2.3 — Adam Smith: The Division of Labor & The Invisible Hand — Readings

Wednesday, September 16, 2020

Required Readings:

If You Hadn’t Yet:

Today we dive into Smith’s analytical system, and some may say, the first organized discussion of economic analysis. The reading for Smith comes primarily from Book I: Of the Causes of Improvement in the productive Powers of Labour and Book II Of the Nature, Accumulation, and Employment of Stock and a little bit from Book V: Of the Revenue of the Sovereign or Commonwealth. Your reader focuses primarily on Book I and the division of labor (pp.156-165), which is great, but sadly lacks selections on capital from Book II or public finance from Book V.

It is a good idea whenever you can, to read as much of Books IYou can skip Smith’s difficult digression on silver in Chapter 11.

and II as you can. You can find all of The Wealth of Nations online for free here:

Lastly, note the following useful tidbit, although he does use both words occasionally, “stock” is Adam Smith’s word for “capital.”

The following Wikipedia entries can also provide more background:

Questions to Help Your Reading

Book I

Book II