# Exchange

## Definition

The act of trading one's surplus production for the goods produced by others.
Smith presents exchange as the mechanism by which the division of labour
translates into universal opulence: each workman disposes of their surplus
output and receives in return the surplus of others, so that all are
supplied beyond what any individual could produce alone.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Exchange appears in the chapter's conclusion as the connecting mechanism
between specialised production and general welfare. Smith implicitly treats
it as prerequisite to the division of labour (explored further in Chapter 2),
since specialisation only benefits workers if they can trade their surplus.

## Economic Domain

Exchange

## Smith's Original Wording

"Every workman has a great quantity of his own work to dispose of beyond what
he himself has occasion for; and every other workman being exactly in the same
situation, he is enabled to exchange a great quantity of his own goods for a
great quantity or, what comes to the same thing, for the price of a great
quantity of theirs."
