Previous
Book 1, Chapter 1
Themes
Key
LitCharts assigns a color and icon to each theme in The Wealth of Nations, which you can use to track the themes throughout the work.
Labor, Markets, and Growth
Capital Accumulation and Investment
Institutions and Good Governance
Mercantilism and Free Trade
Money and Banking
Summary
Analysis
The division of labor comes from humans’ natural disposition to trade, which other animals do not share. People help one another out of mutual self-interest, because they recognize that they have things that others need. They tend to naturally specialize in the things they are talented at doing. For instance, if a tribesman is unusually skilled at making bows and arrows, then learns that others will sell him food in exchange, he will likely start making more bows and arrows instead of going hunting. He thereby becomes an artisan. As people specialize, practice and education amplify their small, natural differences in talent. So whereas animals do not see the value in their differences, humans bring theirs together “into a common stock.”
Trade and the division of labor are two sides of the same coin. After all, specialization is useless if people can’t trade what they produce for what they need, and trade can’t occur unless there are useful things to exchange. Crucially, Smith also presents these economic ties as a key part of how human societies form. Like many other Enlightenment philosophers, he begins from an imagined state of nature, portraying people as disconnected individuals who live separately in the wild but freely come together in order to form a society. While modern social scientists know that this picture is not historically accurate, as part of a theoretical exercise, it still helps us understand how mutually-beneficial trade can build and strengthen our social ties.
Themes
