Principium Volume II, Book 8, Quote 850, 852, and 855

850. (8-4-2010) (On Competition)ATJ By dividing the whole circulation into a great number of parts, the failure of any one company, an accident which, in the course of things, must sometimes happen, becomes of less consequence to the public. This free competition, too, obliges all…to be more liberal in their dealings with their customers, lest their rivals should carry them away. In general, if any branch of trade, or any division of labour [sic], be advantageous to the public, the freer and more general the competition, it will always be the more so.

- Adam Smith – The Wealth of Nations, 1776


852. (8-04-2010) Both productive and unproductive labourers [sic], and those who do not labour at all, are all equally maintained by the annual produce of the land and labour of the country. This produce, how great soever [sic], can never be infinite, but must have certain limits. According therefore, as a smaller or greater proportion of it is in any one year employed in maintaining unproductive hands, the more in the one case and the less in the other will remain for the productive, and the next year’s produce will be greater or smaller accordingly; the whole annual produce, if we except the spontaneous productions of the earth, being the effect of productive labour.

- Adam Smith – The Wealth of Nations, 1776


855. (8-5-2010) (The effect of using capital to encourage the production of something of value.)ATJ In mercantile and manufacturing towns, where the inferior ranks of people are chiefly maintained by the employment of capital, they are in general industrious, sober, and thriving;…In those towns which are principally supported by the constant or occasional residence of a court, and in which the inferior ranks of people are chiefly maintained by the spending of revenue, they are in general idle, dissolute, and poor; as at Rome, Versailles….[T]here is little trade or industry in any of the parliament towns…and the inferior ranks of people, being chiefly maintained by the expense of the members of the courts of justice, and of those who come to plead before them, are in general idle and poor.

- Adam Smith – The Wealth of Nations, 1776

(This is very interesting when we consider it in context to Washington D.C. today and that of Rome. We look at Rome from this distance in the future and we see such opulent architecture, buildings, roads, and palaces of grandeur. What we may and often do not learn is that Roman grandeur was built off the taxation of the productive masses of their empire not by the produce of Rome itself. Compare that with Washington D.C., with its fantastic buildings and boulevards, again built by the taxes of the people of the United States, but the poverty and idleness of the inhabitants of that city is known.)ATJ

(I know this book is filled with old language and you might be thinking that this may be hard to understand at times, but it lays the foundation for the future economic study of Milton Friedman and Ludwig Von Mises and even Thomas Sowell, who are so much easier to comprehend, just stick with it.)ATJ

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