
The Wealth of Nations, Book 2
by Adam Smith
'The Wealth of Nations, Book 2' Summary
Book II: Of the Nature, Accumulation, and Employment of Stock
Of the Division of Stock:
When the stock which a man possesses is no more than sufficient to maintain him for a few days or a few weeks, he seldom thinks of deriving any revenue from it. He consumes it as sparingly as he can, and endeavours by his labour to acquire something which may supply its place before it be consumed altogether. His revenue is, in this case, derived from his labour only. This is the state of the greater part of the labouring poor in all countries.
But when he possesses stock sufficient to maintain him for months or years, he naturally endeavours to derive a revenue from the greater part of it; reserving only so much for his immediate consumption as may maintain him till this revenue begins to come in. His whole stock, therefore, is distinguished into two parts. That part which, he expects, is to afford him this revenue, is called his capital.
Of Money Considered as a particular Branch of the General Stock of the Society:
"From references of the first book, that the price of the greater part of commodities resolves itself into three parts, of which one pays the wages of the labour, another the profits of the stock, and a third the rent of the land which had been employed in producing and bringing them to market: that there are, indeed, some commodities of which the price is made up of two of those parts only, the wages of labour, and the profits of stock: and a very few in which it consists altogether in one, the wages of labour: but that the price of every commodity necessarily resolves itself into some one, or other, or all of these three parts; every part of it which goes neither to rent nor to wages, being necessarily profit to somebody."
Of the Accumulation of Capital, or of Productive and Unproductive Labour:
"One sort of labour adds to the value of the subject upon which it is bestowed: there is another which has no such effect. The former, as it produces a value, may be called productive; the latter, unproductive labour. Thus the labour of a manufacturer adds, generally, to the value of the materials which he works upon, that of his own maintenance, and of his master's profit. The labour of a menial servant, on the contrary, adds to the value of nothing."
Of Stock Lent at Interest:
"The stock which is lent at interest is always considered as a capital by the lender. He expects that in due time it is to be restored to him, and that in the meantime the borrower is to pay him a certain annual rent for the use of it. The borrower may use it either as a capital, or as a stock reserved for immediate consumption. If he uses it as a capital, he employs it in the maintenance of productive labourers, who reproduce the value with a profit. He can, in this case, both restore the capital and pay the interest without alienating or encroaching upon any other source of revenue. If he uses it as a stock reserved for immediate consumption, he acts the part of a prodigal, and dissipates in the maintenance of the idle what was destined for the support of the industrious. He can, in this case, neither restore the capital nor pay the interest without either alienating or encroaching upon some other source of revenue, such as the property or the rent of land."
The stock which is lent at interest is, no doubt, occasionally employed in both these ways, but in the former much more frequently than in the latter."
Of the different employment of Capital:
"A capital may be employed in four different ways; either, first, in procuring the rude produce annually required for the use and consumption of the society; or, secondly, in manufacturing and preparing that rude produce for immediate use and consumption; or, thirdly in transporting either the rude or manufactured produce from the places where they abound to those where they are wanted; or, lastly, in dividing particular portions of either into such small parcels as suit the occasional demands of those who want them."
Book Details
Language
EnglishOriginal Language
EnglishPublished In
1776Authors

Adam Smith
Scotland
Adam Smith was a Scottish economist, philosopher as well as a moral philosopher, a pioneer of political economy, and a key figure during the Scottish Enlightenment, also known as ''The Father of Econo...
Books by Adam SmithDownload eBooks
Listen/Download Audiobook
- Select Speed
Related books

Leviathan (Books I and II) by Thomas Hobbes
Leviathan, or The Matter, Forme and Power of a Common Wealth Ecclesiasticall and Civil, commonly called Leviathan, is a book written in 1651 by Thomas...

Struggles and Triumphs, or Forty Years' of Recollections of P.T. Barnum, written by Himself by P. T. Barnum
This autobiography details the life and business endeavors of P.T. Barnum, the founder of the "Greatest Show on Earth." Barnum, a multifaceted figure,...

Tact by Ralph Waldo Emerson
Tact is a collection of essays by Ralph Waldo Emerson, an American essayist, lecturer, and poet who led the Transcendentalist movement of the mid-19th...

No Animal Food and Nutrition and Diet with Vegetable Recipes by Rupert H. Wheldon
This groundbreaking book, published in the early 20th century, is considered the first vegan cookbook. It goes beyond simply offering recipes, provid...

Wilhelm Meister's Apprenticeship Volume 1 by Johann Wolfgang von Goethe
Wilhelm Meister's Apprenticeship is a complex and multi-layered novel that explores themes of self-discovery, societal pressures, and the search for m...

Vidas Paralelas Tomo IV by Lucius Mestrius Plutarchus
Plutarch's Parallel Lives is a collection of biographies of famous Greek and Roman figures, written in the 1st and 2nd centuries AD. The book compares...

On Everything by Hilaire Belloc
'On Everything' is a collection of essays and short writings by Hilaire Belloc, a prolific writer known for his wit and insightful observations. The b...

Elective Affinities by Johann Wolfgang von Goethe
Elective Affinities explores the complexities of human relationships, particularly within the confines of marriage and societal expectations. It exami...

Anna Karenina, Book 8 by Leo Tolstoy
Set against the backdrop of 19th-century aristocratic Russian society, Anna Karenina delves into the complexities of love, marriage, and morality. The...

Honey-Bee by Anatole France
This captivating tale takes readers on a remarkable exploration of intellectual curiosity, societal norms, and the power of human connection. Anatole...
Reviews for The Wealth of Nations, Book 2
No reviews posted or approved, yet...