---
entity_slug: retail_trade
evaluator: null
evaluated_at: '2026-02-23T06:17:52.028736'
overall_score: 4.6
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes retail trade from wholesale trade
    and captures the key insight about apparent profits being disguised wages. It's
    precise and non-circular, though could be slightly more specific about what constitutes
    "small quantities."
- 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 discusses how retail merchants' higher apparent profits
    largely represent compensation for additional labor and skill rather than pure
    capital returns. The concept faithfully represents Smith's actual argument.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: The "Exchange" domain is perfectly appropriate for retail trade, as it
    represents a fundamental mechanism of market exchange between producers/wholesalers
    and final consumers. This is clearly an exchange process rather than production,
    distribution, or consumption per se.
- name: vsm_relevance
  value: 4.0
  max_value: 5.0
  rationale: Retail trade maps well to S1 (primary operations) as it represents operational
    activities that directly interface with the environment (consumers), and potentially
    to S4 (intelligence) as retailers gather market information about consumer preferences.
    It has clear VSM relevance rather than being abstract.
- name: explanatory_value
  value: 5.0
  max_value: 5.0
  rationale: This entity provides significant explanatory power by illuminating Smith's
    key insight that apparent profit differentials often mask labor compensation,
    revealing the underlying economic mechanism rather than just describing surface
    phenomena. It helps explain how market structures affect the distribution of returns
    between labor and capital.
---

# Evaluation: Retail Trade

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes retail trade from wholesale trade and captures the key insight about apparent profits being disguised wages. It's precise and non-circular, though could be slightly more specific about what constitutes "small quantities."

## source_grounding — 5.0 / 5.0

This entity is directly grounded in Smith's analysis from Book I, Chapter 10, where he explicitly discusses how retail merchants' higher apparent profits largely represent compensation for additional labor and skill rather than pure capital returns. The concept faithfully represents Smith's actual argument.

## domain_placement — 5.0 / 5.0

The "Exchange" domain is perfectly appropriate for retail trade, as it represents a fundamental mechanism of market exchange between producers/wholesalers and final consumers. This is clearly an exchange process rather than production, distribution, or consumption per se.

## vsm_relevance — 4.0 / 5.0

Retail trade maps well to S1 (primary operations) as it represents operational activities that directly interface with the environment (consumers), and potentially to S4 (intelligence) as retailers gather market information about consumer preferences. It has clear VSM relevance rather than being abstract.

## explanatory_value — 5.0 / 5.0

This entity provides significant explanatory power by illuminating Smith's key insight that apparent profit differentials often mask labor compensation, revealing the underlying economic mechanism rather than just describing surface phenomena. It helps explain how market structures affect the distribution of returns between labor and capital.
