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    Smith Quotes & FAQs

    Frequently Asked Questions

    Adam Smith is best known today as the father of modern economics. His most famous work, An Inquiry into the Nature and Causes of the Wealth of Nations, continues to be regarded as the foundation text for the study of the relationship between society, politics, commerce and prosperity.

    Yet there is more to Adam Smith than a single book, no matter how influential it proved to be. His other philosophical work ranged widely, taking in explorations of morality, aesthetics and jurisprudence. He was also a teacher with a profound interest in education for all.

    Adam Smith, therefore, deserves his place as a central figure of the Scottish Enlightenment - the extraordinary flowering of intellectual and cultural achievement that contributed so much to the shaping of the modern world.

    Adam Smith is best known today as the father of modern economics. His most famous work, An Inquiry into the Nature and Causes of the Wealth of Nations, continues to be regarded as the foundation text for the study of the relationship between society, politics, commerce and prosperity.

    Yet there is more to Adam Smith than a single book, no matter how influential it proved to be. His other philosophical work ranged widely, taking in explorations of morality, aesthetics and jurisprudence. He was also a teacher with a profound interest in education for all.

    Originally built in 1691, Smith occupied Panmure House between 1778 and 1790, during which time he completed the final editions of his master works: The Theory of Moral Sentiments and The Wealth of Nations.  Other great luminaries and thinkers of the Scottish Enlightenment visited Smith regularly at the House across this period.

    The Wealth of Nations was first published in 1776.

    In 1759.

    Margaret Douglas.

    Adam Smith was born in 1723 in the Fife coastal town of Kirkcaldy. He never knew his father, a lawyer and customs official, who died five months before he was born. Adam was raised by his mother, Margaret Douglas, who came from a local landowning family. She remained a strong influence throughout his life. Though a sickly child, Adam excelled at his books.

    Smith died in 1790 and is buried in the nearby Canongate Kirkyard.

    Adam Smith is remembered today as the author of An Inquiry into the Natures and Causes of the Wealth of Nations. As a consequence, he is hailed globally as the founder of modern economics. Remarkable though this reputation is, there was more to Adam Smith than a single book.

    His importance as a moral philosopher is now far better understood through recent study of The Theory of Moral Sentiments. His other works, on the nature of justice, science and the expressive arts, are also recognised as major contributions to Enlightenment thought.

    There is also far more to the man than the selective use of the more contentious passages of The Wealth of Nations might suggest. As his other works show, Smith did not simply believe in the primacy of man’s selfishness or in the purity of free markets. The ideas he explores and the conclusions he draws are far more complex, realistic and humane.

    In 1740, Smith gained a Snell scholarship to Balliol College, Oxford. 

    In 1764, Adam Smith become tutor to the young Duke of Buccleuch who was about to embark on a tour of Europe. The Duke’s stepfather, Charles Townshend, was a leading politician and a great admirer of Smith’s work.

    Smith Quotes

    'How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.'

    The Theory of Moral Sentiments, Book I, Chapter I

    Quotes from 'An Inquiry into the Nature and Causes of the Wealth of Nations'

    ‘No Society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.’

    THE DIVISION OF LABOUR

    ‘The greatest improvement in the productive powers of labour, and the greater part of skill, dexterity and judgement with which it is anywhere directed, or applied, seem to have been the effects of the division of labour.’

    EXCHANGE

    ‘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. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.’

    THE INDEX OF VALUE

    ‘Wages, profit, and rent, are the three original sources of all revenue as well as of all exchangeable value. All other revenue is ultimately derived from some one or other of these.’

    THE ‘AUTOMATIC’ MARKET

    ‘When the price of any commodity is neither more nor less than what is sufficient to pay the rent of the land, the wages of the labour, and the profits of the stock employed in raising, preparing, and bringing it to market, according to their natural rates, the commodity is then sold for what may be called its natural price.’

    MONEY AND VALUE

    'But the amount of the metal pieces which circulate in a society can never be equal to the revenue of all its members. As the same guinea which pays the weekly pension of one man to-day, may pay that of another to-morrow, and that of a third the day thereafter, the amount of the metal pieces which annually circulate in any country must always be of much less value than the whole money pensions annually paid with them.....That revenue, therefore, cannot consist in those metal pieces, of which the amount is so much inferior to its value, but in the power of purchasing, in the goods which can successively be bought with them as they circulate from hand to hand.'

    CAPITAL AND GROWTH

    In all countries where there is tolerable security, every man of common understanding will endeavour to employ whatever stock he can command in procuring either present enjoyment or future profit. 

    PRODUCTIVE LABOUR

    Though the manufacturer has his wages advanced to him by his master, he, in reality, costs him no expence, the value of those wages being generally restored, together with a profit, in the improved value of the subject upon which his labour is bestowed. But the maintenance of a menial servant never is restored. A man grows rich by employing a multitude of manufacturers: he grows poor by maintaining a multitude of menial servants.

    SURPLUS PROFIT

    Whatever part of his stock a man employs as a capital, he always expects is to be replaced to him with a profit. He employs it, therefore, in maintaining productive hands only; and after having served in the function of a capital to him, it constitutes a revenue to them.

    SAVING, NOT CONSUMING

    Whatever, therefore, we may imagine the real wealth and revenue of a country to consist in, whether in the value of the annual produce of its land and labour, as plain reason seems to dictate; or in the quantity of the precious metals which circulate within it, as vulgar prejudices suppose; in either view of the matter, every prodigal appears to be a public enemy, and every frugal man a public benefactor.

    INVESTMENT

     The person who employs his stock in maintaining labour, necessarily wishes to employ it in such a manner as to produce as great a quantity of work as possible. He endeavours, therefore, both to make among his workmen the most proper distribution of employment, and to furnish them with the best machines which he can either invent or afford to purchase. 

    INCREASE IN PRODUCTION

    Whatever a person saves from his revenue he adds to his capital, and either employs it himself in maintaining an additional number of productive hands, or enables some other person to do so, by lending it to him for an interest, that is, for a share of the profits. As the capital of an individual can be increased only by what he saves from his annual revenue or his annual gains, so the capital of a society, which is the same with that of all the individuals who compose it, can be increased only in the same manner.

    By what a frugal man annually saves, he not only affords maintenance to an additional number of productive hands, for that or the ensuing year, but, like the founder of a public workhouse, he establishes as it were a perpetual fund for the maintenance of an equal number in all times to come. 

    More quotes from Smith

    ‘No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.’    

    ‘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.’    

    ‘A nation is not made wealthy by the childish accumulation of shiny metals, but it enriched by the economic prosperity of its people.’    

    ‘The first thing you have to know is yourself. A man who knows himself can step outside himself and watch his own reactions like an observer.’    

    ‘A criminal is a person with predatory instincts who has not sufficient capital to form a corporation. Most government is by the rich for the rich. Government comprises a large part of the organized injustice in any society, ancient or modern. Civil government, insofar as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, and for the defence of those who have property against those who have none.’    

    ‘Mercy to the guilty is cruelty to the innocent.’    

    ‘By pursuing his own interest (the individual) frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.’    

    ‘Individual Ambition Serves the Common Good.’    

    ‘The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.’    

    ‘Man is an animal that makes bargains: no other animal does this – no dog exchanges bones with another.’   

    ‘There is no art which government sooner learns of another than that of draining money from the pockets of the people.’    

    ‘It must always be remembered, however, that it is the luxuries and not the necessary expense of the inferior ranks of people, that ought ever to be taxed.’    

    ‘Nothing is more graceful than habitual cheerfulness.’    

    ‘All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.’    

    ‘The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.’    

    ‘Science is the great antidote to the poison of enthusiasm and superstition.’    

    ‘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.’    

    ‘The rate of profit… is naturally low in rich and high in poor countries, and it is always highest in the countries which are going fastest to ruin.’    

    ‘To feel much for others and little for ourselves, that to restrain our selfish, and to indulge our benevolent affections, constitutes the perfection of human nature.’    

    ‘All money is a matter of belief.’    

    ‘The interest of [businessmen] is always in some respects different from, and even opposite to, that of the public … The proposal of any new law or regulation of commerce which comes from this order … ought never to be adopted, till after having been long and carefully examined … with the most suspicious attention. It comes from an order of men … who have generally an interest to deceive and even oppress the public.’    

    ‘The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess … It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue but something more than in that proportion.’    

    ‘Never complain of that of which it is at all times in your power to rid yourself.’    

    ‘With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches.’    

    ‘But avarice and ambition in the rich, in the poor the hatred of labour and the love of present ease and enjoyment, are the passions which prompt to invade property, passions much more steady in their operation, and much more universal in their influence. Wherever there is great property there is great inequality. For one very rich man, there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many.’    

    ‘Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all wealth of the world was originally purchased.’    

    ‘Wherever there is great property there is great inequality. For one very rich man, there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions.’    

    ‘The great secret of education is to direct vanity to proper objects.’    

    ‘Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to society… 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 not part of his intention’    

    ‘Happiness never lays its finger on its pulse.’    

    ‘The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it… He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard. He does not consider that…in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.’    

    ‘The learned ignore the evidence of their senses to preserve the coherence of the ideas of their imagination.’    

    ‘Virtue is more to be feared than vice because its excesses are not subject to the regulation of conscience.’  

    ‘I have never known much good done by those who affected to trade for the public good.’    

    ‘On the road from the City of Skepticism, I had to pass through the Valley of Ambiguity.’    

    ‘Defence is superior to opulence.’     

    ‘As soon as government management begins it upsets the natural equilibrium of industrial relations, and each interference only requires further bureaucratic control until the end is the tyranny of the totalitarian state.’    

    ‘A merchant, it has been said very properly, is not necessarily the citizen of any particular country.’   

    ‘In raising the price of commodities, the rise of wages operates in the same manner as simple interest does in the accumulation of debt. Our merchants and master manufacturers complain much of the bad effects of high wages in raising the price and thereby lessening the sale of their goods, both at home and abroad. They say nothing concerning the bad effects of high profits; they are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.’  

    ‘The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state ….As Henry Home (Lord Kames) has written, a goal of taxation should be to ‘remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.'‘    

    ‘He is led by an invisible hand to promote an end which was no part of his intention’    

    ‘Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life.’     

    ‘Consumption is the sole end and purpose of all production, and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident that it would be absurd to attempt to prove it. But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce.’    

    ‘Every man lives by exchanging.’  

    ‘The uniform, constant, and uninterrupted effort of every man to better his condition . . . is frequently powerful enough to maintain the natural progress of things toward improvement, in spite of the extravagance of government, and of the greatest errors of administration.’    

    ‘Goods can serve many other purposes besides purchasing money, but money can serve no other purpose besides purchasing goods.’    

    ‘It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow citizens.’    

    ‘A monopoly granted either to an individual or to a trading company has the same effect as a secret in trade or manufactures. The monopolists, by keeping the market constantly understocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate.’    

    ‘Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.’    

    ‘The world neither ever saw, nor ever will see, a perfectly fair lottery.’    

    ‘The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable.’    

    ‘Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.’    

    ‘Corn is necessary, silver is only a superfluity.’    

    ‘It is the interest of every man to live as much at his ease as he can; and if his emoluments are to be precisely the same, whether he does or does not perform some very laborious duty, it is certainly his interest, at least as interest is vulgarly understood, either to neglect it altogether or, if he is subject to some authority which will not suffer him to do this, to perform it in as careless and slovenly a manner as that authority will permit.’     

    ‘It is not the actual greatness of national wealth, but its continual increase, which occasions a rise in the wages of labour. It is not, accordingly, in the richest countries, but in the most thriving, or in those which are growing rich the fastest, that the wages of labour are highest. England is certainly, in the present times, a much richer country than any part of North America. The wages of labour, however, are much higher in North America than in any part of England.’    

    ‘Have lots of experiments, but make sure they’re strategically focused.’    

    ‘The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid, the nature of human affairs can scarce admit a remedy.’    

    ‘Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.’    

    ‘Fear is in almost all cases a wretched instrument of government, and ought in particular never to be employed against any order of men who have the smallest pretensions to independency.’  

    ‘The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, or applied, seem to have been the effects of the division of labour.’    

    ‘Great nations are never impoverished by private, though they sometimes are by public prodigality and misconduct.’   

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