The Wealth of Nations
The free market benefits the consumer by weeding out inefficient producers.
A free market nation only labels one an infidel after bankruptcy.
Wealth is not a fixed amount and thus free trade benefits all and does not deprive any nations of wealth.
Long before writing the wealth of nations, Adam Smith studied and published work on moral philosophy, which was very influential in his work on economics.
The first and chief design of every system of government is to maintain justice by preventing members of society from encroaching on the rights of others.
A just society permits individuals to follow the dictates of self interest. But justice need only require someone do nothing so a society should strive for virtue just as much as justice to satisfy the sociability of humans.
Justice is the foundation of a proper society and virtue is the ornament that enhances its features. The former is to be forced by rule of law and the latter is to be left to the beneficence of its constituents.
In a mercantile system, the interest of the consumer is almost always sacrificed to that of the producer.
Free market prices gravitate toward natural prices and any intervention or tax moves that price further from its natural value and hurts the consumer.
Mercantilists generally viewed money as wealth and thus focused on a balance of trade that brought in gold and silver rather than other commodities or goods.
Mercantilists also believed that for one nation to profit, another nation had to lose. Trade, in their eyes, was a zero sum game rather than mutually beneficial meaning trade deficits denominated in gold were always a bad thing even if it meant acquiring other commodities or benefiting industry more generally.
The primary cause of a nation’s wealth is the productivity of human labor; The division of labor causes the labor to become more productive; The propensity to barter and exchange causes the division of labor; The desire to barter and exchange is caused by the desire to persuade other people; The desire to persuade is caused by the desire for assistance from others in a society; Our desire for assistance stems from the knowledge gained through reason and communication and recognition that social cooperation is the best way to satisfy our wants.
Exchange will occur only if each participant believes they are getting an equal amount of labor value. Labor measures the exchangeable value of commodities.
The labor theory of value was eventually overthrown by the theory of marginal utility.
Before the division of labor, everyone produced and kept the whole produce of their labor. With the division of labor came specialization and dependence on others in society.
In a progressive society, rent and wages continuously rise while profit continues to fall amid increasing competition.