An Inquiry Into the Nature and Causes of the Wealth of Nations

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.

CHAP. I.

Of the Division of Labour 2

CHAP. II.

Of the Principle which gives occasion to the Division of Labour 6

CHAP. III.

That the Division of Labour is limited by the Extent of the Market 8

CHAP. IV.

Of the Origin and Use of Money 9

CHAP. V.

Of the real and nominal Price of Commodities, or of their Price in Labour, and their Price in Money 12

CHAP. VI.

Of the Component Parts of the Price of Commodities 20

CHAP. VII.

Of the Natural and Market Price of Commodities 23

CHAP. VIII.

Of the Wages of Labour 27

CHAP. IX.

Of the Profits of Stock 36

CHAP. X.

Of Wages and Profit in the different Employments of Labour and Stock 41

PART I. Inequalities arising from the Nature of the Employments themselves ib.

PART II. Inequalities occasioned by the Policy of Europe 50

CHAP. XI.

Of the Rent of Land 60

PART I. Of the Produce of Land which always affords Rent 61

PART II. Of the Produce of Land which sometimes does, and sometimes does not, afford Rent 68

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 74

Digression concerning the Variations in the Value of Silver during the course of the four last centuries ib. First Period ib. Second Period 81 Third Period ib.

Variations in the Proportion between the respective Values of Gold and Silver 89

Grounds of the Suspicion that the Value of Silver still continues to decrease 91

Different Effects of the Progress of Improvement on the real Price of three different sorts of rude Produce ib. First Sort 92 Second Sort ib. Third Sort 97

Conclusion of the Digression concerning the Variations in the Value of Silver 101

Effects of the Progress of Improvement on the real Price of Manufactures 103

Conclusion of the Chapter 105

OF THE NATURE, ACCUMULATION, AND EMPLOYMENT OF STOCK.

Introduction 111

CHAP. I.

Of the Division of Stock 112

CHAP. II.

Of Money considered as a particular Branch of the general Stock of the Society, or of the Expense of maintaining the National Capital 115

CHAP. III.

Of the Accumulation of Capital, or of productive and unproductive Labour 135

CHAP. IV.

Of Stock lent at Interest 144

CHAP. V.

Of the different Employment of Capitals 147

OF THE DIFFERENT PROGRESS OF OPULENCE IN DIFFERENT NATIONS.

CHAP. I.

Of the Natural Progress of Opulence 155

CHAP. II.

Of the Discouragement of Agriculture in the ancient States of Europe, after the fall of the Roman Empire 157

CHAP. III.

Of the Rise and Progress of Cities and Towns, after the fall of the Roman Empire 162

CHAP. IV.

How the Commerce of the Towns contributed to the Improvement of the Country 167

OF THE SYSTEMS OF POLITICAL ECONOMY.

Introduction 173

CHAP. I.

Of the Principle of the Commercial or Mercantile system ib.

CHAP. II.

Of Restraints on the Importation from Foreign Countries, of such Goods as can be produced at Home 183

CHAP. III.

Of the extraordinary Restraints on the Importation of Goods of almost all kinds, from those Countries with which the Balance is supposed to be disadvantageous 192

PART I. Of the Unreasonableness of those Restraints, even on the Principles of the Commercial System ib.

Digression concerning Banks of Deposit, particularly concerning that of Amsterdam 194

PART II. Of the Unreasonableness of these extraordinary Restraints, on other Principles 199

CHAP. IV.

Of Drawbacks 203

CHAP. V.

Of Bounties 205

Digression concerning the Corn Trade and Corn Laws 213

CHAP. VI.

Of Treaties of Commerce 222

CHAP. VII.

Of Colonies 227

PART I. Of the Motives for establishing new Colonies ib.

PART II. Causes of the Prosperity of new Colonies 231

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 243

CHAP. VIII.

Conclusion of the Mercantile System 266

CHAP. IX.

Of the Agricultural Systems, or of those Systems of Political Economy which represent the Produce of Land as either the sole or the principal Source of the Revenue and Wealth of every Country 275

APPENDIX.

Account of Herring Busses fitted out in Scotland, the Amount of the Cargoes and the Bounties on them 287

Account of Foreign Salt imported into Scotland, and of Scotch Salt delivered duty free, for the Herring Fishery 288

OF THE REVENUE OF THE SOVEREIGN OR COMMONWEALTH.

CHAP. I.

Of the Expenses of the Sovereign or Commonwealth 289

PART I. Of the Expense of Defence ib.

PART II. Of the Expense of Justice 297

PART III. Of the Expense of Public Works and Public Institutions 302

ART. I. Of the Public Works and Institutions for facilitating the Commerce of Society.--1st, For facilitating the general Commerce of the Society.-- 2d, For facilitating particular Branches of Commerce 303

ART. II. Of the Expense of the Institutions for the Education of Youth 318

ART. III. Of the Expense of the Institutions for the Instruction of People of all Ages 330

PART IV. Of the Expense of supporting the Dignity of the Sovereign 342

Conclusion of the Chapter ib.

CHAP. II.

Of the Sources of the general or Public Revenue of the Society 343

PART I. Of the Funds or Sources of Revenue which may particularly belong to the Sovereign or Commonwealth ib.

PART II. Of Taxes 347

ART. I. Taxes on rent; Taxes on the Rent of Land 348

Taxes which are proportioned, not to the Rent, but to the Produce of Land 352

Taxes on the Rent of Houses 354

ART. II. Taxes on Profit, or on the Revenue arising from Stock 357

Taxes on the Profit of particular Employments 359

APPENDIX to Articles I. and II.--Taxes on the Capital Value of Lands, Houses, and Stock 362

ART. III. Taxes on the Wages of Labour 365

ART. IV. Taxes which, it is intended, should fall indifferently on every different Species of Revenue 366

Capitation Taxes 367

Taxes on consumable Commodities 368

CHAP. III.

Of Public Debts 385

SHORT ACCOUNT OF THE LIFE AND WRITINGS OF DR. ADAM SMITH

Adam Smith, the celebrated author of 'An Inquiry into the Nature and Causes of the Wealth of Nations,' was born in the town of Kirkaldy, on the 5th of June 1723. His father, at an early period of life, practised as a writer to the signet in Edinburgh, and officiated as private secretary to the Earl of Loudon, during the time his Lordship was principal secretary of state in Scotland, and keeper of the great seal; but afterwards settled at Kirkaldy, where, for some time before his death, he held the office of comptroller of the customs. He died a few months before the birth of his son.

The constitution of young Smith, during infancy, was so sickly as to require all the care and solicitude of his surviving parent, whose only child he was. The duty which thus devolved on his mother, it is allowed, she discharged in the most ample manner; and, indeed, carried her indulgence so far as to have drawn on herself, it has been said, some degree of blame. But it certainly does not appear that any bad consequences resulted, on this occasion, from unbounded parental fondness; nor can it be said, that any permanent disadvantage was felt by the retirement, and even seclusion, which long-continued weakness rendered necessary. To the inability of young Smith to engage in the active sports of his early companions, we ought, perhaps, to trace the foundation of those habits, and love of retirement, which distinguished him, in a peculiar manner, during a long life[1].

We are informed that Smith received the rudiments of education at the grammar-school of Kirkaldy; and, at that time, attracted some notice by his passion for books, and by the extraordinary powers of his memory. He was also observed, even at this early period of life, to have contracted those habits of absence in company, and of talking to himself, for which he was afterwards so remarkable.

In 1737, he was sent to the university of Glasgow, where, it is said, he evinced an uncommon partiality for the study of mathematics and natural philosophy. Being designed for the English church, he left that place in about three years, and entered, in 1740, an exhibitioner on Snell's foundation, at Baliol college, Oxford. But to this celebrated seminary he acknowledged very slender obligations. He had, however, attained a solid foundation of knowledge, and also the precious habits of attention, and the most industrious application. Here he diligently pursued his favourite speculations in private, interrupted only by the regular calls of scholastic discipline. He cultivated, with the greatest assiduity and success, the study of the languages, both ancient and modern; and formed an intimate acquaintance with the works of the poets of his own country, as well as with those of Greece and Rome, France and Italy.

Of the turns and delicacies of the English tongue, it has been observed, he then gained such a critical knowledge, as was scarcely to be expected from his northern education. With the view of improving his style, he employed himself in frequent translations, particularly from the French; a practice which he used to recommend to all who cultivate the art of writing. His modest deportment, and his secret studies, however, provoked, it has been said, the jealousy or the suspicion of his superiors. It has been mentioned, that the heads of the college having thought proper to visit his chamber, found him engaged in perusing Hume's Treatise of Human Nature, then recently published. This the reverend inquisitors seized, while they severely reprimanded the young philosopher.

After a residence of seven years at Oxford, he returned, against the wishes of his friends, to Kirkaldy, the place of his nativity, where he lived for some time with his mother, without determining on any fixed plan of life; Mr. Smith having thus chosen to forego every prospect of church preferment, rather than do violence to his conscience by preaching a particular system of tenets.

In 1748, being then in the twenty-fifth year of his age, he took up his residence in the capital of Scotland, when he first entered into public life, by delivering lectures, under the patronage of Lord Kames, on rhetoric and the belles lettres, which he continued for two years. These lectures were never published; but the substance of them appears to have been afterwards communicated to Dr. Blair, as he acknowledges, in his Lectures, to have been indebted to Dr. Smith for a manuscript treatise, from which he had taken several ideas in the eighteenth lecture, on the general characters of style, particularly the plain and the simple; and also the characters of those English authors belonging to the several classes in that and the following lecture.

In 1751, he was chosen professor of logic in the university of Glasgow. Of the manner in which he discharged the duties of this important situation, it would be difficult now to present a more satisfactory account than that which has been given by one of his own pupils 'In the professorship of logic,' it is observed, 'Mr. Smith soon saw the necessity of departing widely from the plan that had been followed by his predecessors, and of directing the attention of his pupils to studies of a more interesting and useful nature than the logic and metaphysics of the schools. Accordingly, after exhibiting a general view of the powers of the mind, and explaining so much of the ancient logic as was requisite to gratify curiosity, with respect to an artificial mode of reasoning, which had once occupied the universal attention of the learned, he dedicated all the rest of his time to the delivery of a system of rhetoric and belles lettres.'

During the following year, he was nominated professor of moral philosophy in the same university. By this appointment he was peculiarly gratified, and the duties of it he was well fitted to discharge, as it embraced the study of his favourite science, political economy, many of the doctrines of which, even then, had been familiarised to his mind. After entering on the duties of his new situation, he appears to have turned his attention to the division of the science of morals, which he was induced to divide into four parts. The first contained Natural Theology, in which he considered the proofs of the being and attributes of God, and those principles of the human mind on which religion is founded. The second comprehended Ethics, strictly so called.

In the third, he treated, at more length, of that branch of morality which relates to Justice, and which, being susceptible of precise and accurate rules, is capable of a more systematic demonstration. In the fourth, he examined these political regulations which are founded on Expediency, and which are calculated to increase the riches, the power, and the prosperity of a state.