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  Townprovides facilities and luxury  Countryprovides 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)Agriculture 2)Manufactures 3)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.