Adam Smith

Principles are our summary of their public statements.

• Prioritize consumer interests

  Customers

  The primary goal of production is consumption, so business decisions should prioritize the needs and benefits of the customer over the producer.

  3 more supporting quotes are in the member records.

  Source Wikiquote: Adam Smith  (opens in a new tab)

• Fair Contribution Principle

  Integrity

  It is unjust for the whole society to pay for expenses that only benefit a specific group.

  Supporting quotes

  • “The directors of such [joint-stock] companies, however, being the managers rather of other people's money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.”

  2 more supporting quotes are in the member records.

• Beware of Vanity in Spending

  Wealth

  Generosity and hospitality are sustainable virtues, but spending driven by vanity leads to financial ruin.

  3 more supporting quotes are in the member records.

  Source Wikiquote: Adam Smith  (opens in a new tab)

• Capital Drives Productive Employment

  Management

  The ability to employ productive labor is directly limited by and proportional to the amount of capital stock available to put them to work.

  Supporting quotes

  • “The abundance or scantiness of this supply, too, seems to depend more upon the former of those two circumstances than upon the latter.”

  2 more supporting quotes are in the member records.

• Leverage the ecosystem

  Wealth

  No single person can produce everything; wealth comes from exchanging specialized surplus with others in a broad network.

  3 more supporting quotes are in the member records.

  Source An Inquiry into the Nature and Causes of the Wealth of Nations  (opens in a new tab)

• Measure Wealth by Command of Labor

  Wealth

  True wealth is measured by the amount of other people's labor or products of labor that one can afford to purchase.

  Supporting quotes

  • “Nothing is more useful than water; but it will purchase scarce any thing; scarce any thing can be had in exchange for it.”

  2 more supporting quotes are in the member records.

• Focus on local market arbitrage

  Strategy

  A merchant only needs to care about the difference in money prices between two locations to realize a profit, regardless of the local purchasing power.

  3 more supporting quotes are in the member records.

  Source An Inquiry into the Nature and Causes of the Wealth of Nations  (opens in a new tab)

• Pay for Sustainable Performance

  Hiring

  High wages encourage diligence, but employers must ensure workers do not overexert themselves to the point of ruining their health.

  Supporting quotes

  • “It will be found, I believe, in every sort of trade, that the man who works so moderately, as to be able to work constantly, not only preserves his health the longest, but, in the course of the year, executes the greatest quantity of work.”

  2 more supporting quotes are in the member records.

• Growth Creates Happiness

  Strategy

  The condition of the working class is best when society is in a progressive, growing state rather than a stationary or declining one.

  Supporting quotes

  • “It will be found, I believe, in every sort of trade, that the man who works so moderately, as to be able to work constantly, not only preserves his health the longest, but, in the course of the year, executes the greatest quantity of work.”

  2 more supporting quotes are in the member records.

• Price in the Cost of Trust

  Hiring

  When hiring for roles that handle precious materials or sensitive information, one must pay a premium to ensure the person maintains a social rank consistent with that trust.

  3 more supporting quotes are in the member records.

  Source An Inquiry into the Nature and Causes of the Wealth of Nations  (opens in a new tab)

• Account for the Failure Rate

  Strategy

  In high-risk fields where many fail, the successful few must earn enough to cover the collective investment and education costs of the entire group.

  3 more supporting quotes are in the member records.

  Source An Inquiry into the Nature and Causes of the Wealth of Nations  (opens in a new tab)

• Price Proximity to Cost

  Pricing

  A business owner should judge how 'cheap' a product is by how close its market price sits to the minimum cost of production and moderate profit.

  Supporting quotes

  • “A commodity may be said to be dear or cheap not only according to the absolute greatness or smallness of its usual price, but according as that price is more or less above the lowest for which it is possible to bring it to market”

  2 more supporting quotes are in the member records.

• Real vs Nominal Price

  Wealth

  Distinguish between a price rise caused by currency devaluation and a rise caused by the actual increased labor or value of the commodity.

  Supporting quotes

  • “A commodity may be said to be dear or cheap not only according to the absolute greatness or smallness of its usual price, but according as that price is more or less above the lowest for which it is possible to bring it to market”

  2 more supporting quotes are in the member records.

• Master the Small Vexations

  Leadership

  A leader should not show distress over minor inconveniences, as others find petty complaints annoying rather than sympathetic.

  1 more supporting quote is in the member records.

  Source The Theory of Moral Sentiments: Or, an Essay Towards an Analysis of the Principles by Which Men Naturally Judge Concerning the Conduct and Character, First of Their Neighbours, and  (opens in a new tab)

• Display Success Hide Failure

  Marketing

  People naturally sympathize more with joy than sorrow, so showing success attracts allies while showing distress can lead to social rejection.

  1 more supporting quote is in the member records.

  Source The Theory of Moral Sentiments: Or, an Essay Towards an Analysis of the Principles by Which Men Naturally Judge Concerning the Conduct and Character, First of Their Neighbours, and  (opens in a new tab)

• Finish what you start

  Leadership

  The merit of a project is often attributed to the person who brings it to a conclusion. Taking over a nearly finished task can rob the original creator of their full credit and glory.

  3 more supporting quotes are in the member records.

  Source The Theory of Moral Sentiments: Or, an Essay Towards an Analysis of the Principles by Which Men Naturally Judge Concerning the Conduct and Character, First of Their Neighbours, and  (opens in a new tab)

• Action defines human fulfillment

  Mindset

  True satisfaction comes from the active and proper exercise of one's abilities rather than just seeking comfort or avoiding pain.

  3 more supporting quotes are in the member records.

  Source The Theory of Moral Sentiments: Or, an Essay Towards an Analysis of the Principles by Which Men Naturally Judge Concerning the Conduct and Character, First of Their Neighbours, and  (opens in a new tab)

• Transparency in motivation matters

  Brand

  The perceived value of an action is tied to its perceived motive; hidden selfish agendas can destroy trust and reputation.

  3 more supporting quotes are in the member records.

  Source The Theory of Moral Sentiments: Or, an Essay Towards an Analysis of the Principles by Which Men Naturally Judge Concerning the Conduct and Character, First of Their Neighbours, and  (opens in a new tab)

• Ground Theories in Familiar Reality

  Content

  A theory about human behavior must resemble the truth of daily life to be credible, unlike abstract sciences which can remain detached.

  Supporting quotes

  • “Human society, when we contemplate it in a certain abstract and philosophical light, appears like a great, an immense machine, whose regular and harmonious movements produce a thousand agreeable effects.”

  2 more supporting quotes are in the member records.