SOCB42H3 Lecture Notes - Lecture 2: Factor Price, Barter, List Of Muppets
Document Summary
Smith cautions us that if market and natural price are not in equilibrium = losing out/not knowing the full range of capabilities of workers. Smith compares commercial society to original state using anthropological studies and giving us an overview of european (roman) society. Stock and capital: in order to produce good = need stock. Example: pins wire, tools, buttons: productive vs unproductive labour. Productive labour: work that is performed and adds value to a product. Generates wealth/surplus by adding value to tangible goods. Example: a wrapped chocolate is worth more than an unwrapped chocolate. Unproductive labour: work that is performed and does not directly result in a tangible product, does not result in an improvement to a real, material product. Helps indirectly, but does not directly generate more wealth. Capital replacement: reinvest in productive labour, replace tools and whatnot that are used during production. Business owners take products and reinvest in them, and people become lazy.
