Adam Smith: Labor Wealth

Adam Smith Money Quote saying It was work that bought the world, not money or precious metals, but labor that bought the wealth of the world. Adam Smith said:
 

 

“Labour was the first price, the original purchase – money that was paid for all things. It was not by gold or by silver, but by labour, that all wealth of the world was originally purchased” — Adam Smith

In this quote, Adam Smith is discussing the origins and fundamental role of labor in the creation of wealth. He states that “labor was the first price, the original purchase-money” used to obtain all things of value in the world.

Smith is arguing that throughout history, it was not gold, silver or other currencies that were primarily used to acquire wealth, but rather human labor itself. People exchanged their labor and work as the original “payment” to produce useful goods, services and assets.

In essence, the quote establishes labor as the original and most basic form of payment that drove early economic transactions and allowed for the accumulation of wealth over time. Smith sees labor as the primary commodity exchanged by humans to fulfill their needs and desires, long before money was established. It reflects his view that labor is the ultimate source of all value in an economy.

Birthday: c. 16 June – Death: July 17, 1790

Adam Smith: Common Scarcity

Adam Smith Money Quote saying (The Wealth of Nations, 1776) that one of the most frequent complaints heard is that there isn’t enough money. Adam Smith said:
 

 

“No complaint… is more common than that of a scarcity of money” — Adam Smith

In this quote, Adam Smith seems to be commenting on a common public perception regarding money availability. By stating that “no complaint…is more common than that of a scarcity of money”, Smith implies that shortages of currency available in circulation are frequently cited as an economic concern.

However, Smith’s broader work indicated a more nuanced understanding of money supply. The quote conveys Smith’s observation that lack of money on hand is a frequent public talking point, yet his economic philosophy recognized money’s role is to enable exchange, not be hoarded, and that a growing economy and innovation tend to self-regulate money availability through market forces as needs and production expand.

Overall, while acknowledging money shortage complaints, Smith appeared to believe well-functioning free markets could generally meet liquidity needs, and that broader economic growth and trade were more important to overall prosperity than money’s physical quantity alone according to the principles in his seminal book The Wealth of Nations.

Birthday: c. 16 June – Death: July 17, 1790

Adam Smith: High Wages, High Profits

Adam Smith Money Quote saying business owners fully blame wages for increasing the cost of goods, but rarely believe profits have any deleterious effect. Adam Smith said:
 

 

“Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits” — Adam Smith

In this quote, Adam Smith is critiquing how merchants and business owners complain about the negative effects of “high wages” on goods prices and sales. However, Smith notes that they fail to acknowledge or mention the negative impacts of their own “high profits”. By “high profits”, Smith is referring to large profit margins that businesses earn by paying workers relatively low wages.

He is suggesting that high profits also contribute to increasing the prices consumers pay for goods. Overall, Smith is pointing out a double standard where employers blame only high labor costs and not their own profit-seeking behaviors for any economic issues. The quote aims to show that business owners should not scapegoat high wages alone and ignore the role of profits in determining overall production and pricing.

Birthday: c. 16 June – Death: July 17, 1790

Adam Smith: Pernicious Effects of Gain

Adam Smith Money Quote saying retailers complain of the high cost of wages but never of profits. Adam Smith said:
 

 

“Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people” — Adam Smith

In this quote, Adam Smith is criticizing merchants and business owners for only focusing on the negative effects of high wages on goods prices and sales, while ignoring the negative impacts of their own high profits. By “high profits”, Smith is referring to large profit margins that businesses earn by paying workers relatively low wages.

He notes that the employers “complain much” about high labor costs raising prices, but “say nothing” and are “silent” about how their own profit-seeking behaviors also contribute to increasing consumer prices. Smith suggests it is hypocritical for employers to solely blame workers’ wages, and not acknowledge how profits also play a role in determining overall production and pricing.

The quote aims to highlight the one-sided and self-serving nature of business owners who scapegoat high wages but do not reflect on the “pernicious effects” or harms that may also stem from prioritizing high profits.

Birthday: c. 16 June – Death: July 17, 1790

Adam Smith: Profit Like Compound Interest

Adam Smith Money Quote saying attempts to understand the effect of product costs with comparisons of interest types on both wages and profits. Adam Smith said:
 

 

“In regards to the price of commodities, the rise of wages operates as simple interest does, the rise of profit operates like compound interest” — Adam Smith

In this quote, Adam Smith is comparing how wage increases and profit increases each impact commodity prices. He states that a rise in wages, which are the costs paid to workers, operates on commodity prices “like simple interest” – meaning it directly and linearly increases the price.

However, he notes that a rise in business profits operates on prices “like compound interest” – implying it has an exponential or compounding effect that causes prices to increase at a faster rate over time.

Smith is arguing that while higher wages impose a direct cost increase, rising profits allow businesses to continually raise prices in a self-reinforcing cycle. So in essence, the quote examines how wage hikes versus profit hikes differentially influence the prices of goods and commodities in the economy.

Birthday: c. 16 June – Death: July 17, 1790

Adam Smith: Finding Out Who You Are

Adam Smith Money Quotation saying when learning character flaws (or strengths) it can be expensive to learn them from investment decisions. Adam Smith said:
 

 

“If you don’t know who you are, the stock market is an expensive place to find out” — Adam Smith

In this quote, Adam Smith is cautioning against using the stock market as a means of self-discovery or identity exploration. By stating that it is an “expensive place” to find out who you are, Smith suggests that experimenting with investments in the volatile stock market without a clear financial plan or investment strategy could result in significant losses.

The quote implies that only those with a strong sense of their investment goals, risk tolerance and financial self-awareness will find real success in the market. Smith appears to be advising that unless you have a clear financial identity, the stock market is not a good arena for learning about yourself through trial and error, as such an approach may prove quite costly.

Birthday: c. 16 June – Death: July 17, 1790

Daryl Cagle, CagleCartoons.com