THE annual labour of every nation is the fund whichoriginally supplies it with all the necessaries and conveniencesof life which it annually consumes, and which consist alwayseither in the immediate produce of that labour, or in what ispurchased with that produce from other nations.
According therefore as this produce, or what is purchasedwith it, bears a greater or smaller proportion to the number ofthose who are to consume it, the nation will be better or worsesupplied with all the necessaries and conveniences for which ithas occasion.
But this proportion must in every nation be regulated by twodifferent circumstances; first, by the skill, dexterity, andjudgment with which its labour is generally applied; and,secondly, by the proportion between the number of those who areemployed in useful labour, and that of those who are not soemployed. Whatever be the soil, climate, or extent of territoryof any particular nation, the abundance or scantiness of itsannual supply must, in that particular situation, depend uponthose two circumstances.
The abundance or scantiness of this supply, too, seems todepend more upon the former of those two circumstances than uponthe latter. Among the savage nations of hunters and fishers,every individual who is able to work, is more or less employed inuseful labour, and endeavours to provide, as well as he can, thenecessaries and conveniences of life, for himself, or such of hisfamily or tribe as are either too old, or too young, or tooinfirm to go a hunting and fishing. Such nations, however, are somiserably poor that, from mere want, they are frequently reduced,or, at least, think themselves reduced, to the necessitysometimes of directly destroying, and sometimes of abandoningtheir infants, their old people, and those afflicted withlingering diseases, to perish with hunger, or to be devoured bywild beasts. Among civilised and thriving nations, on thecontrary, though a great number of people do not labour at all,many of whom consume the produce of ten times, frequently of ahundred times more labour than the greater part of those whowork; yet the produce of the whole labour of the society is sogreat that all are often abundantly supplied, and a workman, evenof the lowest and poorest order, if he is frugal and industrious,may enjoy a greater share of the necessaries and conveniences oflife than it is possible for any savage to acquire.
The causes of this improvement, in the productive powers oflabour, and the order, according to which its produce isnaturally distributed among the different ranks and conditions ofmen in the society, make the subject of the first book of this Inquiry. Whatever be the actual state of the skill, dexterity, andjudgment with which labour is applied in any nation, theabundance or scantiness of its annual supply must depend, duringthe continuance of that state, upon the proportion between thenumber of those who are annually employed in useful labour, andthat of those who are not so employed. The number of useful andproductive labourers, it will hereafter appear, is everywhere inproportion to the quantity of capital stock which is employed insetting them to work, and to the particular way in which it is soemployed. The second book, therefore, treats of the nature ofcapital stock, of the manner in which it is graduallyaccumulated, and of the different quantities of labour which itputs into motion, according to the different ways in which it isemployed.
Nations tolerably well advanced as to skill, dexterity, andjudgment, in the application of labour, have followed verydifferent plans in the general conduct or direction of it; thoseplans have not all been equally favourable to the greatness ofits produce. The policy of some nations has given extraordinaryencouragement to the industry of the country; that of others tothe industry of towns. Scarce any nation has dealt equally andimpartially with every sort of industry. Since the downfall ofthe Roman empire, the policy of Europe has been more favourableto arts, manufactures, and commerce, the industry of towns, thanto agriculture, the industry of the country. The circumstanceswhich seem to have introduced and established this policy areexplained in the third book.
Though those different plans were, perhaps, first introducedby the private interests and prejudices of particular orders ofmen, without any regard to, or foresight of, their consequencesupon the general welfare of the society; yet they have givenoccasion to very different theories of political economy; ofwhich some magnify the importance of that industry which iscarried on in towns, others of that which is carried on in thecountry. Those theories have had a considerable influence, notonly upon the opinions of men of learning, but upon the publicconduct of princes and sovereign states. I have endeavoured, inthe fourth book, to explain, as fully and distinctly as I can,those different theories, and the principal effects which theyhave produced in different ages and nations.
To explain in what has consisted the revenue of the greatbody of the people, or what has been the nature of those fundswhich, in different ages and nations, have supplied their annualconsumption, is the object of these four first books. The fifthand last book treats of the revenue of the sovereign, orcommonwealth. In this book I have endeavoured to show, first,what are the necessary expenses of the sovereign, orcommonwealth; which of those expenses ought to be defrayed by thegeneral contribution of the whole society; and which of them bythat of some particular part only, or of some particular membersof it: secondly, what are the different methods in which thewhole society may be made to contribute towards defraying theexpenses incumbent on the whole society, and what are theprincipal advantages and inconveniences of each of those methods:and, thirdly and lastly, what are the reasons and causes whichhave induced almost all modern governments to mortgage some partof this revenue, or to contract debts, and what have been theeffects of those debts upon the real wealth, the annual produceof the land and labour of the society.
(Adam Smith, The Wealth of Nations, The Introduction)