Adam Smith and M. Garnier present a comprehensive investigation into the foundational mechanics of political economy, shifting the focus from mercantilist gold accumulation to the productive powers of human labor. The core argument rests on the observation that the division of labor is the primary engine of economic progress, drastically increasing output through specialized dexterity, time-saving, and machinery invention. However, this division is strictly limited by the extent of the market, making trade infrastructure and open exchange vital to national opulence.
As societies advance beyond primitive stages, the simple produce of labor is subject to deductions for rent and profit, transforming the price of commodities into a tripartite division comprising wages, profit, and land rent. Smith rigorously distinguishes between the natural price—covering the ordinary costs of production—and the market price, which fluctuates around the center based on supply and demand. Monopolies, corporation laws, and state restrictions distort this natural equilibrium, artificially inflating prices and misallocating capital.
The accumulation of stock and the distinction between productive and unproductive labor form the machinery of capital growth. Smith analyzes how capital is distributed across agriculture, manufacturing, wholesale, and retail, demonstrating that self-interest naturally directs capital toward the most advantageous national employments when left free from government bounties and prohibitions.
Addressing systems of political economy, the authors dismantle the mercantile fallacy that wealth consists solely of money and that national gain requires an adverse trade balance. Through detailed critiques of colonial policy, taxation systems, and public debts, the work argues for the abolition of artificial restraints and the establishment of natural liberty.
The treatise concludes by outlining the legitimate duties of the sovereign, including defense, justice, and public works, alongside an analysis of taxation principles. By establishing that individuals pursuing their own interests under conditions of justice are led by an invisible hand to promote societal ends, the work lays the permanent foundation for modern economic science and commercial freedom.
