
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

Prophet by D. H. Lawrence
The Prophet is a collection of philosophical essays presented as speeches delivered by a wise, exiled prophet named Almustafa. Each speech explores va...

Zapiski iz podpolya (Notes from the Underground) by Fyodor Dostoyevsky
Notes from Underground by Fyodor Dostoevsky is a sophisticated novell with extremely hard to comprehend philosophical ideas lying on the border of par...

The Wealth of Nations, Book 5 by Adam Smith
An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to by its shortened title The Wealth of Nations, is the magnum opus...

But, I Don't Think by Randall Garrett
In a future where humanity has spread across the galaxy, a complex and unusual social structure has evolved. The story revolves around the concept of...

Arroyo by Élisée Reclus
This book is a poetic and philosophical exploration of the natural world, following the journey of a single stream as it flows through various landsca...

Capital and Interest by Frederic Bastiat
Capital and Interest is an essay by French economist Frédéric Bastiat that addresses the popular fallacy of the day that capital should be available t...

Lettres persanes - Tome premier by Charles-Louis de Secondat, baron de La Brède et de Montesquieu
Les Lettres persanes est un roman épistolaire du XVIIIe siècle, où Montesquieu utilise la perspective de deux voyageurs persans, Usbek et Rica, pour c...

Leviathan, or The Matter, Forme and Power of a Common Wealth Ecclesiasticall and Civil by Thomas Hobbes
Leviathan or The Matter, Forme and Power of a Commonwealth Ecclesiasticall and Civil, commonly referred to as Leviathan, is a book written by Thomas H...

Swann's Way by Marcel Proust
Swann's Way is the first book in the seven-volume work In Search of Lost Time, or Remembrance of Things Past, by Marcel Proust. It is a novel written...

Fables de La Fontaine, livre 11 by Jean de La Fontaine
Ce onzième livre des fables de Jean de La Fontaine est celui qui contient le plus petit nombre de fables: 10. Toutefois, les textes de ces fables sont...
Reviews for The Wealth of Nations, Book 2
No reviews posted or approved, yet...