Liberty Fund Books

Description

First published in 1776, the year in which the American Revolution officially began, Smith's Wealth of Nations sparked a revolution of its own. In it Smith analyzes the major elements of political economy, from market pricing and the division of labor to monetary, tax, trade, and other government policies that affect economic behavior. Throughout he offers seminal arguments for free trade, free markets, and limited government.

Criticizing mercantilists who sought to use the state to increase their nations' supply of precious metals, Smith points out that a nation's wealth should be measured by the well-being of its people. Prosperity in turn requires voluntary exchange of goods in a peaceful, well-ordered market. How to establish and maintain such markets? For Smith the answer lay in man's social instincts, which government may encourage by upholding social standards of decency, honesty, and virtue, but which government undermines when it unduly interferes with the intrinsically private functions of production and exchange. Social and economic order arise from the natural desires to better one's (and one's family's) lot and to gain the praise and avoid the censure of one's neighbors and business associates. Individuals behave decently and honestly because it gives them a clear conscience as well as the good reputation necessary for public approbation and sustained, profitable business relations.

Table of Contents

Introduction and Plan of the Work 10

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

CHAPTER I
Of the Division of Labour 13

CHAPTER II
Of the Principle which gives occasion to the Division of Labour 25

CHAPTER III
That the Division of Labour is limited by the Extent of the Market 31

CHAPTER IV
Of the Origin and Use of Money 37

CHAPTER V
Of the real and nominal Price of Commodities, or of their Price in Labour, and their Price in Money 47

CHAPTER VI
Of the component Parts of the Price of Commodities 65

CHAPTER VII
Of the natural and market Price of Commodities 72

CHAPTER VIII
Of the Wages of Labour 82

CHAPTER IX
Of the Profits of Stock 105

CHAPTER X
Of Wages and Profit in the different Employments of Labour and Stock 116

Part I. Inequalities arising from the Nature of the Employments themselves 116

Part II. Inequalities occasioned by the Policy of Europe 135

CHAPTER XI
Of the Rent of Land 160

Part I. Of the Produce of Land which always affords Rent 162

Part II. Of the Produce of Land which sometimes does, and sometimes does not, afford Rent 178

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 193

Digression concerning the Variations in the Value of Silver during the Course of the Four last Centuries

First Period 195

Second Period 210

Third Period 211

Variations in the Proportion between the respective Values of Gold and Silver 228

Grounds of the Suspicion that the Value of Silver still continues to decrease 234

Different Effects of the Progress of Improvement upon the real Price of three different Sorts of rude Produce 234

First Sort 235

Second Sort 237

Third Sort 246

Conclusion of the Digression concerning the Variations in the Value of Silver 255

Effects of the Progress of Improvement upon the real Price of Manufactures 260

Conclusion of the Chapter 264

BOOK II.

Of the Nature, Accumulation, and Employment of Stock

INTRODUCTION 276

CHAPTER I
Of the Division of Stock 279

CHAPTER II
Of Money considered as a particular Branch of the general Stock of the Society, or of the Expence of maintaining the National Capital 286

CHAPTER III
Of the Accumulation of Capital, or of productive and unproductive Labour 330

CHAPTER IV
Of Stock lent at Interest 350

CHAPTER V
Of the different Employment of Capitals 360

BOOK III
Of the different Progress of Opulence in different Nations

CHAPTER I
Of the natural Progress of Opulence 376

CHAPTER II
Of the Discouragement of Agriculture in the antient State of Europe after the Fall of the Roman Empire 381

CHAPTER III
Of the Rise and Progress of Cities and Towns, after the Fall of the Roman Empire 397

CHAPTER IV
How the Commerce of the Towns contributed to the Impovement of the Country 411

BOOK IV
Of Systems of political Oeconomy

INTRODUCTION 428

CHAPTER I
Of the Principle of the commercial, or mercantile System 429

CHAPTER II
Of Restraints upon the Importation from foreign Countries of such Goods as can be produced at Home 452

CHAPTER 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

Part I. Of the Unreasonableness of those Restraints even upon the Principles of the Commercial System 473

Digression concerning Banks of Deposit, particularly concerning that of Amsterdam 479

Part II. Of the Unreasonableness of those extraordinary Restraints upon other Principles 488

CHAPTER IV
Of Drawbacks 499

CHAPTER V
Of Bounties 505

Digression concerning the Corn Trade and Corn Laws 524

CHAPTER VI
Of Treaties of Commerce 545

CHAPTER VII
Of Colonies

Part I. Of the Motives for establishing new Colonies 556

Part II. Causes of the Prosperity of new Colonies 564

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 591

CHAPTER VIII
Conclusion of the Mercantile System 642

CHAPTER IX
Of the agricultural Systems, or of those Systems of political Oeconomy, which represent the Produce of Land, as either the sole or the principal Source of the Revenue and Wealth of every Country 663

BOOK V

Of the Revenue of the Sovereign or Commonwealth

CHAPTER I
Of the Expences of the Sovereign or Commonwealth

Part I. Of the Expence of Defence 689

Part II. Of the Expence of Justice 708

Part III. Of the Expence of publick Works and publick Institutions 723

Of the Publick Works and Institutions for facilitating the Commerce of the Society

And, first, of those which are necessary for facilitating Commerce in general 724

Of the Publick Works and Institutions which are necessary for facilitating particular Branches of Commerce 731

Article 2d. Of the Expence of the Institutions for the Education of Youth 758

Article 3d. Of the Expence of the Institutions for the Instruction of People of all Ages 788

Part IV. Of the Expence of supporting the Dignity of the Sovereign 814

Conclusion of the Chapter 814

CHAPTER II
Of the Sources of the general or publick Revenue of the Society

Part I. Of the Funds or Sources of Revenue which may peculiarly belong to the Sovereign or Commonwealth 817

Part II. Of Taxes 825

Article 1st. Taxes upon Rent; Taxes upon the Rent of Land 828

Taxes which are proportioned, not to the Rent, but to the Produce of Land 836

Taxes upon the Rent of Houses 840

Article 2d. Taxes upon Profit, or upon the Revenue arising from Stock 847

Taxes upon the Profit of particular Employments 852

Appendix to Articles 1st and 2d. Taxes upon the Capital Value of Lands, Houses, and Stock 858

Article 3d. Taxes upon the Wages of Labour 864

Article 4th. Taxes which, it is intended, should fall indifferently upon every different Species of Revenue

Capitation Taxes 867

Taxes upon consumable Commodities 869

CHAPTER III
Of publick Debts 907

[Appendix] 948