Literature Study GuidesThe Wealth Of NationsVolume 1 Book 3 Chapter 1 Summary

The Wealth of Nations | Study Guide

Adam Smith

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The Wealth of Nations | Volume 1, Book 3, Chapter 1 : Of the Natural Progress of Opulence | Summary

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Summary

Smith begins Book 3 by suggesting a "natural" pattern of economic growth and industrial development, one that would arise if people were free to pursue their self-interest without oppression or fear. Agriculture and manufacturing, he says, are of great mutual benefit to one another, and anyone who argues otherwise is mistaken. Agriculture, however, is the primary and original economic activity, since it supplies what is necessary to daily life. Manufacturing, which, in Smith's view, provides only "conveniency and luxury," tends to arise later. In the natural state of things, towns will only grow to the extent that the countryside around them is improved and cultivated.

However, this picture of economic progress is very different from the one observed in real life. Towns, Smith concedes, seem to have grown up much faster than their rural neighborhoods, and much more money has been devoted to manufacturing and to trade than one would expect in the "natural" scenario. Moreover, people have somehow been led to prefer these professions, when their natural preference would be for the peace and stability of country life. The cause of this "inverted" situation, Smith argues, is a set of laws and customs whose origins reach back to the Middle Ages.

Analysis

"Natural," like "human nature" in Book 1, is an important term for Enlightenment-era authors. Smith is one of many contemporary writers using the word to evoke a sense of rightness and balance. More specifically, in its appeals to "natural liberty," The Wealth of Nations echoes the writings of John Locke, who developed a political philosophy based on natural law, an underlying and unvarying moral code according to which all people were free and equal. This law, in turn, formed the basis of a theory of natural rights, among which were life, liberty, and—notably in this context—private property. For Smith, it is self-evident that when the natural rights of a country's citizens are respected, their economic history will follow a natural, and thus maximally prosperous course. "Artificial," being the opposite of "natural," is a term Smith liberally employs to disparage any action that constrains or disrupts the free market.

For Smith, a largely agrarian economy is both the "natural" way of things, and is the most beneficial for building a nation's wealth. His point here is not that merchants should put down their ledgers and go work the land in order to get close to nature; rather, Smith is laying the groundwork for his recommendations to policymakers in the latter half of the treatise (Books 4 and 5). There, he will argue against policies that promote merchants' interests over those of farmers, boosting trade at the expense of agriculture.

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