The Wealth of Nations by Adam Smith: Free EPUB, AZW3 & KEPUB Download
The Wealth of Nations
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The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.
According, therefore, as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniencies for which it has occasion.
But this proportion must in every nation be regulated by two different circumstances: first, by the skill, dexterity, and judgment with which its labour is generally applied; and, secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed. Whatever be the soil, climate, or extent of territory of any particular nation, the abundance or scantiness of its annual supply must, in that particular situation, depend upon those two circumstances.
that of those who are not so employed.
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~378,000 words (estimated)
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Kirkcaldy and London, 1766-1776, with the whole commercial world in view
5 Books
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Public domain in the United States
Project Gutenberg #3300
The Wealth of Nations is Adam Smith’s inquiry into why some nations grow rich while others stay poor, published in London in 1776 after a decade of writing and a longer career teaching moral philosophy at Glasgow. It opens not with money but with labour: the yearly work of a people is the fund that feeds it, and the book asks what makes that work more or less productive. The answer runs through five books, from the pin factory and the division of labour to the bargaining that fixes wages, the history of European towns and landlords, and a long attack on tariffs, bounties and colonial monopoly.
The book is far more sceptical than its reputation. Smith describes masters and workmen bargaining with unequal power, places the invisible hand inside a chapter arguing against import restraints, calls the colonial trade a dead weight on the springs of industry, and wants government to pay for defence, courts, roads and schools because no private profit could repay those costs. The famous sentences are small parts of a long, empirical and often polemical argument about prices, wages and power, and they read differently when the chapter around them is restored. See Wikipedia’s article on The Wealth of Nations for its publication history. The text is available via Project Gutenberg #3300.
The Wealth of Nations by Adam Smith: Summary, Characters & Themes
This page is a summary and analysis of The Wealth of Nations by Adam Smith, with the historical setting, the argument of its five books, the figures who carry it, the themes it keeps returning to, the chapter summaries and the free download links. It appeared in London in 1776, the year the American colonies declared independence, and it is not a tract: it runs to some three hundred and seventy-eight thousand words of reasoning, price tables, statute law, colonial accounts and digressions on the value of silver in ancient Rome. Smith had lectured on moral philosophy at Glasgow for more than a decade and had published The Theory of Moral Sentiments in 1759; he spent two years in France and then nearly ten at Kirkcaldy writing this book, and he revised it through five editions in his lifetime. The text in this edition is the complete work, unabridged, in three e-reader formats.
Adam Smith was a Scottish moral philosopher whose subject was sympathy, justice and exchange rather than the balance of trade. His method is inductive and historical. He begins from observed facts, the time a workman needs for one pin, the daily wage commanded in New York, the fall in the value of silver after the Spanish mines opened, and reasons upward from them, quoting statutes, price lists and the records of the mint. He distrusts systems, and the fourth book is a sustained demolition of the system of his own day, carried out with the system’s own documents. Where value is concerned he is careful to say that prices settle by “the higgling and bargaining of the market” and not by decree, and most of the book is an account of how that bargaining works out across centuries of European history.
Two passages have been made to carry the whole book, and both read differently where they stand. The pin factory opens chapter one: a workman “not educated to this business” could scarce make one pin in a day, and certainly not twenty, but ten men dividing the work into about eighteen operations turned out upwards of forty-eight thousand pins, near four thousand eight hundred for each man. The invisible hand appears once in the entire volume, in the chapter on restraints upon the importation of goods which can be produced at home, where Smith argues that a merchant who keeps his capital in the country is “led by an invisible hand to promote an end which was no part of his intention”. It is an argument about where capital goes, made against a specific duty, not a general promise that private vice produces public good, and the sentence carries no weight in the other four books.
The harder edges of the book are usually left out of the quotations. Chapter eight states plainly that masters and workmen have interests “by no means the same”, and that the law authorises combinations of masters while prohibiting those of workmen; Smith notes that “a man must always live by his work”, which sets a floor under wages. In the fifth book he describes the labourer whose life is spent on a few simple operations as becoming “as stupid and ignorant as it is possible for a human creature to become”, and says this is the state the labouring poor must fall into “unless government takes some pains to prevent it”. He also observes that wherever there is great property there is great inequality, that for one very rich man there must be at least five hundred poor, and that the owner sleeps safely only under the protection of the civil magistrate. None of it appears in the pin factory chapter.
The last third of the book is about cost. Smith adds up the expense of empire, the bounties paid to merchants, the wars fought for colonial trade and the debt that followed them, and concludes that Britain has been paying heavily for a monopoly that returns little. He is not against government: he wants it to fund defence, courts, roads, bridges, canals, schools and the post office, and he thinks tolls on roads and canals a fairer tax than most. What he attacks is government doing favours for particular traders. This page follows that argument in order, then connects it to On Liberty, Mill’s later essay on the limits of social coercion, and to The Prince, Machiavelli’s manual on power without sentiment. The text used here is the Project Gutenberg transcription (#3300), which is in the public domain in the United States.
Historical Context
The book was published in London in 1776, in two volumes, while Britain was fighting in America and losing. The policy world Smith describes was not abstract: the Navigation Acts reserved colonial trade to English shipping, bounties subsidised particular exports, and prohibitive duties, seventy-five per cent on most French goods by Smith’s reckoning, kept rival manufactures out. Governments measured success by the stock of gold and silver and by a favourable balance of trade, and the war then beginning was fought in part over the colonial market those policies protected. Smith’s example of the pin factory was a small manufactory of the kind he had seen in Glasgow.
Smith was born at Kirkcaldy in 1723, studied at Glasgow and at Balliol College, Oxford, and held the chair of moral philosophy at Glasgow from 1752 until 1764, lecturing on natural theology, ethics, jurisprudence and police. The Theory of Moral Sentiments made his name in 1759. He then travelled through France as tutor to the young Duke of Buccleuch, met Quesnay and Turgot, and returned to Kirkcaldy in 1766 to write. The book appeared ten years later, and Smith spent the rest of his life revising it and serving as Commissioner of Customs in Edinburgh, a post whose ledgers, drawbacks and bounties are visible on nearly every page of the fourth book.
Its argument was aimed at living legislation, and the political nation noticed. The book supplied later administrations with arguments for freer trade, and Pitt cited it in parliament, though Smith’s own view of the American crisis was that the colonies should either be represented or let go, since the monopoly was worth less than the cost of holding it. The French edition and then the German translations carried the argument across Europe, where it was read alongside the physiocrats Smith had met. Contemporaries argued over its theology and its theory of value; the phrase about the invisible hand, unremarked for a century, was raised to the book’s motto much later, and by then the five books had been reduced to a slogan about markets.
Key Characters & Literary Archetypes
- The pin-maker: An unnamed workman who could scarce make one pin in a day, and certainly not twenty, if he had to draw the wire, cut it, point it and head it himself. Ten of them, dividing the work into about eighteen operations, made upwards of forty-eight thousand pins a day, near four thousand eight hundred each. He is the book’s first witness that the skill of a people is a matter of arrangement rather than of individual craft, and that a single pair of hands is a poor measure of a nation’s output.
- The master: The butcher, the brewer, the baker and the clothier who hires the work. He is one of the two parties to the wage contract, and Smith is candid that his interest is to give as little as possible. Masters are fewer, meet more easily, and find the law on their side: there are acts against workmen combining, and none against masters doing the same in silence. He is not a villain in the book, but he is the stronger party, and Smith never pretends otherwise.
- The labourer of the northern colonies: A common workman in New York in 1773, earning three shillings and sixpence local currency a day, two shillings sterling, with land so plentiful that the population doubles in twenty or five-and-twenty years. A young widow with four or five children is courted there as a fortune, Smith notes, because children are worth money. He is the book’s measure of what high wages look like in a thriving country, and the reason Smith thinks the interest of the labourer and the growth of the nation point the same way.
- The merchant and the carrier: The trader whose stock moves between town and country and across seas, and whose competition drives profit down wherever many rich rivals crowd into one branch of trade. His annual profit fluctuates so much, Smith says, that he cannot tell you its average, and varies not merely from year to year but from day to day, almost from hour to hour. Interest is the only usable proxy for what he earns. He is also the character most likely to ask the state for a monopoly, the fourth book’s subject.
- The colonial planter: The settler who becomes a master rather than a servant, because land is cheap and a man with a little spare stock prefers to work it himself than to hire out. In North America, Smith observes, an artificer who saves becomes a planter, and a planter is really a master, independent of all the world. His independence is what the exclusive trade of the mother country tries to bind to one market, and the cost of that binding is the subject of the long chapter on colonies.
- The sovereign: The prince or commonwealth that must raise armies, keep courts, build roads and canals, endow schools and borrow in war. Smith treats him without flattery: kings and ministers are always the greatest spendthrifts, and it is impertinence for them to pretend to watch over the economy of private people. Yet without him property cannot be enjoyed, contracts cannot be enforced, and children cannot be taught, and the debts he runs up are the price of the whole arrangement.
Core Literary Themes
- Division of labour and its bill: The book opens with an argument that arrangement multiplies output: eighteen operations, ten men, forty-eight thousand pins. Smith then spends the fifth book describing what that arrangement costs the people inside it, predicting that a life spent on a few simple operations makes a man stupid and ignorant, and that this is the state the labouring poor must fall into unless government intervenes with schooling. The theme is stated twice, in praise at the start and in warning at the end, and the distance between the two is the moral centre of the book. Nothing in the pin factory chapter prepares a reader for the fifth book’s remedy, which is public education.
- Self-interest and the invisible hand: Smith’s butcher and brewer supply dinner from regard to their own interest, not benevolence, and he takes that as ordinary rather than admirable. The one appearance of the invisible hand comes in the chapter against import restraints, where the point is narrower than the legend: a merchant who prefers domestic to foreign employment unintentionally raises domestic revenue, and no legislator could have directed him better. Smith is describing a mechanism for allocating capital, not a cosmic guarantee about greed, and he follows the sentence immediately with the admission that he has never known much good done by those who affected to trade for the public good.
- The wage bargain is not a meeting of equals: Chapter eight gives the conflict a voice: workmen want more, masters want to give less, and the law forbids only one side to combine. Smith reports that masters maintain a tacit, constant and uniform combination not to raise wages above the ordinary rate, that the workmen’s counter-combinations end in the ruin of their ringleaders, and that wages cannot fall below subsistence because a man must always live by his work. The book’s sympathy here is with the poorer party, and its estimate of the richer one is unflattering. It also gives the book its clearest standard for judging a society: what its poorest workers can live on.
- The mercantile system and the colonies: The fourth book is a prosecution. Smith traces the doctrine that wealth is money back to the Spaniards asking for gold and the Tartars asking for sheep and oxen, notes that the Tartar notion was nearer the truth, and then measures the policy built on it: prohibitions on French goods that made smugglers the principal importers, bounties for the rich and neglect for the poor, and an exclusive colonial trade that confines the colonies to one market and hangs as a dead weight on the springs of industry. The argument is not that trade should be unmanaged but that this particular management has been captured by the traders it was said to serve.
- Government as necessary, expensive and easily captured: Smith gives the sovereign three duties, defence, justice and public works, and prices each of them. Standing armies cost, courts cost, roads and canals can pay for themselves by tolls, schools are worth endowing, and war borrowing leaves a debt that outlives the war. The state is not the enemy of commerce in his account; it is the instrument that makes property safe and the market possible, and the danger is that particular traders will use it for themselves. The fifth book is therefore both a defence of public spending and a warning about who tends to direct it, a more useful position than either side of the modern argument usually allows.
Why Download Our Custom E-Reader Edition of The Wealth of Nations?
Three hundred and seventy-eight thousand words is the first obstacle. The book is long because Smith argues by assembling evidence, statute by statute and price by price, and a reader who only knows the pin factory and the invisible hand has read perhaps two pages of it. This edition keeps the whole text in reading order, so the passages quoted in newspapers can be checked against the chapters they came from, and the parts nobody quotes, wages, rents, colonies, tolls and debts, are all here, in the order Smith published them.
The second obstacle is the shape of the argument, which is cumulative and often digressive. Smith breaks off to explain the value of silver from the mines of Potosi to the price of corn, or the history of the feudal lords dismissing their retainers for a pair of diamond buckles. Chapter marks and a table of contents that follows the author’s own five books make it possible to read one argument at a time, or to drop into the chapter on colonies, or on the expense of justice, without losing the thread of the whole.
The third is that the book is usually met in fragments. Read in fragments it looks like a manifesto for markets. Read in order it is something more interesting: a report on a commercial society by a moral philosopher who expected masters to cheat workmen, thought universities could be lazy, doubted that merchants knew the public interest, and believed the state has expensive duties it cannot avoid. The point of an edition like this is to make that longer reading easy, on a phone, in the morning, without carrying a Victorian octavo, and to show how much of the argument the slogans leave out.
- Project Gutenberg transcription, via Project Gutenberg #3300 — the complete text, unabridged, in Smith’s own division into five books and their chapters.
- Reading order start with the introduction and the first four chapters of Book I, then the chapter on wages, then Book IV chapter 2, where the invisible hand actually lives.
- The whole text five books and every chapter, unabridged, with the author’s own book and chapter headings in place and no editorial paraphrase.
- Three formats EPUB for phones and tablets, AZW3 for Kindle and KEPUB for Kobo, set from the same source text with real chapter marks.
- On Liberty — free EPUB, AZW3 & KEPUB
- The Prince — free EPUB, AZW3 & KEPUB
- A Modest Proposal — free EPUB, AZW3 & KEPUB
Chapter summaries
Ten sections following the book’s own five-part plan. The argument moves from a single pin factory to the finances of an empire: how labour is divided, how its product is priced and paid for, how capital accumulated in Europe, what the policy built on the wrong idea of wealth has cost, and what government must do and what it must spend. Smith’s own order is kept throughout, including the digressions that a modern editor would cut.
- Introduction and Plan of the Work: Four pages that fix the question. The annual labour of a nation is the fund that supplies it, and the supply is regulated by two things: the skill and judgment with which labour is applied, and the proportion of those employed usefully to those who are not. Smith compares savage nations, where want is so severe that infants are exposed and the old abandoned, with a civilised one where a frugal workman enjoys more than any savage can acquire, then sets out the five books to come, one by one, in the order he means to take them.
- Book I, ch. 1-4: Division of Labour: The pin factory opens the argument: eighteen operations, ten men, forty-eight thousand pins a day. Smith traces the division of labour to the human propensity to truck and barter, notes that no dog ever made a fair exchange of one bone for another, and argues that the difference between a philosopher and a street porter is an effect of division rather than its cause. Money follows as the commodity that escapes the double coincidence of wants, and Smith calls it the great wheel of circulation while insisting it is no part of the revenue of a society.
- Book I, ch. 5-7: Real Price and Market Price: Labour is the real measure of exchangeable value, the toil and trouble of acquiring a thing, and money is only the nominal measure, which varies when the American mines flood Europe with silver and cut its value to a third. Smith separates natural price, the sum of rent, wages and profit at their ordinary rates, from market price, which moves with the quantity brought to market against the effectual demand. A poor man’s wish for a coach and six is a demand, but not an effectual one, and a siege raises the price of bread.
- Book I, ch. 8-11: Wages, Profit and Rent: The wage chapter is the book’s most concrete and least quoted. Masters and workmen bargain with opposed interests and unequal power, the law forbids workmen to combine and permits masters, and yet wages have a floor because a man must live by his work. High wages belong to thriving countries, low profits to rich ones, and interest is the only reliable guide to profit because profit itself shifts from hour to hour. Rent, the last share, is traced to the fertility and situation of land, The chapter closes on the inequalities of pay across employments.
- Book II: Stock and Its Employment: A nation’s stock divides into what is consumed and what is employed to produce, and the employed part into fixed and circulating capital, tools and buildings against materials, wages and goods in transit. A tailor needs only a parcel of needles, and a house let for rent yields nothing to the public. Smith then argues that frugality predominates, that private thrift builds nations while public prodigality can ruin them, that the steady effort of every man to better his condition is the engine of growth, and that paper money lets a country ride on Daedalian wings.
- Book III: The Different Progress of Opulence: A history of Europe against the grain of its own textbooks. The natural order is agriculture, then manufactures, then foreign trade, but Europe inverted it: towns grew first, on commerce and manufacture, and their wealth slowly bought the countryside out of feudal dependence. Smith describes the great proprietors dismissing retainers for trinkets and luxury goods, an unintended revolution in land tenure that he treats with dry amusement, and the long detour by which the continent arrived at the commercial society he is describing.
- Book IV, ch. 1-3: The Mercantile System: The prosecution opens. The doctrine that wealth is money gets traced from the Spaniards’ question about gold to the Tartars’ question about sheep and oxen, and Smith observes that the Tartar notion was nearer the truth. He then examines the restraints on imports, and it is here, in the argument against a home-market monopoly, that the invisible hand appears once and is not mentioned again. The chapter after it turns to duties aimed at particular countries, where seventy-five per cent on French goods made smugglers the principal importers.
- Book IV, ch. 4-7: Drawbacks, Bounties and Colonies: The machinery of the system, item by item: drawbacks that refund taxes on re-export, bounties that pay merchants to sell abroad at a loss, the Methuen treaty of 1703 that traded Portuguese wines for English cloth, and the great subject of the colonies. Smith argues that the exclusive trade confines them to one market and is a dead weight on the springs of industry, that they have never furnished military force for the mother country, and that they cost more in defence than they return in trade.
- Book IV, ch. 8-9: The Two Systems Compared: The conclusion of the fourth book, and its sharpest sentence: it is the industry carried on for the rich and powerful that the mercantile system encourages, while that carried on for the poor and indigent is neglected or oppressed. The linen yarn example makes it concrete, spinners scattered through the country without support or protection while the weavers’ masters collected bounties and bought their yarn cheap. The last chapter then weighs the agricultural system of the physiocrats, which Smith admires and finds too rigid, and names the three ordinary sources of revenue as land, labour and stock.
- Book V: The Revenue of the Sovereign: The state’s bill. Defence, justice, public works and education are duties the sovereign must pay for, and Smith prices them: standing armies, courts where great property needs protection, tolls on roads and canals that users pay in proportion to the wear they cause, parish schools for the labouring poor, and taxes on rent, profit and consumption. He ends with public debts contracted in four French wars, the sinking fund, the funded debt and the ordinary expedient of borrowing in time of war, and the collapse they threaten, which he expects will arrive long after his own time.
The Wealth of Nations: Frequently Asked Questions
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Part of: Philosophy classics · Classic fiction
