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AN¡¡INQUIRY¡¡INTO¡¡THE¡¡NATURE¡¡AND¡¡CAUSES¡¡OF¡¡THE¡¡WEALTH¡¡OF¡¡NATIONS



by¡¡Adam¡¡Smith¡¡



1776







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¡¡¡¡¡¡¡¡¡¡THE¡¡annual¡¡labour¡¡of¡¡every¡¡nation¡¡is¡¡the¡¡fund¡¡which

originally¡¡supplies¡¡it¡¡with¡¡all¡¡the¡¡necessaries¡¡and¡¡conveniences

of¡¡life¡¡which¡¡it¡¡annually¡¡consumes£»¡¡and¡¡which¡¡consist¡¡always

either¡¡in¡¡the¡¡immediate¡¡produce¡¡of¡¡that¡¡labour£»¡¡or¡¡in¡¡what¡¡is

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with¡¡it£»¡¡bears¡¡a¡¡greater¡¡or¡¡smaller¡¡proportion¡¡to¡¡the¡¡number¡¡of

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supplied¡¡with¡¡all¡¡the¡¡necessaries¡¡and¡¡conveniences¡¡for¡¡which¡¡it

has¡¡occasion¡£

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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

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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¡¡conveniences¡¡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¡¡civilised¡¡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¡¡conveniences¡¡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£»¡¡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¡¡downfall¡¡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¡£

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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¡¡economy£»¡¡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

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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¡¡expenses¡¡of¡¡the¡¡sovereign£»¡¡or

commonwealth£»¡¡which¡¡of¡¡those¡¡expenses¡¡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£º¡¡secondly£»¡¡what¡¡are¡¡the¡¡different¡¡methods¡¡in¡¡which¡¡the

whole¡¡society¡¡may¡¡be¡¡made¡¡to¡¡contribute¡¡towards¡¡defraying¡¡the

expenses¡¡incumbent¡¡on¡¡the¡¡whole¡¡society£»¡¡and¡¡what¡¡are¡¡the

principal¡¡advantages¡¡and¡¡inconveniences¡¡of¡¡each¡¡of¡¡those¡¡methods£º

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¡£¡¡¡¡





¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡BOOK¡¡ONE



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¡£¡¡





¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡CHAPTER¡¡I



¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡Of¡¡the¡¡Division¡¡of¡¡Labour¡¡



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and¡¡the¡¡greater¡¡part¡¡of¡¡the¡¡skill£»¡¡dexterity£»¡¡and¡¡judgment¡¡with

which¡¡it¡¡is¡¡anywhere¡¡directed£»¡¡or¡¡applied£»¡¡seem¡¡to¡¡have¡¡been¡¡the

effects¡¡of¡¡the¡¡division¡¡of¡¡labour¡£

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business¡¡of¡¡society£»¡¡will¡¡be¡¡more¡¡easily¡¡understood¡¡by

considering¡¡in¡¡what¡¡manner¡¡it¡¡operates¡¡in¡¡some¡¡particular

manufactures¡£¡¡It¡¡is¡¡commonly¡¡supposed¡¡to¡¡be¡¡carried¡¡furthest¡¡in

some¡¡very¡¡trifling¡¡ones£»¡¡not¡¡perhaps¡¡that¡¡it¡¡really¡¡is¡¡carried

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