The Wealth of Nations

Adam Smith begins with a practical question: why do some societies produce a more abundant supply of life's necessities and conveniences than others? In The Wealth of Nations, annual labour provides that supply, and prosperity depends especially on the skill, dexterity, and judgment with which labour is organized.

The inquiry develops through the division of labour. Specialization can greatly increase output, but it also requires exchange, reliable institutions, and markets broad enough to support distinct occupations. Prices, wages, profit, and rent describe how the resulting produce is distributed among workers, owners of stock, and landowners. Smith distinguishes productive activity from consumption without treating national wealth as a store of money alone.

Capital accumulation receives equal attention because tools, materials, and saved resources set labour in motion. Different uses of stock have different effects on employment and growth. Smith also examines trade restrictions, colonial systems, taxation, public debt, education, defense, and the administration of justice. His criticism of mercantilism follows from the larger argument that policy should be judged by how it affects social production and ordinary consumers, not by the privileges it grants particular merchants.

The book does not claim that self-interest automatically produces justice. Competition can restrain private power only under laws that protect exchange and limit collusion. Economic liberty therefore operates inside a moral and political framework concerned with public institutions, unequal bargaining power, and the material conditions of national life.