exchange, and its use as a measure of value is not mentioned. The next chapter explains that it is vulgarly used as a measure of value because it is used as an instrument of commerce or medium of exchange.]
[Lectures, p. 157. Law, Money and Trade, 1705, ch. i. (followed by Harris, Money and Coins, pt. i., § 3 ), contrasts the value of water with that of diamonds. The cheapness of water is referred to by Plato Euthydem. 304 B., quoted by Pufendorf, De jure naturæ et gentium, lib. v., cap. i., § 6; cp. Barbeyrac’s note on § 4.]
[Ed. 1 reads ‘subject which is’.]
