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Adam Smith, “Introduction and Plan of the Work” in his Wealth of Nations

Adam Smith’s concise ‘Introduction and Plan of the Work’ (Cannan, 1904)

presents a labour productivity story, mainly for professional men to consume,

developed throughout ‘An Inquiry into the Nature and Causes of the Wealth of

Nations’. Smith provides his introduction in just four paragraphs and then

devotes a paragraph to each of the five books within the work. Apart from

Smith’s overview of Book IV, his section on the plan of the work accurately

reflects the contents of his books. Interestingly, Smith’s own introduction

refrains from mentioning the invisible hand, competition, markets, self-

interest, laissez faire and the system of natural liberty. Many academics

(Naverson, 2003; Wright, 2007; Bradley 2010; Kurz, 2016) have focused

almost exclusively on a part or a collection these ‘famous’ passages of Smith’s

work and largely ignored other areas of the piece. Smith’s omission of the

well-known aspects of Wealth of Nations (WN) in his introduction allows him

to present a structured argument that resonates throughout the work about

the productivity of (productive) labour as the source of a nation’s annual

wealth. Smith provides an introduction with the omission of famous aspects of

his work to focus on the most important themes of the work.

The first paragraph of Smith’s introduction (Cannan, 1904) is one sentence

and it uses perspicuous language to outline the nature of the annual wealth of

a nation. Firstly, Smith writes in annualised terms, this means his analysis can

be used to compare the wealth of a nation to itself in previous years – hence,

the growth in wealth of a nation can be observed. Secondly, Smith identifies

that what is consumed annually are necessaries and conveniences. For Smith,

necessaries are goods required for subsistence, whereas conveniences are

luxuries. Thirdly, the annual wealth of a nation is the annual labour of that

nation. Hence, all necessities and conveniences are a direct product of the

annual labour of a nation. Moreover, necessities and conveniences can also be

imported – paid for by the produce of labour that is exported. The importance

of Smith’s first sentence cannot be overstated as it is a key pillar throughout

his entire work. Smith purposely introduces his main themes in his

introduction and does not mention his ‘famous’ passages because they

successfully build upon his main themes later in the work.

Paragraph two of Smith’s introduction observes the supply to a nation

depends upon the ratio between produce and population– this is a per capita

idea. In paragraph three, Smith expands that the distribution of produce

among its population is determined by labour productivity (skill, dexterity and

judgment), productive and unproductive labour. Smith has a physicalist

conception of labour. Broadly, smith views labour that produces a service as

unproductive; whereas, labour that produces a good is productive. Smith later

qualifies this distinction between productive and unproductive labour with an

example of unproductive labour in Book II, Chapter III of WN: “Like the

declamation of the actor, the harangue of the orator, or the tune of the

musician, the work of all of them perishes in the very instant of its

production” (Cannan, 1904, p. 281). Smith’s argument about unproductive

labour is that it vanishes the moment it is produced. Smith clearly builds upon

his introduction when he qualifies his original assertions. For Smith, the

distinction between unproductive labour and productive labour is critical;

hence, the distinction is made in his introduction, as opposed to his ‘famous’

passages which are not in his introduction.

After introducing the nature of the WN in paragraph one to three, Smith turns

his attention to the causes of the WN in paragraph four. Smith argues that in

thriving nations necessaries are quickly met due to frugal and industrious

individuals’ want to improve. Smith makes a distinction between animal

instinct for preservation and the human sense of vanity, ambition and

progress. For Smith, the latter is the cause of the WN. Therefore, in thriving

nations, more unproductive labour (for services) can be supported as the need

for necessaries are already met. The rest of Smith’s work in the WN builds

upon human nature as the cause for the WN. In Book I, Chapter VII, Smith

writes of a developmental path in which the demand for labourers increases as

the wealth fund of a nation increases. As more labourers are employed, more

surplus value is created – in turn, this surplus is used to increase the number

of labourers. This continuity between Smith’s introduction and the rest of the

WN allows him to carry his reader though a logical route of explanation.

Smith finishes his concise introduction by the end of paragraph four. The rest

of the ‘introduction and plan of the work’ is devoted to providing a clear plan

of the work. Firstly, Smith briefly, yet appropriately, notes that his first book

examines the productive powers of labour and its distribution among men in

society. Smith later expands on this topic in Book I with the division of labour

(enhancing labour productivity) and individuals’ contributions to useful

production to distribute labour’s produce among men. Smith successfully

expands upon his plan of the work in Book I. Therefore, in this case Smith’s

plan of the work can be considered successful in its ability to provide an

accurate reflection of Book I.

Furthermore, Smith’s overviews (in the plan of the work) of Books II, III and

V can be considered successful as they provide an accurate reflection of the

contents of their respective books. Smith reiterates, in the paragraph on Book

II, that the abundance or scantiness of a nation’s supply depends on the

proportion of labour that is employed in productive labour (as opposed to

unproductive labour). Book II in WN further explores this relationship,

introduced in the plan of the work, between a nation’s supply as the ratio of

productive labour to unproductive labour. Smith’s paragraph in the plan of

the work for Book III notes that since the Roman Empire, European nations

have promoted industry in towns over agricultural produce in the countryside.

Expanding, Smith explains that the wealth of a nation is enhanced by having a

higher proportion of labour devoted to industry in towns compared to

agriculture in the countryside – for agricultural produce it is difficult to reap

the benefits from the division of labour. Smith states he will explore the

causes of Europe’s policy to focus on industry in towns rather than

agricultural produce in the countryside. Smith’s overview of Book III, as for

the books that precede it, provides a fitting reflection of its contents.

Furthermore, Book V is the last book that Smith provides an accurate

overview for in his plan of the work. Smith states, in his overview, book V aims

to identify what the necessary expenses of a sovereign are and how they are to

be defrayed by society. Secondly, Smith writes that he aims to investigate the

different methods (such as a tax) in which a society may be made to contribute

towards defraying necessary expenses – each method will be evaluated to

determine their principle advantages and inconveniences. Thirdly, Smith aims

to identify the causes of governments to mortgage some part of this revenue,

or contract debts, and the effect this has on real wealth (annual produce).

Smith’s overview of Book V in the plan of the work is an accurate reflection of

the contents of the book because the book first explores costs that effect the

whole of society, such as Defence, Justice, Public Institutions. Book V then

investigates the best ways to defray those costs to society. Finally, Smith

studies Public debts and the effect these have on a Nation’s annual output.

Cleary, for Book V Smith sets out, in his plan of the work, a path that the book

follows carefully.

Contrastingly, Smith’s overview of Book IV is inaccurate. Midway through

paragraph eight in Smith’s plan of the work, Book IV is introduced as an

inspection of varying theories of political œconomy that gave rise to different

policies; however, Smith spends very little time summarising the literature

that precedes him in Book IV. Instead, Smith uses Book IV to further develop

his own arguments. Therefore, unlike the rest of Smith’s plan of the work

(where Smith accurately outlines Books I, II, III and V), paragraph eight fails

to provide an accurate description for the content of Book IV.

In conclusion, Adam Smith presents a concise overview, in four paragraphs, of

his labour productivity story in the ‘Introduction and Plan of the Work’.

Smith’s introductory story assumes the productivity of (productive) labour as

the source of a nation’s annual wealth – as developed throughout WN. In the

first two paragraphs smith conveys the main theme of the WN to the

professional male reader. To be concise in his introduction, Smith omits well

known aspects of his work, that many modern academics have explored, to

present a logical path for the reader to follow. Apart from Smith’s overview of

Book IV, his section on the plan of the work accurately reflects the contents of

his books.

Bradley, M. (2010) ADAM SMITH’S SYSTEM OF NATURAL LIBERTY:

COMPETITION, CONTESTABILITY, AND MARKET PROCESS.

Journal of the History of Economic Thought, Vol. 32, no. 2, pp. 237-262.

Cannan, E. (ed.) (1904) An Inquiry into the Nature and Causes of the

Wealth of Nations by Adam Smith, edited with an Introduction,

Notes, Marginal Summary and an Enlarged Index. Available from:

http://lf-oll.s3.amazonaws.com/titles/237/Smith_0206-01_EBk_v6.0.pdf

[Accessed: 16th November 2016]

Kurz, H. D. (2016) Adam Smith on markets, competition and

violations of natural liberty. Cambridge Journal of Economics, Vol. 40,

no. 2, pp. 615-638.

Naverson, J. (2003) The “Invisible Hand”. Journal of Business Ethics, Vol.

46, no. 4, pp. 201-212.

Wright, J. B. (2007) The Treatment of Smith’s Invisible Hand. Journal

of Economic Education, Vol. 38, no. 3, pp. 341-358.