---
entity_slug: wholesale_trade
evaluator: null
evaluated_at: '2026-02-23T06:39:21.131398'
overall_score: 4.2
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes wholesale from retail trade based
    on quantity sold and customer type (businesses vs. consumers). It also captures
    Smith's specific insight about the relationship between apparent profits and genuine
    returns to capital.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This entity is directly grounded in Smith's analysis from Book I, Chapter
    10, where he explicitly contrasts wholesale and retail trade to illustrate profit
    differentials. The distinction between "apparent profits" and "genuine profits"
    reflects Smith's actual argument about returns to capital.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: '"Exchange" is the correct domain placement, as wholesale trade is fundamentally
    about the mechanisms and structures of market exchange. This fits perfectly within
    Smith''s broader analysis of commercial systems and trade relationships.'
- name: vsm_relevance
  value: 3.0
  max_value: 5.0
  rationale: Wholesale trade maps reasonably well to S1 (primary operations) as a
    core economic activity, but it's primarily a descriptive category of commercial
    activity rather than a cybernetic function. It doesn't naturally align with the
    regulatory or intelligence functions of higher VSM systems.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: "This entity illuminates an important structural mechanism in Smith's\
    \ economic theory\u2014how different forms of trade reflect different relationships\
    \ between risk, capital, and profit. It helps explain the deeper logic behind\
    \ apparent profit differentials across commercial employments."
---

# Evaluation: Wholesale Trade

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes wholesale from retail trade based on quantity sold and customer type (businesses vs. consumers). It also captures Smith's specific insight about the relationship between apparent profits and genuine returns to capital.

## source_grounding — 5.0 / 5.0

This entity is directly grounded in Smith's analysis from Book I, Chapter 10, where he explicitly contrasts wholesale and retail trade to illustrate profit differentials. The distinction between "apparent profits" and "genuine profits" reflects Smith's actual argument about returns to capital.

## domain_placement — 5.0 / 5.0

"Exchange" is the correct domain placement, as wholesale trade is fundamentally about the mechanisms and structures of market exchange. This fits perfectly within Smith's broader analysis of commercial systems and trade relationships.

## vsm_relevance — 3.0 / 5.0

Wholesale trade maps reasonably well to S1 (primary operations) as a core economic activity, but it's primarily a descriptive category of commercial activity rather than a cybernetic function. It doesn't naturally align with the regulatory or intelligence functions of higher VSM systems.

## explanatory_value — 4.0 / 5.0

This entity illuminates an important structural mechanism in Smith's economic theory—how different forms of trade reflect different relationships between risk, capital, and profit. It helps explain the deeper logic behind apparent profit differentials across commercial employments.
