Adam Smith Quotations
A collection of my favourite quotations
Adam Smith’s wisdom is as relevant today as in was in 1776 when The Wealth of Nations was first published.
On the division of labour…
It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people.
The Wealth Of Nations, Book I, Chapter I, p. 22, para. 10.
It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy…What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom.
The Wealth Of Nations, Book IV Chapter II, pp. 456-7, paras. 11-12.
…and trade specialisation
By means of glasses, hotbeds, and hotwalls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?
The Wealth Of Nations, Book IV, Chapter II, p. 458, para. 15.
In general, if any branch of trade, or any division of labour, be advantageous to the public, the freer and more general the competition, it will always be the more so.
The Wealth Of Nations, Book II, Chapter II, p.329, para. 106.
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 Wealth Of Nations, Book IV Chapter VIII, v. ii, p. 660, para. 49.
…and the distortion of trade
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices…. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.
The Wealth Of Nations, Book IV Chapter VIII, p. 145, para. c27.
A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a public register, facilitates such assemblies…. A regulation which enables those of the same trade to tax themselves in order to provide for their poor, their sick, their widows and orphans…renders such assemblies necessary. An incorporation not only renders them necessary, but makes the act of the majority binding upon the whole. In a free trade, an effectual combination cannot be established but by the unanimous consent of every single trader, and it cannot last longer than every single trader continues of the same mind. The majority of a corporation can enact a bye-law, with proper penalties, which will limit the competition more effectually and more durably than any voluntary combination whaever.
The Wealth Of Nations, Book IV Chapter VIII, p. 145, paras. c29-30.
To widen the market and to narrow the competition, is always the interest of the dealers…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
The Wealth Of Nations, Book I, Chapter XI, Conclusion of the Chapter, p.267, para. 10.
It is the highest impertinence and presumption… in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense… They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will.
The Wealth Of Nations, Book II, Chapter III, p.346, para. 36.
The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.
The Wealth Of Nations, Book IV, Chapter II, p. 456, para. 10.
There is no art which one government sooner learns of another than that of draining money from the pockets of the people.
The Wealth Of Nations, Book V Chapter II Part II, Appendix to Articles I&II, p. 861, para. 12.
The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities…
The Wealth Of Nations, Book V Chapter II Pt II, v. ii, p. 825, para. 3.
The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person…
The Wealth Of Nations, Book V Chapter II Pt II, p. 825, para. 4.
Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay…
The Wealth Of Nations, Book V Chapter II Pt II, p. 826, para. 5.
Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible, over and above what it brings into the public treasury of the state…
The Wealth Of Nations, Book V Chapter II Pt II, p. 826, para. 6.
The proprietor of stock is necessarily a citizen of the world, and is not necessarily attached to any particular country. He would be apt to abandon the country in which he was exposed to a vexatious inquisition, in order to be assessed to a burdensome tax, and would remove his stock to some other country where he could either carry on his business, or enjoy his fortune more at his ease.
The Wealth Of Nations, Book V, Chapter II, Article II, pp. 848-9. para. f. 8
The bounty to the white-herring fishery is a tonnage bounty; and is proportioned to the burden of the ship, not to her diligence or success in the fishery; and it has, I am afraid, been too common for vessels to fit out for the sole purpose of catching, not the fish, but the bounty.
The Wealth Of Nations, Book IV, Chapter V, p. 520, para 32.
On import controls
As a rich man is likely to be a better customer to the industrious people in his neighbourhood than a poor, so is likewise a rich nation. [Trade restrictions,] by aiming at the impoverishment of all our neighbours, tend to render that very commerce insignificant and contemptible.
The Wealth Of Nations, Book IV, Chapter III, Part II, p.495, para. c11.
Public services are never better performed than when their reward comes in consequence of their being performed, and is proportioned to the diligence employed in performing them.
The Wealth Of Nations, Book V, Chapter 1, Part II, p. 719, para. b20.
…and perverse incentives
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…either to neglect it altogether, or…to perform it in [a] careless and slovenly a manner…
The Wealth Of Nations, Book V, Chapter I, Part III, Article II, p. 760, para. f7.
If [justice] is removed, the great, the immense fabric of human society, that fabric which to raise and support seems in this world if I may say so has the peculiar and darling care of Nature, must in a moment crumble into atoms.
The Theory Of Moral Sentiments, Part II Section II Chapter III, p. 86, para.4.
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.
Lecture in 1755, quoted in Dugald Stewart, Account Of The Life And Writings Of Adam Smith LLD, Section IV, 25.
…and human empathy
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, Part I, Section I, Chapter I, p. 9, para.1.