Adam Smith highlights the importance of division of labour.

Smith gives a specific

example in the context of pin making. He said that anyone might be able to create a few pins
each day, but a team of specialized workers who each are assigned a task that they are good at,
can create hundreds of pins. This would lead to an increase in the overall productivity.

The increase of the force of production is owed to three different circumstances. First is
the increase of the dexterity of the workman, second is that having workers specialize in
something saves time, and third is that specially made machines make their work more efficient.
The increase of the dexterity of the workman simply means that a person doing only one specific
thing will make them better and faster at it, thus, a specialization, which would make these
workers more efficient in completing their work. This also contributes to lesser time being spent
making, as having a specialization means that workers do not have to constantly keep switching
or changing positions or stations in the factory. They can just stay where they are and focus on
their one task, which saves a lot of time overall. Lastly, advancements in technology have
allowed machines that specialize in doing something, help make the whole process of production
more efficient for everyone involved.

Smith says that although price is useful to estimate the value of something, it is not as
reliable as labour is, as the value of both gold and silver are constantly fluctuating. Gold and
silver would not be valuable if everyone had a lot of it. Labour on the other hand, is intangible,
and sometimes it is difficult to find someone with the exact skills that a specific type of work
needs.

Smith emphasizes that division of labour is motivated by the ability to exchange goods.
The market's size, however, limits the aforementioned division of labour. There is more
specialization in larger markets due to higher demand, while there is less specialization in
smaller markets due to lower demand.

People trade by using the money they get from their labour to exchange for other goods
and services they may need or want. Without money, the division of labour can only go so far, as
consumers would still be left needing or wanting for things they have no way of availing. This
makes producers end up with a surplus of goods, and no profitable way to get rid of them. Value
is also discussed in two different contexts, with value in use and value in exchange. Value in use
is how useful a commodity actually is. Value in exchange is the power of purchasing other goods
with said object, basically what others would be willing to exchange for it.

Smith investigates how shifts in manufacturing costs and wages impact the actual cost of
items. Although the money supply or market conditions may cause changes in the nominal price
of commodities, the real price—which is determined by the quantity of labour needed for
production—remains more stable. He highlights that in order to fully appreciate the price of
commodities and how they affect the economy, one must be able to understand the difference
between the two prices—real and nominal. Which again, nominal reflects the price in current
currency (money), while real takes into account inflation, and changes in purchasing power of
said currency. Changes in wages and the cost of production influence the real price of goods,
while changes in the money supply affect nominal prices.

The three initial sources of all revenue and exchangeable value are wages, profit, and
rent. All additional income comes from one of these. Wages go to labourers, as this is what they
earn in exchange for their labour. Profit goes to producers as people spend their wages on needs
and wants, and these producers also supply funds and materials for production. Rent goes to
landowners as people pay them in order to use their land. This all contributes to the price of a
commodity comprising the cost of labour, capital, and land. Labour refers to the people working
to create the commodity, capital to the initial price of the supplies needed to create the
commodity, and land to the land on which the commodity is created, such as a workhouse or a
factory.

These all contribute to the value theory. The way that supply and demand interact to
determine the perceived value of products and services is determined by market dynamics. These
influences cause prices to alter, reflecting modifications in the perceived value of commodities.
Money, on the other hand, serves as a mediator, making the valuation and exchange of things
simple. However, variations in its availability can affect nominal prices without changing the
fundamental value of the goods. Pricing is significantly influenced by the cost of manufacturing,
which includes labour, capital, and land. Price changes can have an effect on the true value of the
items, which is reflected in the actual cost of production. Compared to the nominal price, the real
price takes inflation and changes in purchasing power into account, providing a more accurate
picture of the true value of items over time. Labour is a basic component that plays a major role
in determining value; the amount and quality of labour frequently influence how much goods are
valued. All of these factors are essential in determining the value of goods in a society.

A wage is what a labourer receives in turn for his work. It is the most basic component of
commodity prices. Wages are set by employers. Employers usually prefer to pay their employees
a subsistence wage, or a living wage, which is the bare minimum you can pay someone in order
for them to afford only their most basic needs.

The nature of one’s work usually determines the wage a worker will receive from it.
Certain occupations provide a higher wage than others, and a lot of factors contribute to this.
Smith highlights certain factors affecting wages such as skill and education, difficulty and
unpleasantness of work, demand and supply of labour, and negotiation and bargaining power.
Under skill and education, work that requires advanced education or specialized skills typically
pays more as workers here are scarce due to the high amount of investment needed to have those
skills in the first place. Under difficulty and unpleasantness of work, jobs that are dangerous also
usually pay more in order to entice labourers to work for them. Under demand and supply of
labour, if the job market of a specific type of work suddenly experiences an overflow of
labourers, then the wage may decrease, while if it experiences a scarcity, it may increase to
attract more labourers. Lastly, under negotiation and bargaining power, wages are also influenced
by the existence of laws affecting labour markets and the capacity of workers to bargain for
higher pay.

Profit, which is a financial gain, is even harder to quantify than wages, as it fluctuates
more rapidly. Smith proposes that, by examining the interest rates on money, we may gain a
sense of these earnings. People will pay more to utilize money if there is an opportunity to profit
greatly from it. However, people will not pay as much to utilize money when there is little to
gain from it. So, regular investment returns will be large wherever there are high standard
interest rates, and they will either rise or fall together. Changes can be monitored in interest rates
to obtain a sense of how investment returns are evolving over time.

The components of national profit are wages, profit, and rent. These combined make up
the national income. By being reinvested and assisting in the creation and accumulation of
wealth throughout society, this income promotes economic growth. These contribute to a nation’s
prosperity and wealth accumulation.

Adam Smith lists the following five main variables as a means of offsetting or
compensating for difference in wages across different occupations: first is the agreeable or
disagreeableness of the employments themselves; second, the easiness and cheapness, or the
difficulty and expense of learning them; third, the constancy or inconstancy of employment in
them; fourth, the small or great trust that must be reposed in those who exercise them; and fifth,
the probability or improbability of success in them.

Agreeableness or disagreeableness refers to how enjoyable a job is for an employee. This

factor can influence wages, as jobs that are less agreeable may offer higher wages to entice
people to come work for them. Ease or difficulty of learning refers to how a job may offer higher
wages if it is in a highly specialized field in order to compensate for the effort and cost of
learning. Constancy or inconstancy refers to the stability of work. Work that is unstable, such as
seasonal ones, may offer higher compensation in order to offset the job insecurity. Extent of trust
required refers to jobs that demand a high level of trust from employees in order to compensate
for the huge amount of responsibility placed onto them. Lastly, the likelihood of success refers to
certain jobs that carry greater risk or have unpredictable results. Due to the accompanying risks,
positions with a lesser probability of success could pay more to entice people. These factors
influence the compensation or wages provided in different occupations.
 Rent is the payment made by a tenant for using a landlord’s land. The landlord's goal in
negotiating lease conditions is to guarantee that the tenant pays what is required to cover the
costs of farming, including seed, labour, equipment, and livestock acquisition and maintenance,
as well as to earn the usual profits expected from farming in that region. Landlords often do not
intend to give the tenant a higher share of the produce; this is the least share that the tenant needs
to avoid losing money. Smith highlights that when landlords organize leases, they maximize their
own profits while making sure that tenants have enough money to cover their expenses and
continue operating at a typical profit margin. This strategy usually results in rent payments that
cover the upper limit of what is affordable for renters while guaranteeing landlords keep the
excess produce over what is needed to maintain the farming operation.

Smith draws attention to the situations of those whose capital is insufficient to support
them for long periods of time. In this condition, the individuals give priority to immediate
consumption, making sparing use of their limited resources and depending mostly on labour to
get new resources prior to the complete depletion of their current stock. In simpler and more
timely terms, we could call this someone living paycheck to paycheck. According to Smith, these
circumstances are common among the working poor in many different nations, where a sizable
section of the populace is primarily dependent on their labour for subsistence.

According to Smith’s theory, investing wealth in profitable endeavors promotes economic

expansion and creates surplus value that, when reinvested as capital, fuels even more expansion.
He provides examples of this cyclical process, explaining how wise use of saved money in
profitable ventures ignites economic growth and promotes societal well-being. However, this is
only mostly applicable to the rich who can afford these kinds of ventures.

Division of labour is important in boosting capital creation. Smith emphasizes how

productivity is enhanced by it, which can result in higher output and the possibility of generating
excess capital that can be used for investment in the future.

Smith explores the complex mechanisms of a society's capital accumulation. He sheds

insight on the ways in which various factors affect returns on investment by examining the
relationship between the rate of profit and the various applications of capital. Industries that
demand greater risk-taking frequently see larger profitability.

Smith also analyzes how different time periods affect business margins. He points out
that because they must wait longer for gains, investments that take longer to materialize typically
yield better returns. On the other hand, projects that yield results more quickly may come with a
smaller profit margin in exchange for their speed. He also emphasizes how expertise and
knowledge impact profit margins. Businesses or jobs requiring a high level of expertise or
knowledge generally make more money since these qualities are valued more in the marketplace.
 The many variables affecting profit margins in different capital applications are
thoroughly examined. Smith highlights the crucial roles that risk, time horizons, and expertise
play in dictating the kinds of returns on investments. His research illuminates the nuances
influencing the profitability of various economic activities within a community by offering a
detailed knowledge of the complicated interactions between these variables.

Smith makes a distinction between productive and unproductive labour. Productive

labour generates wealth and contributes to economic growth. By “generates wealth,” he means
that it contributes to the creation of goods and services that are traded throughout the economy.
By “contributes to economic growth,” he means that it generates revenue and stimulates the
economy. Unproductive labour on the other hand, does not create tangible value and does not
contribute directly to wealth.

Smith later delves into the nature of borrowed capital and its implications for lenders and
borrowers. The lender views borrowed capital that is lent at interest as a type of capital. The
lender anticipates receiving its money back in the end along with an annual rent payment from
the borrower. As a source of investment and financial support, this borrowed cash is an essential
part of the economic environment.

Smith's main contention is based on what the borrower does with this borrowed money.
When it comes to spending it, the borrower must decide whether to use it for immediate
consumption or to deploy it as productive capital for an investment in labour that creates value
and profit. When borrowed capital is used effectively, it helps to sustain labour that is productive,
which makes it easier to reproduce value with profit. In this case, it is feasible for the borrower to
repay the capital and cover the interest without jeopardizing other sources of income. However,
if the borrower chooses to spend it instantly, this decision is similar to careless spending. The
borrower forfeits the ability to repay the capital and interest without alienating or infringing upon
other sources of revenue, like as property or land rent, by burning through the borrowed stock
intended to sustain hard working undertakings.

Smith's analysis gives attention to the crucial function that borrowed capital plays in an
economy and the basic decisions that borrowers must make while using it. The choice between
using this money for investments or spending it defines not just the financial stability of
individual borrowers but also the growth and stability of the economy as a whole. The
differentiation between the efficient utilization and wasteful consumption of borrowed money is
a fundamental feature in economic decision-making, influencing the course of sustainable
economic growth and prudent financial management.
 Smith investigates the various ways in which capital is deployed and the various effects
these have on the value and productivity of a country's resources. He says that although the basic
goal of all capitals is to support productive labour, the degree to which they are able to mobilize
labour and increase a nation's output varies greatly depending on the many ways in which they
are used.

Smith divides capital into four categories of application. First, money is spent on
acquiring the "rude produce," or raw materials, such land, mines, and fisheries, that are required
for society's use. Second, it works to transform these raw materials into completed products that
are fit for immediate use by manufacturing and refining them. Thirdly, money is spent on
moving commodities from areas of abundance to areas of demand, whether they are refined or
raw. Finally, it divides products into smaller sections suited to the demands of customers in the
retail and distribution sectors.

Smith's makes the case that these four categories, which outline the main functions
performed by various economic agents in the economy—land cultivators, manufacturers,
merchants, and retailers, for example—comprise almost every method that capital is used. His
classification scheme offers a thorough foundation for comprehending the various ways that
capital is used in an economy. It highlights the vital responsibilities that different sectors play in
directing capital toward various production and distribution stages, clarifying the complex web
by which capital mobilizes labour and adds to the total productivity and worth of a country's
resources.

In a civilized society, towns and the surrounding countryside have a symbiotic

relationship, with Smith bringing attention to the crucial commerce between the two. He explains
that the main activity of this commerce is the direct exchange of produced commodities from
urban centers for raw materials from rural areas, either by means of representative paper money
or directly through currency. He emphasizes how vital the countryside is to the towns' supply of
food and raw materials for production. Rural communities receive manufactured items from the
towns in exchange. Although towns do not manufacture substances on their own, they receive
wealth and food from the nation through this exchange.

Smith disproves the idea that the gains of one country or community translate into losses
for the other. Due to the benefits of the division of labour, their gains are mutual and reciprocal.
When the nation trades with the town, it uses less of its own work to acquire more produced
goods than it would if it tried to make them on its own. The town acts as a market for the nation's
excess produce, raising its value and facilitating trade for other items in high demand. Having
towns close by benefits the countryside. In addition to earning the value of their avoided
transportation expenses, farmers close to towns can sell their produce for the same price as those
from farther away. This hypothetical situation shows how the nation gains a great deal from its
trade with neighboring communities. Both parties benefit economically from their interactions,
illustrating the benefits of labour division and the connectivity of various economic sectors
within a community.

The natural progress of opulence, or wealth, stems from a few fundamental elements:
division of labour, expansion of markets, capital accumulation, technological innovation, and
education and skills. Division of labour leads to more efficient production and overall economic
growth. Expansion of markets provides increased trade and further enhances productivity and
wealth. Capital accumulation leads to technological advancements, improved infrastructure, and
increased production efficiency. Technological innovation drives improvements in productivity
and the creation of new products. Education and skills is for the workers as a skilled workforce
can lead to greater overall efficiency and innovation. When these components are supported and
given room to grow, they all work together to propel economic expansion, resulting in greater
wealth and prosperity for the country as a whole.

Smith draws comparisons between the people living in towns and cities following the fall
of the Roman Empire and those in ancient Greece and Italy. He explains how, after the fall of the
empire, the majority of people living in cities were mechanics and tradesmen, as opposed to the
landowners who lived in castles surrounded by their estates and tenants.

According to Smith, these city people were formerly considered to be on a very low
social status, similar to serfs. Their earlier status was close to serfdom, as seen by their lack of
liberty in marriage, inheritance, and property disposition, until they were granted certain
privileges through old charters. Like hawkers and peddlers, these folks traveled between fairs
and markets paying different taxes on their products and person either on the way or at certain
places such as fairs, bridges, or manors. These levies were referred to as lastage, stallage,
pontage, and passage taxes.

Smith discusses the rise of "freetraders," or merchants who, in exchange for an annual
poll fee given to their guardians, were freed from some taxes even though they were essentially
subservient. These agreements were transactional in character. Smith calls attention to the
evolution of taxation and protection, and one’s social status within society.

Smith outlines the two main goals of political economy as follows: first, to guarantee the
people a sufficient income, or sustenance, so they can support themselves; and second, to give
the government a sufficient revenue stream so that public services may be provided. The goal of
this discipline is to benefit the sovereign and the populace alike. He delineates two discrete
systems within political economy, the agricultural and the commercial systems, which are
molded by differing advances in opulence throughout time and between countries. His goal is to
provide a thorough explanation of both systems, starting with the commerce system, which he
considers to be the modern system.

The commercial or mercantile system is criticized. Smith provides a critical evaluation of

its consequences for the wealth and prosperity of the country. The mercantile system is based on
the idea that a country's prosperity is mostly obtained through amassing precious
metals—particularly gold and silver—through a favorable trade balance. In this approach, a
country accumulates more bullion (a measure of wealth) if it exports more things than it imports.

Smith disagrees, claiming that prosperity shouldn't be exclusively associated with the
acquisition of precious metals. He highlights the significance of a country's ability to produce
products and services, innovation, the division of labour, and productivity as real sources of
wealth. Smith attacks the mercantile system for its obsession with hoarding metal, claiming that
this practice stunts economic growth by taking funds away from useful endeavors and directing
them toward pointless ones like boosting silver reserves. Smith also emphasizes how
protectionist policies like tariffs, quotas, and monopolies are supported by the mercantile system
and are used to limit imports and promote exporters. Smith contends that these policies impede
free commerce and economic advancement.

Smith's analysis provides a fundamental critique of the economic policies that were
popular during his day. He is a champion of free trade, productive capacity, and a more
comprehensive view of wealth as originating from productive activities rather than only the
ownership of precious metals. He opposes the goal of bullion accumulation.

Smith looks into different motives behind the colonization efforts during his time. There
is trade expansion, economic gain, religious and political factors, and relief of overpopulation.
One motive to colonize was to facilitate trade expansion. Countries like Britain wanted to be in
new markets, not only for their goods and services, but also so they could have a cut of the action
so to speak. Obviously, they wanted money, and a new colony could be a great new source of
this. Another motive is economic gain. Countries hoped to exploit the resources, such as raw
materials or precious metals, abundant in these new territories, thereby boosting their own
wealth. Again, in simpler terms, money. Religious and political factors also contributed as a
motive as a nation's influence and strength in international politics can be increased by
establishing colonies, which can serve as safe havens for religious groups facing persecution.
Lastly, it serves as a relief of overpopulation, as a country can just send some of its people to live
in that newly established colony, with those people technically still being in their territory.

Although these motives played a major role in colonization, they frequently had
unfavorable effects on both the conquered areas and the home countries. Common outcomes
included resource exploitation, the imposition of adverse trade policies, and conflicts with
indigenous communities. Smith emphasizes that fair and mutually beneficial partnerships are a
better path to long-term development and stability than exploitation and domination, and he
supports policies that foster respect and mutual benefit between colonizers and colonies. His
study clarifies the intricate reasons for colonialism and the ensuing political, social, and
economic ramifications.

There are also factors contributing to the prosperity of new colonies. These are
abundance of resources, labour and population growth, trade and commerce, infrastructure and
development, government policies, and innovation and adaptation. Abundant resources were
available in new colonies, and the availability of these presented opportunities for economic
development and wealth creation. Labour and population growth coupled with the cultivation of
previously untapped lands, contributed to agricultural productivity and economic expansion.
Trade and commerce were important as exchange of goods between the new colony and the
so-called motherland facilitated economic growth and the development of markets. Infrastructure
and development helped facilitate trade and the movement of goods, fostering economic activity
and growth. Government policies that promoted free trade, protected property rights, and
encouraged entrepreneurship were conducive to economic development. Innovation and
adaptation allowed the new colony to develop new methods of production and utilize resources
efficiently, contributing to their prosperity.

Smith explores the benefits Europe gained from two major historical occurrences: the
finding of America and the creation of a direct commercial route via the Cape of Good Hope to
the East Indies. The discovery of America changed everything. The American colonies provided
a large supply of precious metals, which increased Europe's bullion reserves. This gave Europe's
economy a boost, encouraging investment, trade, and industrial development. New trading routes
were made possible. European countries exchanged produced goods for an abundance of
precious raw commodities including cotton, sugar, tobacco, and more. This trade opened up new
markets for Europe and stimulated the continent's economy.

The development of a sea route via the Cape of Good Hope to the East Indies offered
Europe a once-in-a-lifetime chance. By avoiding the labourious and costly overland routes, this
trading route offered immediate access to highly sought-after Eastern commodities like textiles
and spices. Europe developed a demand for these commodities, which fueled commerce.

The European economies benefited from the inflow of precious metals, important
resources, and new markets, and trading opportunities were expanded by the availability of
commodities from the East. These historical occurrences cemented their status as crucial turning
points that aided in Europe's ascent to prominence in the global economy.
 Smith highlights the role that public works projects like infrastructure and establishments
like hospitals and schools have in promoting social advancement. He is an advocate of judicious
expenditure, meaning that funds should be allocated to initiatives that will improve productivity
over the long run and benefit society as a whole. In order to maximize societal and economic
growth, he advises against excessive or wasteful spending on initiatives that don't provide
proportionate advantages to society.

Smith highlights the significance of infrastructure, such as roads, bridges, canals, and
ports, in enabling efficient trade by connecting markets and reducing transportation costs. He
also emphasizes that improving access to far-off markets and promoting economic growth
depend heavily on these investments in transportation networks.

Smith also stresses the significance of organizations that promote and oversee trade. He
talks about how legal frameworks, stock markets, and banks all help to make sure that contracts
are upheld and economic transactions go smoothly. These organizations create an atmosphere
that is favorable to trade by offering stability and legal frameworks that inspire confidence in
traders and investors. According to Smith, the establishment of trustworthy institutions and wise
public infrastructure investments are essential for fostering a thriving business climate, lowering
trade barriers, and boosting a society's overall prosperity and economic progress.

Smith emphasizes the necessity of tailored infrastructure, such as transport systems or

facilities, to support industries like mining or manufacturing efficiently. He also emphasizes the
significance of educational and training facilities that meet the requirements of diverse crafts and
trades. He is an advocate of public funding for these educational institutions since they allow
people to obtain specialized knowledge that is pertinent to specific industries. He examines the
cost of operating educational institutions while noting the importance of education in developing
human capital and skills.

Smith highlights the necessity of financing education in a balanced manner in order to

optimize its advantages without placing an excessive financial strain on the system. Smith argues
for responsible spending control over education, making sure that funds spent on education
produce the greatest benefits for society and support the growth of the individual as well as the
larger good of society.

Smith examines educational institutions that serve people of all ages, discussing their
importance as well as the costs involved. He emphasizes the vital role that lifelong learning plays
in enhancing knowledge and developing new skills, as well as the institutions that play a
significant part in the continual evolution of human capital.
 Smith draws attention to the expenses associated with keeping these educational facilities
open. He emphasizes the need for wise resource allocation, stresses the importance of lifelong
learning, and emphasizes the need for careful fiscal management. In order to ensure that the costs
incurred outweigh the subsequent societal and economic rewards, Smith highlights the
significance of striking a balance between the benefits to society and the financial viability of
these organizations.

Smith discusses the price of maintaining the sovereign's rank and dignity. He admits that
there are costs associated with upholding the sovereign's status and ceremonial elements. Smith
accepts these expenditures as an essential component of governing and recognizes their function
in preserving the image and power of the dominant individual in a community.

Smith touches on the necessity of striking a balance when handling the costs associated
with maintaining the sovereign's dignity. He acknowledges the value of maintaining the
sovereign's ceremonial role, but he also stresses the need for fiscal prudence to make sure that
costs associated with upholding the sovereign's dignity do not unnecessarily strain public coffers
or divert resources from more productive uses within the economy.
DONE
CALMA, Francheska Margaux R.
BAPE 1-3

Ang “Rizal in San Francisco: Connections in Philippines-U.S. History” ay tungkol sa

paglalakbay ng ating pambansang bayani na si Jose Rizal sa Amerika. Tinalakay sa video na ito
kung paano tinrato si Rizal at kung ano ano ang mga ginawa niya noong siya ay nasa iba’t ibang
bansa. Dahil ito ay ang 1800s, ang rasismo ay laganap. Hindi maganda ang pakikipag tungo ng
iba kay Rizal kaya naman siya ay nahirapan. Noong pagdating din niya sa San Francisco, ay
nilagay siya sa quarantine dahilan ng rasismo. Ngunit tiniis ni Rizal lahat ng problemang hinarap
niya dahil sa kanyang layunin at rason kung bakit siya nangibang bansa. Hindi siya umalis ng
Pilipinas para maglakbay at liwaliw, kundi para matuto at mag aral. Si Rizal ay may pagkauhaw
sa kaalaman kaya naman ay lahat gagawin niya para lang matuto.

Dama ko ang hirap na pinagdaanan ni Rizal dahil ako rin ay lumipat sa ibang lugar para rin sa
aking edukasyon. Hindi man kasing layo ang aking nilipatan, malaki pa rin itong pagbabago para
sa akin dahil wala akong kilala sa siyudad, at wala akong maaasahan kundi ang sarili ko. Hindi
man kasing hirap ang pinagdaanan ko, ay nahirapan pa rin ako, kaya naman ay saludo ako sa
ating bayani na si Jose Rizal.