Essay on Analysis of Wealth of Nations by Adam Smith

1040 Words5 Pages
Analysis of Wealth of Nations by Adam Smith People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. Adam Smith The reasons for writing a book such as Adam Smith's The Wealth of Nations are many, and Smith seems to have had several in mind. His study traces the stages in the development of the modern economic system in an attempt to explain it, maps out the origins of money, and finally tackles the issues facing the mercantile system which controlled the society he lived in. In the process, he provides an exposition for his vision of a laissez faire economy, that is, capitalism as we now know it.…show more content…
Looking at his own society's economic system, Smith explores the division of labour, the role it has to play in industrialization, and its general impact upon the wealth of the state. Smith regards the division of labour and the resultant specialization as the key to increasing the productivity of labour, rather than the increase in mechanization since the Industrial Revolution began, as many would argue. Naturally, a highly specialized economic unit would be dependent upon interaction with other, similarly specialized units, and Smith illustrates that a system of fair and accessible trade is necessary for an efficient use of labour. The much quoted example of the pin maker is used to demonstrate Smith's point about the division of labour. Despite its questionable accuracy, this example does much to illustrate the plight of labour under a system of increasing specialization. That is to say, it shows the boredom and melancholia which can be associated with repetitious and laborious work. For Smith, however, any such problem is amply compensated for by the relative prosperity of a society based upon specialized markets and trades. For instance,
Open Document