Made by:Blanca del Cuvillo

I. OF THE NATURAL PROGRESS OF

OPULENCE

CHAPTER’S MAIN IDEAS

According to Adam Smith, the most important activity in the civilized society consists in the exchange, which occurs between the country and the town.

The opulence of the country will mean the opulence of the town.

*Definition of opulence: Abundance of wealth

THE EXCHANGE BETWEEN THE

COUNTRY AND THE TOWN It is the exchange of rude for

manufactured products. The country provides the town the

goods for subsistence and the materials of manufacture.

A part of the manufactured products will go back to the country.

ADVANTAGES OF THE DIVISION OF LABOUR

People from the country sell the surplus of their production in the market of the town and buy manufactures made by the citizens in it.

In the market, the price of a good is always the same, it doesn’t matter if the product comes from a near or a far place.

The cultivators from the country near the market will gain:• The ordinary profits of agriculture• The equivalent to the value of carrying the

products from distant lands

PRICES OF RUDE GOODS

Example: Price of corn

-Country 1 (1 mile)-Country 2 (20

miles)

MARKET

PROGRESS OF OPULENCE

Town provides facilities and luxury

Country provides subsistence

The improvement of the country is more important than the increase of the town for the progress of the general opulence.

NATURAL INCLINATION OF MAN

People tend to invest in agriculture because it is more secure than manufactures or foreign trade. PROBLEM: The town can’t grow more of

what its agriculture is able to support.

SOLUTION: Agriculture needs artificers to develop.Example:

Carpenter

TOWN

Smith

Butcher

Baker

ACCUMULATION OF STOCK

Places with uncultivated lands

• Invests in cultivating lands (agriculture)

• Becomes a planter• Can be independent

Places without uncultivated lands

• Invests in developing its techniques of production

• Becomes a manufacturer

• Depends on the market

When an artificer acquires more stock in:

HOW TO DEVELOP A COUNTRY

The surplus part of the production for which there isn’t demand inside should be exchanged abroad for something for which there exists demand.

It doesn’t matter if the capital employed is national or foreigner.

*A nation can have a high grade of opulence if its exportation trade is carried on by foreigners.

CONCLUSSION Most of the capital of every growing

society is in order devoted to:1)Agriculture2)Manufactures3)Foreign commerce

A nation will reach the opulence when there is a lot of surplus from the country, which allows the development of it and of the towns.