Key Concepts

Argument Explanation
Division of Labor Smith argued that the division of labor, where workers specialize in specific tasks, leads to increased productivity and efficiency. This specialization allows workers to become more skilled and develop better methods for their particular tasks.
Free Market Economy Smith advocated for a free market economy, where prices are determined by the forces of supply and demand, rather than by government intervention or regulation. He believed that the "invisible hand" of the market would naturally allocate resources efficiently and promote economic growth.
Laissez-faire Policy Building on the concept of a free market economy, Smith argued for a laissez-faire (non-interventionist) policy, where the government plays a minimal role in the economy. He believed that government interference in the market, such as through tariffs, monopolies, or regulations, would distort the natural equilibrium of supply and demand.
Specialization and Trade Smith emphasized the benefits of specialization and trade between nations. He argued that countries should focus on producing goods in which they have a comparative advantage and trade for goods they cannot produce efficiently. This specialization and trade would lead to increased productivity, wealth, and economic growth.
Criticism of Mercantilism Smith criticized the mercantilist system, which was prevalent at the time, where nations sought to accumulate gold and silver by promoting exports and restricting imports. He argued that this system was detrimental to economic growth and that the wealth of a nation should be measured by the production of goods and services, not the accumulation of precious metals.

Quotes

Section Quote
Book I, Chapter I "The division of labour, however, so far as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labour."
Book I, Chapter II "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
Book I, Chapter V "The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it."
Book IV, Chapter II "Every individual... neither intends to promote the public interest, nor knows how much he is promoting it... He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention."
Book IV, Chapter VII "By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it."

Contents

Book Chapter Title Summary
Book I: Of the Causes of Improvement in the productive power of labour Chapter 1 Of the Division of Labour Discusses how the specialization of labor increases productivity and innovation.
Book I Chapter 2 Of the Principle which Gives Occasion to the Division of Labour Explains how the division of labor originates from human nature’s tendency to trade and barter.
Book I Chapter 3 That the Division of Labour is Limited by the Extent of the Market Argues that the extent of the market limits the division of labor; larger markets allow for more specialization.
Book I Chapter 4 Of the Origin and Use of Money Describes how money emerged as a medium of exchange to address the inefficiencies of barter.
Book V: Of the Revenue of the Sovereign or Commonwealth Chapter 1 Of the Expenses of the Sovereign or Commonwealth Discusses the various expenditures of the government, including education, defense, and public works.
Book V Chapter 2 Of the Sources of the General or Public Revenue of the Society Explores the ways government raises revenue through taxation and other means.
Book V Chapter 3 Of Public Debts Examines public borrowing and the implications of national debt.