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The Wealth of Nations | Quotes


Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.

Volume 1, Book 1, Chapter 2

This seemingly incidental little quip helps to set the tone for The Wealth of Nations. In Smith's view, self-interest is something humans have in common with other animals. The capacity to pursue that self-interest through barter and trade, however, is an essential and distinguishing human trait.


It is not from the benevolence of ... the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.

Volume 1, Book 1, Chapter 2

Although the "invisible hand" is not as pervasive a presence in the book as one might expect, the idea of self-interest as a positive, productive force is key to The Wealth of Nations. In later chapters Smith will argue that the pursuit of this self-interest leads not only to the production of commodities for trade, like the bread and beer being sold here, but to the production of those goods in as cheap and plentiful a manner as possible.


No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.

Volume 1, Book 1, Chapter 8

In this chapter, Smith confronts the question of whether higher wages are actually good for society. He begins by pointing out the obvious: when people are paid more, they can afford to be less "poor and miserable." If this seems like an uncharacteristically warm sentiment for Smith, fear not—he then proceeds to explain that high wages result in cheaper goods for everyone, and not just in a better life for the working poor.


The most abundant mines, either of the precious metals or of the precious stones, could add little to the wealth of the world.

Volume 1, Book 1, Chapter 11

Smith here points out what he regards as a major flaw of mercantilism: the emphasis on precious metals as a store of value. Since these metals derive their value from their scarcity, he argues, mining more will actually decrease their value in the long run, although a temporarily high demand may disguise this fact.


Every prodigal appears to be a public enemy, and every frugal man a public benefactor.

Volume 1, Book 2, Chapter 3

This harsh judgment is atypical for Smith, who usually only talks this way about merchants. The passage is part of a longer discussion of spending and saving in which Smith invariably views the prodigal—who wastes his money on unproductive labor—as a drain on society, regardless of where his funds might come from. This suggests that, to Smith's way of thinking, saving and investing are not merely wise, but a moral obligation.


It is not the multitude of alehouses ... that occasions a general disposition to drunkenness among the common people.

Volume 1, Book 2, Chapter 5

Here, Smith warns against confusing cause and effect, a type of faulty reasoning he repeatedly attributes to proponents of the mercantile system. In his view, businesses—including alehouses—arise in response to demand, and not the other way around.


Avarice and injustice are always shortsighted.

Volume 1, Book 3, Chapter 2

Smith frequently seems to be of two minds when it comes to greed. In general, he presents himself as a firm believer in the beneficial effects of self-interest, which drives each individual to seek the most profitable job or investment, and thus "naturally" brings about a favorable market state. There are, however, exceptions—areas in which Smith sees greed and selfishness as going too far. Monopolies are one such case, and oppression of one's tenants is another. In examining The Wealth of Nations as a whole, however, it is difficult to make a clear separation between rational, healthy "self-interest," and out-of-control "avarice."


A revolution of the greatest importance to ... public happiness, was ... brought about by two ... orders ... who had not the least intention to serve the public.

Volume 1, Book 3, Chapter 4

In Smith's view, the "great proprietors"—i.e., large landowners—got what they deserved when, through the generations, they lost their wealth bit by bit. It was, after all, their "childish vanity" that led them to spend so much on luxury goods, rather than keeping a careful eye on their budgets. For Smith, this inattention might be forgivable, or even pitiable, but their vanity is a moral failing.

Smith is not much kinder to the other "order" of people mentioned here—the merchants who bankrupted the "great proprietors" by selling them expensive goods. One might expect them to be the heroes of the story since they deprived the landlords of their power to oppress. Smith, however, contemptuously describes the merchants as motivated by the "pedlar principle" of making a profit in whatever way they could.


He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Volume 1, Book 4, Chapter 2

This image, the most famous in all of Smith's writings, gets a single casual mention in The Wealth of Nations. The "invisible hand" as described here is a kind of force that guides markets toward an ideal situation, in which supply matches demand, and capital is employed efficiently in meeting that demand. (Today this condition is called equilibrium.) By this point in the book, however, Smith has given the reader many examples of scenarios, such as monopolies and cartels, that clearly prevent the "hand" from performing this miracle. He will go on to supply many more.


Gold, like every ... commodity, is always somewhere or another to be got for its value by those who have that value to give for it.

Volume 2, Book 4, Chapter 6

With this statement, Smith aims to refute the mercantilist notion that gold is somehow a unique and privileged measure of wealth. The key idea set forth here—that one can "buy" gold with goods just as easily as one buys goods with gold—recurs throughout The Wealth of Nations in various guises. Smith's tendency to repeat it suggests he expected mercantilist ideas to be deeply entrenched among his readers.


The government of an exclusive company of merchants is perhaps the worst of all governments for any country whatever.

Volume 2, Book 4, Chapter 7

In case it wasn't clear from earlier chapters, Smith really doesn't trust merchants. Actually, this is an oversimplification—Smith trusts merchants to pursue their own interest at all times. Under conditions of free and equal competition, Smith argues, merchants drive economic growth, and society in general benefits from their trade activities. But whenever a group of merchants gains exclusive control over a territory or branch of trade, oppressive and exclusionary policies are sure to follow.


Plenty of good land, and liberty to manage their own affairs ... seem to be ... two great causes of the prosperity of all new colonies.

Volume 2, Book 4, Chapter 7

Smith names these two factors in an attempt to explain the success of the American colonies. In his view, the English colonists in America enjoy both abundant land and near-perfect liberty, apart from a few annoying restrictions on foreign trade.


Like the laws of Draco, these laws may be said to be all written in blood.

Volume 2, Book 4, Chapter 8

The laws Smith has in mind here are those restricting the exportation of English goods, a behavior he sees as typical of the mercantile system. The most alarming example is given in the subsequent paragraph, where Smith relates a 16th-century statute of Queen Elizabeth I aimed at preventing the propagation of England's (supposedly superior) breed of sheep. The law decreed that anyone caught exporting sheep would be imprisoned for a year and "have his left hand cut off in a market town ... to be there nailed up." Repeat offenders were to be executed as felons.

Thus, when he links the laws to the notoriously severe 7th century BCE legislator Draco of Athens, Smith is not exaggerating as much as one might hope or think. By his time the law against exporting had been superseded by a somewhat milder measure: a potentially crippling fine took the place of a literal amputation. For Smith the fine is certainly more humane than the previous punishment, but it still places an unduly burdensome restriction on trade.


A man without the proper use of the intellectual faculties of a man is, if possible, more contemptible than even a coward.

Volume 2, Book 5, Chapter 1

In his thoughts on education, Smith seems to walk the line between pragmatism and compassion. Here and elsewhere, he expresses pity for those who are "mutilated" by a lack of education, a deficit he likens to missing a limb. Ultimately, however, Smith offers a less charitable rationalization for funding public education: an educated populace, in his view, is more subservient and easier to manage.


[The colonies] may perhaps be considered as appendages, as a sort of splendid and shewy equipage of the empire.

Volume 2, Book 5, Chapter 3

Here, Smith uses his penchant for ridiculous imagery to point out the foolishness of trying to hold onto the American colonies. Moreover, in likening the colonies to an "equipage"—a horse-drawn carriage with fancy ornaments and footmen—he hearkens back to the history lesson of Book 3. There, he blamed the decline of the landed barons on their fondness for vain baubles (or trinkets), which they mortgaged their lands to possess. Britain, he seems to suggest here, is in danger of going the way of the barons, bankrupting itself to maintain a "splendid and shewy" international presence.

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