"The liberal reward of labour, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth. The scanty maintenance of the labouring poor, on the other hand, is the natural symptom that things are at a stand, and their starving condition, that they are going fast backwards."
- Adam Smith, Wealth of Nations, Book I, Chapter VIII, Of the wages of labour
Let me decipher this a bit. If the national wealth is increasing, then labor will be paid well. If labor is paid well, then the national wealth is increasing. If labor is paid the same year after year or even less, then the national wealth is decreasing rapidly.
Consider that many have said that stagnant wages or massive layoffs make the economy worse, not better.
In other words, if the wealthy are hoarding the flour to bake cakes, the less wealthy won't have much bread. Or, in the case of the U.S. today, if the wealthy are hoarding their wealth to buy luxury goods, the less wealthy won't have much to buy groceries.
If you are a determined reader, or have a very inquiring mind, I highly recommend that you make the effort to read Adam Smith's "An Inquiry into the Nature and Causes of the Wealth of Nations". For any edition that you are considering, be sure to check what the printed pages look like. Some editions have two-columns with small print.
I downloaded my copy from Project Gutenberg and then put it into Word so that I could add comments and bookmarks. Even then, reading it on a laptop screen tempts me to get an iPad. In any case, I hope I can finish reading it by spring. I'm sure I'll be posting many more blog entries on it. I just wish those who assume that it is a paean to the free market would spend more time with it.
