The Wealth of Nations · Chapter
Introduction and Plan of the Work explained
Smith outlines the structure of his inquiry, explaining that the annual labor of a nation is the original fund for all necessities and conveniences.
What happens
Smith outlines the structure of his inquiry, explaining that the annual labor of a nation is the original fund for all necessities and conveniences. He identifies two key determinants of a nation's wealth: the skill and judgment with which labor is applied, and the proportion of useful laborers to non-laborers. He previews the five books: Book I on the causes of improved labor productivity and distribution; Book II on capital stock; Book III on the different policies toward town and country industry; Book IV on theories of political economy; and Book V on the revenue of the sovereign or commonwealth.
Themes in this chapter
Division of Labor
Smith introduces the skill, dexterity, and judgment in labor as a primary factor in national wealth, foreshadowing the division of labor.
Social Class and Inequality
Contrasts the poverty of savage nations with the abundance in civilized ones, noting that even the poorest workman in a thriving nation can enjoy more than a savage.
Role of Government
Book V is described as covering the expenses of the sovereign or commonwealth, including public works and debt.
Characters to notice
- Adam Smith
Author and narrator of the work, presenting the plan and scope of the inquiry.
Key passages
“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.”
A nation's yearly labor is the original source of everything it needs and uses, whether produced at home or bought from abroad.
Smith's foundational statement on national wealth.
“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.”
In prosperous nations, even though many people don't work and some consume far more than they produce, the total output is so large that even the poorest worker can live better than a hunter-gatherer.
Highlights the paradox of inequality and abundance in commercial societies.