The Wealth of Nations. The Theory of Moral Sentiments

Smith believes the natural progress of economic growth to be a reciprocal relationship between the country, whose primary economic activity is agriculture, and towns, which consist of artisans who make tools and household goods for farmers. Both groups need each other, but agriculture must develop first, as it is the primary and original source of economic activity. Smith states this natural development—beginning with the growth of agriculture and progressing into manufacturing performed in the towns—is one that would arise in a market free of interference. This is partly because land is a more secure investment than manufactures or trade. Smith reasons that the country supplies towns with “means of substance and the materials of manufacture,” and the town repays the country with manufactured produce” (121).

Smith explains further that this exchange does not have a winner or a loser, but rather that it is reciprocal. Smith concludes, however, that towns have followed an unnatural course by growing more rapidly than rural areas. He also comments that more resources have been devoted to manufacturing than naturally should have been. Smith argues this is the result of government interference through laws. He adds, “According to the natural course of things, therefore, the greater part of the

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