--- ENTITY: propensity-to-truck-barter-and-exchange ---

# Propensity to Truck, Barter, and Exchange

## Definition

An innate or fundamental disposition in human nature to negotiate, trade, and
exchange goods with others. Smith identifies this propensity as the ultimate
cause of the division of labour, arguing that it is unique to humans and
absent in all other animal species. He leaves open whether it is a primary
instinct or a consequence of the faculties of reason and speech, but treats
it as the foundational mechanism from which specialisation and economic
organisation emerge.

## Source Chapter

Book I, Chapter 2: "Of the Principle which gives Occasion to the Division
of Labour"

## Context

This is the central thesis of the chapter. Smith argues that the division of
labour "is not originally the effect of any human wisdom" but rather the
"necessary, though very slow and gradual, consequence" of this propensity.
The entire chapter serves to establish exchange as the causal origin of
specialisation.

## Economic Domain

General Theory

## Smith's Original Wording

"This division of labour, from which so many advantages are derived, is not
originally the effect of any human wisdom, which foresees and intends that
general opulence to which it gives occasion. It is the necessary, though very
slow and gradual, consequence of a certain propensity in human nature [...] the
propensity to truck, barter, and exchange one thing for another."

## Modern Interpretation

This concept prefigures the modern economic assumption of rational self-interest
as the basis of market behaviour. It also anticipates evolutionary and
institutional economics debates about whether exchange is a natural disposition
or a culturally constructed institution.

--- ENTITY: self-interest ---

# Self-interest

## Definition

The motivation of individuals to pursue their own advantage in economic
transactions. Smith argues that in civilised society, individuals obtain the
co-operation of others not through appeals to benevolence but by engaging
their self-love — showing them that it is to their own advantage to provide
what is desired. Self-interest is the engine that makes exchange function:
each party to a bargain acts from regard to their own benefit.

## Source Chapter

Book I, Chapter 2: "Of the Principle which gives Occasion to the Division
of Labour"

## Context

Smith introduces self-interest through the celebrated passage about the
butcher, brewer, and baker. He contrasts it with benevolence, arguing that
we cannot rely on the goodwill of others for our daily needs in a society
of many, and that self-interest provides a more reliable and universal basis
for economic co-operation.

## Economic Domain

General Theory

## Smith's Original Wording

"It is not from the benevolence of the butcher, the brewer, or the baker that
we expect our dinner, but from their regard to their own interest. We address
ourselves, not to their humanity, but to their self-love, and never talk to
them of our own necessities, but of their advantages."

--- ENTITY: the-bargain ---

# The Bargain

## Definition

A voluntary bilateral exchange in which each party offers something the other
wants. Smith defines the bargain as the fundamental unit of economic
interaction: "Give me that which I want, and you shall have this which you
want." It is through bargaining that individuals obtain "the far greater part
of those good offices which we stand in need of" in civilised society, as
opposed to relying on benevolence or coercion.

## Source Chapter

Book I, Chapter 2: "Of the Principle which gives Occasion to the Division
of Labour"

## Context

The bargain is presented as the practical expression of the propensity to
exchange. Smith argues that it is the dominant mode of economic interaction,
used even by beggars who exchange charity-received goods for things they
actually need.

## Economic Domain

Exchange

## Smith's Original Wording

"Whoever offers to another a bargain of any kind, proposes to do this. Give
me that which I want, and you shall have this which you want, is the meaning
of every such offer."

--- ENTITY: benevolence ---

# Benevolence

## Definition

The disposition to do good to others out of goodwill rather than self-interest.
Smith argues that benevolence is an insufficient basis for economic organisation
in a complex society. While a person may secure the friendship of a few through
appeals to benevolence, they cannot rely on it to obtain the co-operation of
the "great multitudes" they need in civilised life. Even beggars, who depend
chiefly on benevolence for their subsistence, conduct most of their actual
transactions through exchange.

## Source Chapter

Book I, Chapter 2: "Of the Principle which gives Occasion to the Division
of Labour"

## Context

Benevolence serves as the foil to self-interest. Smith systematically argues
that while benevolence exists, it cannot scale to support the complex
interdependencies of a specialised economy, making self-interested exchange
the necessary coordinating mechanism.

## Economic Domain

General Theory

--- ENTITY: surplus-produce ---

# Surplus Produce

## Definition

The portion of a worker's output that exceeds their own consumption needs and
is therefore available for exchange. Smith argues that the certainty of being
able to exchange surplus produce for the products of other workers' labour
is what encourages every person to dedicate themselves to a particular
occupation. Surplus is thus both the material prerequisite and the incentive
for specialisation.

## Source Chapter

Book I, Chapter 2: "Of the Principle which gives Occasion to the Division
of Labour"

## Context

Introduced in the passage describing the emergence of specialised trades in
a tribal society. The armourer, carpenter, smith, and tanner each produce
more of their specialty than they can personally consume, and exchange the
surplus for other goods, reinforcing their commitment to specialisation.

## Economic Domain

Production

## Smith's Original Wording

"And thus the certainty of being able to exchange all that surplus part of
the produce of his own labour, which is over and above his own consumption,
for such parts of the produce of other men's labour as he may have occasion
for, encourages every man to apply himself to a particular occupation."

--- ENTITY: difference-of-talents ---

# Difference of Talents

## Definition

The observable variation in skills, aptitudes, and abilities among individuals
in different occupations. Smith makes the striking argument that this
difference is largely the effect rather than the cause of the division of
labour: people are born with roughly equal abilities, and it is their
different occupations, shaped by habit, custom, and education, that create
the apparent differences. He contrasts humans with dogs, where natural breed
differences are far greater but cannot be made useful because animals lack
the capacity for exchange.

## Source Chapter

Book I, Chapter 2: "Of the Principle which gives Occasion to the Division
of Labour"

## Context

This argument occupies the final portion of the chapter. Smith uses it to
reinforce his claim that exchange, not innate difference, is the driver of
specialisation. The philosopher and the street porter were "very much alike"
until different employments shaped them differently.

## Economic Domain

General Theory

## Smith's Original Wording

"The difference of natural talents in different men, is, in reality, much
less than we are aware of; and the very different genius which appears to
distinguish men of different professions, when grown up to maturity, is not
upon many occasions so much the cause, as the effect of the division of
labour."

--- ENTITY: common-stock ---

# Common Stock

## Definition

The aggregate pool of goods and services created when individuals bring
their diverse specialised products together through exchange. Smith argues
that among humans, unlike animals, different talents are made useful to
one another because their products can be "brought, as it were, into a
common stock, where every man may purchase whatever part of the produce
of other men's talents he has occasion for." This common stock is the
emergent result of widespread exchange among specialised producers.

## Source Chapter

Book I, Chapter 2: "Of the Principle which gives Occasion to the Division
of Labour"

## Context

Appears in the chapter's concluding argument comparing humans and animals.
While a mastiff cannot benefit from a greyhound's speed due to lack of
exchange, humans can pool their different abilities through trade, making
all talents contribute to the general welfare.

## Economic Domain

Exchange
