488 things from this book went into her brain. Here are the first 6.
Adam Smith held that a nation's supply of goods depends on two things: how skilfully and wisely its labour is applied, and how many of its people are doing useful work compared with those who are not.
Adam Smith held that the skill and method with which work is done matters more to a society's abundance than the sheer number of people working, and that a frugal, hard-working person can gain more than the poorest societies could give.
Adam Smith held that a nation's yearly supply of goods depends on how many people are doing useful productive work compared with those who are not. The more capital put to work, the more productive labour it sets going.
Adam Smith held that the biggest gains in what labour can produce come from dividing work into separate parts, with each worker doing one piece. The division is often easiest to see in small trades, where all the workers can be watched in one place.
Adam Smith showed with the pin factory that splitting a job into many small distinct operations, each done by a practised hand, multiplies what a group can produce far beyond what the same people could manage working alone.
Adam Smith held that the division of labour raises productive power in every trade, and that the more advanced a society becomes, the more each person tends to do just one part of the work.
Adam Smith noted that farming resists this kind of splitting, since the seasons call for the same workers to do many different tasks, which is one reason farm productivity improves more slowly than manufacturing.
Adam Smith argued that each country tends to gain most from making the goods that suit its own soil, climate and situation, since those goods can then be made better and cheaper than elsewhere.
Adam Smith held that dividing work into simple steps raises output in three ways: workers get more skilled, less time is lost switching tasks, and machines get invented.
Adam Smith noticed that switching between different tasks wastes time and dulls focus, since a person who keeps changing jobs seldom applies full effort to any of them.
Adam Smith observed that people who focus on one simple task are more likely to find easier methods for it, so many useful improvements come from the workers doing the job.
Adam Smith observed that improvements to machines often come from the makers of machines and from thinkers who watch closely, and that dividing intellectual work into branches makes each person more skilled and saves time.
Adam Smith held that when each worker specialises and produces more than they need, trading the surplus with others spreads plenty through every rank of society.
Adam Smith showed that even a plain woollen coat depends on the work of many people, from shepherds and carriers to dyers and weavers, so everyday goods reflect a web of cooperation most of us never see.
Adam Smith argued that even the humblest person's household goods rely on the combined skills of thousands, so we should not underrate how much we depend on others.
Adam Smith held that the division of labour grows slowly from a natural human urge to trade and exchange, not from anyone planning the wealth it later creates.
Adam Smith held that we get most of what we need from others by appealing to their self-interest rather than their kindness, so a good offer says: give me what I want and you shall have what you want.
Adam Smith observed that people in civilised society need the help of great numbers of others, while their own lives are enough to win only a few real friends.
Adam Smith held that people specialise because they can trade their surplus for what they need, so the certainty of exchange is what encourages each person to develop a particular skill to a high level.
Adam Smith argued that many differences in talent between adults grow out of habit, custom and training after childhood, rather than being fixed by nature, and that the division of labour widens them.
Adam Smith observed that differences in talent only help people when they can exchange what they make, since animals of one species with different skills gain little from each other without a way to trade.
Adam Smith held that the division of labour is limited by the size of the market, since a person can only specialise if he can trade his surplus for what he needs. A small market keeps people doing many jobs themselves.
Adam Smith observed that a trade can only support full-time work where there are enough customers nearby, so a village workman must do many kinds of work. Specialists thrive in towns and places with more buyers.
Adam Smith showed that water transport opens a far wider market than land carriage, so industry grows first along coasts and navigable rivers. Cheap transport is what lets a business reach enough customers to specialise.
Adam Smith argued that trade between distant places depends on the cost of moving goods, and cheap transport lets each place become a market for the other. Lowering the cost of reaching customers widens what can be sold profitably.
Adam Smith held that markets grow outward from the sea and great rivers, so the inland parts of a country improve later, since their market is only the land around them. Cheap transport opens the whole world to a producer.
Adam Smith observed that early civilisation grew around the calm Mediterranean, where fear of open water kept navigation close to shore. Safe, sheltered routes let trade and skill spread before people dared bolder voyages.
Adam Smith saw that Egypt's many canals let goods and people move cheaply between towns, villages and farms, and he thought this easy inland trade was a main cause of its early improvement.
Adam Smith noted that Bengal and eastern China grew rich through their dense networks of inland waterways rather than through foreign trade. Making it cheap to move goods nearby can build prosperity on its own.
Adam Smith noted that land far from the sea or from navigable rivers stays poor in trade, and that a river running through another territory can be blocked by whoever controls its mouth.
Adam Smith observed that once labour is divided, most of a person's needs are met by trading the surplus of their own work for what others produce, so everyone becomes a kind of merchant.
Adam Smith saw that barter stalls when the person with spare goods cannot find someone who wants what they have to offer in return. Every prudent person therefore keeps a stock of something others are likely to accept.
Adam Smith argued that metals suit money because they keep well, can be divided without loss and be joined back together, so a buyer can pay the exact amount needed.
Adam Smith held that a public stamp on coins saves everyone the trouble of weighing and testing metal, which makes trade faster and fairer. Without it, buyers were open to cheap fakes that looked like the real thing.
Smith's point is that a trusted, standard mark lets people accept value without checking every detail themselves. Good certification, in any trade, cuts the cost of doing business and protects honest sellers and buyers alike.
Smith observed that the names of old coins, like the pound, first described a set weight of metal before they became mere labels. Over time a unit's name can drift away from the real thing it once measured, so it is worth asking what a standard truly stands for.
Adam Smith observed that when rulers quietly reduce the metal in their coins, debtors gain and creditors lose, since debts are paid back in the same nominal sum. Watch out for loose money, as it quietly shifts wealth from lenders to borrowers.
Adam Smith drew a useful split between value in use, what a thing is good for, and value in exchange, what it will buy. The two often run in opposite directions, as water is vital yet cheap while a diamond is nearly useless yet costly.
Adam Smith was willing to be tedious in order to be clear, and he admitted that abstract subjects may stay hard even after careful explanation. For any hard idea, it is worth taking the time to explain it fully rather than rushing.
Adam Smith held that a person is rich or poor according to how much other people's labour they can command or afford to buy, since few needs can be met by one's own work once trade is divided up.
Adam Smith held that the true cost of anything is the toil and trouble of getting it, and that money and goods are really stored labour exchanged for other labour. Before money, labour was the first price paid for everything.
Adam Smith held that wealth is really the power to command other people's work and its produce, so a fortune is worth exactly the amount of labour it can buy.
Adam Smith held that labour is the true measure of value, but since hardship and skill are hard to measure exactly, prices are settled by rough bargaining in the market, which is good enough for ordinary business.
Adam Smith observed that once money is the common medium of trade, people judge the value of everything by its price in money, since that is the figure they meet first in daily dealings.
Adam Smith held that money itself changes in value, so it makes a poor fixed measure. He argued that the real worth of anything is the labour it costs to acquire, which stays steady for the person doing the work.
Adam Smith distinguished the real price of labour, meaning the goods and necessities a worker can buy with it, from its nominal price in money. He taught that a worker is rich or poor according to the real price.
Adam Smith held that a money rent can lose its value over time, so a family wanting a steady income should not fix it as a set sum of coin. Tying it to a quantity of goods or metal protects it better.
Adam Smith observed that a fixed amount of coin can buy less as the value of the metal it holds falls. Long-term agreements should be wary of this slow erosion.
Adam Smith showed that rents fixed in corn kept their worth far better than rents fixed in money over the centuries. Payments linked to a real good hold up better than a fixed sum of currency.
Adam Smith warned that repeatedly changing the official denomination or metal content of coins can shrink old money debts almost to nothing. Anyone owed a fixed sum should watch for this kind of hidden loss.
Adam Smith observed that the everyday money price of a commodity can stay steady for decades while its price moves sharply from year to year. Short-term swings can hide a steady underlying level, so judge prices over the long run.
Adam Smith held that labour is the only universal and accurate measure of value, since it lets us compare what things are really worth across different times and places. Money measures value well only at the same time and place.
Adam Smith noted that a merchant trading between distant places need only consider the difference between the money he pays and the money he will receive. Real value differences abroad matter less to him than the margin he earns.
Adam Smith noted that people attend mainly to the money price of goods, yet to judge real value across times and places you must compare what the money could buy in labour, not just the silver amount.
Adam Smith observed that a trading nation tends to keep using the metal it first adopted as money for its measure of value, even after the original need for it has passed.
Adam Smith pointed out that people often keep counting their wealth in an old unit, so accounts can outlast the coins they once described, and a debtor's offer in a different form could be refused or accepted on agreed terms.
Adam Smith explained that when the government fixes a legal exchange rate between two metals, the difference between the standard metal and the other becomes little more than a name while that rate holds.
Adam Smith observed that which metal seems the true measure of value depends on which one people use for keeping accounts and writing debts. The metal named in everyday contracts is the one that looks steady.
Adam Smith held that when a coin's value is fixed by law against another metal, the most valuable metal in it effectively sets its worth. Coins that are worn or made of cheap metal still pass at face value, so people judge them by the good metal behind them.
Adam Smith explained that when the mint takes bullion without charging a fee, the coin price becomes the fixed benchmark for the metal. Market prices tend to settle around that benchmark.
