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• Preface
• Editor’s Introduction
• Introduction and Plan of the Work
• 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 1
• Chapter II: Of the Principle Which Gives Occasion to the Division of Labour
• Chapter III: That the Division of Labour Is Limited By the Extent of the Market
• Chapter IV: Of the Origin and Use of Money
• Chapter V: Of the Real and Nominal Price of Commodities, Or of Their Price In Labour, and Their Price In Money
• Chapter VI: Of the Component Parts of the Price of Commodities
• Chapter VII: Of the Natural and Market Price of Commodities 1
• Chapter VIII: Of the Wages of Labour
• Chapter IX: Of the Profits of Stock
• Chapter X: Of Wages and Profit In the Different Employments of Labour and Stock 1
• Part I: Inequalities Arising From the Nature of the Employments Themselves 1
• Part II: Inequalities Occasioned By the Policy of Europe
• Chapter XI: Of the Rent of Land
• Part I: Of the Produce of Land Which Always Affords Rent
• Part II: Of the Produce of Land Which Sometimes Does, and Sometimes Does Not, Afford Rent
• 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
• Digression Concerning the Variations In the Value of Silver During the Course of the Four Last Centuries
• Book II: Of the Nature, Accumulation, and Employment of Stock
• Introduction
• Chapter I: Of the Division of Stock
• 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
• Chapter III: Of the Accumulation of Capital, Or of Productive and Unproductive Labour
• Chapter IV: Of Stock Lent At Interest
• Chapter V: Of the Different Employment of Capitals
• Book III: Of the Different Progress of Opulence In Different Nations
• Chapter I: Of the Natural Progress of Opulence
• Chapter II: Of the Discouragement of Agriculture In the Ancient State of Europe After the Fall of the Roman Empire
• Chapter III: Of the Rise and Progress of Cities and Towns, After the Fall of the Roman Empire
• Chapter IV: How the Commerce of the Towns Contributed to the Improvement of the Country
• Book IV: Of Systems of Political Œconomy
• Introduction
• Chapter I: Of the Principle of the Commercial Or Mercantile System
• Chapter II: Of Restraints Upon the Importation From Foreign Countries of Such Goods As Can Be Produced At Home
• 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 1
• Part II: Of the Unreasonableness of Those Extraordinary Restraints Upon Other Principles 2

INTRODUCTION AND PLAN OF THE WORK

THE annual1 labour of every nation is the fund which originallyThe produce of annual labour supplies annual consumption, supplies it with all the necessaries and conveniencies of life2 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,better or worse according to the proportion of produce to people, 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.3

But this proportion must in every nation be regulated by twowhich proportion is regulated by the skill, etc., of the labour and the proportion of useful labourers, different circumstances; first, by the skill, dexterity, and judgment with which its labour is generally applied;4 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.5 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.

and more by the skill, etc., than by the proportion of useful labourers, as is shown by the greater produce of civilised societies.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, or1 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 improvement and natural distribution are the subject of Book I.The causes2 of this improvement, in the productive powers of labour, and the order, according to which its produce is naturally distributed3 among the different ranks and conditions of men in the society, make the subject of the First Book of this Inquiry.

Capital stock, which regulates the proportion of useful labourers, is treated of in Book II.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 productive4 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 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,The circumstances which led Europe to encourage the industry of the towns and discourage agriculture are dealt with in Book III. 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 theThe theories to which different policies have given rise are explained in Book IV. 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;1 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 explain2 in what has consisted the revenue of the great bodyThe expenditure, revenue and debts of the sovereign are treated of in Book V. of the people, or what has been the nature3 of those funds, which, in different ages and nations, have supplied their annual consumption, is the object of4 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:5 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.1

[1 ] [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.]

[2 ] [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.’]

[3 ] [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.]

[4 ] [Ed. 1 reads ‘with which labour is generally applied in it’.]

[5 ] [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.

[1 ] [Ed. 1 reads ‘and’.]

[2 ] [Only one cause, the division of labour, is actually treated.]

[3 ] [For the physiocratic origin of the technical use of the terms ‘distribute’ and ‘distribution’ see the Editor’s Introduction.]

[4 ] [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 p. 314.]

[1 ] [See the index for the examples of the use of this term.]

[2 ] [Ed. 1 does not contain ‘to explain’.]

[3 ] [Ed. 1 reads ‘what is the nature’.]

[4 ] [Ed. 1 reads ‘is treated of in’.]

[5 ] [Ed. 1 reads ‘of the society’.]

[1 ] [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.]