Actually, he didn't write that at all. He writes about the three components of price: "But the whole price of any commodity must still finally resolve itself into some one or other, or all of those three parts; as whatever part of it remains after paying the rent of the land, and the price of the whole labour employed in raising, manufacturing, and bringing it to market, must necessarily be profit to somebody."
Another quote: "The real value of all the different component parts of price, it must be observed, is measured by the quantity of labour which they can, each of them, purchase or command. Labour measures the value not only of that part of price which resolves itself into labour, but of that which resolves itself into rent, and of that which resolves itself into profit."
I've actually been meaning to buy myself a copy of the book to read, but textbooks still take up the majority of my reading time. For those that are interested, you can actually download "Wealth of Nations" from Google Books (since the old editions are public domain).
You can get the book with bittorrent, btw i dont think its illegal because the man is dead for 300 years already. I read somewhere that economics is not a natural science, in the sense of providing objective answers to precise questions, but it is a political science. This can be very well understood by reading Adam Smith. The main thrust of his book is on deregulation and freeing up of international trade. He explains in detail how special interests, like the domestic producers of textiles in England, got the governement to erect prohibit for import of textiles and export of wool.... He also explains with great clarity how this harms the country as a whole. For trading, there are great parts having to do with pricing of commodities. I find them very helpful to keep my mind straight. But this is only useful to a trader of commodities with a time horizon of months or years, like myself, not the daytrader obviously.
thanks for that kotika....its insperations like that that will get me through the book when it gets a bit dry and my head starts to hurt j/k
Robots will build the other Robots. Capitalisim is based on charging for labor. Once labor is free then Capitalisim as we know it will become obselete. John
Adam Smith never calls it economics in The Wealth of Nation. He calls it political economy. Book Four is even titled "Of Systems of Political Economy."