Adam Smith’s Three Steps to Prosperity

Adam Smith’s Three Steps to Prosperity

Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations is a long book. But in its first twenty pages, Smith lays out a three-step path to prosperity. Chapter one introduces the division of labor. Chapter two explains people’s propensity to truck, barter, and exchange. Chapter three shows how specialization is limited by the extent of the market. The ideas in these opening chapters of Book I go a long way toward explaining di…