Adam Smith was a key figure in the Scottish Enlightenment and tied to the French and
American Enlightenments which were crucial chapters in the story of modernity. Smith's
standing and influence were established early on. The publication of "The Theory of
Moral Sentiments" in 1759 quickly made him famous. Smith's only other published book,
"An Inquiry into the Nature and Causes of the Wealth of Nations" (published in 1776),
was similarly received and won the careful scrutiny of Bentham, Hegel, and Marx,
among the others. "The Wealth of Nations" clearly influenced thinkers in the American
Founding and has served as a touchstone in scholarly discussions about the workings and
protection of liberal economic arrangements.
"The Wealth of Nations" has among its chief aims the just and effective pursuit of wealth.
Smith's book is undoubtedly the most famous and enduring Enlightenment contribution
on this subject. The Enlightenment is closely tied to the liberation of the desire for
wealth, and so to commerce and the free market which are, according to Smith, the most
effective means to the satisfaction of that desire.
This desire to live better can be found earlier in Hobbes' works. Charles L.Griswold, Jr.1
in his book "Adam Smith and the Virtues of Enlightenment" gives some quotations from
Hobbes' Leviathan and emphasises that a person is nothing without what Hobbes calls
"perpetual tranquillity of mind". In other words, life is ceaselessly driven by desire,
anxiety, and fear; it is eternally filled with disturbance and disquiet. Without any
disturbances and misfortunes we could not possess real "felicity of mind". [...]
1 Charles L.Griswold, JR., Adam Smith and the Virtues of Enlightenment, Cambridge University Press,
1999, p. 219
Table of Contents
1. Introduction
2. Smith's Enlightenment Project and the Framework of Human Life
3. Economic Growth and the Virtues of Prudence
4. The Relationship Between Economic Efficiency and Capital Accumulation
5. The Concept of Productive and Unproductive Labour
6. Industrial Development and the Character of Inhabitants
7. The Problem of Marginal Productivity and Full Employment
8. Smith's Assumptions about Money Theory
Objectives and Themes
This paper examines Adam Smith's economic theories, specifically focusing on Book 2, Chapter III of "The Wealth of Nations," to explore the moral foundations of economic growth and the distinction between productive and unproductive labour.
- The role of moral philosophy in Smith’s economic framework.
- The link between capital accumulation, parsimony, and economic growth.
- Differentiating productive vs. unproductive labour and its impact on the nation.
- The influence of personal consumption choices on public opulence.
- Smith’s perspectives on money theory and the circulation of consumable goods.
Excerpt from the Book
Of the Accumulation of Capital, or of Productive and Unproductive Labour
“There is one sort of labour which adds to the value of the subject upon which it is bestowed: there is another which has no such effect. The former, as it produces may be called productive; the latter, unproductive labour”. The contrast is between the “manufacturer” and the “menial servant”. “A man grows rich by employing a multitude of manufacturers: he grows poor by maintaining a multitude of menial servants… the labour of the manufacturer fixes and realises itself in some particular subjector vendible commodity… The labour of the menial servant, on the contrary, does not fix or realise itself in any particular subject or vendible commodity. His services generally perish in the very instant of their performance".
Summary of Chapters
1. Introduction: Provides an overview of Adam Smith's central position within the Scottish Enlightenment and the historical significance of his major works.
2. Smith's Enlightenment Project and the Framework of Human Life: Discusses Smith’s departure from Hobbesian views on desire and the innate human inclination to improve one's condition.
3. Economic Growth and the Virtues of Prudence: Argues that economic growth is not merely a technical process but one rooted in moral virtues like prudence and self-command.
4. The Relationship Between Economic Efficiency and Capital Accumulation: Explores how the logic of Smith's system connects natural liberty and virtue to the augmentation of capital stock.
5. The Concept of Productive and Unproductive Labour: Defines the core distinction between labour that adds value to a commodity and labour that provides ephemeral personal services.
6. Industrial Development and the Character of Inhabitants: Analyzes how the division of funds between productive and unproductive labour influences the societal character of industrial towns.
7. The Problem of Marginal Productivity and Full Employment: Investigates the challenges of balancing different types of labour and the theoretical potential of full employment.
8. Smith's Assumptions about Money Theory: Details Smith’s views on money as a tool for circulating goods and its relation to national prosperity.
Keywords
Adam Smith, Wealth of Nations, Productive Labour, Unproductive Labour, Capital Accumulation, Scottish Enlightenment, Parsimony, Economic Growth, Menial Servants, Moral Philosophy, Marginal Productivity, Consumable Goods.
Frequently Asked Questions
What is the central focus of this paper?
This paper examines Adam Smith's economic theory, specifically focusing on his analysis of capital accumulation and the distinction between productive and unproductive labour in "The Wealth of Nations".
What are the primary themes discussed?
The core themes include the role of moral virtues in economics, the necessity of capital accumulation for growth, and the impact of labour classification on national wealth.
What is the primary goal of the author?
The goal is to demonstrate how Smith's economic theories are deeply rooted in his broader moral philosophy and his conception of the Enlightenment project.
Which methodology is employed in this research?
The research is a qualitative analysis of Smith's original texts, supported by historical context and secondary literature on the economic history of England.
What topics are covered in the main body?
The body covers Smith's critique of "idleness," the importance of parsimony, the classification of labour, and his theories regarding money and public opulence.
Which keywords best describe this work?
Key terms include Wealth of Nations, Productive Labour, Capital Accumulation, Enlightenment, Parsimony, and Economic Growth.
How does Smith define the difference between productive and unproductive labour?
Productive labour adds value to a vendible commodity, whereas unproductive labour consists of services that perish at the moment of their performance, such as those of a menial servant.
What is Smith's view on the relationship between capital and idleness?
Smith argues that the proportion between capital and revenue regulates industry; wherever capital dominates, industry prevails, while a focus on revenue often leads to idleness.
- Quote paper
- Nataliya Gudz (Author), 2004, Adam Smith: The Wealth of Nations, Bk. 2, Ch.III,Of Accumulation of Capital, or of productive and unproductive labour, Munich, GRIN Verlag, https://www.grin.com/document/24820
