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# Natural State of Employments

## Definition

The condition of economic activities when they are left to follow their natural course without artificial restraints or encouragements, where wages and profits adjust freely according to supply and demand, allowing inequalities to be compensated by corresponding advantages or disadvantages.

## Source Chapter

Book I, Chapter 10

## Context

Smith establishes the concept of the "natural state" as a baseline for analysing how European policy creates artificial inequalities in wages and profits. He argues that in a perfectly free society with perfect liberty, all employments would tend toward equality in their overall advantages and disadvantages, with temporary imbalances quickly corrected by market forces.

## Economic Domain

General Theory

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