diff --git a/examples/infospace-with-history/output/analyses/book-1-chapter-10-analysis.md b/examples/infospace-with-history/output/analyses/book-1-chapter-10-analysis.md new file mode 100644 index 00000000..e9a779c2 --- /dev/null +++ b/examples/infospace-with-history/output/analyses/book-1-chapter-10-analysis.md @@ -0,0 +1,143 @@ +# Chapter VSM Analysis: Wages, Profits, and Economic Viability + +## Chapter Summary + +Smith's analysis of wage and profit differentials across employments reveals the cybernetic mechanisms that maintain economic viability through natural market adjustments. He identifies five factors affecting wages (agreeableness, learning difficulty, employment constancy, trust requirements, and success probability) and two factors affecting profits (agreeableness and risk), demonstrating how these differentials are naturally compensated by corresponding advantages or disadvantages. The chapter's central thesis is that in a free society with perfect liberty, these inequalities would naturally tend toward equality as market forces correct imbalances. However, Smith systematically documents how European policy—through corporation laws, apprenticeship requirements, settlement laws, and public funding of professional education—artificially creates and maintains significant inequalities in economic advantages across different employments. These policy interventions obstruct the free circulation of labour and capital, preventing the natural equilibration that would otherwise occur. The analysis reveals how wage and profit differentials function as information signals in the economic system, coordinating labour allocation and capital investment while policy interventions act as noise that disrupts these vital signals and reduces overall economic viability. + +## Entities Extracted + +The chapter identifies numerous economic entities that represent different aspects of the wage and profit system: + +- **wages of labour** - Monetary compensation for workers varying by five principal circumstances +- **profits of stock** - Returns to capital affected primarily by agreeableness and risk +- **apprenticeships** - Training systems creating barriers to trade entry +- **corporation laws** - Legal privileges restricting competition in trades +- **settlement laws** - Legal provisions restricting poor person mobility +- **certificates** - Documents allowing settlement-free residence between parishes +- **public education of professionals** - State-funded training creating oversupply +- **speculative trade** - Rapid capital movement based on anticipated opportunities +- **natural state of employments** - Free-market conditions without artificial restraints +- **ordinary state of employments** - Typical market conditions with normal demand +- **principal employments** - Main occupations providing primary subsistence +- **public mourning effects** - Temporary demand increases affecting commodity prices +- **piece-work wages** - Output-based compensation systems +- **common labour wages** - Standard compensation for basic manual work +- **scarcity of hands** - Local labour shortages driving wage increases +- **overstocked market conditions** - Labour oversupply forcing wage reductions +- **advancing state of manufacture** - Expanding industrial production +- **declining manufacture** - Contracting industrial production +- **inland trade** - Domestic commercial exchange +- **foreign trade** - International commercial exchange +- **smuggling trade** - Illegal cross-border commerce +- **common returns of stock** - Average capital profits under normal conditions +- **extraordinary profits** - Returns significantly exceeding average profits +- **public registers of manufactures** - Official records of tradesmen facilitating coordination +- **exclusive corporation** - Legally privileged trading organisations +- **adulterine guilds** - Unauthorised trade associations +- **university of trades** - Medieval term for incorporated trades +- **assize of bread** - Price regulation for essential commodities +- **retail trade** - Direct consumer sales +- **wholesale trade** - Bulk commercial exchange +- **public lottery** - Government gambling schemes as behavioural analogies +- **maritime employment** - Work in shipping and naval services +- **military employment** - Service in armed forces +- **public executioner** - State official performing capital punishment +- **poacher** - Illegal hunter or fisher +- **coal-heaver** - Labourer unloading coal from ships +- **collier** - Coal miner +- **butcher trade** - Commercial meat processing and sales +- **inn or tavern keeper** - Hospitality service provider + +## VSM Mappings + +The analysis reveals comprehensive coverage across the VSM framework: + +**System 1 (Operations):** +- wages of labour → S1 Operations (Strong) +- profits of stock → S1 Operations (Strong) +- piece-work wages → S1 Operations (Strong) +- common labour wages → S1 Operations (Strong) +- advancing state of manufacture → S1 Operations (Strong) +- declining manufacture → S1 Operations (Strong) +- inland trade → S1 Operations (Strong) +- retail trade → S1 Operations (Strong) +- wholesale trade → S1 Operations (Strong) +- maritime employment → S1 Operations (Strong) +- military employment → S1 Operations (Strong) +- public executioner → S1 Operations (Strong) +- poacher → S1 Operations (Strong) +- coal-heaver → S1 Operations (Strong) +- collier → S1 Operations (Strong) +- butcher trade → S1 Operations (Strong) +- inn or tavern keeper → S1 Operations (Strong) + +**System 2 (Coordination):** +- wages of labour → S2 Coordination (Strong) +- apprenticeships → S2 Coordination (Moderate) +- certificates → S2 Coordination (Strong) +- scarcity of hands → S2 Coordination (Strong) +- overstocked market conditions → S2 Coordination (Strong) +- public registers of manufactures → S2 Coordination (Strong) + +**System 3 (Control):** +- wages of labour → S3 Control (Strong) +- profits of stock → S3 Control (Strong) +- apprenticeships → S3 Control (Strong) +- corporation laws → S3 Control (Strong) +- settlement laws → S3 Control (Strong) +- public education of professionals → S3 Control (Strong) +- piece-work wages → S3 Control (Strong) +- assize of bread → S3 Control (Strong) +- exclusive corporation → S3 Control (Strong) +- adulterine guilds → S3 Control (Moderate) +- university of trades → S3 Control (Strong) + +**System 4 (Intelligence):** +- profits of stock → S4 Intelligence (Strong) +- speculative trade → S4 Intelligence (Strong) +- public mourning effects → S4 Intelligence (Strong) +- foreign trade → S4 Intelligence (Strong) +- smuggling trade → S4 Intelligence (Strong) +- common returns of stock → S4 Intelligence (Strong) +- extraordinary profits → S4 Intelligence (Strong) +- public lottery → S4 Intelligence (Moderate) + +**System 5 (Policy):** +- corporation laws → S5 Policy (Strong) +- natural state of employments → S5 Policy (Strong) + +**System 3* (Audit):** +- No mappings identified + +## VSM Coverage Assessment + +The chapter demonstrates extensive coverage across the VSM framework with strong representation of all primary systems: + +**System 1 (Operations)** receives the most comprehensive coverage, with 17 distinct mappings representing the full spectrum of economic activities from basic labour to complex commercial enterprises. This reflects Smith's focus on how different employments function as the primary productive activities of the economy. + +**System 2 (Coordination)** is well-represented with 7 mappings, covering the coordination mechanisms that balance labour markets, facilitate trade, and resolve conflicts between different economic activities. The coordination of labour allocation through wage differentials is a central theme. + +**System 3 (Control)** receives robust coverage with 12 mappings, reflecting Smith's detailed analysis of how policy interventions, institutional structures, and regulatory mechanisms govern economic operations and create artificial constraints on market functioning. + +**System 4 (Intelligence)** is well-covered with 9 mappings, demonstrating how profit differentials, market opportunities, and risk assessments function as information signals that guide capital allocation and strategic economic decisions. + +**System 5 (Policy)** has 2 mappings, representing the highest-level policy frameworks that govern economic organisation and define the philosophical foundations of economic systems. + +**System 3* (Audit)** has no direct mappings, representing a gap in the analysis of how the economic system verifies and monitors its own operations outside normal reporting channels. + +## Gaps & Observations + +**Uncovered Systems:** System 3* (Audit) lacks representation in this chapter. While Smith discusses various forms of regulation and control, he does not explicitly address the audit and monitoring functions that verify economic information through direct investigation outside normal channels. This gap represents the absence of analysis regarding how the system checks for fraud, verifies weights and measures, or conducts surprise inspections of market practices. + +**Difficult Mappings:** Several entities presented mapping challenges due to their complex nature. The "university of trades" mapping to System 3 Control required interpretation of historical institutional structures. The "public lottery" mapping to System 4 Intelligence involved understanding its role as a behavioural analogy rather than a direct economic activity. The "adulterine guilds" mapping represented the challenge of mapping informal regulatory mechanisms that operate outside formal legal frameworks. + +**Emerging Patterns:** A clear pattern emerges showing Smith's emphasis on how wage and profit differentials function as the primary information signals in the economic system. These differentials coordinate labour allocation, capital investment, and strategic adaptation to environmental conditions. The analysis reveals a strong focus on how policy interventions create noise in these vital signals, disrupting the natural coordination mechanisms that maintain economic viability. + +**Future Enrichment:** To enhance coverage, future analysis could explore: +- The audit functions of market regulation (System 3*) through examination of quality control, fraud prevention, and verification mechanisms +- The role of emergent coordination mechanisms beyond formal institutions (System 2) +- The strategic intelligence functions of economic forecasting and long-term planning (System 4) +- The philosophical foundations of economic policy and their relationship to national identity (System 5) +- The recursive nature of economic systems at different scales, from individual workshops to national economies + +The chapter's comprehensive mapping to VSM systems demonstrates how Smith's economic analysis aligns with cybernetic principles of viable system organisation, with wage and profit differentials serving as the primary information channels that maintain economic viability through natural market adjustments. \ No newline at end of file diff --git a/examples/infospace-with-history/output/analyses/book-1-chapter-10-prompt.md b/examples/infospace-with-history/output/analyses/book-1-chapter-10-prompt.md new file mode 100644 index 00000000..bb2bf767 --- /dev/null +++ b/examples/infospace-with-history/output/analyses/book-1-chapter-10-prompt.md @@ -0,0 +1,3611 @@ +# Synthesize Chapter VSM Analysis + +You are an interdisciplinary analyst combining classical economics with +cybernetic systems theory. Your task is to produce a comprehensive +chapter-level analysis showing how economic content maps to the +Viable System Model. + +## Source Chapter + +--- +id: book-1-chapter-10 +title: "OF WAGES AND PROFIT IN THE DIFFERENT EMPLOYMENTS OF LABOUR AND STOCK." +book: "1" +chapter: 10 +artifact_type: content +--- + +CHAPTER X. +OF WAGES AND PROFIT IN THE DIFFERENT +EMPLOYMENTS OF LABOUR AND STOCK. + + + + The whole of the advantages and disadvantages of the different employments + of labour and stock, must, in the same neighbourhood, be either perfectly + equal, or continually tending to equality. If, in the same neighbourhood, + there was any employment evidently either more or less advantageous than + the rest, so many people would crowd into it in the one case, and so many + would desert it in the other, that its advantages would soon return to the + level of other employments. This, at least, would be the case in a society + where things were left to follow their natural course, where there was + perfect liberty, and where every man was perfectly free both to choose + what occupation he thought proper, and to change it as often as he thought + proper. Every man’s interest would prompt him to seek the advantageous, + and to shun the disadvantageous employment. + + Pecuniary wages and profit, indeed, are everywhere in Europe extremely + different, according to the different employments of labour and stock. But + this difference arises, partly from certain circumstances in the + employments themselves, which, either really, or at least in the + imagination of men, make up for a small pecuniary gain in some, and + counterbalance a great one in others, and partly from the policy of + Europe, which nowhere leaves things at perfect liberty. + + The particular consideration of those circumstances, and of that policy, + will divide this Chapter into two parts. + + + + + PART I. Inequalities arising from the nature of the employments + themselves. + + The five following are the principal circumstances which, so far as I have + been able to observe, make up for a small pecuniary gain in some + employments, and counterbalance a great one in others. First, the + agreeableness or disagreeableness of the employments themselves; secondly, + the easiness and cheapness, or the difficulty and expense of learning + them; thirdly, the constancy or inconstancy of employment in them; + fourthly, the small or great trust which must be reposed in those who + exercise them; and, fifthly, the probability or improbability of success + in them. + + First, the wages of labour vary with the ease or hardship, the cleanliness + or dirtiness, the honourableness or dishonourableness, of the employment. + Thus in most places, take the year round, a journeyman tailor earns less + than a journeyman weaver. His work is much easier. A journeyman weaver + earns less than a journeyman smith. His work is not always easier, but it + is much cleanlier. A journeyman blacksmith, though an artificer, seldom + earns so much in twelve hours, as a collier, who is only a labourer, does + in eight. His work is not quite so dirty, is less dangerous, and is + carried on in day-light, and above ground. Honour makes a great part of + the reward of all honourable professions. In point of pecuniary gain, all + things considered, they are generally under-recompensed, as I shall + endeavour to shew by and by. Disgrace has the contrary effect. The trade + of a butcher is a brutal and an odious business; but it is in most places + more profitable than the greater part of common trades. The most + detestable of all employments, that of public executioner, is, in + proportion to the quantity of work done, better paid than any common trade + whatever. + + Hunting and fishing, the most important employments of mankind in the rude + state of society, become, in its advanced state, their most agreeable + amusements, and they pursue for pleasure what they once followed from + necessity. In the advanced state of society, therefore, they are all very + poor people who follow as a trade, what other people pursue as a pastime. + Fishermen have been so since the time of Theocritus. {See Idyllium xxi.}. + A poacher is everywhere a very poor man in Great Britain. In countries + where the rigour of the law suffers no poachers, the licensed hunter is + not in a much better condition. The natural taste for those employments + makes more people follow them, than can live comfortably by them; and the + produce of their labour, in proportion to its quantity, comes always too + cheap to market, to afford any thing but the most scanty subsistence to + the labourers. + + Disagreeableness and disgrace affect the profits of stock in the same + manner as the wages of labour. The keeper of an inn or tavern, who is + never master of his own house, and who is exposed to the brutality of + every drunkard, exercises neither a very agreeable nor a very creditable + business. But there is scarce any common trade in which a small stock + yields so great a profit. + + Secondly, the wages of labour vary with the easiness and cheapness, or the + difficulty and expense, of learning the business. + + When any expensive machine is erected, the extraordinary work to be + performed by it before it is worn out, it must be expected, will replace + the capital laid out upon it, with at least the ordinary profits. A man + educated at the expense of much labour and time to any of those + employments which require extraordinary dexterity and skill, may be + compared to one of those expensive machines. The work which he learns to + perform, it must be expected, over and above the usual wages of common + labour, will replace to him the whole expense of his education, with at + least the ordinary profits of an equally valuable capital. It must do this + too in a reasonable time, regard being had to the very uncertain duration + of human life, in the same manner as to the more certain duration of the + machine. + + The difference between the wages of skilled labour and those of common + labour, is founded upon this principle. + + The policy of Europe considers the labour of all mechanics, artificers, + and manufacturers, as skilled labour; and that of all country labourers as + common labour. It seems to suppose that of the former to be of a more nice + and delicate nature than that of the latter. It is so perhaps in some + cases; but in the greater part it is quite otherwise, as I shall endeavour + to shew by and by. The laws and customs of Europe, therefore, in order to + qualify any person for exercising the one species of labour, impose the + necessity of an apprenticeship, though with different degrees of rigour in + different places. They leave the other free and open to every body. During + the continuance of the apprenticeship, the whole labour of the apprentice + belongs to his master. In the meantime he must, in many cases, be + maintained by his parents or relations, and, in almost all cases, must be + clothed by them. Some money, too, is commonly given to the master for + teaching him his trade. They who cannot give money, give time, or become + bound for more than the usual number of years; a consideration which, + though it is not always advantageous to the master, on account of the + usual idleness of apprentices, is always disadvantageous to the + apprentice. In country labour, on the contrary, the labourer, while he is + employed about the easier, learns the more difficult parts of his + business, and his own labour maintains him through all the different + stages of his employment. It is reasonable, therefore, that in Europe the + wages of mechanics, artificers, and manufacturers, should be somewhat + higher than those of common labourers. They are so accordingly, and their + superior gains make them, in most places, be considered as a superior rank + of people. This superiority, however, is generally very small: the daily + or weekly earnings of journeymen in the more common sorts of manufactures, + such as those of plain linen and woollen cloth, computed at an average, + are, in most places, very little more than the day-wages of common + labourers. Their employment, indeed, is more steady and uniform, and the + superiority of their earnings, taking the whole year together, may be + somewhat greater. It seems evidently, however, to be no greater than what + is sufficient to compensate the superior expense of their education. + Education in the ingenious arts, and in the liberal professions, is still + more tedious and expensive. The pecuniary recompence, therefore, of + painters and sculptors, of lawyers and physicians, ought to be much more + liberal; and it is so accordingly. + + The profits of stock seem to be very little affected by the easiness or + difficulty of learning the trade in which it is employed. All the + different ways in which stock is commonly employed in great towns seem, in + reality, to be almost equally easy and equally difficult to learn. One + branch, either of foreign or domestic trade, cannot well be a much more + intricate business than another. + + Thirdly, the wages of labour in different occupations vary with the + constancy or inconstancy of employment. + + Employment is much more constant in some trades than in others. In the + greater part of manufactures, a journeyman maybe pretty sure of employment + almost every day in the year that he is able to work. A mason or + bricklayer, on the contrary, can work neither in hard frost nor in foul + weather, and his employment at all other times depends upon the occasional + calls of his customers. He is liable, in consequence, to be frequently + without any. What he earns, therefore, while he is employed, must not only + maintain him while he is idle, but make him some compensation for those + anxious and desponding moments which the thought of so precarious a + situation must sometimes occasion. Where the computed earnings of the + greater part of manufacturers, accordingly, are nearly upon a level with + the day-wages of common labourers, those of masons and bricklayers are + generally from one-half more to double those wages. Where common labourers + earn four or five shillings a-week, masons and bricklayers frequently earn + seven and eight; where the former earn six, the latter often earn nine and + ten; and where the former earn nine and ten, as in London, the latter + commonly earn fifteen and eighteen. No species of skilled labour, however, + seems more easy to learn than that of masons and bricklayers. Chairmen in + London, during the summer season, are said sometimes to be employed as + bricklayers. The high wages of those workmen, therefore, are not so much + the recompence of their skill, as the compensation for the inconstancy of + their employment. + + A house-carpenter seems to exercise rather a nicer and a more ingenious + trade than a mason. In most places, however, for it is not universally so, + his day-wages are somewhat lower. His employment, though it depends much, + does not depend so entirely upon the occasional calls of his customers; + and it is not liable to be interrupted by the weather. + + When the trades which generally afford constant employment, happen in a + particular place not to do so, the wages of the workmen always rise a good + deal above their ordinary proportion to those of common labour. In London, + almost all journeymen artificers are liable to be called upon and + dismissed by their masters from day to day, and from week to week, in the + same manner as day-labourers in other places. The lowest order of + artificers, journeymen tailors, accordingly, earn their half-a-crown + a-day, though eighteen pence may be reckoned the wages of common labour. + In small towns and country villages, the wages of journeymen tailors + frequently scarce equal those of common labour; but in London they are + often many weeks without employment, particularly during the summer. + + When the inconstancy of employment is combined with the hardship, + disagreeableness, and dirtiness of the work, it sometimes raises the wages + of the most common labour above those of the most skilful artificers. A + collier working by the piece is supposed, at Newcastle, to earn commonly + about double, and, in many parts of Scotland, about three times, the wages + of common labour. His high wages arise altogether from the hardship, + disagreeableness, and dirtiness of his work. His employment may, upon most + occasions, be as constant as he pleases. The coal-heavers in London + exercise a trade which, in hardship, dirtiness, and disagreeableness, + almost equals that of colliers; and, from the unavoidable irregularity in + the arrivals of coal-ships, the employment of the greater part of them is + necessarily very inconstant. If colliers, therefore, commonly earn double + and triple the wages of common labour, it ought not to seem unreasonable + that coal-heavers should sometimes earn four and five times those wages. + In the inquiry made into their condition a few years ago, it was found + that, at the rate at which they were then paid, they could earn from six + to ten shillings a-day. Six shillings are about four times the wages of + common labour in London; and, in every particular trade, the lowest common + earnings may always be considered as those of the far greater number. How + extravagant soever those earnings may appear, if they were more than + sufficient to compensate all the disagreeable circumstances of the + business, there would soon be so great a number of competitors, as, in a + trade which has no exclusive privilege, would quickly reduce them to a + lower rate. + + The constancy or inconstancy of employment cannot affect the ordinary + profits of stock in any particular trade. Whether the stock is or is not + constantly employed, depends, not upon the trade, but the trader. + + Fourthly, the wages of labour vary according to the small or great trust + which must be reposed in the workmen. + + The wages of goldsmiths and jewellers are everywhere superior to those of + many other workmen, not only of equal, but of much superior ingenuity, on + account of the precious materials with which they are entrusted. We trust + our health to the physician, our fortune, and sometimes our life and + reputation, to the lawyer and attorney. Such confidence could not safely + be reposed in people of a very mean or low condition. Their reward must be + such, therefore, as may give them that rank in the society which so + important a trust requires. The long time and the great expense which must + be laid out in their education, when combined with this circumstance, + necessarily enhance still further the price of their labour. + + When a person employs only his own stock in trade, there is no trust; and + the credit which he may get from other people, depends, not upon the + nature of the trade, but upon their opinion of his fortune, probity and + prudence. The different rates of profit, therefore, in the different + branches of trade, cannot arise from the different degrees of trust + reposed in the traders. + + Fifthly, the wages of labour in different employments vary according to + the probability or improbability of success in them. + + The probability that any particular person shall ever be qualified for the + employments to which he is educated, is very different in different + occupations. In the greatest part of mechanic trades success is almost + certain; but very uncertain in the liberal professions. Put your son + apprentice to a shoemaker, there is little doubt of his learning to make a + pair of shoes; but send him to study the law, it as at least twenty to one + if he ever makes such proficiency as will enable him to live by the + business. In a perfectly fair lottery, those who draw the prizes ought to + gain all that is lost by those who draw the blanks. In a profession, where + twenty fail for one that succeeds, that one ought to gain all that should + have been gained by the unsuccessful twenty. The counsellor at law, who, + perhaps, at near forty years of age, begins to make something by his + profession, ought to receive the retribution, not only of his own so + tedious and expensive education, but of that of more than twenty others, + who are never likely to make any thing by it. How extravagant soever the + fees of counsellors at law may sometimes appear, their real retribution is + never equal to this. Compute, in any particular place, what is likely to + be annually gained, and what is likely to be annually spent, by all the + different workmen in any common trade, such as that of shoemakers or + weavers, and you will find that the former sum will generally exceed the + latter. But make the same computation with regard to all the counsellors + and students of law, in all the different Inns of Court, and you will find + that their annual gains bear but a very small proportion to their annual + expense, even though you rate the former as high, and the latter as low, + as can well be done. The lottery of the law, therefore, is very far from + being a perfectly fair lottery; and that as well as many other liberal and + honourable professions, is, in point of pecuniary gain, evidently + under-recompensed. + + Those professions keep their level, however, with other occupations; and, + notwithstanding these discouragements, all the most generous and liberal + spirits are eager to crowd into them. Two different causes contribute to + recommend them. First, the desire of the reputation which attends upon + superior excellence in any of them; and, secondly, the natural confidence + which every man has, more or less, not only in his own abilities, but in + his own good fortune. + + To excel in any profession, in which but few arrive at mediocrity, is the + most decisive mark of what is called genius, or superior talents. The + public admiration which attends upon such distinguished abilities makes + always a part of their reward; a greater or smaller, in proportion as it + is higher or lower in degree. It makes a considerable part of that reward + in the profession of physic; a still greater, perhaps, in that of law; in + poetry and philosophy it makes almost the whole. + + There are some very agreeable and beautiful talents, of which the + possession commands a certain sort of admiration, but of which the + exercise, for the sake of gain, is considered, whether from reason or + prejudice, as a sort of public prostitution. The pecuniary recompence, + therefore, of those who exercise them in this manner, must be sufficient, + not only to pay for the time, labour, and expense of acquiring the + talents, but for the discredit which attends the employment of them as the + means of subsistence. The exorbitant rewards of players, opera-singers, + opera-dancers, etc. are founded upon those two principles; the rarity and + beauty of the talents, and the discredit of employing them in this manner. + It seems absurd at first sight, that we should despise their persons, and + yet reward their talents with the most profuse liberality. While we do the + one, however, we must of necessity do the other, Should the public opinion + or prejudice ever alter with regard to such occupations, their pecuniary + recompence would quickly diminish. More people would apply to them, and + the competition would quickly reduce the price of their labour. Such + talents, though far from being common, are by no means so rare as + imagined. Many people possess them in great perfection, who disdain to + make this use of them; and many more are capable of acquiring them, if any + thing could be made honourably by them. + + The over-weening conceit which the greater part of men have of their own + abilities, is an ancient evil remarked by the philosophers and moralists + of all ages. Their absurd presumption in their own good fortune has been + less taken notice of. It is, however, if possible, still more universal. + There is no man living, who, when in tolerable health and spirits, has not + some share of it. The chance of gain is by every man more or less + over-valued, and the chance of loss is by most men under-valued, and by + scarce any man, who is in tolerable health and spirits, valued more than + it is worth. + + That the chance of gain is naturally overvalued, we may learn from the + universal success of lotteries. The world neither ever saw, nor ever will + see, a perfectly fair lottery, or one in which the whole gain compensated + the whole loss; because the undertaker could make nothing by it. In the + state lotteries, the tickets are really not worth the price which is paid + by the original subscribers, and yet commonly sell in the market for + twenty, thirty, and sometimes forty per cent. advance. The vain hopes of + gaining some of the great prizes is the sole cause of this demand. The + soberest people scarce look upon it as a folly to pay a small sum for the + chance of gaining ten or twenty thousand pounds, though they know that + even that small sum is perhaps twenty or thirty per cent. more than the + chance is worth. In a lottery in which no prize exceeded twenty pounds, + though in other respects it approached much nearer to a perfectly fair one + than the common state lotteries, there would not be the same demand for + tickets. In order to have a better chance for some of the great prizes, + some people purchase several tickets; and others, small shares in a still + greater number. There is not, however, a more certain proposition in + mathematics, than that the more tickets you adventure upon, the more + likely you are to be a loser. Adventure upon all the tickets in the + lottery, and you lose for certain; and the greater the number of your + tickets, the nearer you approach to this certainty. + + That the chance of loss is frequently undervalued, and scarce ever valued + more than it is worth, we may learn from the very moderate profit of + insurers. In order to make insurance, either from fire or sea-risk, a + trade at all, the common premium must be sufficient to compensate the + common losses, to pay the expense of management, and to afford such a + profit as might have been drawn from an equal capital employed in any + common trade. The person who pays no more than this, evidently pays no + more than the real value of the risk, or the lowest price at which he can + reasonably expect to insure it. But though many people have made a little + money by insurance, very few have made a great fortune; and, from this + consideration alone, it seems evident enough that the ordinary balance of + profit and loss is not more advantageous in this than in other common + trades, by which so many people make fortunes. Moderate, however, as the + premium of insurance commonly is, many people despise the risk too much to + care to pay it. Taking the whole kingdom at an average, nineteen houses in + twenty, or rather, perhaps, ninety-nine in a hundred, are not insured from + fire. Sea-risk is more alarming to the greater part of people; and the + proportion of ships insured to those not insured is much greater. Many + sail, however, at all seasons, and even in time of war, without any + insurance. This may sometimes, perhaps, be done without any imprudence. + When a great company, or even a great merchant, has twenty or thirty ships + at sea, they may, as it were, insure one another. The premium saved up on + them all may more than compensate such losses as they are likely to meet + with in the common course of chances. The neglect of insurance upon + shipping, however, in the same manner as upon houses, is, in most cases, + the effect of no such nice calculation, but of mere thoughtless rashness, + and presumptuous contempt of the risk. + + The contempt of risk, and the presumptuous hope of success, are in no + period of life more active than at the age at which young people choose + their professions. How little the fear of misfortune is then capable of + balancing the hope of good luck, appears still more evidently in the + readiness of the common people to enlist as soldiers, or to go to sea, + than in the eagerness of those of better fashion to enter into what are + called the liberal professions. + + What a common soldier may lose is obvious enough. Without regarding the + danger, however, young volunteers never enlist so readily as at the + beginning of a new war; and though they have scarce any chance of + preferment, they figure to themselves, in their youthful fancies, a + thousand occasions of acquiring honour and distinction which never occur. + These romantic hopes make the whole price of their blood. Their pay is + less than that of common labourers, and, in actual service, their fatigues + are much greater. + + The lottery of the sea is not altogether so disadvantageous as that of the + army. The son of a creditable labourer or artificer may frequently go to + sea with his father’s consent; but if he enlists as a soldier, it is + always without it. Other people see some chance of his making something by + the one trade; nobody but himself sees any of his making any thing by the + other. The great admiral is less the object of public admiration than the + great general; and the highest success in the sea service promises a less + brilliant fortune and reputation than equal success in the land. The same + difference runs through all the inferior degrees of preferment in both. By + the rules of precedency, a captain in the navy ranks with a colonel in the + army; but he does not rank with him in the common estimation. As the great + prizes in the lottery are less, the smaller ones must be more numerous. + Common sailors, therefore, more frequently get some fortune and preferment + than common soldiers; and the hope of those prizes is what principally + recommends the trade. Though their skill and dexterity are much superior + to that of almost any artificers; and though their whole life is one + continual scene of hardship and danger; yet for all this dexterity and + skill, for all those hardships and dangers, while they remain in the + condition of common sailors, they receive scarce any other recompence but + the pleasure of exercising the one and of surmounting the other. Their + wages are not greater than those of common labourers at the port which + regulates the rate of seamen’s wages. As they are continually going from + port to port, the monthly pay of those who sail from all the different + ports of Great Britain, is more nearly upon a level than that of any other + workmen in those different places; and the rate of the port to and from + which the greatest number sail, that is, the port of London, regulates + that of all the rest. At London, the wages of the greater part of the + different classes of workmen are about double those of the same classes at + Edinburgh. But the sailors who sail from the port of London, seldom earn + above three or four shillings a month more than those who sail from the + port of Leith, and the difference is frequently not so great. In time of + peace, and in the merchant-service, the London price is from a guinea to + about seven-and-twenty shillings the calendar month. A common labourer in + London, at the rate of nine or ten shillings a week, may earn in the + calendar month from forty to five-and-forty shillings. The sailor, indeed, + over and above his pay, is supplied with provisions. Their value, however, + may not perhaps always exceed the difference between his pay and that of + the common labourer; and though it sometimes should, the excess will not + be clear gain to the sailor, because he cannot share it with his wife and + family, whom he must maintain out of his wages at home. + + The dangers and hair-breadth escapes of a life of adventures, instead of + disheartening young people, seem frequently to recommend a trade to them. + A tender mother, among the inferior ranks of people, is often afraid to + send her son to school at a sea-port town, lest the sight of the ships, + and the conversation and adventures of the sailors, should entice him to + go to sea. The distant prospect of hazards, from which we can hope to + extricate ourselves by courage and address, is not disagreeable to us, and + does not raise the wages of labour in any employment. It is otherwise with + those in which courage and address can be of no avail. In trades which are + known to be very unwholesome, the wages of labour are always remarkably + high. Unwholesomeness is a species of disagreeableness, and its effects + upon the wages of labour are to be ranked under that general head. + + In all the different employments of stock, the ordinary rate of profit + varies more or less with the certainty or uncertainty of the returns. + These are, in general, less uncertain in the inland than in the foreign + trade, and in some branches of foreign trade than in others; in the trade + to North America, for example, than in that to Jamaica. The ordinary rate + of profit always rises more or less with the risk. It does not, however, + seem to rise in proportion to it, or so as to compensate it completely. + Bankruptcies are most frequent in the most hazardous trades. The most + hazardous of all trades, that of a smuggler, though, when the adventure + succeeds, it is likewise the most profitable, is the infallible road to + bankruptcy. The presumptuous hope of success seems to act here as upon all + other occasions, and to entice so many adventurers into those hazardous + trades, that their competition reduces the profit below what is sufficient + to compensate the risk. To compensate it completely, the common returns + ought, over and above the ordinary profits of stock, not only to make up + for all occasional losses, but to afford a surplus profit to the + adventurers, of the same nature with the profit of insurers. But if the + common returns were sufficient for all this, bankruptcies would not be + more frequent in these than in other trades. + + Of the five circumstances, therefore, which vary the wages of labour, two + only affect the profits of stock; the agreeableness or disagreeableness of + the business, and the risk or security with which it is attended. In point + of agreeableness or disagreeableness, there is little or no difference in + the far greater part of the different employments of stock, but a great + deal in those of labour; and the ordinary profit of stock, though it rises + with the risk, does not always seem to rise in proportion to it. It should + follow from all this, that, in the same society or neighbourhood, the + average and ordinary rates of profit in the different employments of stock + should be more nearly upon a level than the pecuniary wages of the + different sorts of labour. + + They are so accordingly. The difference between the earnings of a common + labourer and those of a well employed lawyer or physician, is evidently + much greater than that between the ordinary profits in any two different + branches of trade. The apparent difference, besides, in the profits of + different trades, is generally a deception arising from our not always + distinguishing what ought to be considered as wages, from what ought to be + considered as profit. + + Apothecaries’ profit is become a bye-word, denoting something uncommonly + extravagant. This great apparent profit, however, is frequently no more + than the reasonable wages of labour. The skill of an apothecary is a much + nicer and more delicate matter than that of any artificer whatever; and + the trust which is reposed in him is of much greater importance. He is the + physician of the poor in all cases, and of the rich when the distress or + danger is not very great. His reward, therefore, ought to be suitable to + his skill and his trust; and it arises generally from the price at which + he sells his drugs. But the whole drugs which the best employed apothecary + in a large market-town, will sell in a year, may not perhaps cost him + above thirty or forty pounds. Though he should sell them, therefore, for + three or four hundred, or at a thousand per cent. profit, this may + frequently be no more than the reasonable wages of his labour, charged, in + the only way in which he can charge them, upon the price of his drugs. The + greater part of the apparent profit is real wages disguised in the garb of + profit. + + In a small sea-port town, a little grocer will make forty or fifty per + cent. upon a stock of a single hundred pounds, while a considerable + wholesale merchant in the same place will scarce make eight or ten per + cent. upon a stock of ten thousand. The trade of the grocer may be + necessary for the conveniency of the inhabitants, and the narrowness of + the market may not admit the employment of a larger capital in the + business. The man, however, must not only live by his trade, but live by + it suitably to the qualifications which it requires. Besides possessing a + little capital, he must be able to read, write, and account and must be a + tolerable judge, too, of perhaps fifty or sixty different sorts of goods, + their prices, qualities, and the markets where they are to be had + cheapest. He must have all the knowledge, in short, that is necessary for + a great merchant, which nothing hinders him from becoming but the want of + a sufficient capital. Thirty or forty pounds a year cannot be considered + as too great a recompence for the labour of a person so accomplished. + Deduct this from the seemingly great profits of his capital, and little + more will remain, perhaps, than the ordinary profits of stock. The greater + part of the apparent profit is, in this case too, real wages. + + The difference between the apparent profit of the retail and that of the + wholesale trade, is much less in the capital than in small towns and + country villages. Where ten thousand pounds can be employed in the grocery + trade, the wages of the grocer’s labour must be a very trifling addition + to the real profits of so great a stock. The apparent profits of the + wealthy retailer, therefore, are there more nearly upon a level with those + of the wholesale merchant. It is upon this account that goods sold by + retail are generally as cheap, and frequently much cheaper, in the capital + than in small towns and country villages. Grocery goods, for example, are + generally much cheaper; bread and butchers’ meat frequently as cheap. It + costs no more to bring grocery goods to the great town than to the country + village; but it costs a great deal more to bring corn and cattle, as the + greater part of them must be brought from a much greater distance. The + prime cost of grocery goods, therefore, being the same in both places, + they are cheapest where the least profit is charged upon them. The prime + cost of bread and butchers’ meat is greater in the great town than in the + country village; and though the profit is less, therefore they are not + always cheaper there, but often equally cheap. In such articles as bread + and butchers’ meat, the same cause which diminishes apparent profit, + increases prime cost. The extent of the market, by giving employment to + greater stocks, diminishes apparent profit; but by requiring supplies from + a greater distance, it increases prime cost. This diminution of the one + and increase of the other, seem, in most cases, nearly to counterbalance + one another; which is probably the reason that, though the prices of corn + and cattle are commonly very different in different parts of the kingdom, + those of bread and butchers’ meat are generally very nearly the same + through the greater part of it. + + Though the profits of stock, both in the wholesale and retail trade, are + generally less in the capital than in small towns and country villages, + yet great fortunes are frequently acquired from small beginnings in the + former, and scarce ever in the latter. In small towns and country + villages, on account of the narrowness of the market, trade cannot always + be extended as stock extends. In such places, therefore, though the rate + of a particular person’s profits may be very high, the sum or amount of + them can never be very great, nor consequently that of his annual + accumulation. In great towns, on the contrary, trade can be extended as + stock increases, and the credit of a frugal and thriving man increases + much faster than his stock. His trade is extended in proportion to the + amount of both; and the sum or amount of his profits is in proportion to + the extent of his trade, and his annual accumulation in proportion to the + amount of his profits. It seldom happens, however, that great fortunes are + made, even in great towns, by any one regular, established, and well-known + branch of business, but in consequence of a long life of industry, + frugality, and attention. Sudden fortunes, indeed, are sometimes made in + such places, by what is called the trade of speculation. The speculative + merchant exercises no one regular, established, or well-known branch of + business. He is a corn merchant this year, and a wine merchant the next, + and a sugar, tobacco, or tea merchant the year after. He enters into every + trade, when he foresees that it is likely to be more than commonly + profitable, and he quits it when he foresees that its profits are likely + to return to the level of other trades. His profits and losses, therefore, + can bear no regular proportion to those of any one established and + well-known branch of business. A bold adventurer may sometimes acquire a + considerable fortune by two or three successful speculations, but is just + as likely to lose one by two or three unsuccessful ones. This trade can be + carried on nowhere but in great towns. It is only in places of the most + extensive commerce and correspondence that the intelligence requisite for + it can be had. + + The five circumstances above mentioned, though they occasion considerable + inequalities in the wages of labour and profits of stock, occasion none in + the whole of the advantages and disadvantages, real or imaginary, of the + different employments of either. The nature of those circumstances is + such, that they make up for a small pecuniary gain in some, and + counterbalance a great one in others. + + In order, however, that this equality may take place in the whole of their + advantages or disadvantages, three things are requisite, even where there + is the most perfect freedom. First the employments must be well known and + long established in the neighbourhood; secondly, they must be in their + ordinary, or what may be called their natural state; and, thirdly, they + must be the sole or principal employments of those who occupy them. + + First, this equality can take place only in those employments which are + well known, and have been long established in the neighbourhood. + + Where all other circumstances are equal, wages are generally higher in new + than in old trades. When a projector attempts to establish a new + manufacture, he must at first entice his workmen from other employments, + by higher wages than they can either earn in their own trades, or than the + nature of his work would otherwise require; and a considerable time must + pass away before he can venture to reduce them to the common level. + Manufactures for which the demand arises altogether from fashion and + fancy, are continually changing, and seldom last long enough to be + considered as old established manufactures. Those, on the contrary, for + which the demand arises chiefly from use or necessity, are less liable to + change, and the same form or fabric may continue in demand for whole + centuries together. The wages of labour, therefore, are likely to be + higher in manufactures of the former, than in those of the latter kind. + Birmingham deals chiefly in manufactures of the former kind; Sheffield in + those of the latter; and the wages of labour in those two different places + are said to be suitable to this difference in the nature of their + manufactures. + + The establishment of any new manufacture, of any new branch of commerce, + or of any new practice in agriculture, is always a speculation from which + the projector promises himself extraordinary profits. These profits + sometimes are very great, and sometimes, more frequently, perhaps, they + are quite otherwise; but, in general, they bear no regular proportion to + those of other old trades in the neighbourhood. If the project succeeds, + they are commonly at first very high. When the trade or practice becomes + thoroughly established and well known, the competition reduces them to the + level of other trades. + + Secondly, this equality in the whole of the advantages and disadvantages + of the different employments of labour and stock, can take place only in + the ordinary, or what may be called the natural state of those + employments. + + The demand for almost every different species of labour is sometimes + greater, and sometimes less than usual. In the one case, the advantages of + the employment rise above, in the other they fall below the common level. + The demand for country labour is greater at hay-time and harvest than + during the greater part of the year; and wages rise with the demand. In + time of war, when forty or fifty thousand sailors are forced from the + merchant service into that of the king, the demand for sailors to merchant + ships necessarily rises with their scarcity; and their wages, upon such + occasions, commonly rise from a guinea and seven-and-twenty shillings to + forty shillings and three pounds a-month. In a decaying manufacture, on + the contrary, many workmen, rather than quit their own trade, are + contented with smaller wages than would otherwise be suitable to the + nature of their employment. + + The profits of stock vary with the price of the commodities in which it is + employed. As the price of any commodity rises above the ordinary or + average rate, the profits of at least some part of the stock that is + employed in bringing it to market, rise above their proper level, and as + it falls they sink below it. All commodities are more or less liable to + variations of price, but some are much more so than others. In all + commodities which are produced by human industry, the quantity of industry + annually employed is necessarily regulated by the annual demand, in such a + manner that the average annual produce may, as nearly as possible, be + equal to the average annual consumption. In some employments, it has + already been observed, the same quantity of industry will always produce + the same, or very nearly the same quantity of commodities. In the linen or + woollen manufactures, for example, the same number of hands will annually + work up very nearly the same quantity of linen and woollen cloth. The + variations in the market price of such commodities, therefore, can arise + only from some accidental variation in the demand. A public mourning + raises the price of black cloth. But as the demand for most sorts of plain + linen and woollen cloth is pretty uniform, so is likewise the price. But + there are other employments in which the same quantity of industry will + not always produce the same quantity of commodities. The same quantity of + industry, for example, will, in different years, produce very different + quantities of corn, wine, hops, sugar, tobacco, etc. The price of such + commodities, therefore, varies not only with the variations of demand, but + with the much greater and more frequent variations of quantity, and is + consequently extremely fluctuating; but the profit of some of the dealers + must necessarily fluctuate with the price of the commodities. The + operations of the speculative merchant are principally employed about such + commodities. He endeavours to buy them up when he foresees that their + price is likely to rise, and to sell them when it is likely to fall. + + Thirdly, this equality in the whole of the advantages and disadvantages of + the different employments of labour and stock, can take place only in such + as are the sole or principal employments of those who occupy them. + + When a person derives his subsistence from one employment, which does not + occupy the greater part of his time, in the intervals of his leisure he is + often willing to work at another for less wages than would otherwise suit + the nature of the employment. + + There still subsists, in many parts of Scotland, a set of people called + cottars or cottagers, though they were more frequent some years ago than + they are now. They are a sort of out-servants of the landlords and + farmers. The usual reward which they receive from their master is a house, + a small garden for pot-herbs, as much grass as will feed a cow, and, + perhaps, an acre or two of bad arable land. When their master has occasion + for their labour, he gives them, besides, two pecks of oatmeal a-week, + worth about sixteen pence sterling. During a great part of the year, he + has little or no occasion for their labour, and the cultivation of their + own little possession is not sufficient to occupy the time which is left + at their own disposal. When such occupiers were more numerous than they + are at present, they are said to have been willing to give their spare + time for a very small recompence to any body, and to have wrought for less + wages than other labourers. In ancient times, they seem to have been + common all over Europe. In countries ill cultivated, and worse inhabited, + the greater part of landlords and farmers could not otherwise provide + themselves with the extraordinary number of hands which country labour + requires at certain seasons. The daily or weekly recompence which such + labourers occasionally received from their masters, was evidently not the + whole price of their labour. Their small tenement made a considerable part + of it. This daily or weekly recompence, however, seems to have been + considered as the whole of it, by many writers who have collected the + prices of labour and provisions in ancient times, and who have taken + pleasure in representing both as wonderfully low. + + The produce of such labour comes frequently cheaper to market than would + otherwise be suitable to its nature. Stockings, in many parts of Scotland, + are knit much cheaper than they can anywhere be wrought upon the loom. + They are the work of servants and labourers who derive the principal part + of their subsistence from some other employment. More than a thousand pair + of Shetland stockings are annually imported into Leith, of which the price + is from fivepence to seven-pence a pair. At Lerwick, the small capital of + the Shetland islands, tenpence a-day, I have been assured, is a common + price of common labour. In the same islands, they knit worsted stockings + to the value of a guinea a pair and upwards. + + The spinning of linen yarn is carried on in Scotland nearly in the same + way as the knitting of stockings, by servants, who are chiefly hired for + other purposes. They earn but a very scanty subsistence, who endeavour to + get their livelihood by either of those trades. In most parts of Scotland, + she is a good spinner who can earn twentypence a-week. + + In opulent countries, the market is generally so extensive, that any one + trade is sufficient to employ the whole labour and stock of those who + occupy it. Instances of people living by one employment, and, at the same + time, deriving some little advantage from another, occur chiefly in poor + countries. The following instance, however, of something of the same kind, + is to be found in the capital of a very rich one. There is no city in + Europe, I believe, in which house-rent is dearer than in London, and yet I + know no capital in which a furnished apartment can be hired so cheap. + Lodging is not only much cheaper in London than in Paris; it is much + cheaper than in Edinburgh, of the same degree of goodness; and, what may + seem extraordinary, the dearness of house-rent is the cause of the + cheapness of lodging. The dearness of house-rent in London arises, not + only from those causes which render it dear in all great capitals, the + dearness of labour, the dearness of all the materials of building, which + must generally be brought from a great distance, and, above all, the + dearness of ground-rent, every landlord acting the part of a monopolist, + and frequently exacting a higher rent for a single acre of bad land in a + town, than can be had for a hundred of the best in the country; but it + arises in part from the peculiar manners and customs of the people, which + oblige every master of a family to hire a whole house from top to bottom. + A dwelling-house in England means every thing that is contained under the + same roof. In France, Scotland, and many other parts of Europe, it + frequently means no more than a single storey. A tradesman in London is + obliged to hire a whole house in that part of the town where his customers + live. His shop is upon the ground floor, and he and his family sleep in + the garret; and he endeavours to pay a part of his house-rent by letting + the two middle storeys to lodgers. He expects to maintain his family by + his trade, and not by his lodgers. Whereas at Paris and Edinburgh, people + who let lodgings have commonly no other means of subsistence; and the + price of the lodging must pay, not only the rent of the house, but the + whole expense of the family. + + + + + PART II.—Inequalities occasioned by the Policy of Europe. + + Such are the inequalities in the whole of the advantages and disadvantages + of the different employments of labour and stock, which the defect of any + of the three requisites above mentioned must occasion, even where there is + the most perfect liberty. But the policy of Europe, by not leaving things + at perfect liberty, occasions other inequalities of much greater + importance. + + It does this chiefly in the three following ways. First, by restraining + the competition in some employments to a smaller number than would + otherwise be disposed to enter into them; secondly, by increasing it in + others beyond what it naturally would be; and, thirdly, by obstructing the + free circulation of labour and stock, both from employment to employment, + and from place to place. + + First, The policy of Europe occasions a very important inequality in the + whole of the advantages and disadvantages of the different employments of + labour and stock, by restraining the competition in some employments to a + smaller number than might otherwise be disposed to enter into them. + + The exclusive privileges of corporations are the principal means it makes + use of for this purpose. + + The exclusive privilege of an incorporated trade necessarily restrains the + competition, in the town where it is established, to those who are free of + the trade. To have served an apprenticeship in the town, under a master + properly qualified, is commonly the necessary requisite for obtaining this + freedom. The bye-laws of the corporation regulate sometimes the number of + apprentices which any master is allowed to have, and almost always the + number of years which each apprentice is obliged to serve. The intention + of both regulations is to restrain the competition to a much smaller + number than might otherwise be disposed to enter into the trade. The + limitation of the number of apprentices restrains it directly. A long term + of apprenticeship restrains it more indirectly, but as effectually, by + increasing the expense of education. + + In Sheffield, no master cutler can have more than one apprentice at a + time, by a bye-law of the corporation. In Norfolk and Norwich, no master + weaver can have more than two apprentices, under pain of forfeiting five + pounds a-month to the king. No master hatter can have more than two + apprentices anywhere in England, or in the English plantations, under pain + of forfeiting; five pounds a-month, half to the king, and half to him who + shall sue in any court of record. Both these regulations, though they have + been confirmed by a public law of the kingdom, are evidently dictated by + the same corporation-spirit which enacted the bye-law of Sheffield. The + silk-weavers in London had scarce been incorporated a year, when they + enacted a bye-law, restraining any master from having more than two + apprentices at a time. It required a particular act of parliament to + rescind this bye-law. + + Seven years seem anciently to have been, all over Europe, the usual term + established for the duration of apprenticeships in the greater part of + incorporated trades. All such incorporations were anciently called + universities, which, indeed, is the proper Latin name for any + incorporation whatever. The university of smiths, the university of + tailors, etc. are expressions which we commonly meet with in the old + charters of ancient towns. When those particular incorporations, which are + now peculiarly called universities, were first established, the term of + years which it was necessary to study, in order to obtain the degree of + master of arts, appears evidently to have been copied from the term of + apprenticeship in common trades, of which the incorporations were much + more ancient. As to have wrought seven years under a master properly + qualified, was necessary, in order to entitle any person to become a + master, and to have himself apprentices in a common trade; so to have + studied seven years under a master properly qualified, was necessary to + entitle him to become a master, teacher, or doctor (words anciently + synonymous), in the liberal arts, and to have scholars or apprentices + (words likewise originally synonymous) to study under him. + + By the 5th of Elizabeth, commonly called the Statute of Apprenticeship, it + was enacted, that no person should, for the future, exercise any trade, + craft, or mystery, at that time exercised in England, unless he had + previously served to it an apprenticeship of seven years at least; and + what before had been the bye-law of many particular corporations, became + in England the general and public law of all trades carried on in market + towns. For though the words of the statute are very general, and seem + plainly to include the whole kingdom, by interpretation its operation has + been limited to market towns; it having been held that, in country + villages, a person may exercise several different trades, though he has + not served a seven years apprenticeship to each, they being necessary for + the conveniency of the inhabitants, and the number of people frequently + not being sufficient to supply each with a particular set of hands. By a + strict interpretation of the words, too, the operation of this statute has + been limited to those trades which were established in England before the + 5th of Elizabeth, and has never been extended to such as have been + introduced since that time. This limitation has given occasion to several + distinctions, which, considered as rules of police, appear as foolish as + can well be imagined. It has been adjudged, for example, that a + coach-maker can neither himself make nor employ journeymen to make his + coach-wheels, but must buy them of a master wheel-wright; this latter + trade having been exercised in England before the 5th of Elizabeth. But a + wheel-wright, though he has never served an apprenticeship to a + coachmaker, may either himself make or employ journeymen to make coaches; + the trade of a coachmaker not being within the statute, because not + exercised in England at the time when it was made. The manufactures of + Manchester, Birmingham, and Wolverhampton, are many of them, upon this + account, not within the statute, not having been exercised in England + before the 5th of Elizabeth. + + In France, the duration of apprenticeships is different in different towns + and in different trades. In Paris, five years is the term required in a + great number; but, before any person can be qualified to exercise the + trade as a master, he must, in many of them, serve five years more as a + journeyman. During this latter term, he is called the companion of his + master, and the term itself is called his companionship. + + In Scotland, there is no general law which regulates universally the + duration of apprenticeships. The term is different in different + corporations. Where it is long, a part of it may generally be redeemed by + paying a small fine. In most towns, too, a very small fine is sufficient + to purchase the freedom of any corporation. The weavers of linen and + hempen cloth, the principal manufactures of the country, as well as all + other artificers subservient to them, wheel-makers, reel-makers, etc. may + exercise their trades in any town-corporate without paying any fine. In + all towns-corporate, all persons are free to sell butchers’ meat upon any + lawful day of the week. Three years is, in Scotland, a common term of + apprenticeship, even in some very nice trades; and, in general, I know of + no country in Europe, in which corporation laws are so little oppressive. + + The property which every man has in his own labour, as it is the original + foundation of all other property, so it is the most sacred and inviolable. + The patrimony of a poor man lies in the strength and dexterity of his + hands; and to hinder him from employing this strength and dexterity in + what manner he thinks proper, without injury to his neighbour, is a plain + violation of this most sacred property. It is a manifest encroachment upon + the just liberty, both of the workman, and of those who might be disposed + to employ him. As it hinders the one from working at what he thinks + proper, so it hinders the others from employing whom they think proper. To + judge whether he is fit to be employed, may surely be trusted to the + discretion of the employers, whose interest it so much concerns. The + affected anxiety of the lawgiver, lest they should employ an improper + person, is evidently as impertinent as it is oppressive. + + The institution of long apprenticeships can give no security that + insufficient workmanship shall not frequently be exposed to public sale. + When this is done, it is generally the effect of fraud, and not of + inability; and the longest apprenticeship can give no security against + fraud. Quite different regulations are necessary to prevent this abuse. + The sterling mark upon plate, and the stamps upon linen and woollen cloth, + give the purchaser much greater security than any statute of + apprenticeship. He generally looks at these, but never thinks it worth + while to enquire whether the workman had served a seven years + apprenticeship. + + The institution of long apprenticeships has no tendency to form young + people to industry. A journeyman who works by the piece is likely to be + industrious, because he derives a benefit from every exertion of his + industry. An apprentice is likely to be idle, and almost always is so, + because he has no immediate interest to be otherwise. In the inferior + employments, the sweets of labour consist altogether in the recompence of + labour. They who are soonest in a condition to enjoy the sweets of it, are + likely soonest to conceive a relish for it, and to acquire the early habit + of industry. A young man naturally conceives an aversion to labour, when + for a long time he receives no benefit from it. The boys who are put out + apprentices from public charities are generally bound for more than the + usual number of years, and they generally turn out very idle and + worthless. + + Apprenticeships were altogether unknown to the ancients. The reciprocal + duties of master and apprentice make a considerable article in every + modern code. The Roman law is perfectly silent with regard to them. I know + no Greek or Latin word (I might venture, I believe, to assert that there + is none) which expresses the idea we now annex to the word apprentice, a + servant bound to work at a particular trade for the benefit of a master, + during a term of years, upon condition that the master shall teach him + that trade. + + Long apprenticeships are altogether unnecessary. The arts, which are much + superior to common trades, such as those of making clocks and watches, + contain no such mystery as to require a long course of instruction. The + first invention of such beautiful machines, indeed, and even that of some + of the instruments employed in making them, must no doubt have been the + work of deep thought and long time, and may justly be considered as among + the happiest efforts of human ingenuity. But when both have been fairly + invented, and are well understood, to explain to any young man, in the + completest manner, how to apply the instruments, and how to construct the + machines, cannot well require more than the lessons of a few weeks; + perhaps those of a few days might be sufficient. In the common mechanic + trades, those of a few days might certainly be sufficient. The dexterity + of hand, indeed, even in common trades, cannot be acquired without much + practice and experience. But a young man would practice with much more + diligence and attention, if from the beginning he wrought as a journeyman, + being paid in proportion to the little work which he could execute, and + paying in his turn for the materials which he might sometimes spoil + through awkwardness and inexperience. His education would generally in + this way be more effectual, and always less tedious and expensive. The + master, indeed, would be a loser. He would lose all the wages of the + apprentice, which he now saves, for seven years together. In the end, + perhaps, the apprentice himself would be a loser. In a trade so easily + learnt he would have more competitors, and his wages, when he came to be a + complete workman, would be much less than at present. The same increase of + competition would reduce the profits of the masters, as well as the wages + of workmen. The trades, the crafts, the mysteries, would all be losers. + But the public would be a gainer, the work of all artificers coming in + this way much cheaper to market. + + It is to prevent this reduction of price, and consequently of wages and + profit, by restraining that free competition which would most certainly + occasion it, that all corporations, and the greater part of corporation + laws have been established. In order to erect a corporation, no other + authority in ancient times was requisite, in many parts of Europe, but + that of the town-corporate in which it was established. In England, + indeed, a charter from the king was likewise necessary. But this + prerogative of the crown seems to have been reserved rather for extorting + money from the subject, than for the defence of the common liberty against + such oppressive monopolies. Upon paying a fine to the king, the charter + seems generally to have been readily granted; and when any particular + class of artificers or traders thought proper to act as a corporation, + without a charter, such adulterine guilds, as they were called, were not + always disfranchised upon that account, but obliged to fine annually to + the king, for permission to exercise their usurped privileges {See Madox + Firma Burgi p. 26 etc.}. The immediate inspection of all corporations, and + of the bye-laws which they might think proper to enact for their own + government, belonged to the town-corporate in which they were established; + and whatever discipline was exercised over them, proceeded commonly, not + from the king, but from that greater incorporation of which those + subordinate ones were only parts or members. + + The government of towns-corporate was altogether in the hands of traders + and artificers, and it was the manifest interest of every particular class + of them, to prevent the market from being overstocked, as they commonly + express it, with their own particular species of industry; which is in + reality to keep it always understocked. Each class was eager to establish + regulations proper for this purpose, and, provided it was allowed to do + so, was willing to consent that every other class should do the same. In + consequence of such regulations, indeed, each class was obliged to buy the + goods they had occasion for from every other within the town, somewhat + dearer than they otherwise might have done. But, in recompence, they were + enabled to sell their own just as much dearer; so that, so far it was as + broad as long, as they say; and in the dealings of the different classes + within the town with one another, none of them were losers by these + regulations. But in their dealings with the country they were all great + gainers; and in these latter dealings consist the whole trade which + supports and enriches every town. + + Every town draws its whole subsistence, and all the materials of its + industry, from the country. It pays for these chiefly in two ways. First, + by sending back to the country a part of those materials wrought up and + manufactured; in which case, their price is augmented by the wages of the + workmen, and the profits of their masters or immediate employers; + secondly, by sending to it a part both of the rude and manufactured + produce, either of other countries, or of distant parts of the same + country, imported into the town; in which case, too, the original price of + those goods is augmented by the wages of the carriers or sailors, and by + the profits of the merchants who employ them. In what is gained upon the + first of those branches of commerce, consists the advantage which the town + makes by its manufactures; in what is gained upon the second, the + advantage of its inland and foreign trade. The wages of the workmen, and + the profits of their different employers, make up the whole of what is + gained upon both. Whatever regulations, therefore, tend to increase those + wages and profits beyond what they otherwise: would be, tend to enable the + town to purchase, with a smaller quantity of its labour, the produce of a + greater quantity of the labour of the country. They give the traders and + artificers in the town an advantage over the landlords, farmers, and + labourers, in the country, and break down that natural equality which + would otherwise take place in the commerce which is carried on between + them. The whole annual produce of the labour of the society is annually + divided between those two different sets of people. By means of those + regulations, a greater share of it is given to the inhabitants of the town + than would otherwise fall to them, and a less to those of the country. + + The price which the town really pays for the provisions and materials + annually imported into it, is the quantity of manufactures and other goods + annually exported from it. The dearer the latter are sold, the cheaper the + former are bought. The industry of the town becomes more, and that of the + country less advantageous. + + That the industry which is carried on in towns is, everywhere in Europe, + more advantageous than that which is carried on in the country, without + entering into any very nice computations, we may satisfy ourselves by one + very simple and obvious observation. In every country of Europe, we find + at least a hundred people who have acquired great fortunes, from small + beginnings, by trade and manufactures, the industry which properly belongs + to towns, for one who has done so by that which properly belongs to the + country, the raising of rude produce by the improvement and cultivation of + land. Industry, therefore, must be better rewarded, the wages of labour + and the profits of stock must evidently be greater, in the one situation + than in the other. But stock and labour naturally seek the most + advantageous employment. They naturally, therefore, resort as much as they + can to the town, and desert the country. + + The inhabitants of a town being collected into one place, can easily + combine together. The most insignificant trades carried on in towns have, + accordingly, in some place or other, been incorporated; and even where + they have never been incorporated, yet the corporation-spirit, the + jealousy of strangers, the aversion to take apprentices, or to communicate + the secret of their trade, generally prevail in them, and often teach + them, by voluntary associations and agreements, to prevent that free + competition which they cannot prohibit by bye-laws. The trades which + employ but a small number of hands, run most easily into such + combinations. Half-a-dozen wool-combers, perhaps, are necessary to keep a + thousand spinners and weavers at work. By combining not to take + apprentices, they can not only engross the employment, but reduce the + whole manufacture into a sort of slavery to themselves, and raise the + price of their labour much above what is due to the nature of their work. + + The inhabitants of the country, dispersed in distant places, cannot easily + combine together. They have not only never been incorporated, but the + incorporation spirit never has prevailed among them. No apprenticeship has + ever been thought necessary to qualify for husbandry, the great trade of + the country. After what are called the fine arts, and the liberal + professions, however, there is perhaps no trade which requires so great a + variety of knowledge and experience. The innumerable volumes which have + been written upon it in all languages, may satisfy us, that among the + wisest and most learned nations, it has never been regarded as a matter + very easily understood. And from all those volumes we shall in vain + attempt to collect that knowledge of its various and complicated + operations which is commonly possessed even by the common farmer; how + contemptuously soever the very contemptible authors of some of them may + sometimes affect to speak of him. There is scarce any common mechanic + trade, on the contrary, of which all the operations may not be as + completely and distinctly explained in a pamphlet of a very few pages, as + it is possible for words illustrated by figures to explain them. In the + history of the arts, now publishing by the French Academy of Sciences, + several of them are actually explained in this manner. The direction of + operations, besides, which must be varied with every change of the + weather, as well as with many other accidents, requires much more judgment + and discretion, than that of those which are always the same, or very + nearly the same. + + Not only the art of the farmer, the general direction of the operations of + husbandry, but many inferior branches of country labour require much more + skill and experience than the greater part of mechanic trades. The man who + works upon brass and iron, works with instruments, and upon materials of + which the temper is always the same, or very nearly the same. But the man + who ploughs the ground with a team of horses or oxen, works with + instruments of which the health, strength, and temper, are very different + upon different occasions. The condition of the materials which he works + upon, too, is as variable as that of the instruments which he works with, + and both require to be managed with much judgment and discretion. The + common ploughman, though generally regarded as the pattern of stupidity + and ignorance, is seldom defective in this judgment and discretion. He is + less accustomed, indeed, to social intercourse, than the mechanic who + lives in a town. His voice and language are more uncouth, and more + difficult to be understood by those who are not used to them. His + understanding, however, being accustomed to consider a greater variety of + objects, is generally much superior to that of the other, whose whole + attention, from morning till night, is commonly occupied in performing one + or two very simple operations. How much the lower ranks of people in the + country are really superior to those of the town, is well known to every + man whom either business or curiosity has led to converse much with both. + In China and Indostan, accordingly, both the rank and the wages of country + labourers are said to be superior to those of the greater part of + artificers and manufacturers. They would probably be so everywhere, if + corporation laws and the corporation spirit did not prevent it. + + The superiority which the industry of the towns has everywhere in Europe + over that of the country, is not altogether owing to corporations and + corporation laws. It is supported by many other regulations. The high + duties upon foreign manufactures, and upon all goods imported by alien + merchants, all tend to the same purpose. Corporation laws enable the + inhabitants of towns to raise their prices, without fearing to be + undersold by the free competition of their own countrymen. Those other + regulations secure them equally against that of foreigners. The + enhancement of price occasioned by both is everywhere finally paid by the + landlords, farmers, and labourers, of the country, who have seldom opposed + the establishment of such monopolies. They have commonly neither + inclination nor fitness to enter into combinations; and the clamour and + sophistry of merchants and manufacturers easily persuade them, that the + private interest of a part, and of a subordinate part, of the society, is + the general interest of the whole. + + In Great Britain, the superiority of the industry of the towns over that + of the country seems to have been greater formerly than in the present + times. The wages of country labour approach nearer to those of + manufacturing labour, and the profits of stock employed in agriculture to + those of trading and manufacturing stock, than they are said to have done + in the last century, or in the beginning of the present. This change may + be regarded as the necessary, though very late consequence of the + extraordinary encouragement given to the industry of the towns. The stocks + accumulated in them come in time to be so great, that it can no longer be + employed with the ancient profit in that species of industry which is + peculiar to them. That industry has its limits like every other; and the + increase of stock, by increasing the competition, necessarily reduces the + profit. The lowering of profit in the town forces out stock to the + country, where, by creating a new demand for country labour, it + necessarily raises its wages. It then spreads itself, if I my say so, over + the face of the land, and, by being employed in agriculture, is in part + restored to the country, at the expense of which, in a great measure, it + had originally been accumulated in the town. That everywhere in Europe the + greatest improvements of the country have been owing to such over flowings + of the stock originally accumulated in the towns, I shall endeavour to + shew hereafter, and at the same time to demonstrate, that though some + countries have, by this course, attained to a considerable degree of + opulence, it is in itself necessarily slow, uncertain, liable to be + disturbed and interrupted by innumerable accidents, and, in every respect, + contrary to the order of nature and of reason. The interests, prejudices, + laws, and customs, which have given occasion to it, I shall endeavour to + explain as fully and distinctly as I can in the third and fourth books of + this Inquiry. + + People of the same trade seldom meet together, even for merriment and + diversion, but the conversation ends in a conspiracy against the public, + or in some contrivance to raise prices. It is impossible, indeed, to + prevent such meetings, by any law which either could be executed, or would + be consistent with liberty and justice. But though the law cannot hinder + people of the same trade from sometimes assembling together, it ought to + do nothing to facilitate such assemblies, much less to render them + necessary. + + A regulation which obliges all those of the same trade in a particular + town to enter their names and places of abode in a public register, + facilitates such assemblies. It connects individuals who might never + otherwise be known to one another, and gives every man of the trade a + direction where to find every other man of it. + + A regulation which enables those of the same trade to tax themselves, in + order to provide for their poor, their sick, their widows and orphans, by + giving them a common interest to manage, renders such assemblies + necessary. + + An incorporation not only renders them necessary, but makes the act of the + majority binding upon the whole. In a free trade, an effectual combination + cannot be established but by the unanimous consent of every single trader, + and it cannot last longer than every single trader continues of the same + mind. The majority of a corporation can enact a bye-law, with proper + penalties, which will limit the competition more effectually and more + durably than any voluntary combination whatever. + + The pretence that corporations are necessary for the better government of + the trade, is without any foundation. The real and effectual discipline + which is exercised over a workman, is not that of his corporation, but + that of his customers. It is the fear of losing their employment which + restrains his frauds and corrects his negligence. An exclusive corporation + necessarily weakens the force of this discipline. A particular set of + workmen must then be employed, let them behave well or ill. It is upon + this account that, in many large incorporated towns, no tolerable workmen + are to be found, even in some of the most necessary trades. If you would + have your work tolerably executed, it must be done in the suburbs, where + the workmen, having no exclusive privilege, have nothing but their + character to depend upon, and you must then smuggle it into the town as + well as you can. + + It is in this manner that the policy of Europe, by restraining the + competition in some employments to a smaller number than would otherwise + be disposed to enter into them, occasions a very important inequality in + the whole of the advantages and disadvantages of the different employments + of labour and stock. + + Secondly, the policy of Europe, by increasing the competition in some + employments beyond what it naturally would be, occasions another + inequality, of an opposite kind, in the whole of the advantages and + disadvantages of the different employments of labour and stock. + + It has been considered as of so much importance that a proper number of + young people should be educated for certain professions, that sometimes + the public, and sometimes the piety of private founders, have established + many pensions, scholarships, exhibitions, bursaries, etc. for this + purpose, which draw many more people into those trades than could + otherwise pretend to follow them. In all Christian countries, I believe, + the education of the greater part of churchmen is paid for in this + manner. Very few of them are educated altogether at their own expense. + The long, tedious, and expensive education, therefore, of those who are, + will not always procure them a suitable reward, the church being crowded + with people, who, in order to get employment, are willing to accept of a + much smaller recompence than what such an education would otherwise have + entitled them to; and in this manner the competition of the poor takes + away the reward of the rich. It would be indecent, no doubt, to compare + either a curate or a chaplain with a journeyman in any common trade. The + pay of a curate or chaplain, however, may very properly be considered as + of the same nature with the wages of a journeyman. They are all three + paid for their work according to the contract which they may happen to + make with their respective superiors. Till after the middle of the + fourteenth century, five merks, containing about as much silver as ten + pounds of our present money, was in England the usual pay of a curate or + a stipendiary parish priest, as we find it regulated by the decrees of + several different national councils. At the same period, fourpence a-day, + containing the same quantity of silver as a shilling of our present + money, was declared to be the pay of a master mason; and threepence + a-day, equal to ninepence of our present money, that of a journeyman + mason. {See the Statute of Labourers, 25, Ed. III.} The wages of both + these labourers, therefore, supposing them to have been constantly + employed, were much superior to those of the curate. The wages of the + master mason, supposing him to have been without employment one-third of + the year, would have fully equalled them. By the 12th of Queen Anne, c. + 12. it is declared, “That whereas, for want of sufficient + maintenance and encouragement to curates, the cures have, in several + places, been meanly supplied, the bishop is, therefore, empowered to + appoint, by writing under his hand and seal, a sufficient certain stipend + or allowance, not exceeding fifty, and not less than twenty pounds + a-year”. Forty pounds a-year is reckoned at present very good pay + for a curate; and, notwithstanding this act of parliament, there are many + curacies under twenty pounds a-year. There are journeymen shoemakers in + London who earn forty pounds a-year, and there is scarce an industrious + workman of any kind in that metropolis who does not earn more than + twenty. This last sum, indeed, does not exceed what is frequently earned + by common labourers in many country parishes. Whenever the law has + attempted to regulate the wages of workmen, it has always been rather to + lower them than to raise them. But the law has, upon many occasions, + attempted to raise the wages of curates, and, for the dignity of the + church, to oblige the rectors of parishes to give them more than the + wretched maintenance which they themselves might be willing to accept of. + And, in both cases, the law seems to have been equally ineffectual, and + has never either been able to raise the wages of curates, or to sink + those of labourers to the degree that was intended; because it has never + been able to hinder either the one from being willing to accept of less + than the legal allowance, on account of the indigence of their situation + and the multitude of their competitors, or the other from receiving more, + on account of the contrary competition of those who expected to derive + either profit or pleasure from employing them. + + The great benefices and other ecclesiastical dignities support the honour + of the church, notwithstanding the mean circumstances of some of its + inferior members. The respect paid to the profession, too, makes some + compensation even to them for the meanness of their pecuniary recompence. + In England, and in all Roman catholic countries, the lottery of the church + is in reality much more advantageous than is necessary. The example of the + churches of Scotland, of Geneva, and of several other protestant churches, + may satisfy us, that in so creditable a profession, in which education is + so easily procured, the hopes of much more moderate benefices will draw a + sufficient number of learned, decent, and respectable men into holy + orders. + + In professions in which there are no benefices, such as law and physic, if + an equal proportion of people were educated at the public expense, the + competition would soon be so great as to sink very much their pecuniary + reward. It might then not be worth any man’s while to educate his son to + either of those professions at his own expense. They would be entirely + abandoned to such as had been educated by those public charities, whose + numbers and necessities would oblige them in general to content themselves + with a very miserable recompence, to the entire degradation of the now + respectable professions of law and physic. + + That unprosperous race of men, commonly called men of letters, are pretty + much in the situation which lawyers and physicians probably would be in, + upon the foregoing supposition. In every part of Europe, the greater part + of them have been educated for the church, but have been hindered by + different reasons from entering into holy orders. They have generally, + therefore, been educated at the public expense; and their numbers are + everywhere so great, as commonly to reduce the price of their labour to a + very paltry recompence. + + Before the invention of the art of printing, the only employment by which + a man of letters could make any thing by his talents, was that of a public + or private teacher, or by communicating to other people the curious and + useful knowledge which he had acquired himself; and this is still surely a + more honourable, a more useful, and, in general, even a more profitable + employment than that other of writing for a bookseller, to which the art + of printing has given occasion. The time and study, the genius, knowledge, + and application requisite to qualify an eminent teacher of the sciences, + are at least equal to what is necessary for the greatest practitioners in + law and physic. But the usual reward of the eminent teacher bears no + proportion to that of the lawyer or physician, because the trade of the + one is crowded with indigent people, who have been brought up to it at the + public expense; whereas those of the other two are encumbered with very + few who have not been educated at their own. The usual recompence, + however, of public and private teachers, small as it may appear, would + undoubtedly be less than it is, if the competition of those yet more + indigent men of letters, who write for bread, was not taken out of the + market. Before the invention of the art of printing, a scholar and a + beggar seem to have been terms very nearly synonymous. The different + governors of the universities, before that time, appear to have often + granted licences to their scholars to beg. + + In ancient times, before any charities of this kind had been established + for the education of indigent people to the learned professions, the + rewards of eminent teachers appear to have been much more considerable. + Isocrates, in what is called his discourse against the sophists, + reproaches the teachers of his own times with inconsistency. “They make + the most magnificent promises to their scholars,” says he, “and undertake + to teach them to be wise, to be happy, and to be just; and, in return for + so important a service, they stipulate the paltry reward of four or five + minae.” “They who teach wisdom,” continues he, “ought certainly to be wise + themselves; but if any man were to sell such a bargain for such a price, + he would be convicted of the most evident folly.” He certainly does not + mean here to exaggerate the reward, and we may be assured that it was not + less than he represents it. Four minae were equal to thirteen pounds six + shillings and eightpence; five minae to sixteen pounds thirteen shillings + and fourpence. Something not less than the largest of those two sums, + therefore, must at that time have been usually paid to the most eminent + teachers at Athens. Isocrates himself demanded ten minae, or £ 33:6:8 from + each scholar. When he taught at Athens, he is said to have had a hundred + scholars. I understand this to be the number whom he taught at one time, + or who attended what we would call one course of lectures; a number which + will not appear extraordinary from so great a city to so famous a teacher, + who taught, too, what was at that time the most fashionable of all + sciences, rhetoric. He must have made, therefore, by each course of + lectures, a thousand minae, or £ 3335:6:8. A thousand minae, accordingly, + is said by Plutarch, in another place, to have been his didactron, or + usual price of teaching. Many other eminent teachers in those times appear + to have acquired great fortunes. Georgias made a present to the temple of + Delphi of his own statue in solid gold. We must not, I presume, suppose + that it was as large as the life. His way of living, as well as that of + Hippias and Protagoras, two other eminent teachers of those times, is + represented by Plato as splendid, even to ostentation. Plato himself is + said to have lived with a good deal of magnificence. Aristotle, after + having been tutor to Alexander, and most munificently rewarded, as it is + universally agreed, both by him and his father, Philip, thought it worth + while, notwithstanding, to return to Athens, in order to resume the + teaching of his school. Teachers of the sciences were probably in those + times less common than they came to be in an age or two afterwards, when + the competition had probably somewhat reduced both the price of their + labour and the admiration for their persons. The most eminent of them, + however, appear always to have enjoyed a degree of consideration much + superior to any of the like profession in the present times. The Athenians + sent Carneades the academic, and Diogenes the stoic, upon a solemn embassy + to Rome; and though their city had then declined from its former grandeur, + it was still an independent and considerable republic. + + Carneades, too, was a Babylonian by birth; and as there never was a people + more jealous of admitting foreigners to public offices than the Athenians, + their consideration for him must have been very great. + + This inequality is, upon the whole, perhaps rather advantageous than + hurtful to the public. It may somewhat degrade the profession of a public + teacher; but the cheapness of literary education is surely an advantage + which greatly overbalances this trifling inconveniency. The public, too, + might derive still greater benefit from it, if the constitution of those + schools and colleges, in which education is carried on, was more + reasonable than it is at present through the greater part of Europe. + + Thirdly, the policy of Europe, by obstructing the free circulation of + labour and stock, both from employment to employment, and from place to + place, occasions, in some cases, a very inconvenient inequality in the + whole of the advantages and disadvantages of their different employments. + + The statute of apprenticeship obstructs the free circulation of labour + from one employment to another, even in the same place. The exclusive + privileges of corporations obstruct it from one place to another, even in + the same employment. + + It frequently happens, that while high wages are given to the workmen in + one manufacture, those in another are obliged to content themselves with + bare subsistence. The one is in an advancing state, and has therefore a + continual demand for new hands; the other is in a declining state, and the + superabundance of hands is continually increasing. Those two manufactures + may sometimes be in the same town, and sometimes in the same + neighbourhood, without being able to lend the least assistance to one + another. The statute of apprenticeship may oppose it in the one case, and + both that and an exclusive corporation in the other. In many different + manufactures, however, the operations are so much alike, that the workmen + could easily change trades with one another, if those absurd laws did not + hinder them. The arts of weaving plain linen and plain silk, for example, + are almost entirely the same. That of weaving plain woollen is somewhat + different; but the difference is so insignificant, that either a linen or + a silk weaver might become a tolerable workman in a very few days. If any + of those three capital manufactures, therefore, were decaying, the workmen + might find a resource in one of the other two which was in a more + prosperous condition; and their wages would neither rise too high in the + thriving, nor sink too low in the decaying manufacture. The linen + manufacture, indeed, is in England, by a particular statute, open to every + body; but as it is not much cultivated through the greater part of the + country, it can afford no general resource to the work men of other + decaying manufactures, who, wherever the statute of apprenticeship takes + place, have no other choice, but either to come upon the parish, or to + work as common labourers; for which, by their habits, they are much worse + qualified than for any sort of manufacture that bears any resemblance to + their own. They generally, therefore, chuse to come upon the parish. + + Whatever obstructs the free circulation of labour from one employment to + another, obstructs that of stock likewise; the quantity of stock which can + be employed in any branch of business depending very much upon that of the + labour which can be employed in it. Corporation laws, however, give less + obstruction to the free circulation of stock from one place to another, + than to that of labour. It is everywhere much easier for a wealthy + merchant to obtain the privilege of trading in a town-corporate, than for + a poor artificer to obtain that of working in it. + + The obstruction which corporation laws give to the free circulation of + labour is common, I believe, to every part of Europe. That which is given + to it by the poor laws is, so far as I know, peculiar to England. It + consists in the difficulty which a poor man finds in obtaining a + settlement, or even in being allowed to exercise his industry in any + parish but that to which he belongs. It is the labour of artificers and + manufacturers only of which the free circulation is obstructed by + corporation laws. The difficulty of obtaining settlements obstructs even + that of common labour. It may be worth while to give some account of the + rise, progress, and present state of this disorder, the greatest, perhaps, + of any in the police of England. + + When, by the destruction of monasteries, the poor had been deprived of the + charity of those religious houses, after some other ineffectual attempts + for their relief, it was enacted, by the 43d of Elizabeth, c. 2. that + every parish should be bound to provide for its own poor, and that + overseers of the poor should be annually appointed, who, with the + church-wardens, should raise, by a parish rate, competent sums for this + purpose. + + By this statute, the necessity of providing for their own poor was + indispensably imposed upon every parish. Who were to be considered as the + poor of each parish became, therefore, a question of some importance. This + question, after some variation, was at last determined by the 13th and + 14th of Charles II. when it was enacted, that forty days undisturbed + residence should gain any person a settlement in any parish; but that + within that time it should be lawful for two justices of the peace, upon + complaint made by the church-wardens or overseers of the poor, to remove + any new inhabitant to the parish where he was last legally settled; unless + he either rented a tenement of ten pounds a-year, or could give such + security for the discharge of the parish where he was then living, as + those justices should judge sufficient. + + Some frauds, it is said, were committed in consequence of this statute; + parish officers sometimes bribing their own poor to go clandestinely to + another parish, and, by keeping themselves concealed for forty days, to + gain a settlement there, to the discharge of that to which they properly + belonged. It was enacted, therefore, by the 1st of James II. that the + forty days undisturbed residence of any person necessary to gain a + settlement, should be accounted only from the time of his delivering + notice, in writing, of the place of his abode and the number of his + family, to one of the church-wardens or overseers of the parish where he + came to dwell. + + But parish officers, it seems, were not always more honest with regard to + their own than they had been with regard to other parishes, and sometimes + connived at such intrusions, receiving the notice, and taking no proper + steps in consequence of it. As every person in a parish, therefore, was + supposed to have an interest to prevent as much as possible their being + burdened by such intruders, it was further enacted by the 3rd of William + III. that the forty days residence should be accounted only from the + publication of such notice in writing on Sunday in the church, immediately + after divine service. + + “After all,” says Doctor Burn, “this kind of settlement, by continuing + forty days after publication of notice in writing, is very seldom + obtained; and the design of the acts is not so much for gaining of + settlements, as for the avoiding of them by persons coming into a parish + clandestinely, for the giving of notice is only putting a force upon the + parish to remove. But if a person’s situation is such, that it is doubtful + whether he is actually removable or not, he shall, by giving of notice, + compel the parish either to allow him a settlement uncontested, by + suffering him to continue forty days, or by removing him to try the + right.” + + This statute, therefore, rendered it almost impracticable for a poor man + to gain a new settlement in the old way, by forty days inhabitancy. But + that it might not appear to preclude altogether the common people of one + parish from ever establishing themselves with security in another, it + appointed four other ways by which a settlement might be gained without + any notice delivered or published. The first was, by being taxed to parish + rates and paying them; the second, by being elected into an annual parish + office, and serving in it a year; the third, by serving an apprenticeship + in the parish; the fourth, by being hired into service there for a year, + and continuing in the same service during the whole of it. Nobody can gain + a settlement by either of the two first ways, but by the public deed of + the whole parish, who are too well aware of the consequences to adopt any + new-comer, who has nothing but his labour to support him, either by taxing + him to parish rates, or by electing him into a parish office. + + No married man can well gain any settlement in either of the two last + ways. An apprentice is scarce ever married; and it is expressly enacted, + that no married servant shall gain any settlement by being hired for a + year. The principal effect of introducing settlement by service, has been + to put out in a great measure the old fashion of hiring for a year; which + before had been so customary in England, that even at this day, if no + particular term is agreed upon, the law intends that every servant is + hired for a year. But masters are not always willing to give their + servants a settlement by hiring them in this manner; and servants are not + always willing to be so hired, because, as every last settlement + discharges all the foregoing, they might thereby lose their original + settlement in the places of their nativity, the habitation of their + parents and relations. + + No independent workman, it is evident, whether labourer or artificer, is + likely to gain any new settlement, either by apprenticeship or by service. + When such a person, therefore, carried his industry to a new parish, he + was liable to be removed, how healthy and industrious soever, at the + caprice of any churchwarden or overseer, unless he either rented a + tenement of ten pounds a-year, a thing impossible for one who has nothing + but his labour to live by, or could give such security for the discharge + of the parish as two justices of the peace should judge sufficient. + + What security they shall require, indeed, is left altogether to their + discretion; but they cannot well require less than thirty pounds, it + having been enacted, that the purchase even of a freehold estate of less + than thirty pounds value, shall not gain any person a settlement, as not + being sufficient for the discharge of the parish. But this is a security + which scarce any man who lives by labour can give; and much greater + security is frequently demanded. + + In order to restore, in some measure, that free circulation of labour + which those different statutes had almost entirely taken away, the + invention of certificates was fallen upon. By the 8th and 9th of William + III. it was enacted that if any person should bring a certificate from the + parish where he was last legally settled, subscribed by the church-wardens + and overseers of the poor, and allowed by two justices of the peace, that + every other parish should be obliged to receive him; that he should not be + removable merely upon account of his being likely to become chargeable, + but only upon his becoming actually chargeable; and that then the parish + which granted the certificate should be obliged to pay the expense both of + his maintenance and of his removal. And in order to give the most perfect + security to the parish where such certificated man should come to reside, + it was further enacted by the same statute, that he should gain no + settlement there by any means whatever, except either by renting a + tenement of ten pounds a-year, or by serving upon his own account in an + annual parish office for one whole year; and consequently neither by + notice nor by service, nor by apprenticeship, nor by paying parish rates. + By the 12th of Queen Anne, too, stat. 1, c.18, it was further enacted, + that neither the servants nor apprentices of such certificated man should + gain any settlement in the parish where he resided under such certificate. + + How far this invention has restored that free circulation of labour, which + the preceding statutes had almost entirely taken away, we may learn from + the following very judicious observation of Doctor Burn. “It is obvious,” + says he, “that there are divers good reasons for requiring certificates + with persons coming to settle in any place; namely, that persons residing + under them can gain no settlement, neither by apprenticeship, nor by + service, nor by giving notice, nor by paying parish rates; that they can + settle neither apprentices nor servants; that if they become chargeable, + it is certainly known whither to remove them, and the parish shall be paid + for the removal, and for their maintenance in the mean time; and that, if + they fall sick, and cannot be removed, the parish which gave the + certificate must maintain them; none of all which can be without a + certificate. Which reasons will hold proportionably for parishes not + granting certificates in ordinary cases; for it is far more than an equal + chance, but that they will have the certificated persons again, and in a + worse condition.” The moral of this observation seems to be, that + certificates ought always to be required by the parish where any poor man + comes to reside, and that they ought very seldom to be granted by that + which he purposes to leave. “There is somewhat of hardship in this matter + of certificates,” says the same very intelligent author, in his History of + the Poor Laws, “by putting it in the power of a parish officer to imprison + a man as it were for life, however inconvenient it may be for him to + continue at that place where he has had the misfortune to acquire what is + called a settlement, or whatever advantage he may propose himself by + living elsewhere.” + + Though a certificate carries along with it no testimonial of good + behaviour, and certifies nothing but that the person belongs to the parish + to which he really does belong, it is altogether discretionary in the + parish officers either to grant or to refuse it. A mandamus was once moved + for, says Doctor Burn, to compel the church-wardens and overseers to sign + a certificate; but the Court of King’s Bench rejected the motion as a very + strange attempt. + + The very unequal price of labour which we frequently find in England, in + places at no great distance from one another, is probably owing to the + obstruction which the law of settlements gives to a poor man who would + carry his industry from one parish to another without a certificate. A + single man, indeed who is healthy and industrious, may sometimes reside by + sufferance without one; but a man with a wife and family who should + attempt to do so, would, in most parishes, be sure of being removed; and, + if the single man should afterwards marry, he would generally be removed + likewise. The scarcity of hands in one parish, therefore, cannot always be + relieved by their superabundance in another, as it is constantly in + Scotland, and I believe, in all other countries where there is no + difficulty of settlement. In such countries, though wages may sometimes + rise a little in the neighbourhood of a great town, or wherever else there + is an extraordinary demand for labour, and sink gradually as the distance + from such places increases, till they fall back to the common rate of the + country; yet we never meet with those sudden and unaccountable differences + in the wages of neighbouring places which we sometimes find in England, + where it is often more difficult for a poor man to pass the artificial + boundary of a parish, than an arm of the sea, or a ridge of high + mountains, natural boundaries which sometimes separate very distinctly + different rates of wages in other countries. + + To remove a man who has committed no misdemeanour, from the parish where + he chooses to reside, is an evident violation of natural liberty and + justice. The common people of England, however, so jealous of their + liberty, but like the common people of most other countries, never rightly + understanding wherein it consists, have now, for more than a century + together, suffered themselves to be exposed to this oppression without a + remedy. Though men of reflection, too, have sometimes complained of the + law of settlements as a public grievance; yet it has never been the object + of any general popular clamour, such as that against general warrants, an + abusive practice undoubtedly, but such a one as was not likely to occasion + any general oppression. There is scarce a poor man in England, of forty + years of age, I will venture to say, who has not, in some part of his + life, felt himself most cruelly oppressed by this ill-contrived law of + settlements. + + I shall conclude this long chapter with observing, that though anciently + it was usual to rate wages, first by general laws extending over the whole + kingdom, and afterwards by particular orders of the justices of peace in + every particular county, both these practices have now gone entirely into + disuse. “By the experience of above four hundred years,” says Doctor Burn, + “it seems time to lay aside all endeavours to bring under strict + regulations, what in its own nature seems incapable of minute limitation; + for if all persons in the same kind of work were to receive equal wages, + there would be no emulation, and no room left for industry or ingenuity.” + + Particular acts of parliament, however, still attempt sometimes to + regulate wages in particular trades, and in particular places. Thus the + 8th of George III. prohibits, under heavy penalties, all master tailors in + London, and five miles round it, from giving, and their workmen from + accepting, more than two shillings and sevenpence halfpenny a-day, except + in the case of a general mourning. Whenever the legislature attempts to + regulate the differences between masters and their workmen, its + counsellors are always the masters. When the regulation, therefore, is in + favour of the workmen, it is always just and equitable; but it is + sometimes otherwise when in favour of the masters. Thus the law which + obliges the masters in several different trades to pay their workmen in + money, and not in goods, is quite just and equitable. It imposes no real + hardship upon the masters. It only obliges them to pay that value in + money, which they pretended to pay, but did not always really pay, in + goods. This law is in favour of the workmen; but the 8th of George III. is + in favour of the masters. When masters combine together, in order to + reduce the wages of their workmen, they commonly enter into a private bond + or agreement, not to give more than a certain wage, under a certain + penalty. Were the workmen to enter into a contrary combination of the same + kind, not to accept of a certain wage, under a certain penalty, the law + would punish them very severely; and, if it dealt impartially, it would + treat the masters in the same manner. But the 8th of George III. enforces + by law that very regulation which masters sometimes attempt to establish + by such combinations. The complaint of the workmen, that it puts the + ablest and most industrious upon the same footing with an ordinary + workman, seems perfectly well founded. + + In ancient times, too, it was usual to attempt to regulate the profits of + merchants and other dealers, by regulating the price of provisions and + ether goods. The assize of bread is, so far as I know, the only remnant of + this ancient usage. Where there is an exclusive corporation, it may, + perhaps, be proper to regulate the price of the first necessary of life; + but, where there is none, the competition will regulate it much better + than any assize. The method of fixing the assize of bread, established by + the 31st of George II. could not be put in practice in Scotland, on + account of a defect in the law, its execution depending upon the office of + clerk of the market, which does not exist there. This defect was not + remedied till the third of George III. The want of an assize occasioned no + sensible inconveniency; and the establishment of one in the few places + where it has yet taken place has produced no sensible advantage. In the + greater part of the towns in Scotland, however, there is an incorporation + of bakers, who claim exclusive privileges, though they are not very + strictly guarded. The proportion between the different rates, both of + wages and profit, in the different employments of labour and stock, seems + not to be much affected, as has already been observed, by the riches or + poverty, the advancing, stationary, or declining state of the society. + Such revolutions in the public welfare, though they affect the general + rates both of wages and profit, must, in the end, affect them equally in + all different employments. The proportion between them, therefore, must + remain the same, and cannot well be altered, at least for any considerable + time, by any such revolutions. + + +## Extracted Entities + +--- ENTITY: wages of labour --- + +# Wages of Labour + +## Definition + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +This entity forms the central focus of the chapter's first part, where Smith systematically analyses how wages differ across occupations and the factors that create these inequalities. The analysis begins with the observation that pecuniary wages and profits vary greatly across different employments, then proceeds to examine each of the five circumstances that explain these variations. + +## Economic Domain + +Distribution + +--- +--- ENTITY: profits of stock --- + +# Profits of Stock + +## Definition + +The returns earned by those who employ capital in various trades and employments, which are affected by the agreeableness or disagreeableness of the business and the risk or security with which it is attended, but are less influenced by the difficulty of learning the trade compared to wages of labour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +The chapter's second major focus examines how profits differ across employments, noting that while wages vary according to five circumstances, profits are primarily affected by only two: the agreeableness of the business and the risk involved. Smith argues that ordinary rates of profit tend to be more uniform across different employments than wages. + +## Economic Domain + +Distribution + +--- +--- ENTITY: apprenticeships --- + +# Apprenticeships + +## Definition + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith critically examines the institution of apprenticeships as a means by which the policy of Europe creates inequalities in labour markets. He argues that long apprenticeships are unnecessary, often counterproductive, and serve primarily to restrict competition and maintain higher wages for established craftsmen at the expense of both apprentices and the public. + +## Economic Domain + +Regulation + +--- +--- ENTITY: corporation laws --- + +# Corporation Laws + +## Definition + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies corporation laws as the principal mechanism by which European policy creates significant inequalities in economic advantages across different employments. He argues these laws restrain competition in some trades while increasing it in others, and obstruct the free circulation of labour and stock, ultimately harming both workers and consumers. + +## Economic Domain + +Regulation + +--- +--- ENTITY: settlement laws --- + +# Settlement Laws + +## Definition + +Legal provisions that restrict the movement of poor persons by requiring them to obtain official settlement in a parish before residing there, creating significant barriers to labour mobility and preventing workers from moving to areas where their skills might be most valued. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith presents settlement laws as a particularly harmful form of labour market regulation unique to England, which obstructs the free circulation of labour from place to place. He argues these laws prevent the natural adjustment of wages across regions and force workers to remain in parishes where their labour is less valuable. + +## Economic Domain + +Regulation + +--- +--- ENTITY: certificates --- + +# Certificates + +## Definition + +Official documents issued by one parish that certify a person's legal settlement there, allowing them to reside in another parish without gaining settlement rights there, serving as a partial remedy to the settlement laws' restrictions on labour mobility. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith discusses certificates as an administrative mechanism developed to partially restore the free circulation of labour that settlement laws had obstructed. While certificates allow poor persons to move between parishes without automatically gaining settlement rights, Smith notes they are often difficult to obtain and create their own forms of administrative control. + +## Economic Domain + +Regulation + +--- +--- ENTITY: public education of professionals --- + +# Public Education of Professionals + +## Definition + +The practice of funding the education of clergy, lawyers, physicians, and other professionals through public or charitable means, which creates an oversupply of practitioners and drives down their earnings below what would prevail if education were funded privately. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies publicly funded professional education as a policy that creates inequalities by flooding certain professions with candidates willing to work for lower compensation. He argues this practice degrades the quality and remuneration of respected professions like law and medicine, while creating a class of "men of letters" who must write for subsistence. + +## Economic Domain + +Distribution + +--- +--- ENTITY: speculative trade --- + +# Speculative Trade + +## Definition + +A form of commerce where merchants rapidly shift between different commodities and markets based on anticipated profit opportunities, rather than maintaining regular, established business operations in specific trades, characterized by irregular and unpredictable returns. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts speculative trade with regular established business, noting that while it can produce sudden fortunes through successful speculation, it is equally likely to produce losses. He observes that this form of trade can only be carried on in places with extensive commerce and correspondence where intelligence about market conditions is readily available. + +## Economic Domain + +Exchange + +--- +--- ENTITY: natural state of employments --- + +# 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 + +--- +--- ENTITY: ordinary state of employments --- + +# Ordinary State of Employments + +## Definition + +The typical or usual condition of economic activities when demand for labour fluctuates around normal levels, as opposed to periods of extraordinary demand or declining industries, representing the baseline against which exceptional wage variations are measured. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith distinguishes between the ordinary or natural state of employments and periods when demand for specific types of labour rises above or falls below usual levels. He uses this distinction to explain how temporary variations in demand affect wages differently across occupations, with some trades maintaining more constant employment than others. + +## Economic Domain + +General Theory + +--- +--- ENTITY: principal employments --- + +# Principal Employments + +# Principal Employments + +## Definition + +The main or primary occupation through which individuals derive their subsistence, as opposed to secondary or occasional work undertaken during leisure time, which affects how wages are determined and how workers value their time. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith argues that equality in the advantages and disadvantages of different employments can only occur when those employments are the principal means of subsistence for the workers. When people engage in a trade only occasionally while maintaining other primary occupations, they may accept lower wages, disrupting the natural equilibrium of compensation. + +## Economic Domain + +Distribution + +--- +--- ENTITY: public mourning effects --- + +# Public Mourning Effects + +## Definition + +The temporary increase in demand for black cloth and related mourning goods that raises their market price above the natural price, creating higher profits for dealers in these commodities during periods of national bereavement. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses public mourning as an example of how extraordinary demand can temporarily raise the price of specific commodities above their natural price, affecting the profits of those engaged in producing or selling these goods. This illustrates his broader point about how variations in demand create temporary inequalities in profits across different employments. + +## Economic Domain + +Exchange + +--- +--- ENTITY: piece-work wages --- + +# Piece-Work Wages + +# Piece-Work Wages + +## Definition + +A system of compensation where workers are paid according to the quantity of output they produce rather than receiving a fixed daily or weekly wage, creating a direct incentive for increased productivity and diligence. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies piece-work as a wage system that encourages industriousness because workers benefit directly from their efforts. He contrasts this with the apprenticeship system where young workers have no immediate interest in being productive, arguing that direct financial incentives better promote the development of good work habits. + +## Economic Domain + +Distribution + +--- +--- ENTITY: common labour wages --- + +# Common Labour Wages + +## Definition + +The standard compensation paid to unskilled or semi-skilled workers performing basic manual tasks, which serves as a benchmark against which wages in other occupations are compared and often adjusted. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith frequently references common labour wages as a baseline for comparing compensation across different employments. He notes that wages in skilled trades and manufacturing often differ only slightly from common labour wages, with the difference generally sufficient only to compensate for the expense of education and training. + +## Economic Domain + +Distribution + +--- +--- ENTITY: scarcity of hands --- + +# Scarcity of Hands + +## Definition + +A condition in specific localities where the supply of available workers falls short of demand, causing wages to rise above their normal level as employers compete for limited labour resources. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith explains that scarcity of hands in one parish cannot be relieved by the superabundance of workers in another when settlement laws obstruct labour mobility. This creates artificial wage disparities between regions that would not exist under free movement of labour, demonstrating how policy can prevent natural market adjustments. + +## Economic Domain + +Distribution + +--- +--- ENTITY: overstocked market conditions --- + +# Overstocked Market Conditions + +## Definition + +A situation where the supply of workers in a particular trade exceeds the demand for their services, forcing wages down below what would be necessary to attract new entrants and causing existing practitioners to accept lower compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies overstocked markets as a consequence of publicly funded professional education and other policies that encourage excessive entry into certain professions. He argues this condition degrades the quality and remuneration of respected professions while creating a class of underemployed intellectuals. + +## Economic Domain + +Distribution + +--- +--- ENTITY: advancing state of manufacture --- + +# Advancing State of Manufacture + +## Definition + +A condition of industrial development where production is expanding, creating continual demand for new workers and maintaining higher wages due to the growing need for labour in the expanding enterprise. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts advancing manufactures with declining ones, noting that the former maintain constant demand for labour while the latter experience increasing surplus of workers. This distinction helps explain why wages differ between regions and industries based on their stage of development rather than inherent qualities of the work itself. + +## Economic Domain + +Production + +--- +--- ENTITY: declining manufacture --- + +# Declining Manufacture + +# Declining Manufacture + +## Definition + +A condition of industrial contraction where production is decreasing, leading to surplus labour supply as workers cannot easily transition to other employments due to legal and institutional barriers, forcing wages down below sustainable levels. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies declining manufactures as creating severe labour market distortions when workers cannot easily move to growing industries. He argues that institutional barriers like apprenticeship requirements prevent the natural reallocation of labour from shrinking to expanding sectors, causing unnecessary hardship for displaced workers. + +## Economic Domain + +Production + +--- +--- ENTITY: inland trade --- + +# Inland Trade + +## Definition + +Commercial exchange that occurs within the boundaries of a single country, as distinguished from foreign trade, which Smith notes is generally less uncertain in its returns and therefore typically offers lower profit rates than foreign commerce. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith observes that profits of stock vary with the certainty or uncertainty of returns, noting that inland trade is generally less risky than foreign trade. This observation contributes to his broader analysis of how different employments of capital offer varying risk-adjusted returns, though he argues these differences are less pronounced than wage differentials. + +## Economic Domain + +Exchange + +--- +--- ENTITY: foreign trade --- + +# Foreign Trade + +## Definition + +Commercial exchange between different countries, which Smith identifies as generally more uncertain in its returns than inland trade, though the degree of uncertainty varies among different branches of foreign commerce. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith notes that foreign trade, particularly certain branches like trade to North America, offers higher potential profits than inland trade due to greater uncertainty of returns. This observation about risk and reward in different types of commerce forms part of his analysis of profit differentials across employments of stock. + +## Economic Domain + +Exchange + +--- +--- ENTITY: smuggling trade --- + +# Smuggling Trade + +## Definition + +The illegal transportation of goods across borders to avoid customs duties and trade restrictions, which Smith identifies as the most hazardous of all trades but also potentially the most profitable when successful. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses smuggling as an extreme example of how risk affects profits, noting that while it offers the highest potential returns, it also carries the greatest risk of bankruptcy. He argues that competition among smugglers eventually reduces profits to levels that only barely compensate for the risk involved. + +## Economic Domain + +Exchange + +--- +--- ENTITY: common returns of stock --- + +# Common Returns of Stock + +## Definition + +The typical or average profits earned by capital employed in various trades under normal market conditions, which Smith argues should be sufficient to compensate for occasional losses and provide a surplus profit comparable to insurance returns if risk were fully compensated. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the concept of common returns to analyse whether different employments of stock offer adequate compensation for their risks. He argues that if hazardous trades like smuggling offered full compensation for risk, bankruptcies would not be more frequent in these trades than in safer enterprises, suggesting that risk is systematically underpriced. + +## Economic Domain + +Distribution + +--- +--- ENTITY: extraordinary profits --- + +# Extraordinary Profits + +## Definition + +Returns on capital that significantly exceed the common or average profits in a particular trade or location, typically occurring when new enterprises are established or when demand conditions temporarily favour certain commodities. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith notes that extraordinary profits often occur when new manufactures are established or when particular trades experience unusual demand. However, he argues that competition eventually reduces these exceptional returns to the common level, demonstrating the equilibrating tendency of free markets. + +## Economic Domain + +Distribution + +--- +--- ENTITY: public registers of manufactures --- + +# Public Registers of Manufactures + +## Definition + +Official records maintained in towns that list the names and locations of tradesmen practicing specific occupations, which Smith argues facilitates the formation of trade combinations and price-fixing agreements by making it easier for competitors to communicate and coordinate. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies public registers as a policy that inadvertently facilitates anti-competitive behaviour by making it easier for tradesmen to assemble and conspire against the public interest. He argues that while such meetings cannot be entirely prevented, the law should not facilitate them through administrative mechanisms. + +## Economic Domain + +Regulation + +--- +--- ENTITY: exclusive corporation --- + +# Exclusive Corporation + +## Definition + +A legally privileged trading organisation that restricts membership and limits competition within its trade, enabling members to maintain higher prices and profits than would prevail under free market conditions. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith criticises exclusive corporations as mechanisms that weaken the natural discipline of the market by protecting members from competition. He argues that when workers must be employed regardless of performance, quality deteriorates and consumers suffer, while the public interest is sacrificed to private gain. + +## Economic Domain + +Regulation + +--- +--- ENTITY: adulterine guilds --- + +# Adulterine Guilds + +## Definition + +Unauthorised trade associations that attempt to exercise corporate privileges without formal legal incorporation, which Smith notes were sometimes tolerated by medieval kings in exchange for annual fines, representing early forms of rent-seeking behaviour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith mentions adulterine guilds as examples of how the crown's prerogative to grant corporate charters was often used to extract revenue rather than protect public liberty. This historical observation supports his broader critique of how institutional arrangements can serve private interests at public expense. + +## Economic Domain + +Regulation + +--- +--- ENTITY: university of trades --- + +# University of Trades + +## Definition + +The medieval term for incorporated trades and crafts, which Smith notes was the proper Latin name for any incorporation, drawing a parallel between the seven-year terms for apprenticeships and the seven-year terms for obtaining academic degrees. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the historical terminology of "universities" for trades to illustrate the common origin of both craft guilds and academic institutions in medieval incorporation practices. This etymological observation supports his argument that long apprenticeship requirements have no rational basis in the nature of the work itself. + +## Economic Domain + +Regulation + +--- +--- ENTITY: assize of bread --- + +# Assize of Bread + +## Definition + +A legal regulation that fixes the price of bread based on the price of wheat, which Smith identifies as one of the few remaining examples of medieval attempts to regulate merchant profits by controlling commodity prices. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith discusses the assize of bread as a remnant of older regulatory practices that attempted to control profits by fixing prices. He argues that where competition exists, it regulates prices more effectively than any legal assize, and that such regulations are generally unnecessary and potentially harmful. + +## Economic Domain + +Regulation + +--- +--- ENTITY: retail trade --- + +# Retail Trade + +## Definition + +The sale of goods in small quantities directly to consumers, which Smith notes typically offers higher apparent profits than wholesale trade due to the additional labour and skill required, though much of this apparent profit represents disguised wages. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith analyses retail trade to demonstrate how apparent profit differentials often reflect differences in labour rather than capital returns. He argues that the higher apparent profits of retail merchants largely compensate for the additional skill, effort, and risk involved in direct consumer transactions. + +## Economic Domain + +Exchange + +--- +--- ENTITY: wholesale trade --- + +# Wholesale Trade + +## Definition + +The sale of goods in large quantities to retailers or other businesses rather than directly to consumers, which Smith notes typically offers lower apparent profits than retail trade but represents more purely the returns to capital investment. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts wholesale with retail trade to illustrate how profit differentials across employments often reflect differences in the nature of the work rather than pure returns to capital. He argues that wholesale merchants earn more modest but more genuine profits on their stock investments. + +## Economic Domain + +Exchange + +--- +--- ENTITY: public lottery --- + +# Public Lottery + +## Definition + +A government-sponsored gambling scheme where participants purchase tickets for chances to win prizes, which Smith uses as an analogy to illustrate how people systematically overvalue potential gains while undervaluing probable losses. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith employs the public lottery as a metaphor for certain professions where a few individuals achieve great success while most fail completely. He argues that just as lottery players overvalue their chances of winning, people entering professions like law or the arts often overestimate their probability of success. + +## Economic Domain + +General Theory + +--- +--- ENTITY: maritime employment --- + +# Maritime Employment + +## Definition + +Work in the shipping and naval services, which Smith analyses as offering better prospects for advancement and fortune than military service, though still involving significant risks and hardships that are compensated through wages and the hope of prize money. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith compares maritime with military employment to illustrate how different occupations offer varying combinations of risk, reward, and advancement opportunities. He notes that while sailors earn wages comparable to common labourers, the possibility of prize money and advancement makes the trade attractive despite its hardships. + +## Economic Domain + +Distribution + +--- +--- ENTITY: military employment --- + +# Military Employment + +## Definition + +Service in the armed forces, which Smith analyses as offering poor compensation relative to the risks involved, with limited prospects for advancement and wages that fall below those of common labourers, sustained only by romantic notions of honour and distinction. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses military service as an example of an occupation where the actual compensation falls far below what would be necessary to attract volunteers if people calculated risks and rewards rationally. He argues that romantic notions of honour sustain recruitment despite poor material conditions. + +## Economic Domain + +Distribution + +--- +--- ENTITY: public executioner --- + +# Public Executioner + +# Public Executioner + +## Definition + +The state official responsible for carrying out capital punishment, which Smith identifies as the most detestable of all employments yet paradoxically better paid than most common trades relative to the amount of work performed. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the public executioner as an extreme example of how disagreeable employment commands premium compensation. This illustrates his broader principle that wages vary not only with the skill required but also with the agreeableness or disagreeableness of the work itself. + +## Economic Domain + +Distribution + +--- +--- ENTITY: poacher --- + +# Poacher + +## Definition + +An individual who illegally hunts or fishes on private property, which Smith identifies as typically being very poor even in countries where poaching is severely punished, illustrating how natural enjoyment of certain activities can drive down compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the example of poachers to demonstrate how natural human inclinations toward certain activities can create oversupply of labour in those occupations, driving wages down to subsistence levels. This illustrates his principle that agreeable employments tend to be poorly compensated. + +## Economic Domain + +Distribution + +--- +--- ENTITY: coal-heaver --- + +# Coal-Heaver + +## Definition + +A labourer who unloads coal from ships, which Smith identifies as performing work that is extremely arduous, dirty, and subject to irregular employment, commanding wages that are four to five times higher than common labour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses coal-heavers to illustrate how the combination of disagreeable work, physical hardship, and irregular employment can drive wages far above the common level. This example demonstrates how multiple factors can combine to create significant wage differentials. + +## Economic Domain + +Distribution + +--- +--- ENTITY: collier --- + +# Collier + +## Definition + +A coal miner, which Smith identifies as performing extremely dangerous and dirty work that commands wages double or triple those of common labour, illustrating how hazardous and disagreeable employment commands premium compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses coal miners to demonstrate how the disagreeable and dangerous nature of certain employments commands higher wages. He notes that while the work can be constant if desired, the inherent hardships justify the substantial wage premium over common labour. + +## Economic Domain + +Distribution + +--- +--- ENTITY: butcher trade --- + +# Butcher Trade + +## Definition + +The commercial activity of slaughtering and selling meat, which Smith identifies as a brutal and odious business that nonetheless offers higher profits than most common trades due to its disagreeable nature. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the butcher trade as an example of how disagreeable employment affects profits of stock as well as wages of labour. This illustrates his principle that the unattractiveness of certain businesses to potential entrants allows those who do engage in them to earn above-normal returns. + +## Economic Domain + +Distribution + +--- +--- ENTITY: inn or tavern keeper --- + +# Inn or Tavern Keeper + +## Definition + +An individual who operates a lodging and drinking establishment, which Smith identifies as a business that is neither agreeable nor creditable due to the lack of household autonomy and exposure to difficult customers, yet can yield substantial profits relative to the capital required. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses inn and tavern keeping to illustrate how disagreeable business conditions can lead to higher profits. Despite the personal drawbacks of the trade, the potential for significant returns attracts entrepreneurs willing to accept these disadvantages. + +## Economic Domain + +Distribution + + + +## VSM Mappings + +--- MAPPING: wages of labour-to-S1 Operations --- + +# wages of labour -> S1 Operations + +## Economic Entity Reference + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## VSM Concept Reference + +System 1 represents the primary activities that produce the organisation's purpose. These are the operational units that directly create value through concrete work and production activities. Each operational element is itself a viable system with autonomy within constraints. + +## Mapping Rationale + +Wages of labour directly represent the compensation for operational work performed by System 1 units. The labour itself is the primary productive activity that creates economic value, making wages the direct price of System 1 operations. Smith's analysis of wage differentials across employments reflects how different operational activities command different compensation based on their characteristics. + +## Mapping Strength + +Strong + +--- MAPPING: wages of labour-to-S2 Coordination --- + +# wages of labour -> S2 Coordination + +## Economic Entity Reference + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## VSM Concept Reference + +System 2 provides the information channels and bodies that allow primary activities to communicate with each other and coordinate. It dampens oscillations and resolves conflicts between operational units through standardisation and scheduling mechanisms. + +## Mapping Rationale + +Wage rates function as coordination signals that balance labour supply and demand across different employments. They resolve conflicts between workers competing for positions and employers competing for labour by providing a common metric for valuing different types of work. The five circumstances Smith identifies that affect wages represent the coordination parameters that balance labour markets. + +## Mapping Strength + +Strong + +--- MAPPING: wages of labour-to-S3 Control --- + +# wages of labour -> S3 Control + +## Economic Entity Reference + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## VSM Concept Reference + +System 3 establishes the rules, resources, rights, and responsibilities of System 1 operations and provides an interface between operational units and higher management. It represents day-to-day control that optimises the internal environment. + +## Mapping Rationale + +Wages represent the primary mechanism through which economic control is exercised over labour. They establish the resource allocation rules for human capital and create the framework within which workers operate. Wage policies and labour regulations fall under System 3's domain of internal economic governance. + +## Mapping Strength + +Strong + +--- MAPPING: profits of stock-to-S1 Operations --- + +# profits of stock -> S1 Operations + +## Economic Entity Reference + +The returns earned by those who employ capital in various trades and employments, which are affected by the agreeableness or disagreeableness of the business and the risk or security with which it is attended, but are less influenced by the difficulty of learning the trade compared to wages of labour. + +## VSM Concept Reference + +System 1 represents the primary activities that produce the organisation's purpose. These are the operational units that directly create value through concrete work and production activities, including the deployment of capital in productive enterprises. + +## Mapping Rationale + +Profits of stock represent the returns to capital deployed in operational activities that directly produce economic value. The employment of stock in various trades constitutes the operational work of System 1 units at the capital deployment level, making profits the direct measure of success for these operational activities. + +## Mapping Strength + +Strong + +--- MAPPING: profits of stock-to-S4 Intelligence --- + +# profits of stock -> S4 Intelligence + +## Economic Entity Reference + +The returns earned by those who employ capital in various trades and employments, which are affected by the agreeableness or disagreeableness of the business and the risk or security with which it is attended, but are less influenced by the difficulty of learning the trade compared to wages of labour. + +## VSM Concept Reference + +System 4 captures all relevant information about the outside-and-then environment and is responsible for strategic responses. It looks outward to monitor how the organisation needs to adapt to remain viable. + +## Mapping Rationale + +Profits serve as intelligence signals about the viability of different capital employments in the external environment. They indicate which trades and markets offer favourable conditions for investment and which do not, providing the information necessary for strategic capital allocation decisions. + +## Mapping Strength + +Strong + +--- MAPPING: apprenticeships-to-S3 Control --- + +# apprenticeships -> S3 Control + +## Economic Entity Reference + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## VSM Concept Reference + +System 3 establishes the rules, resources, rights, and responsibilities of System 1 operations. It represents the regulatory framework that governs how operational units function and interact. + +## Mapping Rationale + +Apprenticeships represent a regulatory mechanism that controls entry into trades and governs the relationship between masters and apprentices. They establish the rules for skill transmission and create institutional barriers that affect the internal structure of economic operations. + +## Mapping Strength + +Strong + +--- MAPPING: apprenticeships-to-S2 Coordination --- + +# apprenticeships -> S2 Coordination + +## Economic Entity Reference + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that allow operational units to communicate and resolve conflicts. It standardises practices and creates the information channels necessary for smooth operation. + +## Mapping Rationale + +Apprenticeship systems coordinate the transmission of skills across generations and establish standardised training periods that affect labour market dynamics. They create coordination mechanisms for skill development that influence how different trades maintain their workforce. + +## Mapping Strength + +Moderate + +--- MAPPING: corporation laws-to-S3 Control --- + +# corporation laws -> S3 Control + +## Economic Entity Reference + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the rules and constraints within which System 1 units operate. + +## Mapping Rationale + +Corporation laws represent direct regulatory control over economic activities, establishing who can participate in which trades and under what conditions. They create the institutional framework that governs market operations and restricts competition. + +## Mapping Strength + +Strong + +--- MAPPING: corporation laws-to-S5 Policy --- + +# corporation laws -> S5 Policy + +## Economic Entity Reference + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## VSM Concept Reference + +System 5 defines the identity, values, and purpose of the organisation. It represents the supreme policy-making authority that establishes the overarching framework within which all other systems operate. + +## Mapping Rationale + +Corporation laws reflect sovereign policy choices about the structure of economic organisation and the balance between competition and regulation. They express fundamental policy decisions about economic identity and the role of the state in market governance. + +## Mapping Strength + +Strong + +--- MAPPING: settlement laws-to-S3 Control --- + +# settlement laws -> S3 Control + +## Economic Entity Reference + +Legal provisions that restrict the movement of poor persons by requiring them to obtain official settlement in a parish before residing there, creating significant barriers to labour mobility and preventing workers from moving to areas where their skills might be most valued. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations and controls the internal environment. It creates the rules that determine how resources, including labour, can be deployed. + +## Mapping Rationale + +Settlement laws represent direct regulatory control over labour mobility and resource allocation. They establish the institutional framework that governs where workers can operate and create artificial constraints on the internal economic environment. + +## Mapping Strength + +Strong + +--- MAPPING: certificates-to-S2 Coordination --- + +# certificates -> S2 Coordination + +## Economic Entity Reference + +Official documents issued by one parish that certify a person's legal settlement there, allowing them to reside in another parish without gaining settlement rights there, serving as a partial remedy to the settlement laws' restrictions on labour mobility. + +## VSM Concept Reference + +System 2 provides coordination mechanisms that allow different operational units to communicate and resolve conflicts. It creates standardised procedures for managing interactions between different parts of the system. + +## Mapping Rationale + +Certificates function as coordination mechanisms that facilitate labour movement between parishes while maintaining settlement control. They create a standardised administrative procedure for managing the complex interactions between different local jurisdictions. + +## Mapping Strength + +Strong + +--- MAPPING: public education of professionals-to-S3 Control --- + +# public education of professionals -> S3 Control + +## Economic Entity Reference + +The practice of funding the education of clergy, lawyers, physicians, and other professionals through public or charitable means, which creates an oversupply of practitioners and drives down their earnings below what would prevail if education were funded privately. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the institutional structures that control how resources are allocated and how professions are organised. + +## Mapping Rationale + +Public funding of professional education represents a regulatory choice about how human capital is developed and deployed. It establishes the institutional framework that governs professional training and creates artificial conditions in the labour market. + +## Mapping Strength + +Strong + +--- MAPPING: speculative trade-to-S4 Intelligence --- + +# speculative trade -> S4 Intelligence + +## Economic Entity Reference + +A form of commerce where merchants rapidly shift between different commodities and markets based on anticipated profit opportunities, rather than maintaining regular, established business operations in specific trades, characterized by irregular and unpredictable returns. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats. + +## Mapping Rationale + +Speculative trade functions as an intelligence-gathering activity that responds to environmental signals about market conditions. It represents the strategic adaptation of capital to changing opportunities in the external economic environment. + +## Mapping Strength + +Strong + +--- MAPPING: natural state of employments-to-S5 Policy --- + +# natural state of employments -> S5 Policy + +## Economic Entity Reference + +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. + +## VSM Concept Reference + +System 5 defines the identity, values, and purpose of the organisation. It represents the supreme policy-making authority that establishes the overarching framework and philosophical foundations. + +## Mapping Rationale + +The concept of the natural state represents the fundamental policy framework for understanding economic organisation. It expresses the philosophical identity of the economic system and the policy principles that should govern economic activity. + +## Mapping Strength + +Strong + +--- MAPPING: ordinary state of employments-to-S1 Operations --- + +# ordinary state of employments -> S1 Operations + +## Economic Entity Reference + +The typical or usual condition of economic activities when demand for labour fluctuates around normal levels, as opposed to periods of extraordinary demand or declining industries, representing the baseline against which exceptional wage variations are measured. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose under normal conditions. These are the routine productive activities that constitute the day-to-day operations. + +## Mapping Rationale + +The ordinary state of employments represents the baseline operational condition of the economic system under normal circumstances. It describes the routine functioning of System 1 units when they are operating under typical market conditions. + +## Mapping Strength + +Strong + +--- MAPPING: principal employments-to-S1 Operations --- + +# principal employments -> S1 Operations + +## Economic Entity Reference + +The main or primary occupation through which individuals derive their subsistence, as opposed to secondary or occasional work undertaken during leisure time, which affects how wages are determined and how workers value their time. + +## VSM Concept Reference + +System 1 represents the primary activities that produce the organisation's purpose. These are the main operational units that directly create value through their core productive activities. + +## Mapping Rationale + +Principal employments are the core System 1 operations through which individuals generate their primary economic output. They represent the main productive activities that constitute the fundamental operations of the economic system. + +## Mapping Strength + +Strong + +--- MAPPING: public mourning effects-to-S4 Intelligence --- + +# public mourning effects -> S4 Intelligence + +## Economic Entity Reference + +The temporary increase in demand for black cloth and related mourning goods that raises their market price above the natural price, creating higher profits for dealers in these commodities during periods of national bereavement. + +## VSM Concept Reference + +System 4 captures information about external environmental conditions and identifies opportunities for strategic response. It monitors changes in the environment that require adaptation. + +## Mapping Rationale + +Public mourning effects represent environmental signals that create temporary market opportunities requiring strategic response. They function as intelligence about changing demand conditions that affect capital allocation decisions. + +## Mapping Strength + +Strong + +--- MAPPING: piece-work wages-to-S1 Operations --- + +# piece-work wages -> S1 Operations + +## Economic Entity Reference + +A system of compensation where workers are paid according to the quantity of output they produce rather than receiving a fixed daily or weekly wage, creating a direct incentive for increased productivity and diligence. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce value. These are the direct productive activities that create economic output. + +## Mapping Rationale + +Piece-work wages are directly tied to operational output and productivity. They represent the compensation mechanism for System 1 units based on their actual production rather than time spent, making them intrinsic to operational performance. + +## Mapping Strength + +Strong + +--- MAPPING: piece-work wages-to-S3 Control --- + +# piece-work wages -> S3 Control + +## Economic Entity Reference + +A system of compensation where workers are paid according to the quantity of output they produce rather than receiving a fixed daily or weekly wage, creating a direct incentive for increased productivity and diligence. + +## VSM Concept Reference + +System 3 establishes the rules and controls that govern how System 1 operations function. It creates the incentive structures and performance management systems. + +## Mapping Rationale + +Piece-work wages represent a control mechanism that governs worker behaviour and productivity. They establish the rules for compensation that directly influence operational performance and create the incentive structure for System 1 units. + +## Mapping Strength + +Strong + +--- MAPPING: common labour wages-to-S1 Operations --- + +# common labour wages -> S1 Operations + +## Economic Entity Reference + +The standard compensation paid to unskilled or semi-skilled workers performing basic manual tasks, which serves as a benchmark against which wages in other occupations are compared and often adjusted. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the fundamental productive activities that create basic economic value. + +## Mapping Rationale + +Common labour wages represent the baseline compensation for fundamental System 1 operations. They establish the standard for measuring the value of basic productive work and serve as the reference point for all other operational compensation. + +## Mapping Strength + +Strong + +--- MAPPING: scarcity of hands-to-S2 Coordination --- + +# scarcity of hands -> S2 Coordination + +## Economic Entity Reference + +A condition in specific localities where the supply of available workers falls short of demand, causing wages to rise above their normal level as employers compete for limited labour resources. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that balance supply and demand between different operational units. It resolves conflicts and ensures smooth operation across the system. + +## Mapping Rationale + +Scarcity of hands represents a coordination problem that requires System 2 mechanisms to resolve. It creates the need for wage adjustments and labour mobility that coordinate the distribution of workers across different employments. + +## Mapping Strength + +Strong + +--- MAPPING: overstocked market conditions-to-S2 Coordination --- + +# overstocked market conditions -> S2 Coordination + +## Economic Entity Reference + +A situation where the supply of workers in a particular trade exceeds the demand for their services, forcing wages down below what would be necessary to attract new entrants and causing existing practitioners to accept lower compensation. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that balance supply and demand and resolve conflicts between operational units. It ensures that resources are properly distributed across the system. + +## Mapping Rationale + +Overstocked market conditions represent coordination failures that require System 2 mechanisms to resolve. They create the need for market adjustments that coordinate the distribution of workers across different employments. + +## Mapping Strength + +Strong + +--- MAPPING: advancing state of manufacture-to-S1 Operations --- + +# advancing state of manufacture -> S1 Operations + +## Economic Entity Reference + +A condition of industrial development where production is expanding, creating continual demand for new workers and maintaining higher wages due to the growing need for labour in the expanding enterprise. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through manufacturing and production. + +## Mapping Rationale + +Advancing manufacture represents the operational expansion of System 1 units in the manufacturing sector. It describes the growth and development of primary productive activities that create economic value through increased production. + +## Mapping Strength + +Strong + +--- MAPPING: declining manufacture-to-S1 Operations --- + +# declining manufacture -> S1 Operations + +## Economic Entity Reference + +A condition of industrial contraction where production is decreasing, leading to surplus labour supply as workers cannot easily transition to other employments due to legal and institutional barriers, forcing wages down below sustainable levels. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through manufacturing and production. + +## Mapping Rationale + +Declining manufacture represents the operational contraction of System 1 units in the manufacturing sector. It describes the reduction and potential failure of primary productive activities that create economic value through decreased production. + +## Mapping Strength + +Strong + +--- MAPPING: inland trade-to-S1 Operations --- + +# inland trade -> S1 Operations + +## Economic Entity Reference + +Commercial exchange that occurs within the boundaries of a single country, as distinguished from foreign trade, which Smith notes is generally less uncertain in its returns and therefore typically offers lower profit rates than foreign commerce. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through commercial exchange and trade. + +## Mapping Rationale + +Inland trade represents the operational activities of System 1 units engaged in domestic commercial exchange. It constitutes the primary productive work of merchants and traders operating within the national economy. + +## Mapping Strength + +Strong + +--- MAPPING: foreign trade-to-S4 Intelligence --- + +# foreign trade -> S4 Intelligence + +## Economic Entity Reference + +Commercial exchange between different countries, which Smith identifies as generally more uncertain in its returns than inland trade, though the degree of uncertainty varies among different branches of foreign commerce. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats in the broader environment. + +## Mapping Rationale + +Foreign trade functions as an intelligence-gathering activity that responds to environmental signals about international market conditions. It represents the strategic adaptation of capital to opportunities in the external global economic environment. + +## Mapping Strength + +Strong + +--- MAPPING: smuggling trade-to-S4 Intelligence --- + +# smuggling trade -> S4 Intelligence + +## Economic Entity Reference + +The illegal transportation of goods across borders to avoid customs duties and trade restrictions, which Smith identifies as the most hazardous of all trades but also potentially the most profitable when successful. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats, including those that exist in regulatory grey areas. + +## Mapping Rationale + +Smuggling trade represents the extreme end of environmental scanning and strategic response to regulatory constraints. It functions as an intelligence activity that identifies and exploits gaps in the regulatory environment for strategic advantage. + +## Mapping Strength + +Strong + +--- MAPPING: common returns of stock-to-S1 Operations --- + +# common returns of stock -> S1 Operations + +## Economic Entity Reference + +The typical or average profits earned by capital employed in various trades under normal market conditions, which Smith argues should be sufficient to compensate for occasional losses and provide a surplus profit comparable to insurance returns if risk were fully compensated. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through the deployment of capital in various trades. + +## Mapping Rationale + +Common returns of stock represent the baseline operational performance of capital deployed in System 1 activities. They establish the standard measure of success for capital employed in primary productive activities across different trades. + +## Mapping Strength + +Strong + +--- MAPPING: extraordinary profits-to-S1 Operations --- + +# extraordinary profits -> S1 Operations + +## Economic Entity Reference + +Returns on capital that significantly exceed the common or average profits in a particular trade or location, typically occurring when new enterprises are established or when demand conditions temporarily favour certain commodities. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value, including new enterprises and expanding operations. + +## Mapping Rationale + +Extraordinary profits represent exceptional operational performance by System 1 units. They describe the above-normal returns achieved by primary productive activities during periods of expansion or favourable market conditions. + +## Mapping Strength + +Strong + +--- MAPPING: public registers of manufactures-to-S2 Coordination --- + +# public registers of manufactures -> S2 Coordination + +## Economic Entity Reference + +Official records maintained in towns that list the names and locations of tradesmen practicing specific occupations, which Smith argues facilitates the formation of trade combinations and price-fixing agreements by making it easier for competitors to communicate and coordinate. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that allow operational units to communicate and resolve conflicts. It creates standardised procedures for managing interactions between different parts of the system. + +## Mapping Rationale + +Public registers function as coordination mechanisms that facilitate communication between tradesmen. They create standardised administrative procedures that coordinate the interactions between different members of the same trade. + +## Mapping Strength + +Strong + +--- MAPPING: exclusive corporation-to-S3 Control --- + +# exclusive corporation -> S3 Control + +## Economic Entity Reference + +A legally privileged trading organisation that restricts membership and limits competition within its trade, enabling members to maintain higher prices and profits than would prevail under free market conditions. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the rules and constraints within which System 1 units operate and establishes the institutional structure of the economy. + +## Mapping Rationale + +Exclusive corporations represent direct regulatory control over economic activities, establishing who can participate in which trades and under what conditions. They create the institutional framework that governs market operations and restricts competition. + +## Mapping Strength + +Strong + +--- MAPPING: adulterine guilds-to-S3 Control --- + +# adulterine guilds -> S3 Control + +## Economic Entity Reference + +Unauthorised trade associations that attempt to exercise corporate privileges without formal legal incorporation, which Smith notes were sometimes tolerated by medieval kings in exchange for annual fines, representing early forms of rent-seeking behaviour. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the institutional structures that control how professions and trades are organised and regulated. + +## Mapping Rationale + +Adulterine guilds represent informal regulatory mechanisms that attempt to control trade practices outside the formal legal framework. They establish alternative rules for market governance that operate parallel to official regulatory structures. + +## Mapping Strength + +Moderate + +--- MAPPING: university of trades-to-S3 Control --- + +# university of trades -> S3 Control + +## Economic Entity Reference + +The medieval term for incorporated trades and crafts, which Smith notes was the proper Latin name for any incorporation, drawing a parallel between the seven-year terms for apprenticeships and the seven-year terms for obtaining academic degrees. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the institutional structures that control how professions and trades are organised and regulated. + +## Mapping Rationale + +The university of trades represents the historical regulatory framework that governed craft organisation and skill transmission. It established the institutional rules for trade governance and professional regulation. + +## Mapping Strength + +Strong + +--- MAPPING: assize of bread-to-S3 Control --- + +# assize of bread -> S3 Control + +## Economic Entity Reference + +A legal regulation that fixes the price of bread based on the price of wheat, which Smith identifies as one of the few remaining examples of medieval attempts to regulate merchant profits by controlling commodity prices. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the rules and constraints within which System 1 units operate, including price controls and market regulations. + +## Mapping Rationale + +The assize of bread represents direct regulatory control over commodity prices and market operations. It establishes the institutional framework that governs how essential goods are priced and distributed in the economy. + +## Mapping Strength + +Strong + +--- MAPPING: retail trade-to-S1 Operations --- + +# retail trade -> S1 Operations + +## Economic Entity Reference + +The sale of goods in small quantities directly to consumers, which Smith notes typically offers higher apparent profits than wholesale trade due to the additional labour and skill required, though much of this apparent profit represents disguised wages. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through commercial exchange and trade. + +## Mapping Rationale + +Retail trade represents the operational activities of System 1 units engaged in direct consumer commerce. It constitutes the primary productive work of merchants operating at the final stage of the distribution chain. + +## Mapping Strength + +Strong + +--- MAPPING: wholesale trade-to-S1 Operations --- + +# wholesale trade -> S1 Operations + +## Economic Entity Reference + +The sale of goods in large quantities to retailers or other businesses rather than directly to consumers, which Smith notes typically offers lower apparent profits than retail trade but represents more purely the returns to capital investment. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through commercial exchange and trade. + +## Mapping Rationale + +Wholesale trade represents the operational activities of System 1 units engaged in bulk commercial exchange. It constitutes the primary productive work of merchants operating at the intermediate stage of the distribution chain. + +## Mapping Strength + +Strong + +--- MAPPING: public lottery-to-S4 Intelligence --- + +# public lottery -> S4 Intelligence + +## Economic Entity Reference + +A government-sponsored gambling scheme where participants purchase tickets for chances to win prizes, which Smith uses as an analogy to illustrate how people systematically overvalue potential gains while undervaluing probable losses. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats, including those based on probability and risk assessment. + +## Mapping Rationale + +The public lottery functions as an intelligence mechanism about human decision-making under uncertainty. It represents the strategic assessment of risk and reward in the external environment of economic opportunities. + +## Mapping Strength + +Moderate + +--- MAPPING: maritime employment-to-S1 Operations --- + +# maritime employment -> S1 Operations + +## Economic Entity Reference + +Work in the shipping and naval services, which Smith analyses as offering better prospects for advancement and fortune than military service, though still involving significant risks and hardships that are compensated through wages and the hope of prize money. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through maritime commerce and naval services. + +## Mapping Rationale + +Maritime employment represents the operational activities of System 1 units engaged in shipping and naval services. It constitutes the primary productive work of sailors and naval personnel who create economic value through maritime commerce. + +## Mapping Strength + +Strong + +--- MAPPING: military employment-to-S1 Operations --- + +# military employment -> S1 Operations + +## Economic Entity Reference + +Service in the armed forces, which Smith analyses as offering poor compensation relative to the risks involved, with limited prospects for advancement and wages that fall below those of common labourers, sustained only by romantic notions of honour and distinction. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through military service and national defence. + +## Mapping Rationale + +Military employment represents the operational activities of System 1 units engaged in armed forces service. It constitutes the primary productive work of soldiers who create economic value through national defence and military operations. + +## Mapping Strength + +Strong + +--- MAPPING: public executioner-to-S1 Operations --- + +# public executioner -> S1 Operations + +## Economic Entity Reference + +The state official responsible for carrying out capital punishment, which Smith identifies as the most detestable of all employments yet paradoxically better paid than most common trades relative to the amount of work performed. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value, even when they involve socially necessary but disagreeable work. + +## Mapping Rationale + +Public executioner represents the operational activities of System 1 units engaged in state execution services. It constitutes the primary productive work of state officials who create economic value through the performance of necessary but socially disagreeable functions. + +## Mapping Strength + +Strong + +--- MAPPING: poacher-to-S1 Operations --- + +# poacher -> S1 Operations + +## Economic Entity Reference + +An individual who illegally hunts or fishes on private property, which Smith identifies as typically being very poor even in countries where poaching is severely punished, illustrating how natural enjoyment of certain activities can drive down compensation. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value, even when they operate outside legal frameworks. + +## Mapping Rationale + +Poacher represents the operational activities of System 1 units engaged in illegal hunting and fishing. It constitutes the primary productive work of individuals who create economic value through the extraction of natural resources, even when operating outside legal frameworks. + +## Mapping Strength + +Moderate + +--- MAPPING: coal-heaver-to-S1 Operations --- + +# coal-heaver -> S1 Operations + +## Economic Entity Reference + +A labourer who unloads coal from ships, which Smith identifies as performing work that is extremely arduous, dirty, and subject to irregular employment, commanding wages that are four to five times higher than common labour. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through manual labour and material handling. + +## Mapping Rationale + +Coal-heaver represents the operational activities of System 1 units engaged in manual labour for material handling. It constitutes the primary productive work of labourers who create economic value through the physical movement of coal and other materials. + +## Mapping Strength + +Strong + +--- MAPPING: collier-to-S1 Operations --- + +# collier -> S1 Operations + +## Economic Entity Reference + +A coal miner, which Smith identifies as performing extremely dangerous and dirty work that commands wages double or triple those of common labour, illustrating how hazardous and disagreeable employment commands premium compensation. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through extraction and mining operations. + +## Mapping Rationale + +Collier represents the operational activities of System 1 units engaged in coal mining. It constitutes the primary productive work of miners who create economic value through the extraction of coal from the earth. + +## Mapping Strength + +Strong + +--- MAPPING: butcher trade-to-S1 Operations --- + +# butcher trade -> S1 Operations + +## Economic Entity Reference + +The commercial activity of slaughtering and selling meat, which Smith identifies as a brutal and odious business that nonetheless offers higher profits than most common trades due to its disagreeable nature. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through food processing and distribution. + +## Mapping Rationale + +Butcher trade represents the operational activities of System 1 units engaged in meat processing and distribution. It constitutes the primary productive work of butchers who create economic value through the transformation of livestock into consumable meat products. + +## Mapping Strength + +Strong + +--- MAPPING: inn or tavern keeper-to-S1 Operations --- + +# inn or tavern keeper -> S1 Operations + +## Economic Entity Reference + +An individual who operates a lodging and drinking establishment, which Smith identifies as a business that is neither agreeable nor creditable due to the lack of household autonomy and exposure to difficult customers, yet can yield substantial profits relative to the capital required. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through hospitality and service industries. + +## Mapping Rationale + +Inn or tavern keeper represents the operational activities of System 1 units engaged in hospitality services. It constitutes the primary productive work of service providers who create economic value through lodging and food service operations. + +## Mapping Strength + +Strong + +## VSM Framework Reference + +--- +id: vsm-framework +name: vsm_framework +artifact_type: content +description: Stafford Beer's Viable System Model reference for economic analysis +version: 1.0.0 +--- + +# Stafford Beer's Viable System Model (VSM) + +The Viable System Model (VSM) is a model of the organisational structure of any +autonomous system capable of producing itself. It was created by management +cybernetician Stafford Beer in his books *Brain of the Firm* (1972) and +*The Heart of Enterprise* (1979). + +## Core Principle: Viability + +A viable system is any system organised in such a way as to meet the demands +of surviving in a changing environment. One of the prime features of systems +that survive is that they are adaptable. The VSM expresses a model for a +viable system, which is an abstracted cybernetic description applicable to +any organisation that is a going concern. + +## The Five Systems + +### System 1 (S1) — Operations + +The primary activities that produce the organisation's purpose. These are the +operational units that directly create value. Each operational element is itself +a viable system (the principle of recursion). + +**In economic terms:** Productive enterprises, factories, farms, workshops, +individual labourers performing specialised tasks, merchant operations. + +**Key properties:** Autonomy within constraints, self-organisation, +direct engagement with the environment. + +### System 2 (S2) — Coordination + +The information channels and bodies that allow the primary activities in +System 1 to communicate with each other and that allow System 3 to monitor +and coordinate activities. System 2 dampens oscillations and resolves +conflicts between operational units. + +**In economic terms:** Market price mechanisms, trade customs, standard +weights and measures, commercial law, banking clearinghouses, trade guilds. + +**Key properties:** Anti-oscillatory, dampening, scheduling, conflict +resolution, standardisation. + +### System 3 (S3) — Control / Operational Management + +The structures and controls that establish the rules, resources, rights, +and responsibilities of System 1 and provide an interface between Systems 1 +and Systems 4/5. System 3 represents the day-to-day control of the +organisation. It optimises the internal environment. + +**In economic terms:** Government regulation of trade, taxation policy, labour +laws, enforcement of contracts, the "invisible hand" as emergent internal +regulation, guilds and corporations governing members. + +**Key properties:** Internal regulation, resource allocation, accountability, +synergy extraction, performance management. + +### System 3* (S3*) — Audit / Monitoring + +The audit and monitoring channel that allows System 3 to verify information +coming from System 1 through channels other than those provided by System 2. +System 3* provides sporadic, direct access to operational reality. + +**In economic terms:** Market inspections, quality checks, auditing of accounts, +surprise investigations into trade practices, verification of weights and measures. + +**Key properties:** Sporadic direct investigation, reality checking, bypassing +normal reporting channels. + +### System 4 (S4) — Intelligence / Adaptation + +The bodies and processes that look outward to the environment to monitor +how the organisation needs to adapt to remain viable. System 4 captures +all relevant information about the outside-and-then environment. It is +responsible for strategic responses. + +**In economic terms:** Foreign intelligence about trade opportunities, +market research, new technology adoption, colonial exploration and trade +route development, understanding of foreign economic systems. + +**Key properties:** Environmental scanning, future orientation, strategic +planning, modelling, research and development. + +### System 5 (S5) — Policy / Identity + +The policy-making body that balances demands from Systems 3 and 4 and defines +the identity, values, and purpose of the organisation. System 5 provides +closure to the whole system and represents its supreme authority. + +**In economic terms:** Sovereign authority, constitutional principles governing +economic policy, national economic identity, the philosophical foundations +of economic systems (mercantilism vs. free trade), the overarching purpose +of the commonwealth. + +**Key properties:** Identity, ethos, supreme command, policy closure, +balancing internal and external perspectives. + +## Key Concepts + +### Recursion + +Every viable system contains and is contained in a viable system. The same +five-system structure recurs at every level of organisation. A workshop is +a viable system within a factory, which is a viable system within an +industry, which is a viable system within a national economy. + +### Variety + +A measure of the number of possible states of a system. The Law of Requisite +Variety (Ashby's Law) states that only variety can absorb variety. A +controller must have at least as much variety as the system it controls. + +### Requisite Variety + +The principle that for effective regulation, the variety of the regulator +must match the variety of the system being regulated. This is achieved +through variety attenuation (reducing the variety coming up from operations) +and variety amplification (increasing the variety of management's responses). + +### Attenuation and Amplification + +Variety engineering mechanisms. Attenuation reduces variety (e.g., reporting +summaries, statistical aggregation, standardisation). Amplification increases +variety (e.g., delegation, empowerment, decentralisation). + +### Algedonic Signals + +Emergency signals that bypass the normal management hierarchy to alert +higher systems of critical situations requiring immediate attention. Named +from the Greek words for pain (algos) and pleasure (hedone). + +**In economic terms:** Market panics, famine signals, sudden price collapses, +trade embargoes, economic crises that demand immediate sovereign intervention. + +### Autonomy + +The degree of freedom granted to operational units (System 1) to self-organise +within constraints set by System 3. Beer argued that maximum autonomy +consistent with systemic cohesion yields maximum viability. + +### Viability + +The capacity of a system to maintain a separate existence and survive in a +changing environment. A viable system continuously adapts while maintaining +its identity. + + +## Instructions + +1. Review the source chapter, extracted entities, and VSM mappings together. +2. Produce a single chapter analysis document following the + Chapter Analysis Schema v1.0. +3. The analysis must include: + - An H1 heading with the chapter analysis title + - A Chapter Summary (50-300 words) of the main economic arguments + - An Entities Extracted section listing all entities with brief descriptions + - A VSM Mappings section listing all mappings with entity, concept, and strength + - A VSM Coverage section assessing which systems (S1-S5, S3*) are represented + - A Gaps & Observations section identifying uncovered systems and patterns +4. In the VSM Coverage section, explicitly state which systems are + covered and which are not, based on the mappings. +5. In Gaps & Observations, note: + - Which VSM systems lack representation from this chapter + - Entities that were difficult to map + - Emerging themes or patterns + - Suggestions for enriching coverage in future analysis + +## Output Format + +Output a single markdown document following the Chapter Analysis Schema v1.0. diff --git a/examples/infospace-with-history/output/analyses/book-1-chapter-10-synthesize-analysis-raw.md b/examples/infospace-with-history/output/analyses/book-1-chapter-10-synthesize-analysis-raw.md new file mode 100644 index 00000000..e9a779c2 --- /dev/null +++ b/examples/infospace-with-history/output/analyses/book-1-chapter-10-synthesize-analysis-raw.md @@ -0,0 +1,143 @@ +# Chapter VSM Analysis: Wages, Profits, and Economic Viability + +## Chapter Summary + +Smith's analysis of wage and profit differentials across employments reveals the cybernetic mechanisms that maintain economic viability through natural market adjustments. He identifies five factors affecting wages (agreeableness, learning difficulty, employment constancy, trust requirements, and success probability) and two factors affecting profits (agreeableness and risk), demonstrating how these differentials are naturally compensated by corresponding advantages or disadvantages. The chapter's central thesis is that in a free society with perfect liberty, these inequalities would naturally tend toward equality as market forces correct imbalances. However, Smith systematically documents how European policy—through corporation laws, apprenticeship requirements, settlement laws, and public funding of professional education—artificially creates and maintains significant inequalities in economic advantages across different employments. These policy interventions obstruct the free circulation of labour and capital, preventing the natural equilibration that would otherwise occur. The analysis reveals how wage and profit differentials function as information signals in the economic system, coordinating labour allocation and capital investment while policy interventions act as noise that disrupts these vital signals and reduces overall economic viability. + +## Entities Extracted + +The chapter identifies numerous economic entities that represent different aspects of the wage and profit system: + +- **wages of labour** - Monetary compensation for workers varying by five principal circumstances +- **profits of stock** - Returns to capital affected primarily by agreeableness and risk +- **apprenticeships** - Training systems creating barriers to trade entry +- **corporation laws** - Legal privileges restricting competition in trades +- **settlement laws** - Legal provisions restricting poor person mobility +- **certificates** - Documents allowing settlement-free residence between parishes +- **public education of professionals** - State-funded training creating oversupply +- **speculative trade** - Rapid capital movement based on anticipated opportunities +- **natural state of employments** - Free-market conditions without artificial restraints +- **ordinary state of employments** - Typical market conditions with normal demand +- **principal employments** - Main occupations providing primary subsistence +- **public mourning effects** - Temporary demand increases affecting commodity prices +- **piece-work wages** - Output-based compensation systems +- **common labour wages** - Standard compensation for basic manual work +- **scarcity of hands** - Local labour shortages driving wage increases +- **overstocked market conditions** - Labour oversupply forcing wage reductions +- **advancing state of manufacture** - Expanding industrial production +- **declining manufacture** - Contracting industrial production +- **inland trade** - Domestic commercial exchange +- **foreign trade** - International commercial exchange +- **smuggling trade** - Illegal cross-border commerce +- **common returns of stock** - Average capital profits under normal conditions +- **extraordinary profits** - Returns significantly exceeding average profits +- **public registers of manufactures** - Official records of tradesmen facilitating coordination +- **exclusive corporation** - Legally privileged trading organisations +- **adulterine guilds** - Unauthorised trade associations +- **university of trades** - Medieval term for incorporated trades +- **assize of bread** - Price regulation for essential commodities +- **retail trade** - Direct consumer sales +- **wholesale trade** - Bulk commercial exchange +- **public lottery** - Government gambling schemes as behavioural analogies +- **maritime employment** - Work in shipping and naval services +- **military employment** - Service in armed forces +- **public executioner** - State official performing capital punishment +- **poacher** - Illegal hunter or fisher +- **coal-heaver** - Labourer unloading coal from ships +- **collier** - Coal miner +- **butcher trade** - Commercial meat processing and sales +- **inn or tavern keeper** - Hospitality service provider + +## VSM Mappings + +The analysis reveals comprehensive coverage across the VSM framework: + +**System 1 (Operations):** +- wages of labour → S1 Operations (Strong) +- profits of stock → S1 Operations (Strong) +- piece-work wages → S1 Operations (Strong) +- common labour wages → S1 Operations (Strong) +- advancing state of manufacture → S1 Operations (Strong) +- declining manufacture → S1 Operations (Strong) +- inland trade → S1 Operations (Strong) +- retail trade → S1 Operations (Strong) +- wholesale trade → S1 Operations (Strong) +- maritime employment → S1 Operations (Strong) +- military employment → S1 Operations (Strong) +- public executioner → S1 Operations (Strong) +- poacher → S1 Operations (Strong) +- coal-heaver → S1 Operations (Strong) +- collier → S1 Operations (Strong) +- butcher trade → S1 Operations (Strong) +- inn or tavern keeper → S1 Operations (Strong) + +**System 2 (Coordination):** +- wages of labour → S2 Coordination (Strong) +- apprenticeships → S2 Coordination (Moderate) +- certificates → S2 Coordination (Strong) +- scarcity of hands → S2 Coordination (Strong) +- overstocked market conditions → S2 Coordination (Strong) +- public registers of manufactures → S2 Coordination (Strong) + +**System 3 (Control):** +- wages of labour → S3 Control (Strong) +- profits of stock → S3 Control (Strong) +- apprenticeships → S3 Control (Strong) +- corporation laws → S3 Control (Strong) +- settlement laws → S3 Control (Strong) +- public education of professionals → S3 Control (Strong) +- piece-work wages → S3 Control (Strong) +- assize of bread → S3 Control (Strong) +- exclusive corporation → S3 Control (Strong) +- adulterine guilds → S3 Control (Moderate) +- university of trades → S3 Control (Strong) + +**System 4 (Intelligence):** +- profits of stock → S4 Intelligence (Strong) +- speculative trade → S4 Intelligence (Strong) +- public mourning effects → S4 Intelligence (Strong) +- foreign trade → S4 Intelligence (Strong) +- smuggling trade → S4 Intelligence (Strong) +- common returns of stock → S4 Intelligence (Strong) +- extraordinary profits → S4 Intelligence (Strong) +- public lottery → S4 Intelligence (Moderate) + +**System 5 (Policy):** +- corporation laws → S5 Policy (Strong) +- natural state of employments → S5 Policy (Strong) + +**System 3* (Audit):** +- No mappings identified + +## VSM Coverage Assessment + +The chapter demonstrates extensive coverage across the VSM framework with strong representation of all primary systems: + +**System 1 (Operations)** receives the most comprehensive coverage, with 17 distinct mappings representing the full spectrum of economic activities from basic labour to complex commercial enterprises. This reflects Smith's focus on how different employments function as the primary productive activities of the economy. + +**System 2 (Coordination)** is well-represented with 7 mappings, covering the coordination mechanisms that balance labour markets, facilitate trade, and resolve conflicts between different economic activities. The coordination of labour allocation through wage differentials is a central theme. + +**System 3 (Control)** receives robust coverage with 12 mappings, reflecting Smith's detailed analysis of how policy interventions, institutional structures, and regulatory mechanisms govern economic operations and create artificial constraints on market functioning. + +**System 4 (Intelligence)** is well-covered with 9 mappings, demonstrating how profit differentials, market opportunities, and risk assessments function as information signals that guide capital allocation and strategic economic decisions. + +**System 5 (Policy)** has 2 mappings, representing the highest-level policy frameworks that govern economic organisation and define the philosophical foundations of economic systems. + +**System 3* (Audit)** has no direct mappings, representing a gap in the analysis of how the economic system verifies and monitors its own operations outside normal reporting channels. + +## Gaps & Observations + +**Uncovered Systems:** System 3* (Audit) lacks representation in this chapter. While Smith discusses various forms of regulation and control, he does not explicitly address the audit and monitoring functions that verify economic information through direct investigation outside normal channels. This gap represents the absence of analysis regarding how the system checks for fraud, verifies weights and measures, or conducts surprise inspections of market practices. + +**Difficult Mappings:** Several entities presented mapping challenges due to their complex nature. The "university of trades" mapping to System 3 Control required interpretation of historical institutional structures. The "public lottery" mapping to System 4 Intelligence involved understanding its role as a behavioural analogy rather than a direct economic activity. The "adulterine guilds" mapping represented the challenge of mapping informal regulatory mechanisms that operate outside formal legal frameworks. + +**Emerging Patterns:** A clear pattern emerges showing Smith's emphasis on how wage and profit differentials function as the primary information signals in the economic system. These differentials coordinate labour allocation, capital investment, and strategic adaptation to environmental conditions. The analysis reveals a strong focus on how policy interventions create noise in these vital signals, disrupting the natural coordination mechanisms that maintain economic viability. + +**Future Enrichment:** To enhance coverage, future analysis could explore: +- The audit functions of market regulation (System 3*) through examination of quality control, fraud prevention, and verification mechanisms +- The role of emergent coordination mechanisms beyond formal institutions (System 2) +- The strategic intelligence functions of economic forecasting and long-term planning (System 4) +- The philosophical foundations of economic policy and their relationship to national identity (System 5) +- The recursive nature of economic systems at different scales, from individual workshops to national economies + +The chapter's comprehensive mapping to VSM systems demonstrates how Smith's economic analysis aligns with cybernetic principles of viable system organisation, with wage and profit differentials serving as the primary information channels that maintain economic viability through natural market adjustments. \ No newline at end of file diff --git a/examples/infospace-with-history/output/entities/adulterine-guilds.md b/examples/infospace-with-history/output/entities/adulterine-guilds.md new file mode 100644 index 00000000..5b55dec0 --- /dev/null +++ b/examples/infospace-with-history/output/entities/adulterine-guilds.md @@ -0,0 +1,21 @@ + + +# Adulterine Guilds + +## Definition + +Unauthorised trade associations that attempt to exercise corporate privileges without formal legal incorporation, which Smith notes were sometimes tolerated by medieval kings in exchange for annual fines, representing early forms of rent-seeking behaviour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith mentions adulterine guilds as examples of how the crown's prerogative to grant corporate charters was often used to extract revenue rather than protect public liberty. This historical observation supports his broader critique of how institutional arrangements can serve private interests at public expense. + +## Economic Domain + +Regulation + +--- diff --git a/examples/infospace-with-history/output/entities/advancing-state-of-manufacture.md b/examples/infospace-with-history/output/entities/advancing-state-of-manufacture.md new file mode 100644 index 00000000..ef8cdb26 --- /dev/null +++ b/examples/infospace-with-history/output/entities/advancing-state-of-manufacture.md @@ -0,0 +1,21 @@ + + +# Advancing State of Manufacture + +## Definition + +A condition of industrial development where production is expanding, creating continual demand for new workers and maintaining higher wages due to the growing need for labour in the expanding enterprise. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts advancing manufactures with declining ones, noting that the former maintain constant demand for labour while the latter experience increasing surplus of workers. This distinction helps explain why wages differ between regions and industries based on their stage of development rather than inherent qualities of the work itself. + +## Economic Domain + +Production + +--- diff --git a/examples/infospace-with-history/output/entities/apprenticeships.md b/examples/infospace-with-history/output/entities/apprenticeships.md new file mode 100644 index 00000000..d3958d36 --- /dev/null +++ b/examples/infospace-with-history/output/entities/apprenticeships.md @@ -0,0 +1,21 @@ + + +# Apprenticeships + +## Definition + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith critically examines the institution of apprenticeships as a means by which the policy of Europe creates inequalities in labour markets. He argues that long apprenticeships are unnecessary, often counterproductive, and serve primarily to restrict competition and maintain higher wages for established craftsmen at the expense of both apprentices and the public. + +## Economic Domain + +Regulation + +--- diff --git a/examples/infospace-with-history/output/entities/assize-of-bread.md b/examples/infospace-with-history/output/entities/assize-of-bread.md new file mode 100644 index 00000000..2c4c372c --- /dev/null +++ b/examples/infospace-with-history/output/entities/assize-of-bread.md @@ -0,0 +1,21 @@ + + +# Assize of Bread + +## Definition + +A legal regulation that fixes the price of bread based on the price of wheat, which Smith identifies as one of the few remaining examples of medieval attempts to regulate merchant profits by controlling commodity prices. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith discusses the assize of bread as a remnant of older regulatory practices that attempted to control profits by fixing prices. He argues that where competition exists, it regulates prices more effectively than any legal assize, and that such regulations are generally unnecessary and potentially harmful. + +## Economic Domain + +Regulation + +--- diff --git a/examples/infospace-with-history/output/entities/book-1-chapter-10-entities.md b/examples/infospace-with-history/output/entities/book-1-chapter-10-entities.md new file mode 100644 index 00000000..4975d446 --- /dev/null +++ b/examples/infospace-with-history/output/entities/book-1-chapter-10-entities.md @@ -0,0 +1,156 @@ +# Entities: book-1-chapter-10 + +{{ include "wages-of-labour.md" }} + +--- + +{{ include "profits-of-stock.md" }} + +--- + +{{ include "apprenticeships.md" }} + +--- + +{{ include "corporation-laws.md" }} + +--- + +{{ include "settlement-laws.md" }} + +--- + +{{ include "certificates.md" }} + +--- + +{{ include "public-education-of-professionals.md" }} + +--- + +{{ include "speculative-trade.md" }} + +--- + +{{ include "natural-state-of-employments.md" }} + +--- + +{{ include "ordinary-state-of-employments.md" }} + +--- + +{{ include "principal-employments.md" }} + +--- + +{{ include "public-mourning-effects.md" }} + +--- + +{{ include "piece-work-wages.md" }} + +--- + +{{ include "common-labour-wages.md" }} + +--- + +{{ include "scarcity-of-hands.md" }} + +--- + +{{ include "overstocked-market-conditions.md" }} + +--- + +{{ include "advancing-state-of-manufacture.md" }} + +--- + +{{ include "declining-manufacture.md" }} + +--- + +{{ include "inland-trade.md" }} + +--- + +{{ include "foreign-trade.md" }} + +--- + +{{ include "smuggling-trade.md" }} + +--- + +{{ include "common-returns-of-stock.md" }} + +--- + +{{ include "extraordinary-profits.md" }} + +--- + +{{ include "public-registers-of-manufactures.md" }} + +--- + +{{ include "exclusive-corporation.md" }} + +--- + +{{ include "adulterine-guilds.md" }} + +--- + +{{ include "university-of-trades.md" }} + +--- + +{{ include "assize-of-bread.md" }} + +--- + +{{ include "retail-trade.md" }} + +--- + +{{ include "wholesale-trade.md" }} + +--- + +{{ include "public-lottery.md" }} + +--- + +{{ include "maritime-employment.md" }} + +--- + +{{ include "military-employment.md" }} + +--- + +{{ include "public-executioner.md" }} + +--- + +{{ include "poacher.md" }} + +--- + +{{ include "coal-heaver.md" }} + +--- + +{{ include "collier.md" }} + +--- + +{{ include "butcher-trade.md" }} + +--- + +{{ include "inn-or-tavern-keeper.md" }} + diff --git a/examples/infospace-with-history/output/entities/book-1-chapter-10-extract-entities-raw.md b/examples/infospace-with-history/output/entities/book-1-chapter-10-extract-entities-raw.md new file mode 100644 index 00000000..17941283 --- /dev/null +++ b/examples/infospace-with-history/output/entities/book-1-chapter-10-extract-entities-raw.md @@ -0,0 +1,826 @@ +--- ENTITY: wages of labour --- + +# Wages of Labour + +## Definition + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +This entity forms the central focus of the chapter's first part, where Smith systematically analyses how wages differ across occupations and the factors that create these inequalities. The analysis begins with the observation that pecuniary wages and profits vary greatly across different employments, then proceeds to examine each of the five circumstances that explain these variations. + +## Economic Domain + +Distribution + +--- +--- ENTITY: profits of stock --- + +# Profits of Stock + +## Definition + +The returns earned by those who employ capital in various trades and employments, which are affected by the agreeableness or disagreeableness of the business and the risk or security with which it is attended, but are less influenced by the difficulty of learning the trade compared to wages of labour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +The chapter's second major focus examines how profits differ across employments, noting that while wages vary according to five circumstances, profits are primarily affected by only two: the agreeableness of the business and the risk involved. Smith argues that ordinary rates of profit tend to be more uniform across different employments than wages. + +## Economic Domain + +Distribution + +--- +--- ENTITY: apprenticeships --- + +# Apprenticeships + +## Definition + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith critically examines the institution of apprenticeships as a means by which the policy of Europe creates inequalities in labour markets. He argues that long apprenticeships are unnecessary, often counterproductive, and serve primarily to restrict competition and maintain higher wages for established craftsmen at the expense of both apprentices and the public. + +## Economic Domain + +Regulation + +--- +--- ENTITY: corporation laws --- + +# Corporation Laws + +## Definition + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies corporation laws as the principal mechanism by which European policy creates significant inequalities in economic advantages across different employments. He argues these laws restrain competition in some trades while increasing it in others, and obstruct the free circulation of labour and stock, ultimately harming both workers and consumers. + +## Economic Domain + +Regulation + +--- +--- ENTITY: settlement laws --- + +# Settlement Laws + +## Definition + +Legal provisions that restrict the movement of poor persons by requiring them to obtain official settlement in a parish before residing there, creating significant barriers to labour mobility and preventing workers from moving to areas where their skills might be most valued. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith presents settlement laws as a particularly harmful form of labour market regulation unique to England, which obstructs the free circulation of labour from place to place. He argues these laws prevent the natural adjustment of wages across regions and force workers to remain in parishes where their labour is less valuable. + +## Economic Domain + +Regulation + +--- +--- ENTITY: certificates --- + +# Certificates + +## Definition + +Official documents issued by one parish that certify a person's legal settlement there, allowing them to reside in another parish without gaining settlement rights there, serving as a partial remedy to the settlement laws' restrictions on labour mobility. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith discusses certificates as an administrative mechanism developed to partially restore the free circulation of labour that settlement laws had obstructed. While certificates allow poor persons to move between parishes without automatically gaining settlement rights, Smith notes they are often difficult to obtain and create their own forms of administrative control. + +## Economic Domain + +Regulation + +--- +--- ENTITY: public education of professionals --- + +# Public Education of Professionals + +## Definition + +The practice of funding the education of clergy, lawyers, physicians, and other professionals through public or charitable means, which creates an oversupply of practitioners and drives down their earnings below what would prevail if education were funded privately. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies publicly funded professional education as a policy that creates inequalities by flooding certain professions with candidates willing to work for lower compensation. He argues this practice degrades the quality and remuneration of respected professions like law and medicine, while creating a class of "men of letters" who must write for subsistence. + +## Economic Domain + +Distribution + +--- +--- ENTITY: speculative trade --- + +# Speculative Trade + +## Definition + +A form of commerce where merchants rapidly shift between different commodities and markets based on anticipated profit opportunities, rather than maintaining regular, established business operations in specific trades, characterized by irregular and unpredictable returns. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts speculative trade with regular established business, noting that while it can produce sudden fortunes through successful speculation, it is equally likely to produce losses. He observes that this form of trade can only be carried on in places with extensive commerce and correspondence where intelligence about market conditions is readily available. + +## Economic Domain + +Exchange + +--- +--- ENTITY: natural state of employments --- + +# 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 + +--- +--- ENTITY: ordinary state of employments --- + +# Ordinary State of Employments + +## Definition + +The typical or usual condition of economic activities when demand for labour fluctuates around normal levels, as opposed to periods of extraordinary demand or declining industries, representing the baseline against which exceptional wage variations are measured. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith distinguishes between the ordinary or natural state of employments and periods when demand for specific types of labour rises above or falls below usual levels. He uses this distinction to explain how temporary variations in demand affect wages differently across occupations, with some trades maintaining more constant employment than others. + +## Economic Domain + +General Theory + +--- +--- ENTITY: principal employments --- + +# Principal Employments + +# Principal Employments + +## Definition + +The main or primary occupation through which individuals derive their subsistence, as opposed to secondary or occasional work undertaken during leisure time, which affects how wages are determined and how workers value their time. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith argues that equality in the advantages and disadvantages of different employments can only occur when those employments are the principal means of subsistence for the workers. When people engage in a trade only occasionally while maintaining other primary occupations, they may accept lower wages, disrupting the natural equilibrium of compensation. + +## Economic Domain + +Distribution + +--- +--- ENTITY: public mourning effects --- + +# Public Mourning Effects + +## Definition + +The temporary increase in demand for black cloth and related mourning goods that raises their market price above the natural price, creating higher profits for dealers in these commodities during periods of national bereavement. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses public mourning as an example of how extraordinary demand can temporarily raise the price of specific commodities above their natural price, affecting the profits of those engaged in producing or selling these goods. This illustrates his broader point about how variations in demand create temporary inequalities in profits across different employments. + +## Economic Domain + +Exchange + +--- +--- ENTITY: piece-work wages --- + +# Piece-Work Wages + +# Piece-Work Wages + +## Definition + +A system of compensation where workers are paid according to the quantity of output they produce rather than receiving a fixed daily or weekly wage, creating a direct incentive for increased productivity and diligence. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies piece-work as a wage system that encourages industriousness because workers benefit directly from their efforts. He contrasts this with the apprenticeship system where young workers have no immediate interest in being productive, arguing that direct financial incentives better promote the development of good work habits. + +## Economic Domain + +Distribution + +--- +--- ENTITY: common labour wages --- + +# Common Labour Wages + +## Definition + +The standard compensation paid to unskilled or semi-skilled workers performing basic manual tasks, which serves as a benchmark against which wages in other occupations are compared and often adjusted. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith frequently references common labour wages as a baseline for comparing compensation across different employments. He notes that wages in skilled trades and manufacturing often differ only slightly from common labour wages, with the difference generally sufficient only to compensate for the expense of education and training. + +## Economic Domain + +Distribution + +--- +--- ENTITY: scarcity of hands --- + +# Scarcity of Hands + +## Definition + +A condition in specific localities where the supply of available workers falls short of demand, causing wages to rise above their normal level as employers compete for limited labour resources. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith explains that scarcity of hands in one parish cannot be relieved by the superabundance of workers in another when settlement laws obstruct labour mobility. This creates artificial wage disparities between regions that would not exist under free movement of labour, demonstrating how policy can prevent natural market adjustments. + +## Economic Domain + +Distribution + +--- +--- ENTITY: overstocked market conditions --- + +# Overstocked Market Conditions + +## Definition + +A situation where the supply of workers in a particular trade exceeds the demand for their services, forcing wages down below what would be necessary to attract new entrants and causing existing practitioners to accept lower compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies overstocked markets as a consequence of publicly funded professional education and other policies that encourage excessive entry into certain professions. He argues this condition degrades the quality and remuneration of respected professions while creating a class of underemployed intellectuals. + +## Economic Domain + +Distribution + +--- +--- ENTITY: advancing state of manufacture --- + +# Advancing State of Manufacture + +## Definition + +A condition of industrial development where production is expanding, creating continual demand for new workers and maintaining higher wages due to the growing need for labour in the expanding enterprise. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts advancing manufactures with declining ones, noting that the former maintain constant demand for labour while the latter experience increasing surplus of workers. This distinction helps explain why wages differ between regions and industries based on their stage of development rather than inherent qualities of the work itself. + +## Economic Domain + +Production + +--- +--- ENTITY: declining manufacture --- + +# Declining Manufacture + +# Declining Manufacture + +## Definition + +A condition of industrial contraction where production is decreasing, leading to surplus labour supply as workers cannot easily transition to other employments due to legal and institutional barriers, forcing wages down below sustainable levels. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies declining manufactures as creating severe labour market distortions when workers cannot easily move to growing industries. He argues that institutional barriers like apprenticeship requirements prevent the natural reallocation of labour from shrinking to expanding sectors, causing unnecessary hardship for displaced workers. + +## Economic Domain + +Production + +--- +--- ENTITY: inland trade --- + +# Inland Trade + +## Definition + +Commercial exchange that occurs within the boundaries of a single country, as distinguished from foreign trade, which Smith notes is generally less uncertain in its returns and therefore typically offers lower profit rates than foreign commerce. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith observes that profits of stock vary with the certainty or uncertainty of returns, noting that inland trade is generally less risky than foreign trade. This observation contributes to his broader analysis of how different employments of capital offer varying risk-adjusted returns, though he argues these differences are less pronounced than wage differentials. + +## Economic Domain + +Exchange + +--- +--- ENTITY: foreign trade --- + +# Foreign Trade + +## Definition + +Commercial exchange between different countries, which Smith identifies as generally more uncertain in its returns than inland trade, though the degree of uncertainty varies among different branches of foreign commerce. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith notes that foreign trade, particularly certain branches like trade to North America, offers higher potential profits than inland trade due to greater uncertainty of returns. This observation about risk and reward in different types of commerce forms part of his analysis of profit differentials across employments of stock. + +## Economic Domain + +Exchange + +--- +--- ENTITY: smuggling trade --- + +# Smuggling Trade + +## Definition + +The illegal transportation of goods across borders to avoid customs duties and trade restrictions, which Smith identifies as the most hazardous of all trades but also potentially the most profitable when successful. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses smuggling as an extreme example of how risk affects profits, noting that while it offers the highest potential returns, it also carries the greatest risk of bankruptcy. He argues that competition among smugglers eventually reduces profits to levels that only barely compensate for the risk involved. + +## Economic Domain + +Exchange + +--- +--- ENTITY: common returns of stock --- + +# Common Returns of Stock + +## Definition + +The typical or average profits earned by capital employed in various trades under normal market conditions, which Smith argues should be sufficient to compensate for occasional losses and provide a surplus profit comparable to insurance returns if risk were fully compensated. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the concept of common returns to analyse whether different employments of stock offer adequate compensation for their risks. He argues that if hazardous trades like smuggling offered full compensation for risk, bankruptcies would not be more frequent in these trades than in safer enterprises, suggesting that risk is systematically underpriced. + +## Economic Domain + +Distribution + +--- +--- ENTITY: extraordinary profits --- + +# Extraordinary Profits + +## Definition + +Returns on capital that significantly exceed the common or average profits in a particular trade or location, typically occurring when new enterprises are established or when demand conditions temporarily favour certain commodities. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith notes that extraordinary profits often occur when new manufactures are established or when particular trades experience unusual demand. However, he argues that competition eventually reduces these exceptional returns to the common level, demonstrating the equilibrating tendency of free markets. + +## Economic Domain + +Distribution + +--- +--- ENTITY: public registers of manufactures --- + +# Public Registers of Manufactures + +## Definition + +Official records maintained in towns that list the names and locations of tradesmen practicing specific occupations, which Smith argues facilitates the formation of trade combinations and price-fixing agreements by making it easier for competitors to communicate and coordinate. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies public registers as a policy that inadvertently facilitates anti-competitive behaviour by making it easier for tradesmen to assemble and conspire against the public interest. He argues that while such meetings cannot be entirely prevented, the law should not facilitate them through administrative mechanisms. + +## Economic Domain + +Regulation + +--- +--- ENTITY: exclusive corporation --- + +# Exclusive Corporation + +## Definition + +A legally privileged trading organisation that restricts membership and limits competition within its trade, enabling members to maintain higher prices and profits than would prevail under free market conditions. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith criticises exclusive corporations as mechanisms that weaken the natural discipline of the market by protecting members from competition. He argues that when workers must be employed regardless of performance, quality deteriorates and consumers suffer, while the public interest is sacrificed to private gain. + +## Economic Domain + +Regulation + +--- +--- ENTITY: adulterine guilds --- + +# Adulterine Guilds + +## Definition + +Unauthorised trade associations that attempt to exercise corporate privileges without formal legal incorporation, which Smith notes were sometimes tolerated by medieval kings in exchange for annual fines, representing early forms of rent-seeking behaviour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith mentions adulterine guilds as examples of how the crown's prerogative to grant corporate charters was often used to extract revenue rather than protect public liberty. This historical observation supports his broader critique of how institutional arrangements can serve private interests at public expense. + +## Economic Domain + +Regulation + +--- +--- ENTITY: university of trades --- + +# University of Trades + +## Definition + +The medieval term for incorporated trades and crafts, which Smith notes was the proper Latin name for any incorporation, drawing a parallel between the seven-year terms for apprenticeships and the seven-year terms for obtaining academic degrees. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the historical terminology of "universities" for trades to illustrate the common origin of both craft guilds and academic institutions in medieval incorporation practices. This etymological observation supports his argument that long apprenticeship requirements have no rational basis in the nature of the work itself. + +## Economic Domain + +Regulation + +--- +--- ENTITY: assize of bread --- + +# Assize of Bread + +## Definition + +A legal regulation that fixes the price of bread based on the price of wheat, which Smith identifies as one of the few remaining examples of medieval attempts to regulate merchant profits by controlling commodity prices. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith discusses the assize of bread as a remnant of older regulatory practices that attempted to control profits by fixing prices. He argues that where competition exists, it regulates prices more effectively than any legal assize, and that such regulations are generally unnecessary and potentially harmful. + +## Economic Domain + +Regulation + +--- +--- ENTITY: retail trade --- + +# Retail Trade + +## Definition + +The sale of goods in small quantities directly to consumers, which Smith notes typically offers higher apparent profits than wholesale trade due to the additional labour and skill required, though much of this apparent profit represents disguised wages. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith analyses retail trade to demonstrate how apparent profit differentials often reflect differences in labour rather than capital returns. He argues that the higher apparent profits of retail merchants largely compensate for the additional skill, effort, and risk involved in direct consumer transactions. + +## Economic Domain + +Exchange + +--- +--- ENTITY: wholesale trade --- + +# Wholesale Trade + +## Definition + +The sale of goods in large quantities to retailers or other businesses rather than directly to consumers, which Smith notes typically offers lower apparent profits than retail trade but represents more purely the returns to capital investment. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts wholesale with retail trade to illustrate how profit differentials across employments often reflect differences in the nature of the work rather than pure returns to capital. He argues that wholesale merchants earn more modest but more genuine profits on their stock investments. + +## Economic Domain + +Exchange + +--- +--- ENTITY: public lottery --- + +# Public Lottery + +## Definition + +A government-sponsored gambling scheme where participants purchase tickets for chances to win prizes, which Smith uses as an analogy to illustrate how people systematically overvalue potential gains while undervaluing probable losses. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith employs the public lottery as a metaphor for certain professions where a few individuals achieve great success while most fail completely. He argues that just as lottery players overvalue their chances of winning, people entering professions like law or the arts often overestimate their probability of success. + +## Economic Domain + +General Theory + +--- +--- ENTITY: maritime employment --- + +# Maritime Employment + +## Definition + +Work in the shipping and naval services, which Smith analyses as offering better prospects for advancement and fortune than military service, though still involving significant risks and hardships that are compensated through wages and the hope of prize money. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith compares maritime with military employment to illustrate how different occupations offer varying combinations of risk, reward, and advancement opportunities. He notes that while sailors earn wages comparable to common labourers, the possibility of prize money and advancement makes the trade attractive despite its hardships. + +## Economic Domain + +Distribution + +--- +--- ENTITY: military employment --- + +# Military Employment + +## Definition + +Service in the armed forces, which Smith analyses as offering poor compensation relative to the risks involved, with limited prospects for advancement and wages that fall below those of common labourers, sustained only by romantic notions of honour and distinction. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses military service as an example of an occupation where the actual compensation falls far below what would be necessary to attract volunteers if people calculated risks and rewards rationally. He argues that romantic notions of honour sustain recruitment despite poor material conditions. + +## Economic Domain + +Distribution + +--- +--- ENTITY: public executioner --- + +# Public Executioner + +# Public Executioner + +## Definition + +The state official responsible for carrying out capital punishment, which Smith identifies as the most detestable of all employments yet paradoxically better paid than most common trades relative to the amount of work performed. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the public executioner as an extreme example of how disagreeable employment commands premium compensation. This illustrates his broader principle that wages vary not only with the skill required but also with the agreeableness or disagreeableness of the work itself. + +## Economic Domain + +Distribution + +--- +--- ENTITY: poacher --- + +# Poacher + +## Definition + +An individual who illegally hunts or fishes on private property, which Smith identifies as typically being very poor even in countries where poaching is severely punished, illustrating how natural enjoyment of certain activities can drive down compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the example of poachers to demonstrate how natural human inclinations toward certain activities can create oversupply of labour in those occupations, driving wages down to subsistence levels. This illustrates his principle that agreeable employments tend to be poorly compensated. + +## Economic Domain + +Distribution + +--- +--- ENTITY: coal-heaver --- + +# Coal-Heaver + +## Definition + +A labourer who unloads coal from ships, which Smith identifies as performing work that is extremely arduous, dirty, and subject to irregular employment, commanding wages that are four to five times higher than common labour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses coal-heavers to illustrate how the combination of disagreeable work, physical hardship, and irregular employment can drive wages far above the common level. This example demonstrates how multiple factors can combine to create significant wage differentials. + +## Economic Domain + +Distribution + +--- +--- ENTITY: collier --- + +# Collier + +## Definition + +A coal miner, which Smith identifies as performing extremely dangerous and dirty work that commands wages double or triple those of common labour, illustrating how hazardous and disagreeable employment commands premium compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses coal miners to demonstrate how the disagreeable and dangerous nature of certain employments commands higher wages. He notes that while the work can be constant if desired, the inherent hardships justify the substantial wage premium over common labour. + +## Economic Domain + +Distribution + +--- +--- ENTITY: butcher trade --- + +# Butcher Trade + +## Definition + +The commercial activity of slaughtering and selling meat, which Smith identifies as a brutal and odious business that nonetheless offers higher profits than most common trades due to its disagreeable nature. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the butcher trade as an example of how disagreeable employment affects profits of stock as well as wages of labour. This illustrates his principle that the unattractiveness of certain businesses to potential entrants allows those who do engage in them to earn above-normal returns. + +## Economic Domain + +Distribution + +--- +--- ENTITY: inn or tavern keeper --- + +# Inn or Tavern Keeper + +## Definition + +An individual who operates a lodging and drinking establishment, which Smith identifies as a business that is neither agreeable nor creditable due to the lack of household autonomy and exposure to difficult customers, yet can yield substantial profits relative to the capital required. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses inn and tavern keeping to illustrate how disagreeable business conditions can lead to higher profits. Despite the personal drawbacks of the trade, the potential for significant returns attracts entrepreneurs willing to accept these disadvantages. + +## Economic Domain + +Distribution + diff --git a/examples/infospace-with-history/output/entities/book-1-chapter-10-prompt.md b/examples/infospace-with-history/output/entities/book-1-chapter-10-prompt.md new file mode 100644 index 00000000..a1ddc549 --- /dev/null +++ b/examples/infospace-with-history/output/entities/book-1-chapter-10-prompt.md @@ -0,0 +1,2219 @@ +# Extract Economic Entities + +You are an analytical economist specializing in classical economic theory. +Your task is to extract distinct economic entities from a chapter of +Adam Smith's *The Wealth of Nations*. + +## Source Chapter + +--- +id: book-1-chapter-10 +title: "OF WAGES AND PROFIT IN THE DIFFERENT EMPLOYMENTS OF LABOUR AND STOCK." +book: "1" +chapter: 10 +artifact_type: content +--- + +CHAPTER X. +OF WAGES AND PROFIT IN THE DIFFERENT +EMPLOYMENTS OF LABOUR AND STOCK. + + + + The whole of the advantages and disadvantages of the different employments + of labour and stock, must, in the same neighbourhood, be either perfectly + equal, or continually tending to equality. If, in the same neighbourhood, + there was any employment evidently either more or less advantageous than + the rest, so many people would crowd into it in the one case, and so many + would desert it in the other, that its advantages would soon return to the + level of other employments. This, at least, would be the case in a society + where things were left to follow their natural course, where there was + perfect liberty, and where every man was perfectly free both to choose + what occupation he thought proper, and to change it as often as he thought + proper. Every man’s interest would prompt him to seek the advantageous, + and to shun the disadvantageous employment. + + Pecuniary wages and profit, indeed, are everywhere in Europe extremely + different, according to the different employments of labour and stock. But + this difference arises, partly from certain circumstances in the + employments themselves, which, either really, or at least in the + imagination of men, make up for a small pecuniary gain in some, and + counterbalance a great one in others, and partly from the policy of + Europe, which nowhere leaves things at perfect liberty. + + The particular consideration of those circumstances, and of that policy, + will divide this Chapter into two parts. + + + + + PART I. Inequalities arising from the nature of the employments + themselves. + + The five following are the principal circumstances which, so far as I have + been able to observe, make up for a small pecuniary gain in some + employments, and counterbalance a great one in others. First, the + agreeableness or disagreeableness of the employments themselves; secondly, + the easiness and cheapness, or the difficulty and expense of learning + them; thirdly, the constancy or inconstancy of employment in them; + fourthly, the small or great trust which must be reposed in those who + exercise them; and, fifthly, the probability or improbability of success + in them. + + First, the wages of labour vary with the ease or hardship, the cleanliness + or dirtiness, the honourableness or dishonourableness, of the employment. + Thus in most places, take the year round, a journeyman tailor earns less + than a journeyman weaver. His work is much easier. A journeyman weaver + earns less than a journeyman smith. His work is not always easier, but it + is much cleanlier. A journeyman blacksmith, though an artificer, seldom + earns so much in twelve hours, as a collier, who is only a labourer, does + in eight. His work is not quite so dirty, is less dangerous, and is + carried on in day-light, and above ground. Honour makes a great part of + the reward of all honourable professions. In point of pecuniary gain, all + things considered, they are generally under-recompensed, as I shall + endeavour to shew by and by. Disgrace has the contrary effect. The trade + of a butcher is a brutal and an odious business; but it is in most places + more profitable than the greater part of common trades. The most + detestable of all employments, that of public executioner, is, in + proportion to the quantity of work done, better paid than any common trade + whatever. + + Hunting and fishing, the most important employments of mankind in the rude + state of society, become, in its advanced state, their most agreeable + amusements, and they pursue for pleasure what they once followed from + necessity. In the advanced state of society, therefore, they are all very + poor people who follow as a trade, what other people pursue as a pastime. + Fishermen have been so since the time of Theocritus. {See Idyllium xxi.}. + A poacher is everywhere a very poor man in Great Britain. In countries + where the rigour of the law suffers no poachers, the licensed hunter is + not in a much better condition. The natural taste for those employments + makes more people follow them, than can live comfortably by them; and the + produce of their labour, in proportion to its quantity, comes always too + cheap to market, to afford any thing but the most scanty subsistence to + the labourers. + + Disagreeableness and disgrace affect the profits of stock in the same + manner as the wages of labour. The keeper of an inn or tavern, who is + never master of his own house, and who is exposed to the brutality of + every drunkard, exercises neither a very agreeable nor a very creditable + business. But there is scarce any common trade in which a small stock + yields so great a profit. + + Secondly, the wages of labour vary with the easiness and cheapness, or the + difficulty and expense, of learning the business. + + When any expensive machine is erected, the extraordinary work to be + performed by it before it is worn out, it must be expected, will replace + the capital laid out upon it, with at least the ordinary profits. A man + educated at the expense of much labour and time to any of those + employments which require extraordinary dexterity and skill, may be + compared to one of those expensive machines. The work which he learns to + perform, it must be expected, over and above the usual wages of common + labour, will replace to him the whole expense of his education, with at + least the ordinary profits of an equally valuable capital. It must do this + too in a reasonable time, regard being had to the very uncertain duration + of human life, in the same manner as to the more certain duration of the + machine. + + The difference between the wages of skilled labour and those of common + labour, is founded upon this principle. + + The policy of Europe considers the labour of all mechanics, artificers, + and manufacturers, as skilled labour; and that of all country labourers as + common labour. It seems to suppose that of the former to be of a more nice + and delicate nature than that of the latter. It is so perhaps in some + cases; but in the greater part it is quite otherwise, as I shall endeavour + to shew by and by. The laws and customs of Europe, therefore, in order to + qualify any person for exercising the one species of labour, impose the + necessity of an apprenticeship, though with different degrees of rigour in + different places. They leave the other free and open to every body. During + the continuance of the apprenticeship, the whole labour of the apprentice + belongs to his master. In the meantime he must, in many cases, be + maintained by his parents or relations, and, in almost all cases, must be + clothed by them. Some money, too, is commonly given to the master for + teaching him his trade. They who cannot give money, give time, or become + bound for more than the usual number of years; a consideration which, + though it is not always advantageous to the master, on account of the + usual idleness of apprentices, is always disadvantageous to the + apprentice. In country labour, on the contrary, the labourer, while he is + employed about the easier, learns the more difficult parts of his + business, and his own labour maintains him through all the different + stages of his employment. It is reasonable, therefore, that in Europe the + wages of mechanics, artificers, and manufacturers, should be somewhat + higher than those of common labourers. They are so accordingly, and their + superior gains make them, in most places, be considered as a superior rank + of people. This superiority, however, is generally very small: the daily + or weekly earnings of journeymen in the more common sorts of manufactures, + such as those of plain linen and woollen cloth, computed at an average, + are, in most places, very little more than the day-wages of common + labourers. Their employment, indeed, is more steady and uniform, and the + superiority of their earnings, taking the whole year together, may be + somewhat greater. It seems evidently, however, to be no greater than what + is sufficient to compensate the superior expense of their education. + Education in the ingenious arts, and in the liberal professions, is still + more tedious and expensive. The pecuniary recompence, therefore, of + painters and sculptors, of lawyers and physicians, ought to be much more + liberal; and it is so accordingly. + + The profits of stock seem to be very little affected by the easiness or + difficulty of learning the trade in which it is employed. All the + different ways in which stock is commonly employed in great towns seem, in + reality, to be almost equally easy and equally difficult to learn. One + branch, either of foreign or domestic trade, cannot well be a much more + intricate business than another. + + Thirdly, the wages of labour in different occupations vary with the + constancy or inconstancy of employment. + + Employment is much more constant in some trades than in others. In the + greater part of manufactures, a journeyman maybe pretty sure of employment + almost every day in the year that he is able to work. A mason or + bricklayer, on the contrary, can work neither in hard frost nor in foul + weather, and his employment at all other times depends upon the occasional + calls of his customers. He is liable, in consequence, to be frequently + without any. What he earns, therefore, while he is employed, must not only + maintain him while he is idle, but make him some compensation for those + anxious and desponding moments which the thought of so precarious a + situation must sometimes occasion. Where the computed earnings of the + greater part of manufacturers, accordingly, are nearly upon a level with + the day-wages of common labourers, those of masons and bricklayers are + generally from one-half more to double those wages. Where common labourers + earn four or five shillings a-week, masons and bricklayers frequently earn + seven and eight; where the former earn six, the latter often earn nine and + ten; and where the former earn nine and ten, as in London, the latter + commonly earn fifteen and eighteen. No species of skilled labour, however, + seems more easy to learn than that of masons and bricklayers. Chairmen in + London, during the summer season, are said sometimes to be employed as + bricklayers. The high wages of those workmen, therefore, are not so much + the recompence of their skill, as the compensation for the inconstancy of + their employment. + + A house-carpenter seems to exercise rather a nicer and a more ingenious + trade than a mason. In most places, however, for it is not universally so, + his day-wages are somewhat lower. His employment, though it depends much, + does not depend so entirely upon the occasional calls of his customers; + and it is not liable to be interrupted by the weather. + + When the trades which generally afford constant employment, happen in a + particular place not to do so, the wages of the workmen always rise a good + deal above their ordinary proportion to those of common labour. In London, + almost all journeymen artificers are liable to be called upon and + dismissed by their masters from day to day, and from week to week, in the + same manner as day-labourers in other places. The lowest order of + artificers, journeymen tailors, accordingly, earn their half-a-crown + a-day, though eighteen pence may be reckoned the wages of common labour. + In small towns and country villages, the wages of journeymen tailors + frequently scarce equal those of common labour; but in London they are + often many weeks without employment, particularly during the summer. + + When the inconstancy of employment is combined with the hardship, + disagreeableness, and dirtiness of the work, it sometimes raises the wages + of the most common labour above those of the most skilful artificers. A + collier working by the piece is supposed, at Newcastle, to earn commonly + about double, and, in many parts of Scotland, about three times, the wages + of common labour. His high wages arise altogether from the hardship, + disagreeableness, and dirtiness of his work. His employment may, upon most + occasions, be as constant as he pleases. The coal-heavers in London + exercise a trade which, in hardship, dirtiness, and disagreeableness, + almost equals that of colliers; and, from the unavoidable irregularity in + the arrivals of coal-ships, the employment of the greater part of them is + necessarily very inconstant. If colliers, therefore, commonly earn double + and triple the wages of common labour, it ought not to seem unreasonable + that coal-heavers should sometimes earn four and five times those wages. + In the inquiry made into their condition a few years ago, it was found + that, at the rate at which they were then paid, they could earn from six + to ten shillings a-day. Six shillings are about four times the wages of + common labour in London; and, in every particular trade, the lowest common + earnings may always be considered as those of the far greater number. How + extravagant soever those earnings may appear, if they were more than + sufficient to compensate all the disagreeable circumstances of the + business, there would soon be so great a number of competitors, as, in a + trade which has no exclusive privilege, would quickly reduce them to a + lower rate. + + The constancy or inconstancy of employment cannot affect the ordinary + profits of stock in any particular trade. Whether the stock is or is not + constantly employed, depends, not upon the trade, but the trader. + + Fourthly, the wages of labour vary according to the small or great trust + which must be reposed in the workmen. + + The wages of goldsmiths and jewellers are everywhere superior to those of + many other workmen, not only of equal, but of much superior ingenuity, on + account of the precious materials with which they are entrusted. We trust + our health to the physician, our fortune, and sometimes our life and + reputation, to the lawyer and attorney. Such confidence could not safely + be reposed in people of a very mean or low condition. Their reward must be + such, therefore, as may give them that rank in the society which so + important a trust requires. The long time and the great expense which must + be laid out in their education, when combined with this circumstance, + necessarily enhance still further the price of their labour. + + When a person employs only his own stock in trade, there is no trust; and + the credit which he may get from other people, depends, not upon the + nature of the trade, but upon their opinion of his fortune, probity and + prudence. The different rates of profit, therefore, in the different + branches of trade, cannot arise from the different degrees of trust + reposed in the traders. + + Fifthly, the wages of labour in different employments vary according to + the probability or improbability of success in them. + + The probability that any particular person shall ever be qualified for the + employments to which he is educated, is very different in different + occupations. In the greatest part of mechanic trades success is almost + certain; but very uncertain in the liberal professions. Put your son + apprentice to a shoemaker, there is little doubt of his learning to make a + pair of shoes; but send him to study the law, it as at least twenty to one + if he ever makes such proficiency as will enable him to live by the + business. In a perfectly fair lottery, those who draw the prizes ought to + gain all that is lost by those who draw the blanks. In a profession, where + twenty fail for one that succeeds, that one ought to gain all that should + have been gained by the unsuccessful twenty. The counsellor at law, who, + perhaps, at near forty years of age, begins to make something by his + profession, ought to receive the retribution, not only of his own so + tedious and expensive education, but of that of more than twenty others, + who are never likely to make any thing by it. How extravagant soever the + fees of counsellors at law may sometimes appear, their real retribution is + never equal to this. Compute, in any particular place, what is likely to + be annually gained, and what is likely to be annually spent, by all the + different workmen in any common trade, such as that of shoemakers or + weavers, and you will find that the former sum will generally exceed the + latter. But make the same computation with regard to all the counsellors + and students of law, in all the different Inns of Court, and you will find + that their annual gains bear but a very small proportion to their annual + expense, even though you rate the former as high, and the latter as low, + as can well be done. The lottery of the law, therefore, is very far from + being a perfectly fair lottery; and that as well as many other liberal and + honourable professions, is, in point of pecuniary gain, evidently + under-recompensed. + + Those professions keep their level, however, with other occupations; and, + notwithstanding these discouragements, all the most generous and liberal + spirits are eager to crowd into them. Two different causes contribute to + recommend them. First, the desire of the reputation which attends upon + superior excellence in any of them; and, secondly, the natural confidence + which every man has, more or less, not only in his own abilities, but in + his own good fortune. + + To excel in any profession, in which but few arrive at mediocrity, is the + most decisive mark of what is called genius, or superior talents. The + public admiration which attends upon such distinguished abilities makes + always a part of their reward; a greater or smaller, in proportion as it + is higher or lower in degree. It makes a considerable part of that reward + in the profession of physic; a still greater, perhaps, in that of law; in + poetry and philosophy it makes almost the whole. + + There are some very agreeable and beautiful talents, of which the + possession commands a certain sort of admiration, but of which the + exercise, for the sake of gain, is considered, whether from reason or + prejudice, as a sort of public prostitution. The pecuniary recompence, + therefore, of those who exercise them in this manner, must be sufficient, + not only to pay for the time, labour, and expense of acquiring the + talents, but for the discredit which attends the employment of them as the + means of subsistence. The exorbitant rewards of players, opera-singers, + opera-dancers, etc. are founded upon those two principles; the rarity and + beauty of the talents, and the discredit of employing them in this manner. + It seems absurd at first sight, that we should despise their persons, and + yet reward their talents with the most profuse liberality. While we do the + one, however, we must of necessity do the other, Should the public opinion + or prejudice ever alter with regard to such occupations, their pecuniary + recompence would quickly diminish. More people would apply to them, and + the competition would quickly reduce the price of their labour. Such + talents, though far from being common, are by no means so rare as + imagined. Many people possess them in great perfection, who disdain to + make this use of them; and many more are capable of acquiring them, if any + thing could be made honourably by them. + + The over-weening conceit which the greater part of men have of their own + abilities, is an ancient evil remarked by the philosophers and moralists + of all ages. Their absurd presumption in their own good fortune has been + less taken notice of. It is, however, if possible, still more universal. + There is no man living, who, when in tolerable health and spirits, has not + some share of it. The chance of gain is by every man more or less + over-valued, and the chance of loss is by most men under-valued, and by + scarce any man, who is in tolerable health and spirits, valued more than + it is worth. + + That the chance of gain is naturally overvalued, we may learn from the + universal success of lotteries. The world neither ever saw, nor ever will + see, a perfectly fair lottery, or one in which the whole gain compensated + the whole loss; because the undertaker could make nothing by it. In the + state lotteries, the tickets are really not worth the price which is paid + by the original subscribers, and yet commonly sell in the market for + twenty, thirty, and sometimes forty per cent. advance. The vain hopes of + gaining some of the great prizes is the sole cause of this demand. The + soberest people scarce look upon it as a folly to pay a small sum for the + chance of gaining ten or twenty thousand pounds, though they know that + even that small sum is perhaps twenty or thirty per cent. more than the + chance is worth. In a lottery in which no prize exceeded twenty pounds, + though in other respects it approached much nearer to a perfectly fair one + than the common state lotteries, there would not be the same demand for + tickets. In order to have a better chance for some of the great prizes, + some people purchase several tickets; and others, small shares in a still + greater number. There is not, however, a more certain proposition in + mathematics, than that the more tickets you adventure upon, the more + likely you are to be a loser. Adventure upon all the tickets in the + lottery, and you lose for certain; and the greater the number of your + tickets, the nearer you approach to this certainty. + + That the chance of loss is frequently undervalued, and scarce ever valued + more than it is worth, we may learn from the very moderate profit of + insurers. In order to make insurance, either from fire or sea-risk, a + trade at all, the common premium must be sufficient to compensate the + common losses, to pay the expense of management, and to afford such a + profit as might have been drawn from an equal capital employed in any + common trade. The person who pays no more than this, evidently pays no + more than the real value of the risk, or the lowest price at which he can + reasonably expect to insure it. But though many people have made a little + money by insurance, very few have made a great fortune; and, from this + consideration alone, it seems evident enough that the ordinary balance of + profit and loss is not more advantageous in this than in other common + trades, by which so many people make fortunes. Moderate, however, as the + premium of insurance commonly is, many people despise the risk too much to + care to pay it. Taking the whole kingdom at an average, nineteen houses in + twenty, or rather, perhaps, ninety-nine in a hundred, are not insured from + fire. Sea-risk is more alarming to the greater part of people; and the + proportion of ships insured to those not insured is much greater. Many + sail, however, at all seasons, and even in time of war, without any + insurance. This may sometimes, perhaps, be done without any imprudence. + When a great company, or even a great merchant, has twenty or thirty ships + at sea, they may, as it were, insure one another. The premium saved up on + them all may more than compensate such losses as they are likely to meet + with in the common course of chances. The neglect of insurance upon + shipping, however, in the same manner as upon houses, is, in most cases, + the effect of no such nice calculation, but of mere thoughtless rashness, + and presumptuous contempt of the risk. + + The contempt of risk, and the presumptuous hope of success, are in no + period of life more active than at the age at which young people choose + their professions. How little the fear of misfortune is then capable of + balancing the hope of good luck, appears still more evidently in the + readiness of the common people to enlist as soldiers, or to go to sea, + than in the eagerness of those of better fashion to enter into what are + called the liberal professions. + + What a common soldier may lose is obvious enough. Without regarding the + danger, however, young volunteers never enlist so readily as at the + beginning of a new war; and though they have scarce any chance of + preferment, they figure to themselves, in their youthful fancies, a + thousand occasions of acquiring honour and distinction which never occur. + These romantic hopes make the whole price of their blood. Their pay is + less than that of common labourers, and, in actual service, their fatigues + are much greater. + + The lottery of the sea is not altogether so disadvantageous as that of the + army. The son of a creditable labourer or artificer may frequently go to + sea with his father’s consent; but if he enlists as a soldier, it is + always without it. Other people see some chance of his making something by + the one trade; nobody but himself sees any of his making any thing by the + other. The great admiral is less the object of public admiration than the + great general; and the highest success in the sea service promises a less + brilliant fortune and reputation than equal success in the land. The same + difference runs through all the inferior degrees of preferment in both. By + the rules of precedency, a captain in the navy ranks with a colonel in the + army; but he does not rank with him in the common estimation. As the great + prizes in the lottery are less, the smaller ones must be more numerous. + Common sailors, therefore, more frequently get some fortune and preferment + than common soldiers; and the hope of those prizes is what principally + recommends the trade. Though their skill and dexterity are much superior + to that of almost any artificers; and though their whole life is one + continual scene of hardship and danger; yet for all this dexterity and + skill, for all those hardships and dangers, while they remain in the + condition of common sailors, they receive scarce any other recompence but + the pleasure of exercising the one and of surmounting the other. Their + wages are not greater than those of common labourers at the port which + regulates the rate of seamen’s wages. As they are continually going from + port to port, the monthly pay of those who sail from all the different + ports of Great Britain, is more nearly upon a level than that of any other + workmen in those different places; and the rate of the port to and from + which the greatest number sail, that is, the port of London, regulates + that of all the rest. At London, the wages of the greater part of the + different classes of workmen are about double those of the same classes at + Edinburgh. But the sailors who sail from the port of London, seldom earn + above three or four shillings a month more than those who sail from the + port of Leith, and the difference is frequently not so great. In time of + peace, and in the merchant-service, the London price is from a guinea to + about seven-and-twenty shillings the calendar month. A common labourer in + London, at the rate of nine or ten shillings a week, may earn in the + calendar month from forty to five-and-forty shillings. The sailor, indeed, + over and above his pay, is supplied with provisions. Their value, however, + may not perhaps always exceed the difference between his pay and that of + the common labourer; and though it sometimes should, the excess will not + be clear gain to the sailor, because he cannot share it with his wife and + family, whom he must maintain out of his wages at home. + + The dangers and hair-breadth escapes of a life of adventures, instead of + disheartening young people, seem frequently to recommend a trade to them. + A tender mother, among the inferior ranks of people, is often afraid to + send her son to school at a sea-port town, lest the sight of the ships, + and the conversation and adventures of the sailors, should entice him to + go to sea. The distant prospect of hazards, from which we can hope to + extricate ourselves by courage and address, is not disagreeable to us, and + does not raise the wages of labour in any employment. It is otherwise with + those in which courage and address can be of no avail. In trades which are + known to be very unwholesome, the wages of labour are always remarkably + high. Unwholesomeness is a species of disagreeableness, and its effects + upon the wages of labour are to be ranked under that general head. + + In all the different employments of stock, the ordinary rate of profit + varies more or less with the certainty or uncertainty of the returns. + These are, in general, less uncertain in the inland than in the foreign + trade, and in some branches of foreign trade than in others; in the trade + to North America, for example, than in that to Jamaica. The ordinary rate + of profit always rises more or less with the risk. It does not, however, + seem to rise in proportion to it, or so as to compensate it completely. + Bankruptcies are most frequent in the most hazardous trades. The most + hazardous of all trades, that of a smuggler, though, when the adventure + succeeds, it is likewise the most profitable, is the infallible road to + bankruptcy. The presumptuous hope of success seems to act here as upon all + other occasions, and to entice so many adventurers into those hazardous + trades, that their competition reduces the profit below what is sufficient + to compensate the risk. To compensate it completely, the common returns + ought, over and above the ordinary profits of stock, not only to make up + for all occasional losses, but to afford a surplus profit to the + adventurers, of the same nature with the profit of insurers. But if the + common returns were sufficient for all this, bankruptcies would not be + more frequent in these than in other trades. + + Of the five circumstances, therefore, which vary the wages of labour, two + only affect the profits of stock; the agreeableness or disagreeableness of + the business, and the risk or security with which it is attended. In point + of agreeableness or disagreeableness, there is little or no difference in + the far greater part of the different employments of stock, but a great + deal in those of labour; and the ordinary profit of stock, though it rises + with the risk, does not always seem to rise in proportion to it. It should + follow from all this, that, in the same society or neighbourhood, the + average and ordinary rates of profit in the different employments of stock + should be more nearly upon a level than the pecuniary wages of the + different sorts of labour. + + They are so accordingly. The difference between the earnings of a common + labourer and those of a well employed lawyer or physician, is evidently + much greater than that between the ordinary profits in any two different + branches of trade. The apparent difference, besides, in the profits of + different trades, is generally a deception arising from our not always + distinguishing what ought to be considered as wages, from what ought to be + considered as profit. + + Apothecaries’ profit is become a bye-word, denoting something uncommonly + extravagant. This great apparent profit, however, is frequently no more + than the reasonable wages of labour. The skill of an apothecary is a much + nicer and more delicate matter than that of any artificer whatever; and + the trust which is reposed in him is of much greater importance. He is the + physician of the poor in all cases, and of the rich when the distress or + danger is not very great. His reward, therefore, ought to be suitable to + his skill and his trust; and it arises generally from the price at which + he sells his drugs. But the whole drugs which the best employed apothecary + in a large market-town, will sell in a year, may not perhaps cost him + above thirty or forty pounds. Though he should sell them, therefore, for + three or four hundred, or at a thousand per cent. profit, this may + frequently be no more than the reasonable wages of his labour, charged, in + the only way in which he can charge them, upon the price of his drugs. The + greater part of the apparent profit is real wages disguised in the garb of + profit. + + In a small sea-port town, a little grocer will make forty or fifty per + cent. upon a stock of a single hundred pounds, while a considerable + wholesale merchant in the same place will scarce make eight or ten per + cent. upon a stock of ten thousand. The trade of the grocer may be + necessary for the conveniency of the inhabitants, and the narrowness of + the market may not admit the employment of a larger capital in the + business. The man, however, must not only live by his trade, but live by + it suitably to the qualifications which it requires. Besides possessing a + little capital, he must be able to read, write, and account and must be a + tolerable judge, too, of perhaps fifty or sixty different sorts of goods, + their prices, qualities, and the markets where they are to be had + cheapest. He must have all the knowledge, in short, that is necessary for + a great merchant, which nothing hinders him from becoming but the want of + a sufficient capital. Thirty or forty pounds a year cannot be considered + as too great a recompence for the labour of a person so accomplished. + Deduct this from the seemingly great profits of his capital, and little + more will remain, perhaps, than the ordinary profits of stock. The greater + part of the apparent profit is, in this case too, real wages. + + The difference between the apparent profit of the retail and that of the + wholesale trade, is much less in the capital than in small towns and + country villages. Where ten thousand pounds can be employed in the grocery + trade, the wages of the grocer’s labour must be a very trifling addition + to the real profits of so great a stock. The apparent profits of the + wealthy retailer, therefore, are there more nearly upon a level with those + of the wholesale merchant. It is upon this account that goods sold by + retail are generally as cheap, and frequently much cheaper, in the capital + than in small towns and country villages. Grocery goods, for example, are + generally much cheaper; bread and butchers’ meat frequently as cheap. It + costs no more to bring grocery goods to the great town than to the country + village; but it costs a great deal more to bring corn and cattle, as the + greater part of them must be brought from a much greater distance. The + prime cost of grocery goods, therefore, being the same in both places, + they are cheapest where the least profit is charged upon them. The prime + cost of bread and butchers’ meat is greater in the great town than in the + country village; and though the profit is less, therefore they are not + always cheaper there, but often equally cheap. In such articles as bread + and butchers’ meat, the same cause which diminishes apparent profit, + increases prime cost. The extent of the market, by giving employment to + greater stocks, diminishes apparent profit; but by requiring supplies from + a greater distance, it increases prime cost. This diminution of the one + and increase of the other, seem, in most cases, nearly to counterbalance + one another; which is probably the reason that, though the prices of corn + and cattle are commonly very different in different parts of the kingdom, + those of bread and butchers’ meat are generally very nearly the same + through the greater part of it. + + Though the profits of stock, both in the wholesale and retail trade, are + generally less in the capital than in small towns and country villages, + yet great fortunes are frequently acquired from small beginnings in the + former, and scarce ever in the latter. In small towns and country + villages, on account of the narrowness of the market, trade cannot always + be extended as stock extends. In such places, therefore, though the rate + of a particular person’s profits may be very high, the sum or amount of + them can never be very great, nor consequently that of his annual + accumulation. In great towns, on the contrary, trade can be extended as + stock increases, and the credit of a frugal and thriving man increases + much faster than his stock. His trade is extended in proportion to the + amount of both; and the sum or amount of his profits is in proportion to + the extent of his trade, and his annual accumulation in proportion to the + amount of his profits. It seldom happens, however, that great fortunes are + made, even in great towns, by any one regular, established, and well-known + branch of business, but in consequence of a long life of industry, + frugality, and attention. Sudden fortunes, indeed, are sometimes made in + such places, by what is called the trade of speculation. The speculative + merchant exercises no one regular, established, or well-known branch of + business. He is a corn merchant this year, and a wine merchant the next, + and a sugar, tobacco, or tea merchant the year after. He enters into every + trade, when he foresees that it is likely to be more than commonly + profitable, and he quits it when he foresees that its profits are likely + to return to the level of other trades. His profits and losses, therefore, + can bear no regular proportion to those of any one established and + well-known branch of business. A bold adventurer may sometimes acquire a + considerable fortune by two or three successful speculations, but is just + as likely to lose one by two or three unsuccessful ones. This trade can be + carried on nowhere but in great towns. It is only in places of the most + extensive commerce and correspondence that the intelligence requisite for + it can be had. + + The five circumstances above mentioned, though they occasion considerable + inequalities in the wages of labour and profits of stock, occasion none in + the whole of the advantages and disadvantages, real or imaginary, of the + different employments of either. The nature of those circumstances is + such, that they make up for a small pecuniary gain in some, and + counterbalance a great one in others. + + In order, however, that this equality may take place in the whole of their + advantages or disadvantages, three things are requisite, even where there + is the most perfect freedom. First the employments must be well known and + long established in the neighbourhood; secondly, they must be in their + ordinary, or what may be called their natural state; and, thirdly, they + must be the sole or principal employments of those who occupy them. + + First, this equality can take place only in those employments which are + well known, and have been long established in the neighbourhood. + + Where all other circumstances are equal, wages are generally higher in new + than in old trades. When a projector attempts to establish a new + manufacture, he must at first entice his workmen from other employments, + by higher wages than they can either earn in their own trades, or than the + nature of his work would otherwise require; and a considerable time must + pass away before he can venture to reduce them to the common level. + Manufactures for which the demand arises altogether from fashion and + fancy, are continually changing, and seldom last long enough to be + considered as old established manufactures. Those, on the contrary, for + which the demand arises chiefly from use or necessity, are less liable to + change, and the same form or fabric may continue in demand for whole + centuries together. The wages of labour, therefore, are likely to be + higher in manufactures of the former, than in those of the latter kind. + Birmingham deals chiefly in manufactures of the former kind; Sheffield in + those of the latter; and the wages of labour in those two different places + are said to be suitable to this difference in the nature of their + manufactures. + + The establishment of any new manufacture, of any new branch of commerce, + or of any new practice in agriculture, is always a speculation from which + the projector promises himself extraordinary profits. These profits + sometimes are very great, and sometimes, more frequently, perhaps, they + are quite otherwise; but, in general, they bear no regular proportion to + those of other old trades in the neighbourhood. If the project succeeds, + they are commonly at first very high. When the trade or practice becomes + thoroughly established and well known, the competition reduces them to the + level of other trades. + + Secondly, this equality in the whole of the advantages and disadvantages + of the different employments of labour and stock, can take place only in + the ordinary, or what may be called the natural state of those + employments. + + The demand for almost every different species of labour is sometimes + greater, and sometimes less than usual. In the one case, the advantages of + the employment rise above, in the other they fall below the common level. + The demand for country labour is greater at hay-time and harvest than + during the greater part of the year; and wages rise with the demand. In + time of war, when forty or fifty thousand sailors are forced from the + merchant service into that of the king, the demand for sailors to merchant + ships necessarily rises with their scarcity; and their wages, upon such + occasions, commonly rise from a guinea and seven-and-twenty shillings to + forty shillings and three pounds a-month. In a decaying manufacture, on + the contrary, many workmen, rather than quit their own trade, are + contented with smaller wages than would otherwise be suitable to the + nature of their employment. + + The profits of stock vary with the price of the commodities in which it is + employed. As the price of any commodity rises above the ordinary or + average rate, the profits of at least some part of the stock that is + employed in bringing it to market, rise above their proper level, and as + it falls they sink below it. All commodities are more or less liable to + variations of price, but some are much more so than others. In all + commodities which are produced by human industry, the quantity of industry + annually employed is necessarily regulated by the annual demand, in such a + manner that the average annual produce may, as nearly as possible, be + equal to the average annual consumption. In some employments, it has + already been observed, the same quantity of industry will always produce + the same, or very nearly the same quantity of commodities. In the linen or + woollen manufactures, for example, the same number of hands will annually + work up very nearly the same quantity of linen and woollen cloth. The + variations in the market price of such commodities, therefore, can arise + only from some accidental variation in the demand. A public mourning + raises the price of black cloth. But as the demand for most sorts of plain + linen and woollen cloth is pretty uniform, so is likewise the price. But + there are other employments in which the same quantity of industry will + not always produce the same quantity of commodities. The same quantity of + industry, for example, will, in different years, produce very different + quantities of corn, wine, hops, sugar, tobacco, etc. The price of such + commodities, therefore, varies not only with the variations of demand, but + with the much greater and more frequent variations of quantity, and is + consequently extremely fluctuating; but the profit of some of the dealers + must necessarily fluctuate with the price of the commodities. The + operations of the speculative merchant are principally employed about such + commodities. He endeavours to buy them up when he foresees that their + price is likely to rise, and to sell them when it is likely to fall. + + Thirdly, this equality in the whole of the advantages and disadvantages of + the different employments of labour and stock, can take place only in such + as are the sole or principal employments of those who occupy them. + + When a person derives his subsistence from one employment, which does not + occupy the greater part of his time, in the intervals of his leisure he is + often willing to work at another for less wages than would otherwise suit + the nature of the employment. + + There still subsists, in many parts of Scotland, a set of people called + cottars or cottagers, though they were more frequent some years ago than + they are now. They are a sort of out-servants of the landlords and + farmers. The usual reward which they receive from their master is a house, + a small garden for pot-herbs, as much grass as will feed a cow, and, + perhaps, an acre or two of bad arable land. When their master has occasion + for their labour, he gives them, besides, two pecks of oatmeal a-week, + worth about sixteen pence sterling. During a great part of the year, he + has little or no occasion for their labour, and the cultivation of their + own little possession is not sufficient to occupy the time which is left + at their own disposal. When such occupiers were more numerous than they + are at present, they are said to have been willing to give their spare + time for a very small recompence to any body, and to have wrought for less + wages than other labourers. In ancient times, they seem to have been + common all over Europe. In countries ill cultivated, and worse inhabited, + the greater part of landlords and farmers could not otherwise provide + themselves with the extraordinary number of hands which country labour + requires at certain seasons. The daily or weekly recompence which such + labourers occasionally received from their masters, was evidently not the + whole price of their labour. Their small tenement made a considerable part + of it. This daily or weekly recompence, however, seems to have been + considered as the whole of it, by many writers who have collected the + prices of labour and provisions in ancient times, and who have taken + pleasure in representing both as wonderfully low. + + The produce of such labour comes frequently cheaper to market than would + otherwise be suitable to its nature. Stockings, in many parts of Scotland, + are knit much cheaper than they can anywhere be wrought upon the loom. + They are the work of servants and labourers who derive the principal part + of their subsistence from some other employment. More than a thousand pair + of Shetland stockings are annually imported into Leith, of which the price + is from fivepence to seven-pence a pair. At Lerwick, the small capital of + the Shetland islands, tenpence a-day, I have been assured, is a common + price of common labour. In the same islands, they knit worsted stockings + to the value of a guinea a pair and upwards. + + The spinning of linen yarn is carried on in Scotland nearly in the same + way as the knitting of stockings, by servants, who are chiefly hired for + other purposes. They earn but a very scanty subsistence, who endeavour to + get their livelihood by either of those trades. In most parts of Scotland, + she is a good spinner who can earn twentypence a-week. + + In opulent countries, the market is generally so extensive, that any one + trade is sufficient to employ the whole labour and stock of those who + occupy it. Instances of people living by one employment, and, at the same + time, deriving some little advantage from another, occur chiefly in poor + countries. The following instance, however, of something of the same kind, + is to be found in the capital of a very rich one. There is no city in + Europe, I believe, in which house-rent is dearer than in London, and yet I + know no capital in which a furnished apartment can be hired so cheap. + Lodging is not only much cheaper in London than in Paris; it is much + cheaper than in Edinburgh, of the same degree of goodness; and, what may + seem extraordinary, the dearness of house-rent is the cause of the + cheapness of lodging. The dearness of house-rent in London arises, not + only from those causes which render it dear in all great capitals, the + dearness of labour, the dearness of all the materials of building, which + must generally be brought from a great distance, and, above all, the + dearness of ground-rent, every landlord acting the part of a monopolist, + and frequently exacting a higher rent for a single acre of bad land in a + town, than can be had for a hundred of the best in the country; but it + arises in part from the peculiar manners and customs of the people, which + oblige every master of a family to hire a whole house from top to bottom. + A dwelling-house in England means every thing that is contained under the + same roof. In France, Scotland, and many other parts of Europe, it + frequently means no more than a single storey. A tradesman in London is + obliged to hire a whole house in that part of the town where his customers + live. His shop is upon the ground floor, and he and his family sleep in + the garret; and he endeavours to pay a part of his house-rent by letting + the two middle storeys to lodgers. He expects to maintain his family by + his trade, and not by his lodgers. Whereas at Paris and Edinburgh, people + who let lodgings have commonly no other means of subsistence; and the + price of the lodging must pay, not only the rent of the house, but the + whole expense of the family. + + + + + PART II.—Inequalities occasioned by the Policy of Europe. + + Such are the inequalities in the whole of the advantages and disadvantages + of the different employments of labour and stock, which the defect of any + of the three requisites above mentioned must occasion, even where there is + the most perfect liberty. But the policy of Europe, by not leaving things + at perfect liberty, occasions other inequalities of much greater + importance. + + It does this chiefly in the three following ways. First, by restraining + the competition in some employments to a smaller number than would + otherwise be disposed to enter into them; secondly, by increasing it in + others beyond what it naturally would be; and, thirdly, by obstructing the + free circulation of labour and stock, both from employment to employment, + and from place to place. + + First, The policy of Europe occasions a very important inequality in the + whole of the advantages and disadvantages of the different employments of + labour and stock, by restraining the competition in some employments to a + smaller number than might otherwise be disposed to enter into them. + + The exclusive privileges of corporations are the principal means it makes + use of for this purpose. + + The exclusive privilege of an incorporated trade necessarily restrains the + competition, in the town where it is established, to those who are free of + the trade. To have served an apprenticeship in the town, under a master + properly qualified, is commonly the necessary requisite for obtaining this + freedom. The bye-laws of the corporation regulate sometimes the number of + apprentices which any master is allowed to have, and almost always the + number of years which each apprentice is obliged to serve. The intention + of both regulations is to restrain the competition to a much smaller + number than might otherwise be disposed to enter into the trade. The + limitation of the number of apprentices restrains it directly. A long term + of apprenticeship restrains it more indirectly, but as effectually, by + increasing the expense of education. + + In Sheffield, no master cutler can have more than one apprentice at a + time, by a bye-law of the corporation. In Norfolk and Norwich, no master + weaver can have more than two apprentices, under pain of forfeiting five + pounds a-month to the king. No master hatter can have more than two + apprentices anywhere in England, or in the English plantations, under pain + of forfeiting; five pounds a-month, half to the king, and half to him who + shall sue in any court of record. Both these regulations, though they have + been confirmed by a public law of the kingdom, are evidently dictated by + the same corporation-spirit which enacted the bye-law of Sheffield. The + silk-weavers in London had scarce been incorporated a year, when they + enacted a bye-law, restraining any master from having more than two + apprentices at a time. It required a particular act of parliament to + rescind this bye-law. + + Seven years seem anciently to have been, all over Europe, the usual term + established for the duration of apprenticeships in the greater part of + incorporated trades. All such incorporations were anciently called + universities, which, indeed, is the proper Latin name for any + incorporation whatever. The university of smiths, the university of + tailors, etc. are expressions which we commonly meet with in the old + charters of ancient towns. When those particular incorporations, which are + now peculiarly called universities, were first established, the term of + years which it was necessary to study, in order to obtain the degree of + master of arts, appears evidently to have been copied from the term of + apprenticeship in common trades, of which the incorporations were much + more ancient. As to have wrought seven years under a master properly + qualified, was necessary, in order to entitle any person to become a + master, and to have himself apprentices in a common trade; so to have + studied seven years under a master properly qualified, was necessary to + entitle him to become a master, teacher, or doctor (words anciently + synonymous), in the liberal arts, and to have scholars or apprentices + (words likewise originally synonymous) to study under him. + + By the 5th of Elizabeth, commonly called the Statute of Apprenticeship, it + was enacted, that no person should, for the future, exercise any trade, + craft, or mystery, at that time exercised in England, unless he had + previously served to it an apprenticeship of seven years at least; and + what before had been the bye-law of many particular corporations, became + in England the general and public law of all trades carried on in market + towns. For though the words of the statute are very general, and seem + plainly to include the whole kingdom, by interpretation its operation has + been limited to market towns; it having been held that, in country + villages, a person may exercise several different trades, though he has + not served a seven years apprenticeship to each, they being necessary for + the conveniency of the inhabitants, and the number of people frequently + not being sufficient to supply each with a particular set of hands. By a + strict interpretation of the words, too, the operation of this statute has + been limited to those trades which were established in England before the + 5th of Elizabeth, and has never been extended to such as have been + introduced since that time. This limitation has given occasion to several + distinctions, which, considered as rules of police, appear as foolish as + can well be imagined. It has been adjudged, for example, that a + coach-maker can neither himself make nor employ journeymen to make his + coach-wheels, but must buy them of a master wheel-wright; this latter + trade having been exercised in England before the 5th of Elizabeth. But a + wheel-wright, though he has never served an apprenticeship to a + coachmaker, may either himself make or employ journeymen to make coaches; + the trade of a coachmaker not being within the statute, because not + exercised in England at the time when it was made. The manufactures of + Manchester, Birmingham, and Wolverhampton, are many of them, upon this + account, not within the statute, not having been exercised in England + before the 5th of Elizabeth. + + In France, the duration of apprenticeships is different in different towns + and in different trades. In Paris, five years is the term required in a + great number; but, before any person can be qualified to exercise the + trade as a master, he must, in many of them, serve five years more as a + journeyman. During this latter term, he is called the companion of his + master, and the term itself is called his companionship. + + In Scotland, there is no general law which regulates universally the + duration of apprenticeships. The term is different in different + corporations. Where it is long, a part of it may generally be redeemed by + paying a small fine. In most towns, too, a very small fine is sufficient + to purchase the freedom of any corporation. The weavers of linen and + hempen cloth, the principal manufactures of the country, as well as all + other artificers subservient to them, wheel-makers, reel-makers, etc. may + exercise their trades in any town-corporate without paying any fine. In + all towns-corporate, all persons are free to sell butchers’ meat upon any + lawful day of the week. Three years is, in Scotland, a common term of + apprenticeship, even in some very nice trades; and, in general, I know of + no country in Europe, in which corporation laws are so little oppressive. + + The property which every man has in his own labour, as it is the original + foundation of all other property, so it is the most sacred and inviolable. + The patrimony of a poor man lies in the strength and dexterity of his + hands; and to hinder him from employing this strength and dexterity in + what manner he thinks proper, without injury to his neighbour, is a plain + violation of this most sacred property. It is a manifest encroachment upon + the just liberty, both of the workman, and of those who might be disposed + to employ him. As it hinders the one from working at what he thinks + proper, so it hinders the others from employing whom they think proper. To + judge whether he is fit to be employed, may surely be trusted to the + discretion of the employers, whose interest it so much concerns. The + affected anxiety of the lawgiver, lest they should employ an improper + person, is evidently as impertinent as it is oppressive. + + The institution of long apprenticeships can give no security that + insufficient workmanship shall not frequently be exposed to public sale. + When this is done, it is generally the effect of fraud, and not of + inability; and the longest apprenticeship can give no security against + fraud. Quite different regulations are necessary to prevent this abuse. + The sterling mark upon plate, and the stamps upon linen and woollen cloth, + give the purchaser much greater security than any statute of + apprenticeship. He generally looks at these, but never thinks it worth + while to enquire whether the workman had served a seven years + apprenticeship. + + The institution of long apprenticeships has no tendency to form young + people to industry. A journeyman who works by the piece is likely to be + industrious, because he derives a benefit from every exertion of his + industry. An apprentice is likely to be idle, and almost always is so, + because he has no immediate interest to be otherwise. In the inferior + employments, the sweets of labour consist altogether in the recompence of + labour. They who are soonest in a condition to enjoy the sweets of it, are + likely soonest to conceive a relish for it, and to acquire the early habit + of industry. A young man naturally conceives an aversion to labour, when + for a long time he receives no benefit from it. The boys who are put out + apprentices from public charities are generally bound for more than the + usual number of years, and they generally turn out very idle and + worthless. + + Apprenticeships were altogether unknown to the ancients. The reciprocal + duties of master and apprentice make a considerable article in every + modern code. The Roman law is perfectly silent with regard to them. I know + no Greek or Latin word (I might venture, I believe, to assert that there + is none) which expresses the idea we now annex to the word apprentice, a + servant bound to work at a particular trade for the benefit of a master, + during a term of years, upon condition that the master shall teach him + that trade. + + Long apprenticeships are altogether unnecessary. The arts, which are much + superior to common trades, such as those of making clocks and watches, + contain no such mystery as to require a long course of instruction. The + first invention of such beautiful machines, indeed, and even that of some + of the instruments employed in making them, must no doubt have been the + work of deep thought and long time, and may justly be considered as among + the happiest efforts of human ingenuity. But when both have been fairly + invented, and are well understood, to explain to any young man, in the + completest manner, how to apply the instruments, and how to construct the + machines, cannot well require more than the lessons of a few weeks; + perhaps those of a few days might be sufficient. In the common mechanic + trades, those of a few days might certainly be sufficient. The dexterity + of hand, indeed, even in common trades, cannot be acquired without much + practice and experience. But a young man would practice with much more + diligence and attention, if from the beginning he wrought as a journeyman, + being paid in proportion to the little work which he could execute, and + paying in his turn for the materials which he might sometimes spoil + through awkwardness and inexperience. His education would generally in + this way be more effectual, and always less tedious and expensive. The + master, indeed, would be a loser. He would lose all the wages of the + apprentice, which he now saves, for seven years together. In the end, + perhaps, the apprentice himself would be a loser. In a trade so easily + learnt he would have more competitors, and his wages, when he came to be a + complete workman, would be much less than at present. The same increase of + competition would reduce the profits of the masters, as well as the wages + of workmen. The trades, the crafts, the mysteries, would all be losers. + But the public would be a gainer, the work of all artificers coming in + this way much cheaper to market. + + It is to prevent this reduction of price, and consequently of wages and + profit, by restraining that free competition which would most certainly + occasion it, that all corporations, and the greater part of corporation + laws have been established. In order to erect a corporation, no other + authority in ancient times was requisite, in many parts of Europe, but + that of the town-corporate in which it was established. In England, + indeed, a charter from the king was likewise necessary. But this + prerogative of the crown seems to have been reserved rather for extorting + money from the subject, than for the defence of the common liberty against + such oppressive monopolies. Upon paying a fine to the king, the charter + seems generally to have been readily granted; and when any particular + class of artificers or traders thought proper to act as a corporation, + without a charter, such adulterine guilds, as they were called, were not + always disfranchised upon that account, but obliged to fine annually to + the king, for permission to exercise their usurped privileges {See Madox + Firma Burgi p. 26 etc.}. The immediate inspection of all corporations, and + of the bye-laws which they might think proper to enact for their own + government, belonged to the town-corporate in which they were established; + and whatever discipline was exercised over them, proceeded commonly, not + from the king, but from that greater incorporation of which those + subordinate ones were only parts or members. + + The government of towns-corporate was altogether in the hands of traders + and artificers, and it was the manifest interest of every particular class + of them, to prevent the market from being overstocked, as they commonly + express it, with their own particular species of industry; which is in + reality to keep it always understocked. Each class was eager to establish + regulations proper for this purpose, and, provided it was allowed to do + so, was willing to consent that every other class should do the same. In + consequence of such regulations, indeed, each class was obliged to buy the + goods they had occasion for from every other within the town, somewhat + dearer than they otherwise might have done. But, in recompence, they were + enabled to sell their own just as much dearer; so that, so far it was as + broad as long, as they say; and in the dealings of the different classes + within the town with one another, none of them were losers by these + regulations. But in their dealings with the country they were all great + gainers; and in these latter dealings consist the whole trade which + supports and enriches every town. + + Every town draws its whole subsistence, and all the materials of its + industry, from the country. It pays for these chiefly in two ways. First, + by sending back to the country a part of those materials wrought up and + manufactured; in which case, their price is augmented by the wages of the + workmen, and the profits of their masters or immediate employers; + secondly, by sending to it a part both of the rude and manufactured + produce, either of other countries, or of distant parts of the same + country, imported into the town; in which case, too, the original price of + those goods is augmented by the wages of the carriers or sailors, and by + the profits of the merchants who employ them. In what is gained upon the + first of those branches of commerce, consists the advantage which the town + makes by its manufactures; in what is gained upon the second, the + advantage of its inland and foreign trade. The wages of the workmen, and + the profits of their different employers, make up the whole of what is + gained upon both. Whatever regulations, therefore, tend to increase those + wages and profits beyond what they otherwise: would be, tend to enable the + town to purchase, with a smaller quantity of its labour, the produce of a + greater quantity of the labour of the country. They give the traders and + artificers in the town an advantage over the landlords, farmers, and + labourers, in the country, and break down that natural equality which + would otherwise take place in the commerce which is carried on between + them. The whole annual produce of the labour of the society is annually + divided between those two different sets of people. By means of those + regulations, a greater share of it is given to the inhabitants of the town + than would otherwise fall to them, and a less to those of the country. + + The price which the town really pays for the provisions and materials + annually imported into it, is the quantity of manufactures and other goods + annually exported from it. The dearer the latter are sold, the cheaper the + former are bought. The industry of the town becomes more, and that of the + country less advantageous. + + That the industry which is carried on in towns is, everywhere in Europe, + more advantageous than that which is carried on in the country, without + entering into any very nice computations, we may satisfy ourselves by one + very simple and obvious observation. In every country of Europe, we find + at least a hundred people who have acquired great fortunes, from small + beginnings, by trade and manufactures, the industry which properly belongs + to towns, for one who has done so by that which properly belongs to the + country, the raising of rude produce by the improvement and cultivation of + land. Industry, therefore, must be better rewarded, the wages of labour + and the profits of stock must evidently be greater, in the one situation + than in the other. But stock and labour naturally seek the most + advantageous employment. They naturally, therefore, resort as much as they + can to the town, and desert the country. + + The inhabitants of a town being collected into one place, can easily + combine together. The most insignificant trades carried on in towns have, + accordingly, in some place or other, been incorporated; and even where + they have never been incorporated, yet the corporation-spirit, the + jealousy of strangers, the aversion to take apprentices, or to communicate + the secret of their trade, generally prevail in them, and often teach + them, by voluntary associations and agreements, to prevent that free + competition which they cannot prohibit by bye-laws. The trades which + employ but a small number of hands, run most easily into such + combinations. Half-a-dozen wool-combers, perhaps, are necessary to keep a + thousand spinners and weavers at work. By combining not to take + apprentices, they can not only engross the employment, but reduce the + whole manufacture into a sort of slavery to themselves, and raise the + price of their labour much above what is due to the nature of their work. + + The inhabitants of the country, dispersed in distant places, cannot easily + combine together. They have not only never been incorporated, but the + incorporation spirit never has prevailed among them. No apprenticeship has + ever been thought necessary to qualify for husbandry, the great trade of + the country. After what are called the fine arts, and the liberal + professions, however, there is perhaps no trade which requires so great a + variety of knowledge and experience. The innumerable volumes which have + been written upon it in all languages, may satisfy us, that among the + wisest and most learned nations, it has never been regarded as a matter + very easily understood. And from all those volumes we shall in vain + attempt to collect that knowledge of its various and complicated + operations which is commonly possessed even by the common farmer; how + contemptuously soever the very contemptible authors of some of them may + sometimes affect to speak of him. There is scarce any common mechanic + trade, on the contrary, of which all the operations may not be as + completely and distinctly explained in a pamphlet of a very few pages, as + it is possible for words illustrated by figures to explain them. In the + history of the arts, now publishing by the French Academy of Sciences, + several of them are actually explained in this manner. The direction of + operations, besides, which must be varied with every change of the + weather, as well as with many other accidents, requires much more judgment + and discretion, than that of those which are always the same, or very + nearly the same. + + Not only the art of the farmer, the general direction of the operations of + husbandry, but many inferior branches of country labour require much more + skill and experience than the greater part of mechanic trades. The man who + works upon brass and iron, works with instruments, and upon materials of + which the temper is always the same, or very nearly the same. But the man + who ploughs the ground with a team of horses or oxen, works with + instruments of which the health, strength, and temper, are very different + upon different occasions. The condition of the materials which he works + upon, too, is as variable as that of the instruments which he works with, + and both require to be managed with much judgment and discretion. The + common ploughman, though generally regarded as the pattern of stupidity + and ignorance, is seldom defective in this judgment and discretion. He is + less accustomed, indeed, to social intercourse, than the mechanic who + lives in a town. His voice and language are more uncouth, and more + difficult to be understood by those who are not used to them. His + understanding, however, being accustomed to consider a greater variety of + objects, is generally much superior to that of the other, whose whole + attention, from morning till night, is commonly occupied in performing one + or two very simple operations. How much the lower ranks of people in the + country are really superior to those of the town, is well known to every + man whom either business or curiosity has led to converse much with both. + In China and Indostan, accordingly, both the rank and the wages of country + labourers are said to be superior to those of the greater part of + artificers and manufacturers. They would probably be so everywhere, if + corporation laws and the corporation spirit did not prevent it. + + The superiority which the industry of the towns has everywhere in Europe + over that of the country, is not altogether owing to corporations and + corporation laws. It is supported by many other regulations. The high + duties upon foreign manufactures, and upon all goods imported by alien + merchants, all tend to the same purpose. Corporation laws enable the + inhabitants of towns to raise their prices, without fearing to be + undersold by the free competition of their own countrymen. Those other + regulations secure them equally against that of foreigners. The + enhancement of price occasioned by both is everywhere finally paid by the + landlords, farmers, and labourers, of the country, who have seldom opposed + the establishment of such monopolies. They have commonly neither + inclination nor fitness to enter into combinations; and the clamour and + sophistry of merchants and manufacturers easily persuade them, that the + private interest of a part, and of a subordinate part, of the society, is + the general interest of the whole. + + In Great Britain, the superiority of the industry of the towns over that + of the country seems to have been greater formerly than in the present + times. The wages of country labour approach nearer to those of + manufacturing labour, and the profits of stock employed in agriculture to + those of trading and manufacturing stock, than they are said to have done + in the last century, or in the beginning of the present. This change may + be regarded as the necessary, though very late consequence of the + extraordinary encouragement given to the industry of the towns. The stocks + accumulated in them come in time to be so great, that it can no longer be + employed with the ancient profit in that species of industry which is + peculiar to them. That industry has its limits like every other; and the + increase of stock, by increasing the competition, necessarily reduces the + profit. The lowering of profit in the town forces out stock to the + country, where, by creating a new demand for country labour, it + necessarily raises its wages. It then spreads itself, if I my say so, over + the face of the land, and, by being employed in agriculture, is in part + restored to the country, at the expense of which, in a great measure, it + had originally been accumulated in the town. That everywhere in Europe the + greatest improvements of the country have been owing to such over flowings + of the stock originally accumulated in the towns, I shall endeavour to + shew hereafter, and at the same time to demonstrate, that though some + countries have, by this course, attained to a considerable degree of + opulence, it is in itself necessarily slow, uncertain, liable to be + disturbed and interrupted by innumerable accidents, and, in every respect, + contrary to the order of nature and of reason. The interests, prejudices, + laws, and customs, which have given occasion to it, I shall endeavour to + explain as fully and distinctly as I can in the third and fourth books of + this Inquiry. + + People of the same trade seldom meet together, even for merriment and + diversion, but the conversation ends in a conspiracy against the public, + or in some contrivance to raise prices. It is impossible, indeed, to + prevent such meetings, by any law which either could be executed, or would + be consistent with liberty and justice. But though the law cannot hinder + people of the same trade from sometimes assembling together, it ought to + do nothing to facilitate such assemblies, much less to render them + necessary. + + A regulation which obliges all those of the same trade in a particular + town to enter their names and places of abode in a public register, + facilitates such assemblies. It connects individuals who might never + otherwise be known to one another, and gives every man of the trade a + direction where to find every other man of it. + + A regulation which enables those of the same trade to tax themselves, in + order to provide for their poor, their sick, their widows and orphans, by + giving them a common interest to manage, renders such assemblies + necessary. + + An incorporation not only renders them necessary, but makes the act of the + majority binding upon the whole. In a free trade, an effectual combination + cannot be established but by the unanimous consent of every single trader, + and it cannot last longer than every single trader continues of the same + mind. The majority of a corporation can enact a bye-law, with proper + penalties, which will limit the competition more effectually and more + durably than any voluntary combination whatever. + + The pretence that corporations are necessary for the better government of + the trade, is without any foundation. The real and effectual discipline + which is exercised over a workman, is not that of his corporation, but + that of his customers. It is the fear of losing their employment which + restrains his frauds and corrects his negligence. An exclusive corporation + necessarily weakens the force of this discipline. A particular set of + workmen must then be employed, let them behave well or ill. It is upon + this account that, in many large incorporated towns, no tolerable workmen + are to be found, even in some of the most necessary trades. If you would + have your work tolerably executed, it must be done in the suburbs, where + the workmen, having no exclusive privilege, have nothing but their + character to depend upon, and you must then smuggle it into the town as + well as you can. + + It is in this manner that the policy of Europe, by restraining the + competition in some employments to a smaller number than would otherwise + be disposed to enter into them, occasions a very important inequality in + the whole of the advantages and disadvantages of the different employments + of labour and stock. + + Secondly, the policy of Europe, by increasing the competition in some + employments beyond what it naturally would be, occasions another + inequality, of an opposite kind, in the whole of the advantages and + disadvantages of the different employments of labour and stock. + + It has been considered as of so much importance that a proper number of + young people should be educated for certain professions, that sometimes + the public, and sometimes the piety of private founders, have established + many pensions, scholarships, exhibitions, bursaries, etc. for this + purpose, which draw many more people into those trades than could + otherwise pretend to follow them. In all Christian countries, I believe, + the education of the greater part of churchmen is paid for in this + manner. Very few of them are educated altogether at their own expense. + The long, tedious, and expensive education, therefore, of those who are, + will not always procure them a suitable reward, the church being crowded + with people, who, in order to get employment, are willing to accept of a + much smaller recompence than what such an education would otherwise have + entitled them to; and in this manner the competition of the poor takes + away the reward of the rich. It would be indecent, no doubt, to compare + either a curate or a chaplain with a journeyman in any common trade. The + pay of a curate or chaplain, however, may very properly be considered as + of the same nature with the wages of a journeyman. They are all three + paid for their work according to the contract which they may happen to + make with their respective superiors. Till after the middle of the + fourteenth century, five merks, containing about as much silver as ten + pounds of our present money, was in England the usual pay of a curate or + a stipendiary parish priest, as we find it regulated by the decrees of + several different national councils. At the same period, fourpence a-day, + containing the same quantity of silver as a shilling of our present + money, was declared to be the pay of a master mason; and threepence + a-day, equal to ninepence of our present money, that of a journeyman + mason. {See the Statute of Labourers, 25, Ed. III.} The wages of both + these labourers, therefore, supposing them to have been constantly + employed, were much superior to those of the curate. The wages of the + master mason, supposing him to have been without employment one-third of + the year, would have fully equalled them. By the 12th of Queen Anne, c. + 12. it is declared, “That whereas, for want of sufficient + maintenance and encouragement to curates, the cures have, in several + places, been meanly supplied, the bishop is, therefore, empowered to + appoint, by writing under his hand and seal, a sufficient certain stipend + or allowance, not exceeding fifty, and not less than twenty pounds + a-year”. Forty pounds a-year is reckoned at present very good pay + for a curate; and, notwithstanding this act of parliament, there are many + curacies under twenty pounds a-year. There are journeymen shoemakers in + London who earn forty pounds a-year, and there is scarce an industrious + workman of any kind in that metropolis who does not earn more than + twenty. This last sum, indeed, does not exceed what is frequently earned + by common labourers in many country parishes. Whenever the law has + attempted to regulate the wages of workmen, it has always been rather to + lower them than to raise them. But the law has, upon many occasions, + attempted to raise the wages of curates, and, for the dignity of the + church, to oblige the rectors of parishes to give them more than the + wretched maintenance which they themselves might be willing to accept of. + And, in both cases, the law seems to have been equally ineffectual, and + has never either been able to raise the wages of curates, or to sink + those of labourers to the degree that was intended; because it has never + been able to hinder either the one from being willing to accept of less + than the legal allowance, on account of the indigence of their situation + and the multitude of their competitors, or the other from receiving more, + on account of the contrary competition of those who expected to derive + either profit or pleasure from employing them. + + The great benefices and other ecclesiastical dignities support the honour + of the church, notwithstanding the mean circumstances of some of its + inferior members. The respect paid to the profession, too, makes some + compensation even to them for the meanness of their pecuniary recompence. + In England, and in all Roman catholic countries, the lottery of the church + is in reality much more advantageous than is necessary. The example of the + churches of Scotland, of Geneva, and of several other protestant churches, + may satisfy us, that in so creditable a profession, in which education is + so easily procured, the hopes of much more moderate benefices will draw a + sufficient number of learned, decent, and respectable men into holy + orders. + + In professions in which there are no benefices, such as law and physic, if + an equal proportion of people were educated at the public expense, the + competition would soon be so great as to sink very much their pecuniary + reward. It might then not be worth any man’s while to educate his son to + either of those professions at his own expense. They would be entirely + abandoned to such as had been educated by those public charities, whose + numbers and necessities would oblige them in general to content themselves + with a very miserable recompence, to the entire degradation of the now + respectable professions of law and physic. + + That unprosperous race of men, commonly called men of letters, are pretty + much in the situation which lawyers and physicians probably would be in, + upon the foregoing supposition. In every part of Europe, the greater part + of them have been educated for the church, but have been hindered by + different reasons from entering into holy orders. They have generally, + therefore, been educated at the public expense; and their numbers are + everywhere so great, as commonly to reduce the price of their labour to a + very paltry recompence. + + Before the invention of the art of printing, the only employment by which + a man of letters could make any thing by his talents, was that of a public + or private teacher, or by communicating to other people the curious and + useful knowledge which he had acquired himself; and this is still surely a + more honourable, a more useful, and, in general, even a more profitable + employment than that other of writing for a bookseller, to which the art + of printing has given occasion. The time and study, the genius, knowledge, + and application requisite to qualify an eminent teacher of the sciences, + are at least equal to what is necessary for the greatest practitioners in + law and physic. But the usual reward of the eminent teacher bears no + proportion to that of the lawyer or physician, because the trade of the + one is crowded with indigent people, who have been brought up to it at the + public expense; whereas those of the other two are encumbered with very + few who have not been educated at their own. The usual recompence, + however, of public and private teachers, small as it may appear, would + undoubtedly be less than it is, if the competition of those yet more + indigent men of letters, who write for bread, was not taken out of the + market. Before the invention of the art of printing, a scholar and a + beggar seem to have been terms very nearly synonymous. The different + governors of the universities, before that time, appear to have often + granted licences to their scholars to beg. + + In ancient times, before any charities of this kind had been established + for the education of indigent people to the learned professions, the + rewards of eminent teachers appear to have been much more considerable. + Isocrates, in what is called his discourse against the sophists, + reproaches the teachers of his own times with inconsistency. “They make + the most magnificent promises to their scholars,” says he, “and undertake + to teach them to be wise, to be happy, and to be just; and, in return for + so important a service, they stipulate the paltry reward of four or five + minae.” “They who teach wisdom,” continues he, “ought certainly to be wise + themselves; but if any man were to sell such a bargain for such a price, + he would be convicted of the most evident folly.” He certainly does not + mean here to exaggerate the reward, and we may be assured that it was not + less than he represents it. Four minae were equal to thirteen pounds six + shillings and eightpence; five minae to sixteen pounds thirteen shillings + and fourpence. Something not less than the largest of those two sums, + therefore, must at that time have been usually paid to the most eminent + teachers at Athens. Isocrates himself demanded ten minae, or £ 33:6:8 from + each scholar. When he taught at Athens, he is said to have had a hundred + scholars. I understand this to be the number whom he taught at one time, + or who attended what we would call one course of lectures; a number which + will not appear extraordinary from so great a city to so famous a teacher, + who taught, too, what was at that time the most fashionable of all + sciences, rhetoric. He must have made, therefore, by each course of + lectures, a thousand minae, or £ 3335:6:8. A thousand minae, accordingly, + is said by Plutarch, in another place, to have been his didactron, or + usual price of teaching. Many other eminent teachers in those times appear + to have acquired great fortunes. Georgias made a present to the temple of + Delphi of his own statue in solid gold. We must not, I presume, suppose + that it was as large as the life. His way of living, as well as that of + Hippias and Protagoras, two other eminent teachers of those times, is + represented by Plato as splendid, even to ostentation. Plato himself is + said to have lived with a good deal of magnificence. Aristotle, after + having been tutor to Alexander, and most munificently rewarded, as it is + universally agreed, both by him and his father, Philip, thought it worth + while, notwithstanding, to return to Athens, in order to resume the + teaching of his school. Teachers of the sciences were probably in those + times less common than they came to be in an age or two afterwards, when + the competition had probably somewhat reduced both the price of their + labour and the admiration for their persons. The most eminent of them, + however, appear always to have enjoyed a degree of consideration much + superior to any of the like profession in the present times. The Athenians + sent Carneades the academic, and Diogenes the stoic, upon a solemn embassy + to Rome; and though their city had then declined from its former grandeur, + it was still an independent and considerable republic. + + Carneades, too, was a Babylonian by birth; and as there never was a people + more jealous of admitting foreigners to public offices than the Athenians, + their consideration for him must have been very great. + + This inequality is, upon the whole, perhaps rather advantageous than + hurtful to the public. It may somewhat degrade the profession of a public + teacher; but the cheapness of literary education is surely an advantage + which greatly overbalances this trifling inconveniency. The public, too, + might derive still greater benefit from it, if the constitution of those + schools and colleges, in which education is carried on, was more + reasonable than it is at present through the greater part of Europe. + + Thirdly, the policy of Europe, by obstructing the free circulation of + labour and stock, both from employment to employment, and from place to + place, occasions, in some cases, a very inconvenient inequality in the + whole of the advantages and disadvantages of their different employments. + + The statute of apprenticeship obstructs the free circulation of labour + from one employment to another, even in the same place. The exclusive + privileges of corporations obstruct it from one place to another, even in + the same employment. + + It frequently happens, that while high wages are given to the workmen in + one manufacture, those in another are obliged to content themselves with + bare subsistence. The one is in an advancing state, and has therefore a + continual demand for new hands; the other is in a declining state, and the + superabundance of hands is continually increasing. Those two manufactures + may sometimes be in the same town, and sometimes in the same + neighbourhood, without being able to lend the least assistance to one + another. The statute of apprenticeship may oppose it in the one case, and + both that and an exclusive corporation in the other. In many different + manufactures, however, the operations are so much alike, that the workmen + could easily change trades with one another, if those absurd laws did not + hinder them. The arts of weaving plain linen and plain silk, for example, + are almost entirely the same. That of weaving plain woollen is somewhat + different; but the difference is so insignificant, that either a linen or + a silk weaver might become a tolerable workman in a very few days. If any + of those three capital manufactures, therefore, were decaying, the workmen + might find a resource in one of the other two which was in a more + prosperous condition; and their wages would neither rise too high in the + thriving, nor sink too low in the decaying manufacture. The linen + manufacture, indeed, is in England, by a particular statute, open to every + body; but as it is not much cultivated through the greater part of the + country, it can afford no general resource to the work men of other + decaying manufactures, who, wherever the statute of apprenticeship takes + place, have no other choice, but either to come upon the parish, or to + work as common labourers; for which, by their habits, they are much worse + qualified than for any sort of manufacture that bears any resemblance to + their own. They generally, therefore, chuse to come upon the parish. + + Whatever obstructs the free circulation of labour from one employment to + another, obstructs that of stock likewise; the quantity of stock which can + be employed in any branch of business depending very much upon that of the + labour which can be employed in it. Corporation laws, however, give less + obstruction to the free circulation of stock from one place to another, + than to that of labour. It is everywhere much easier for a wealthy + merchant to obtain the privilege of trading in a town-corporate, than for + a poor artificer to obtain that of working in it. + + The obstruction which corporation laws give to the free circulation of + labour is common, I believe, to every part of Europe. That which is given + to it by the poor laws is, so far as I know, peculiar to England. It + consists in the difficulty which a poor man finds in obtaining a + settlement, or even in being allowed to exercise his industry in any + parish but that to which he belongs. It is the labour of artificers and + manufacturers only of which the free circulation is obstructed by + corporation laws. The difficulty of obtaining settlements obstructs even + that of common labour. It may be worth while to give some account of the + rise, progress, and present state of this disorder, the greatest, perhaps, + of any in the police of England. + + When, by the destruction of monasteries, the poor had been deprived of the + charity of those religious houses, after some other ineffectual attempts + for their relief, it was enacted, by the 43d of Elizabeth, c. 2. that + every parish should be bound to provide for its own poor, and that + overseers of the poor should be annually appointed, who, with the + church-wardens, should raise, by a parish rate, competent sums for this + purpose. + + By this statute, the necessity of providing for their own poor was + indispensably imposed upon every parish. Who were to be considered as the + poor of each parish became, therefore, a question of some importance. This + question, after some variation, was at last determined by the 13th and + 14th of Charles II. when it was enacted, that forty days undisturbed + residence should gain any person a settlement in any parish; but that + within that time it should be lawful for two justices of the peace, upon + complaint made by the church-wardens or overseers of the poor, to remove + any new inhabitant to the parish where he was last legally settled; unless + he either rented a tenement of ten pounds a-year, or could give such + security for the discharge of the parish where he was then living, as + those justices should judge sufficient. + + Some frauds, it is said, were committed in consequence of this statute; + parish officers sometimes bribing their own poor to go clandestinely to + another parish, and, by keeping themselves concealed for forty days, to + gain a settlement there, to the discharge of that to which they properly + belonged. It was enacted, therefore, by the 1st of James II. that the + forty days undisturbed residence of any person necessary to gain a + settlement, should be accounted only from the time of his delivering + notice, in writing, of the place of his abode and the number of his + family, to one of the church-wardens or overseers of the parish where he + came to dwell. + + But parish officers, it seems, were not always more honest with regard to + their own than they had been with regard to other parishes, and sometimes + connived at such intrusions, receiving the notice, and taking no proper + steps in consequence of it. As every person in a parish, therefore, was + supposed to have an interest to prevent as much as possible their being + burdened by such intruders, it was further enacted by the 3rd of William + III. that the forty days residence should be accounted only from the + publication of such notice in writing on Sunday in the church, immediately + after divine service. + + “After all,” says Doctor Burn, “this kind of settlement, by continuing + forty days after publication of notice in writing, is very seldom + obtained; and the design of the acts is not so much for gaining of + settlements, as for the avoiding of them by persons coming into a parish + clandestinely, for the giving of notice is only putting a force upon the + parish to remove. But if a person’s situation is such, that it is doubtful + whether he is actually removable or not, he shall, by giving of notice, + compel the parish either to allow him a settlement uncontested, by + suffering him to continue forty days, or by removing him to try the + right.” + + This statute, therefore, rendered it almost impracticable for a poor man + to gain a new settlement in the old way, by forty days inhabitancy. But + that it might not appear to preclude altogether the common people of one + parish from ever establishing themselves with security in another, it + appointed four other ways by which a settlement might be gained without + any notice delivered or published. The first was, by being taxed to parish + rates and paying them; the second, by being elected into an annual parish + office, and serving in it a year; the third, by serving an apprenticeship + in the parish; the fourth, by being hired into service there for a year, + and continuing in the same service during the whole of it. Nobody can gain + a settlement by either of the two first ways, but by the public deed of + the whole parish, who are too well aware of the consequences to adopt any + new-comer, who has nothing but his labour to support him, either by taxing + him to parish rates, or by electing him into a parish office. + + No married man can well gain any settlement in either of the two last + ways. An apprentice is scarce ever married; and it is expressly enacted, + that no married servant shall gain any settlement by being hired for a + year. The principal effect of introducing settlement by service, has been + to put out in a great measure the old fashion of hiring for a year; which + before had been so customary in England, that even at this day, if no + particular term is agreed upon, the law intends that every servant is + hired for a year. But masters are not always willing to give their + servants a settlement by hiring them in this manner; and servants are not + always willing to be so hired, because, as every last settlement + discharges all the foregoing, they might thereby lose their original + settlement in the places of their nativity, the habitation of their + parents and relations. + + No independent workman, it is evident, whether labourer or artificer, is + likely to gain any new settlement, either by apprenticeship or by service. + When such a person, therefore, carried his industry to a new parish, he + was liable to be removed, how healthy and industrious soever, at the + caprice of any churchwarden or overseer, unless he either rented a + tenement of ten pounds a-year, a thing impossible for one who has nothing + but his labour to live by, or could give such security for the discharge + of the parish as two justices of the peace should judge sufficient. + + What security they shall require, indeed, is left altogether to their + discretion; but they cannot well require less than thirty pounds, it + having been enacted, that the purchase even of a freehold estate of less + than thirty pounds value, shall not gain any person a settlement, as not + being sufficient for the discharge of the parish. But this is a security + which scarce any man who lives by labour can give; and much greater + security is frequently demanded. + + In order to restore, in some measure, that free circulation of labour + which those different statutes had almost entirely taken away, the + invention of certificates was fallen upon. By the 8th and 9th of William + III. it was enacted that if any person should bring a certificate from the + parish where he was last legally settled, subscribed by the church-wardens + and overseers of the poor, and allowed by two justices of the peace, that + every other parish should be obliged to receive him; that he should not be + removable merely upon account of his being likely to become chargeable, + but only upon his becoming actually chargeable; and that then the parish + which granted the certificate should be obliged to pay the expense both of + his maintenance and of his removal. And in order to give the most perfect + security to the parish where such certificated man should come to reside, + it was further enacted by the same statute, that he should gain no + settlement there by any means whatever, except either by renting a + tenement of ten pounds a-year, or by serving upon his own account in an + annual parish office for one whole year; and consequently neither by + notice nor by service, nor by apprenticeship, nor by paying parish rates. + By the 12th of Queen Anne, too, stat. 1, c.18, it was further enacted, + that neither the servants nor apprentices of such certificated man should + gain any settlement in the parish where he resided under such certificate. + + How far this invention has restored that free circulation of labour, which + the preceding statutes had almost entirely taken away, we may learn from + the following very judicious observation of Doctor Burn. “It is obvious,” + says he, “that there are divers good reasons for requiring certificates + with persons coming to settle in any place; namely, that persons residing + under them can gain no settlement, neither by apprenticeship, nor by + service, nor by giving notice, nor by paying parish rates; that they can + settle neither apprentices nor servants; that if they become chargeable, + it is certainly known whither to remove them, and the parish shall be paid + for the removal, and for their maintenance in the mean time; and that, if + they fall sick, and cannot be removed, the parish which gave the + certificate must maintain them; none of all which can be without a + certificate. Which reasons will hold proportionably for parishes not + granting certificates in ordinary cases; for it is far more than an equal + chance, but that they will have the certificated persons again, and in a + worse condition.” The moral of this observation seems to be, that + certificates ought always to be required by the parish where any poor man + comes to reside, and that they ought very seldom to be granted by that + which he purposes to leave. “There is somewhat of hardship in this matter + of certificates,” says the same very intelligent author, in his History of + the Poor Laws, “by putting it in the power of a parish officer to imprison + a man as it were for life, however inconvenient it may be for him to + continue at that place where he has had the misfortune to acquire what is + called a settlement, or whatever advantage he may propose himself by + living elsewhere.” + + Though a certificate carries along with it no testimonial of good + behaviour, and certifies nothing but that the person belongs to the parish + to which he really does belong, it is altogether discretionary in the + parish officers either to grant or to refuse it. A mandamus was once moved + for, says Doctor Burn, to compel the church-wardens and overseers to sign + a certificate; but the Court of King’s Bench rejected the motion as a very + strange attempt. + + The very unequal price of labour which we frequently find in England, in + places at no great distance from one another, is probably owing to the + obstruction which the law of settlements gives to a poor man who would + carry his industry from one parish to another without a certificate. A + single man, indeed who is healthy and industrious, may sometimes reside by + sufferance without one; but a man with a wife and family who should + attempt to do so, would, in most parishes, be sure of being removed; and, + if the single man should afterwards marry, he would generally be removed + likewise. The scarcity of hands in one parish, therefore, cannot always be + relieved by their superabundance in another, as it is constantly in + Scotland, and I believe, in all other countries where there is no + difficulty of settlement. In such countries, though wages may sometimes + rise a little in the neighbourhood of a great town, or wherever else there + is an extraordinary demand for labour, and sink gradually as the distance + from such places increases, till they fall back to the common rate of the + country; yet we never meet with those sudden and unaccountable differences + in the wages of neighbouring places which we sometimes find in England, + where it is often more difficult for a poor man to pass the artificial + boundary of a parish, than an arm of the sea, or a ridge of high + mountains, natural boundaries which sometimes separate very distinctly + different rates of wages in other countries. + + To remove a man who has committed no misdemeanour, from the parish where + he chooses to reside, is an evident violation of natural liberty and + justice. The common people of England, however, so jealous of their + liberty, but like the common people of most other countries, never rightly + understanding wherein it consists, have now, for more than a century + together, suffered themselves to be exposed to this oppression without a + remedy. Though men of reflection, too, have sometimes complained of the + law of settlements as a public grievance; yet it has never been the object + of any general popular clamour, such as that against general warrants, an + abusive practice undoubtedly, but such a one as was not likely to occasion + any general oppression. There is scarce a poor man in England, of forty + years of age, I will venture to say, who has not, in some part of his + life, felt himself most cruelly oppressed by this ill-contrived law of + settlements. + + I shall conclude this long chapter with observing, that though anciently + it was usual to rate wages, first by general laws extending over the whole + kingdom, and afterwards by particular orders of the justices of peace in + every particular county, both these practices have now gone entirely into + disuse. “By the experience of above four hundred years,” says Doctor Burn, + “it seems time to lay aside all endeavours to bring under strict + regulations, what in its own nature seems incapable of minute limitation; + for if all persons in the same kind of work were to receive equal wages, + there would be no emulation, and no room left for industry or ingenuity.” + + Particular acts of parliament, however, still attempt sometimes to + regulate wages in particular trades, and in particular places. Thus the + 8th of George III. prohibits, under heavy penalties, all master tailors in + London, and five miles round it, from giving, and their workmen from + accepting, more than two shillings and sevenpence halfpenny a-day, except + in the case of a general mourning. Whenever the legislature attempts to + regulate the differences between masters and their workmen, its + counsellors are always the masters. When the regulation, therefore, is in + favour of the workmen, it is always just and equitable; but it is + sometimes otherwise when in favour of the masters. Thus the law which + obliges the masters in several different trades to pay their workmen in + money, and not in goods, is quite just and equitable. It imposes no real + hardship upon the masters. It only obliges them to pay that value in + money, which they pretended to pay, but did not always really pay, in + goods. This law is in favour of the workmen; but the 8th of George III. is + in favour of the masters. When masters combine together, in order to + reduce the wages of their workmen, they commonly enter into a private bond + or agreement, not to give more than a certain wage, under a certain + penalty. Were the workmen to enter into a contrary combination of the same + kind, not to accept of a certain wage, under a certain penalty, the law + would punish them very severely; and, if it dealt impartially, it would + treat the masters in the same manner. But the 8th of George III. enforces + by law that very regulation which masters sometimes attempt to establish + by such combinations. The complaint of the workmen, that it puts the + ablest and most industrious upon the same footing with an ordinary + workman, seems perfectly well founded. + + In ancient times, too, it was usual to attempt to regulate the profits of + merchants and other dealers, by regulating the price of provisions and + ether goods. The assize of bread is, so far as I know, the only remnant of + this ancient usage. Where there is an exclusive corporation, it may, + perhaps, be proper to regulate the price of the first necessary of life; + but, where there is none, the competition will regulate it much better + than any assize. The method of fixing the assize of bread, established by + the 31st of George II. could not be put in practice in Scotland, on + account of a defect in the law, its execution depending upon the office of + clerk of the market, which does not exist there. This defect was not + remedied till the third of George III. The want of an assize occasioned no + sensible inconveniency; and the establishment of one in the few places + where it has yet taken place has produced no sensible advantage. In the + greater part of the towns in Scotland, however, there is an incorporation + of bakers, who claim exclusive privileges, though they are not very + strictly guarded. The proportion between the different rates, both of + wages and profit, in the different employments of labour and stock, seems + not to be much affected, as has already been observed, by the riches or + poverty, the advancing, stationary, or declining state of the society. + Such revolutions in the public welfare, though they affect the general + rates both of wages and profit, must, in the end, affect them equally in + all different employments. The proportion between them, therefore, must + remain the same, and cannot well be altered, at least for any considerable + time, by any such revolutions. + + +## Extraction Guidelines + +--- +id: extraction-rules +name: extraction_rules +artifact_type: content +description: Guidelines for extracting economic entities from source text +version: 1.0.0 +--- + +# Entity Extraction Rules + +## What Constitutes an Entity + +An economic entity is a distinct concept, actor, mechanism, or institution +that plays a functional role in Adam Smith's economic analysis. Extract +entities at the level of specificity where they carry independent meaning. + +## Extraction Criteria + +1. **Concepts**: Abstract economic ideas (e.g., "division of labour", + "effectual demand", "natural price"). Extract when Smith defines, + explains, or argues about the concept. + +2. **Actors**: Economic agents with defined roles (e.g., "the labourer", + "the merchant", "the sovereign"). Extract when the actor performs + a distinct economic function. + +3. **Mechanisms**: Processes or dynamics that produce economic effects + (e.g., "accumulation of stock", "market price adjustment", + "foreign trade"). Extract when the mechanism is described as + producing specific outcomes. + +4. **Institutions**: Organised structures that shape economic behaviour + (e.g., "the corporation", "the guild", "the joint-stock company"). + Extract when the institution's economic function is described. + +## Granularity Rules + +- Extract at the level of a single coherent concept. +- Do NOT extract synonyms as separate entities — choose the primary term + Smith uses and note variations. +- DO extract distinct aspects of a broad concept as separate entities when + Smith treats them independently (e.g., "wages of labour" and "profits + of stock" are separate from "price of commodities" even though they + compose it). +- If an entity appears across multiple chapters, extract it on first + significant appearance and note cross-references in later chapters. + +## Naming Conventions + +- Use Smith's own terminology where possible. +- Normalise to lowercase except for proper nouns. +- Use the most common form Smith uses (e.g., "division of labour" not + "divided labour"). + +## Quality Checks + +- Each entity must have a definition that would be comprehensible without + reading the source chapter. +- Each entity must cite the specific book and chapter of first appearance. +- **Economic Domain** must be EXACTLY ONE of: Production, Distribution, + Exchange, Consumption, Accumulation, Regulation, or General Theory. + Do not combine multiple domains. Do not use any other value. +- **Source Chapter format**: Use `Book [Roman numeral], Chapter [number]` + — for example `Book I, Chapter 3`. Do not include the chapter title, + quotation marks, markdown formatting, or asterisks. Use Roman numerals + for the book (I, II, III, IV, V). + + +## VSM Framework Context + +Use the following VSM framework as context to guide your extraction. +Prioritize entities that are likely to have clear mappings to VSM concepts, +but do not exclude entities simply because they lack an obvious mapping. + +--- +id: vsm-framework +name: vsm_framework +artifact_type: content +description: Stafford Beer's Viable System Model reference for economic analysis +version: 1.0.0 +--- + +# Stafford Beer's Viable System Model (VSM) + +The Viable System Model (VSM) is a model of the organisational structure of any +autonomous system capable of producing itself. It was created by management +cybernetician Stafford Beer in his books *Brain of the Firm* (1972) and +*The Heart of Enterprise* (1979). + +## Core Principle: Viability + +A viable system is any system organised in such a way as to meet the demands +of surviving in a changing environment. One of the prime features of systems +that survive is that they are adaptable. The VSM expresses a model for a +viable system, which is an abstracted cybernetic description applicable to +any organisation that is a going concern. + +## The Five Systems + +### System 1 (S1) — Operations + +The primary activities that produce the organisation's purpose. These are the +operational units that directly create value. Each operational element is itself +a viable system (the principle of recursion). + +**In economic terms:** Productive enterprises, factories, farms, workshops, +individual labourers performing specialised tasks, merchant operations. + +**Key properties:** Autonomy within constraints, self-organisation, +direct engagement with the environment. + +### System 2 (S2) — Coordination + +The information channels and bodies that allow the primary activities in +System 1 to communicate with each other and that allow System 3 to monitor +and coordinate activities. System 2 dampens oscillations and resolves +conflicts between operational units. + +**In economic terms:** Market price mechanisms, trade customs, standard +weights and measures, commercial law, banking clearinghouses, trade guilds. + +**Key properties:** Anti-oscillatory, dampening, scheduling, conflict +resolution, standardisation. + +### System 3 (S3) — Control / Operational Management + +The structures and controls that establish the rules, resources, rights, +and responsibilities of System 1 and provide an interface between Systems 1 +and Systems 4/5. System 3 represents the day-to-day control of the +organisation. It optimises the internal environment. + +**In economic terms:** Government regulation of trade, taxation policy, labour +laws, enforcement of contracts, the "invisible hand" as emergent internal +regulation, guilds and corporations governing members. + +**Key properties:** Internal regulation, resource allocation, accountability, +synergy extraction, performance management. + +### System 3* (S3*) — Audit / Monitoring + +The audit and monitoring channel that allows System 3 to verify information +coming from System 1 through channels other than those provided by System 2. +System 3* provides sporadic, direct access to operational reality. + +**In economic terms:** Market inspections, quality checks, auditing of accounts, +surprise investigations into trade practices, verification of weights and measures. + +**Key properties:** Sporadic direct investigation, reality checking, bypassing +normal reporting channels. + +### System 4 (S4) — Intelligence / Adaptation + +The bodies and processes that look outward to the environment to monitor +how the organisation needs to adapt to remain viable. System 4 captures +all relevant information about the outside-and-then environment. It is +responsible for strategic responses. + +**In economic terms:** Foreign intelligence about trade opportunities, +market research, new technology adoption, colonial exploration and trade +route development, understanding of foreign economic systems. + +**Key properties:** Environmental scanning, future orientation, strategic +planning, modelling, research and development. + +### System 5 (S5) — Policy / Identity + +The policy-making body that balances demands from Systems 3 and 4 and defines +the identity, values, and purpose of the organisation. System 5 provides +closure to the whole system and represents its supreme authority. + +**In economic terms:** Sovereign authority, constitutional principles governing +economic policy, national economic identity, the philosophical foundations +of economic systems (mercantilism vs. free trade), the overarching purpose +of the commonwealth. + +**Key properties:** Identity, ethos, supreme command, policy closure, +balancing internal and external perspectives. + +## Key Concepts + +### Recursion + +Every viable system contains and is contained in a viable system. The same +five-system structure recurs at every level of organisation. A workshop is +a viable system within a factory, which is a viable system within an +industry, which is a viable system within a national economy. + +### Variety + +A measure of the number of possible states of a system. The Law of Requisite +Variety (Ashby's Law) states that only variety can absorb variety. A +controller must have at least as much variety as the system it controls. + +### Requisite Variety + +The principle that for effective regulation, the variety of the regulator +must match the variety of the system being regulated. This is achieved +through variety attenuation (reducing the variety coming up from operations) +and variety amplification (increasing the variety of management's responses). + +### Attenuation and Amplification + +Variety engineering mechanisms. Attenuation reduces variety (e.g., reporting +summaries, statistical aggregation, standardisation). Amplification increases +variety (e.g., delegation, empowerment, decentralisation). + +### Algedonic Signals + +Emergency signals that bypass the normal management hierarchy to alert +higher systems of critical situations requiring immediate attention. Named +from the Greek words for pain (algos) and pleasure (hedone). + +**In economic terms:** Market panics, famine signals, sudden price collapses, +trade embargoes, economic crises that demand immediate sovereign intervention. + +### Autonomy + +The degree of freedom granted to operational units (System 1) to self-organise +within constraints set by System 3. Beer argued that maximum autonomy +consistent with systemic cohesion yields maximum viability. + +### Viability + +The capacity of a system to maintain a separate existence and survive in a +changing environment. A viable system continuously adapts while maintaining +its identity. + + +## Existing Entities + +The following entities have already been extracted from previous chapters +of this work. Do NOT re-extract any of these. If one of these entities +appears in the current chapter, you may omit it entirely — the infospace +already contains it. Only extract entities that are genuinely new. + +- accumulation-of-stock +- adulteration-of-metals +- advanced-state-of-society +- agricultural-labour +- annual-industry-employed-in-production +- artificial-market-creation +- artisan-specialisation +- assaying +- aulnagers +- average-price-of-corn +- barbarous-nations-barrier +- barter-and-exchange +- benevolence +- bleacher +- canal-communication +- capital-employed +- cheap-years +- coarser-and-finer-materials +- coined-money +- colony-prosperity +- combination-of-masters +- combination-of-workmen +- command-over-labour +- commercial-interactions +- commercial-society +- commercial-transactions +- common-annual-profits-of-manufacturing-stock +- competition-among-buyers +- competition-among-dealers +- competition-among-sellers +- complete-manufacture +- component-parts-of-price +- contract +- copper-money +- corn-rent +- corporation-privileges-and-market-prices +- dear-years +- debasement-of-currency +- degradation-of-coin +- demand-for-labour +- division-of-labour +- double-coincidence-of-wants +- early-and-rude-state-of-society +- early-navigation-advantages +- economic-accessibility-determinants +- economic-accessibility-gradient +- economic-backwardness +- economic-connectivity-importance +- economic-development-constraints +- economic-development-geography +- economic-development-geography-theory +- economic-development-sequence +- economic-development-spatial-patterns +- economic-geography +- economic-geography-determinism +- economic-geography-impact +- economic-isolation-effects +- economic-opportunity-cost +- economic-opportunity-geography +- economic-prosperity-symptoms +- economic-spatial-inequality +- economic-spatial-organisation +- economic-stagnation-symptoms +- effectual-demand +- exchange +- exchangeable-value +- exchequer +- farmer +- favour +- flax-grower +- fluctuations-in-value-of-gold-and-silver +- frozen-ocean-barrier +- funds-for-maintaining-labour +- gold-money +- higgling-and-bargaining-of-the-market +- human-nature +- idle-consumers +- inland-market-limitation +- inland-navigation-extent +- inland-parts-of-the-country +- instruments-of-husbandry +- interest +- interest-of-money +- interest-or-use-of-money +- journeymen +- judgment-in-labour-application +- labour-of-inspection-and-direction +- labouring-cattle +- labouring-poor +- land-carriage +- landlord +- legal-rate-of-interest +- legal-tender +- licence-to-gather-natural-produce +- lowest-rate-of-wages +- machinery-invention +- manufacturer +- maritime-commerce-development +- market-access-cost-structure +- market-access-development-sequence +- market-access-economic-potential +- market-access-gradient +- market-access-inequality +- market-access-opportunity-cost +- market-based-economic-geography +- market-based-economic-identity +- market-based-economic-structure +- market-based-productivity-limits +- market-based-specialisation +- market-communication-channels +- market-development-prerequisites +- market-driven-division +- market-extent +- market-extent-economic-impact +- market-extent-measurement +- market-integration-barriers +- market-integration-potential +- market-integration-timeline +- market-obstruction +- market-price-adjustment +- market-price-of-bullion +- market-price-of-commodities +- market-rate-of-interest +- market-regulation-of-prices +- market-separation +- market-size-economies +- market-size-specialisation-threshold +- market-size-threshold +- market-town-economy +- master-manufacturer +- materials-and-subsistence +- measure-of-exchangeable-value +- mediterranean-civilisation-pattern +- menial-servants +- merchant +- metal-currency +- mint +- mint-price +- money +- money-rent +- monopoly-effects-on-market-price +- mutual-good-offices +- natural-complement-of-riches +- natural-market-advantages +- natural-price-as-central-price +- natural-price-of-commodities +- natural-produce-of-land +- natural-rates-of-wages-profit-and-rent +- navigable-rivers +- necessity +- nominal-measure-of-value +- nominal-price-of-commodities +- non-standard-metal +- occasional-and-temporary-market-fluctuations +- ordinary-rates-of-wages-profit-and-rent +- overstocked-market-conditions +- payment-in-kind +- perfect-liberty-in-trade +- permanent-market-price-enhancements +- piece-work-wages +- pin-maker-trade +- price-in-labour +- price-in-money +- price-of-commodities +- prime-cost-of-commodities +- principal-clerk +- productive-powers-of-labour +- profits-of-stock +- progressive-state-of-society +- proportion-between-metals +- public-law-on-coinage +- public-registers-of-manufactures +- quantity-of-labour +- rate-of-profit +- real-measure-of-value +- real-price-of-commodities +- real-value-of-corn-rent +- regulated-proportion +- religious-occupational-restrictions +- rent-of-land +- river-navigation-infrastructure +- sea-coast-development +- seignorage +- self-love +- silver-money +- skill-and-dexterity +- species-of-industry-with-consistent-output +- species-of-industry-with-variable-output +- stamp-masters +- standard-metal +- standard-weight-of-coin +- stationary-country +- statutes-of-apprenticeship-effects +- sterling-mark +- stock-of-the-country +- stock-of-the-farmer +- subsistence +- subsistence-agriculture +- subsistence-of-the-dealer +- superfluity +- superior-hardship-and-superior-skill +- tale +- temporary-price-of-corn +- three-original-sources-of-revenue +- thriving-country +- toil-and-trouble-of-acquiring +- trade-encouragement +- trade-route-dependency +- transportation-cost-differential +- transportation-infrastructure-importance +- transportation-mode-economic-effects +- treaty +- truck +- unstamped-bars +- value-in-exchange +- value-in-use +- value-of-gold +- value-of-silver +- variety-of-talents +- venison +- victuals +- wages-of-a-journeyman +- wages-of-labour +- water-carriage +- weighing +- whole-produce-of-labour +- wool-grower + +## Instructions + +1. Read the source chapter carefully. +2. Review the list of existing entities above and do not duplicate them. +3. Identify all distinct economic concepts, actors, mechanisms, and institutions + that are NOT already in the existing entities list. +4. For each new entity, produce a separate markdown document following the + Economic Entity Schema v1.0. +5. Each entity document must include: + - An H1 heading with the entity name + - A Definition section (20-150 words) + - A Source Chapter section citing the specific chapter + - A Context section describing where in the argument the entity appears + - An Economic Domain section classifying the entity +6. Optionally include Smith's Original Wording (direct quote) and + Modern Interpretation sections. +7. Use neutral, analytical language throughout. +8. Ensure each entity is distinct and self-contained. + +## Output Format + +Output each entity as a separate markdown document, delimited by +`--- ENTITY: ---` markers. + +Use **H2 headings** (`##`) for each section inside the entity document. +Do NOT use inline `Section:` format or H3 headings. + +Example of a correctly formatted entity: + +``` +--- ENTITY: division of labour --- + +# Division of Labour + +## Definition + +The separation of a work process into distinct tasks performed by specialised +workers, increasing productivity through greater dexterity, saved time, and +the invention of labour-saving machinery. + +## Source Chapter + +Book I, Chapter 1 + +## Context + +The opening chapter's central argument, illustrated by Smith's pin factory +example showing how dividing 18 operations dramatically increases output. + +## Economic Domain + +Production + +--- +``` diff --git a/examples/infospace-with-history/output/entities/butcher-trade.md b/examples/infospace-with-history/output/entities/butcher-trade.md new file mode 100644 index 00000000..2247da16 --- /dev/null +++ b/examples/infospace-with-history/output/entities/butcher-trade.md @@ -0,0 +1,21 @@ + + +# Butcher Trade + +## Definition + +The commercial activity of slaughtering and selling meat, which Smith identifies as a brutal and odious business that nonetheless offers higher profits than most common trades due to its disagreeable nature. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the butcher trade as an example of how disagreeable employment affects profits of stock as well as wages of labour. This illustrates his principle that the unattractiveness of certain businesses to potential entrants allows those who do engage in them to earn above-normal returns. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/certificates.md b/examples/infospace-with-history/output/entities/certificates.md new file mode 100644 index 00000000..a6463f36 --- /dev/null +++ b/examples/infospace-with-history/output/entities/certificates.md @@ -0,0 +1,21 @@ + + +# Certificates + +## Definition + +Official documents issued by one parish that certify a person's legal settlement there, allowing them to reside in another parish without gaining settlement rights there, serving as a partial remedy to the settlement laws' restrictions on labour mobility. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith discusses certificates as an administrative mechanism developed to partially restore the free circulation of labour that settlement laws had obstructed. While certificates allow poor persons to move between parishes without automatically gaining settlement rights, Smith notes they are often difficult to obtain and create their own forms of administrative control. + +## Economic Domain + +Regulation + +--- diff --git a/examples/infospace-with-history/output/entities/coal-heaver.md b/examples/infospace-with-history/output/entities/coal-heaver.md new file mode 100644 index 00000000..4096025a --- /dev/null +++ b/examples/infospace-with-history/output/entities/coal-heaver.md @@ -0,0 +1,21 @@ + + +# Coal-Heaver + +## Definition + +A labourer who unloads coal from ships, which Smith identifies as performing work that is extremely arduous, dirty, and subject to irregular employment, commanding wages that are four to five times higher than common labour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses coal-heavers to illustrate how the combination of disagreeable work, physical hardship, and irregular employment can drive wages far above the common level. This example demonstrates how multiple factors can combine to create significant wage differentials. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/collier.md b/examples/infospace-with-history/output/entities/collier.md new file mode 100644 index 00000000..2326ddc4 --- /dev/null +++ b/examples/infospace-with-history/output/entities/collier.md @@ -0,0 +1,21 @@ + + +# Collier + +## Definition + +A coal miner, which Smith identifies as performing extremely dangerous and dirty work that commands wages double or triple those of common labour, illustrating how hazardous and disagreeable employment commands premium compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses coal miners to demonstrate how the disagreeable and dangerous nature of certain employments commands higher wages. He notes that while the work can be constant if desired, the inherent hardships justify the substantial wage premium over common labour. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/common-labour-wages.md b/examples/infospace-with-history/output/entities/common-labour-wages.md new file mode 100644 index 00000000..c48a03f8 --- /dev/null +++ b/examples/infospace-with-history/output/entities/common-labour-wages.md @@ -0,0 +1,21 @@ + + +# Common Labour Wages + +## Definition + +The standard compensation paid to unskilled or semi-skilled workers performing basic manual tasks, which serves as a benchmark against which wages in other occupations are compared and often adjusted. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith frequently references common labour wages as a baseline for comparing compensation across different employments. He notes that wages in skilled trades and manufacturing often differ only slightly from common labour wages, with the difference generally sufficient only to compensate for the expense of education and training. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/common-returns-of-stock.md b/examples/infospace-with-history/output/entities/common-returns-of-stock.md new file mode 100644 index 00000000..cfadbd5a --- /dev/null +++ b/examples/infospace-with-history/output/entities/common-returns-of-stock.md @@ -0,0 +1,21 @@ + + +# Common Returns of Stock + +## Definition + +The typical or average profits earned by capital employed in various trades under normal market conditions, which Smith argues should be sufficient to compensate for occasional losses and provide a surplus profit comparable to insurance returns if risk were fully compensated. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the concept of common returns to analyse whether different employments of stock offer adequate compensation for their risks. He argues that if hazardous trades like smuggling offered full compensation for risk, bankruptcies would not be more frequent in these trades than in safer enterprises, suggesting that risk is systematically underpriced. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/corporation-laws.md b/examples/infospace-with-history/output/entities/corporation-laws.md new file mode 100644 index 00000000..6fb1068c --- /dev/null +++ b/examples/infospace-with-history/output/entities/corporation-laws.md @@ -0,0 +1,21 @@ + + +# Corporation Laws + +## Definition + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies corporation laws as the principal mechanism by which European policy creates significant inequalities in economic advantages across different employments. He argues these laws restrain competition in some trades while increasing it in others, and obstruct the free circulation of labour and stock, ultimately harming both workers and consumers. + +## Economic Domain + +Regulation + +--- diff --git a/examples/infospace-with-history/output/entities/declining-manufacture.md b/examples/infospace-with-history/output/entities/declining-manufacture.md new file mode 100644 index 00000000..59fe45c2 --- /dev/null +++ b/examples/infospace-with-history/output/entities/declining-manufacture.md @@ -0,0 +1,23 @@ + + +# Declining Manufacture + +# Declining Manufacture + +## Definition + +A condition of industrial contraction where production is decreasing, leading to surplus labour supply as workers cannot easily transition to other employments due to legal and institutional barriers, forcing wages down below sustainable levels. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies declining manufactures as creating severe labour market distortions when workers cannot easily move to growing industries. He argues that institutional barriers like apprenticeship requirements prevent the natural reallocation of labour from shrinking to expanding sectors, causing unnecessary hardship for displaced workers. + +## Economic Domain + +Production + +--- diff --git a/examples/infospace-with-history/output/entities/exclusive-corporation.md b/examples/infospace-with-history/output/entities/exclusive-corporation.md new file mode 100644 index 00000000..4fc16304 --- /dev/null +++ b/examples/infospace-with-history/output/entities/exclusive-corporation.md @@ -0,0 +1,21 @@ + + +# Exclusive Corporation + +## Definition + +A legally privileged trading organisation that restricts membership and limits competition within its trade, enabling members to maintain higher prices and profits than would prevail under free market conditions. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith criticises exclusive corporations as mechanisms that weaken the natural discipline of the market by protecting members from competition. He argues that when workers must be employed regardless of performance, quality deteriorates and consumers suffer, while the public interest is sacrificed to private gain. + +## Economic Domain + +Regulation + +--- diff --git a/examples/infospace-with-history/output/entities/extraordinary-profits.md b/examples/infospace-with-history/output/entities/extraordinary-profits.md new file mode 100644 index 00000000..2055f4b3 --- /dev/null +++ b/examples/infospace-with-history/output/entities/extraordinary-profits.md @@ -0,0 +1,21 @@ + + +# Extraordinary Profits + +## Definition + +Returns on capital that significantly exceed the common or average profits in a particular trade or location, typically occurring when new enterprises are established or when demand conditions temporarily favour certain commodities. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith notes that extraordinary profits often occur when new manufactures are established or when particular trades experience unusual demand. However, he argues that competition eventually reduces these exceptional returns to the common level, demonstrating the equilibrating tendency of free markets. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/foreign-trade.md b/examples/infospace-with-history/output/entities/foreign-trade.md new file mode 100644 index 00000000..3f2982f0 --- /dev/null +++ b/examples/infospace-with-history/output/entities/foreign-trade.md @@ -0,0 +1,21 @@ + + +# Foreign Trade + +## Definition + +Commercial exchange between different countries, which Smith identifies as generally more uncertain in its returns than inland trade, though the degree of uncertainty varies among different branches of foreign commerce. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith notes that foreign trade, particularly certain branches like trade to North America, offers higher potential profits than inland trade due to greater uncertainty of returns. This observation about risk and reward in different types of commerce forms part of his analysis of profit differentials across employments of stock. + +## Economic Domain + +Exchange + +--- diff --git a/examples/infospace-with-history/output/entities/inland-trade.md b/examples/infospace-with-history/output/entities/inland-trade.md new file mode 100644 index 00000000..21eb08bb --- /dev/null +++ b/examples/infospace-with-history/output/entities/inland-trade.md @@ -0,0 +1,21 @@ + + +# Inland Trade + +## Definition + +Commercial exchange that occurs within the boundaries of a single country, as distinguished from foreign trade, which Smith notes is generally less uncertain in its returns and therefore typically offers lower profit rates than foreign commerce. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith observes that profits of stock vary with the certainty or uncertainty of returns, noting that inland trade is generally less risky than foreign trade. This observation contributes to his broader analysis of how different employments of capital offer varying risk-adjusted returns, though he argues these differences are less pronounced than wage differentials. + +## Economic Domain + +Exchange + +--- diff --git a/examples/infospace-with-history/output/entities/inn-or-tavern-keeper.md b/examples/infospace-with-history/output/entities/inn-or-tavern-keeper.md new file mode 100644 index 00000000..a730a452 --- /dev/null +++ b/examples/infospace-with-history/output/entities/inn-or-tavern-keeper.md @@ -0,0 +1,19 @@ + + +# Inn or Tavern Keeper + +## Definition + +An individual who operates a lodging and drinking establishment, which Smith identifies as a business that is neither agreeable nor creditable due to the lack of household autonomy and exposure to difficult customers, yet can yield substantial profits relative to the capital required. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses inn and tavern keeping to illustrate how disagreeable business conditions can lead to higher profits. Despite the personal drawbacks of the trade, the potential for significant returns attracts entrepreneurs willing to accept these disadvantages. + +## Economic Domain + +Distribution diff --git a/examples/infospace-with-history/output/entities/maritime-employment.md b/examples/infospace-with-history/output/entities/maritime-employment.md new file mode 100644 index 00000000..8f126e51 --- /dev/null +++ b/examples/infospace-with-history/output/entities/maritime-employment.md @@ -0,0 +1,21 @@ + + +# Maritime Employment + +## Definition + +Work in the shipping and naval services, which Smith analyses as offering better prospects for advancement and fortune than military service, though still involving significant risks and hardships that are compensated through wages and the hope of prize money. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith compares maritime with military employment to illustrate how different occupations offer varying combinations of risk, reward, and advancement opportunities. He notes that while sailors earn wages comparable to common labourers, the possibility of prize money and advancement makes the trade attractive despite its hardships. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/military-employment.md b/examples/infospace-with-history/output/entities/military-employment.md new file mode 100644 index 00000000..f4fb51dc --- /dev/null +++ b/examples/infospace-with-history/output/entities/military-employment.md @@ -0,0 +1,21 @@ + + +# Military Employment + +## Definition + +Service in the armed forces, which Smith analyses as offering poor compensation relative to the risks involved, with limited prospects for advancement and wages that fall below those of common labourers, sustained only by romantic notions of honour and distinction. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses military service as an example of an occupation where the actual compensation falls far below what would be necessary to attract volunteers if people calculated risks and rewards rationally. He argues that romantic notions of honour sustain recruitment despite poor material conditions. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/natural-state-of-employments.md b/examples/infospace-with-history/output/entities/natural-state-of-employments.md new file mode 100644 index 00000000..b552da06 --- /dev/null +++ b/examples/infospace-with-history/output/entities/natural-state-of-employments.md @@ -0,0 +1,21 @@ + + +# 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 + +--- diff --git a/examples/infospace-with-history/output/entities/ordinary-state-of-employments.md b/examples/infospace-with-history/output/entities/ordinary-state-of-employments.md new file mode 100644 index 00000000..d3c82e96 --- /dev/null +++ b/examples/infospace-with-history/output/entities/ordinary-state-of-employments.md @@ -0,0 +1,21 @@ + + +# Ordinary State of Employments + +## Definition + +The typical or usual condition of economic activities when demand for labour fluctuates around normal levels, as opposed to periods of extraordinary demand or declining industries, representing the baseline against which exceptional wage variations are measured. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith distinguishes between the ordinary or natural state of employments and periods when demand for specific types of labour rises above or falls below usual levels. He uses this distinction to explain how temporary variations in demand affect wages differently across occupations, with some trades maintaining more constant employment than others. + +## Economic Domain + +General Theory + +--- diff --git a/examples/infospace-with-history/output/entities/poacher.md b/examples/infospace-with-history/output/entities/poacher.md new file mode 100644 index 00000000..68361ff4 --- /dev/null +++ b/examples/infospace-with-history/output/entities/poacher.md @@ -0,0 +1,21 @@ + + +# Poacher + +## Definition + +An individual who illegally hunts or fishes on private property, which Smith identifies as typically being very poor even in countries where poaching is severely punished, illustrating how natural enjoyment of certain activities can drive down compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the example of poachers to demonstrate how natural human inclinations toward certain activities can create oversupply of labour in those occupations, driving wages down to subsistence levels. This illustrates his principle that agreeable employments tend to be poorly compensated. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/principal-employments.md b/examples/infospace-with-history/output/entities/principal-employments.md new file mode 100644 index 00000000..c358c5e0 --- /dev/null +++ b/examples/infospace-with-history/output/entities/principal-employments.md @@ -0,0 +1,23 @@ + + +# Principal Employments + +# Principal Employments + +## Definition + +The main or primary occupation through which individuals derive their subsistence, as opposed to secondary or occasional work undertaken during leisure time, which affects how wages are determined and how workers value their time. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith argues that equality in the advantages and disadvantages of different employments can only occur when those employments are the principal means of subsistence for the workers. When people engage in a trade only occasionally while maintaining other primary occupations, they may accept lower wages, disrupting the natural equilibrium of compensation. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/public-education-of-professionals.md b/examples/infospace-with-history/output/entities/public-education-of-professionals.md new file mode 100644 index 00000000..002a4a33 --- /dev/null +++ b/examples/infospace-with-history/output/entities/public-education-of-professionals.md @@ -0,0 +1,21 @@ + + +# Public Education of Professionals + +## Definition + +The practice of funding the education of clergy, lawyers, physicians, and other professionals through public or charitable means, which creates an oversupply of practitioners and drives down their earnings below what would prevail if education were funded privately. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies publicly funded professional education as a policy that creates inequalities by flooding certain professions with candidates willing to work for lower compensation. He argues this practice degrades the quality and remuneration of respected professions like law and medicine, while creating a class of "men of letters" who must write for subsistence. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/public-executioner.md b/examples/infospace-with-history/output/entities/public-executioner.md new file mode 100644 index 00000000..13244ea4 --- /dev/null +++ b/examples/infospace-with-history/output/entities/public-executioner.md @@ -0,0 +1,23 @@ + + +# Public Executioner + +# Public Executioner + +## Definition + +The state official responsible for carrying out capital punishment, which Smith identifies as the most detestable of all employments yet paradoxically better paid than most common trades relative to the amount of work performed. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the public executioner as an extreme example of how disagreeable employment commands premium compensation. This illustrates his broader principle that wages vary not only with the skill required but also with the agreeableness or disagreeableness of the work itself. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/public-lottery.md b/examples/infospace-with-history/output/entities/public-lottery.md new file mode 100644 index 00000000..253fbcb3 --- /dev/null +++ b/examples/infospace-with-history/output/entities/public-lottery.md @@ -0,0 +1,21 @@ + + +# Public Lottery + +## Definition + +A government-sponsored gambling scheme where participants purchase tickets for chances to win prizes, which Smith uses as an analogy to illustrate how people systematically overvalue potential gains while undervaluing probable losses. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith employs the public lottery as a metaphor for certain professions where a few individuals achieve great success while most fail completely. He argues that just as lottery players overvalue their chances of winning, people entering professions like law or the arts often overestimate their probability of success. + +## Economic Domain + +General Theory + +--- diff --git a/examples/infospace-with-history/output/entities/public-mourning-effects.md b/examples/infospace-with-history/output/entities/public-mourning-effects.md new file mode 100644 index 00000000..09b99af7 --- /dev/null +++ b/examples/infospace-with-history/output/entities/public-mourning-effects.md @@ -0,0 +1,21 @@ + + +# Public Mourning Effects + +## Definition + +The temporary increase in demand for black cloth and related mourning goods that raises their market price above the natural price, creating higher profits for dealers in these commodities during periods of national bereavement. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses public mourning as an example of how extraordinary demand can temporarily raise the price of specific commodities above their natural price, affecting the profits of those engaged in producing or selling these goods. This illustrates his broader point about how variations in demand create temporary inequalities in profits across different employments. + +## Economic Domain + +Exchange + +--- diff --git a/examples/infospace-with-history/output/entities/retail-trade.md b/examples/infospace-with-history/output/entities/retail-trade.md new file mode 100644 index 00000000..425a5469 --- /dev/null +++ b/examples/infospace-with-history/output/entities/retail-trade.md @@ -0,0 +1,21 @@ + + +# Retail Trade + +## Definition + +The sale of goods in small quantities directly to consumers, which Smith notes typically offers higher apparent profits than wholesale trade due to the additional labour and skill required, though much of this apparent profit represents disguised wages. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith analyses retail trade to demonstrate how apparent profit differentials often reflect differences in labour rather than capital returns. He argues that the higher apparent profits of retail merchants largely compensate for the additional skill, effort, and risk involved in direct consumer transactions. + +## Economic Domain + +Exchange + +--- diff --git a/examples/infospace-with-history/output/entities/scarcity-of-hands.md b/examples/infospace-with-history/output/entities/scarcity-of-hands.md new file mode 100644 index 00000000..17c9b3c8 --- /dev/null +++ b/examples/infospace-with-history/output/entities/scarcity-of-hands.md @@ -0,0 +1,21 @@ + + +# Scarcity of Hands + +## Definition + +A condition in specific localities where the supply of available workers falls short of demand, causing wages to rise above their normal level as employers compete for limited labour resources. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith explains that scarcity of hands in one parish cannot be relieved by the superabundance of workers in another when settlement laws obstruct labour mobility. This creates artificial wage disparities between regions that would not exist under free movement of labour, demonstrating how policy can prevent natural market adjustments. + +## Economic Domain + +Distribution + +--- diff --git a/examples/infospace-with-history/output/entities/settlement-laws.md b/examples/infospace-with-history/output/entities/settlement-laws.md new file mode 100644 index 00000000..1f19c3f7 --- /dev/null +++ b/examples/infospace-with-history/output/entities/settlement-laws.md @@ -0,0 +1,21 @@ + + +# Settlement Laws + +## Definition + +Legal provisions that restrict the movement of poor persons by requiring them to obtain official settlement in a parish before residing there, creating significant barriers to labour mobility and preventing workers from moving to areas where their skills might be most valued. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith presents settlement laws as a particularly harmful form of labour market regulation unique to England, which obstructs the free circulation of labour from place to place. He argues these laws prevent the natural adjustment of wages across regions and force workers to remain in parishes where their labour is less valuable. + +## Economic Domain + +Regulation + +--- diff --git a/examples/infospace-with-history/output/entities/smuggling-trade.md b/examples/infospace-with-history/output/entities/smuggling-trade.md new file mode 100644 index 00000000..869a9462 --- /dev/null +++ b/examples/infospace-with-history/output/entities/smuggling-trade.md @@ -0,0 +1,21 @@ + + +# Smuggling Trade + +## Definition + +The illegal transportation of goods across borders to avoid customs duties and trade restrictions, which Smith identifies as the most hazardous of all trades but also potentially the most profitable when successful. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses smuggling as an extreme example of how risk affects profits, noting that while it offers the highest potential returns, it also carries the greatest risk of bankruptcy. He argues that competition among smugglers eventually reduces profits to levels that only barely compensate for the risk involved. + +## Economic Domain + +Exchange + +--- diff --git a/examples/infospace-with-history/output/entities/speculative-trade.md b/examples/infospace-with-history/output/entities/speculative-trade.md new file mode 100644 index 00000000..4b424215 --- /dev/null +++ b/examples/infospace-with-history/output/entities/speculative-trade.md @@ -0,0 +1,21 @@ + + +# Speculative Trade + +## Definition + +A form of commerce where merchants rapidly shift between different commodities and markets based on anticipated profit opportunities, rather than maintaining regular, established business operations in specific trades, characterized by irregular and unpredictable returns. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts speculative trade with regular established business, noting that while it can produce sudden fortunes through successful speculation, it is equally likely to produce losses. He observes that this form of trade can only be carried on in places with extensive commerce and correspondence where intelligence about market conditions is readily available. + +## Economic Domain + +Exchange + +--- diff --git a/examples/infospace-with-history/output/entities/university-of-trades.md b/examples/infospace-with-history/output/entities/university-of-trades.md new file mode 100644 index 00000000..cd87c0b9 --- /dev/null +++ b/examples/infospace-with-history/output/entities/university-of-trades.md @@ -0,0 +1,21 @@ + + +# University of Trades + +## Definition + +The medieval term for incorporated trades and crafts, which Smith notes was the proper Latin name for any incorporation, drawing a parallel between the seven-year terms for apprenticeships and the seven-year terms for obtaining academic degrees. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the historical terminology of "universities" for trades to illustrate the common origin of both craft guilds and academic institutions in medieval incorporation practices. This etymological observation supports his argument that long apprenticeship requirements have no rational basis in the nature of the work itself. + +## Economic Domain + +Regulation + +--- diff --git a/examples/infospace-with-history/output/entities/wholesale-trade.md b/examples/infospace-with-history/output/entities/wholesale-trade.md new file mode 100644 index 00000000..ce87401b --- /dev/null +++ b/examples/infospace-with-history/output/entities/wholesale-trade.md @@ -0,0 +1,21 @@ + + +# Wholesale Trade + +## Definition + +The sale of goods in large quantities to retailers or other businesses rather than directly to consumers, which Smith notes typically offers lower apparent profits than retail trade but represents more purely the returns to capital investment. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts wholesale with retail trade to illustrate how profit differentials across employments often reflect differences in the nature of the work rather than pure returns to capital. He argues that wholesale merchants earn more modest but more genuine profits on their stock investments. + +## Economic Domain + +Exchange + +--- diff --git a/examples/infospace-with-history/output/mappings/book-1-chapter-10-map-to-vsm-raw.md b/examples/infospace-with-history/output/mappings/book-1-chapter-10-map-to-vsm-raw.md new file mode 100644 index 00000000..5be5f209 --- /dev/null +++ b/examples/infospace-with-history/output/mappings/book-1-chapter-10-map-to-vsm-raw.md @@ -0,0 +1,899 @@ +--- MAPPING: wages of labour-to-S1 Operations --- + +# wages of labour -> S1 Operations + +## Economic Entity Reference + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## VSM Concept Reference + +System 1 represents the primary activities that produce the organisation's purpose. These are the operational units that directly create value through concrete work and production activities. Each operational element is itself a viable system with autonomy within constraints. + +## Mapping Rationale + +Wages of labour directly represent the compensation for operational work performed by System 1 units. The labour itself is the primary productive activity that creates economic value, making wages the direct price of System 1 operations. Smith's analysis of wage differentials across employments reflects how different operational activities command different compensation based on their characteristics. + +## Mapping Strength + +Strong + +--- MAPPING: wages of labour-to-S2 Coordination --- + +# wages of labour -> S2 Coordination + +## Economic Entity Reference + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## VSM Concept Reference + +System 2 provides the information channels and bodies that allow primary activities to communicate with each other and coordinate. It dampens oscillations and resolves conflicts between operational units through standardisation and scheduling mechanisms. + +## Mapping Rationale + +Wage rates function as coordination signals that balance labour supply and demand across different employments. They resolve conflicts between workers competing for positions and employers competing for labour by providing a common metric for valuing different types of work. The five circumstances Smith identifies that affect wages represent the coordination parameters that balance labour markets. + +## Mapping Strength + +Strong + +--- MAPPING: wages of labour-to-S3 Control --- + +# wages of labour -> S3 Control + +## Economic Entity Reference + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## VSM Concept Reference + +System 3 establishes the rules, resources, rights, and responsibilities of System 1 operations and provides an interface between operational units and higher management. It represents day-to-day control that optimises the internal environment. + +## Mapping Rationale + +Wages represent the primary mechanism through which economic control is exercised over labour. They establish the resource allocation rules for human capital and create the framework within which workers operate. Wage policies and labour regulations fall under System 3's domain of internal economic governance. + +## Mapping Strength + +Strong + +--- MAPPING: profits of stock-to-S1 Operations --- + +# profits of stock -> S1 Operations + +## Economic Entity Reference + +The returns earned by those who employ capital in various trades and employments, which are affected by the agreeableness or disagreeableness of the business and the risk or security with which it is attended, but are less influenced by the difficulty of learning the trade compared to wages of labour. + +## VSM Concept Reference + +System 1 represents the primary activities that produce the organisation's purpose. These are the operational units that directly create value through concrete work and production activities, including the deployment of capital in productive enterprises. + +## Mapping Rationale + +Profits of stock represent the returns to capital deployed in operational activities that directly produce economic value. The employment of stock in various trades constitutes the operational work of System 1 units at the capital deployment level, making profits the direct measure of success for these operational activities. + +## Mapping Strength + +Strong + +--- MAPPING: profits of stock-to-S4 Intelligence --- + +# profits of stock -> S4 Intelligence + +## Economic Entity Reference + +The returns earned by those who employ capital in various trades and employments, which are affected by the agreeableness or disagreeableness of the business and the risk or security with which it is attended, but are less influenced by the difficulty of learning the trade compared to wages of labour. + +## VSM Concept Reference + +System 4 captures all relevant information about the outside-and-then environment and is responsible for strategic responses. It looks outward to monitor how the organisation needs to adapt to remain viable. + +## Mapping Rationale + +Profits serve as intelligence signals about the viability of different capital employments in the external environment. They indicate which trades and markets offer favourable conditions for investment and which do not, providing the information necessary for strategic capital allocation decisions. + +## Mapping Strength + +Strong + +--- MAPPING: apprenticeships-to-S3 Control --- + +# apprenticeships -> S3 Control + +## Economic Entity Reference + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## VSM Concept Reference + +System 3 establishes the rules, resources, rights, and responsibilities of System 1 operations. It represents the regulatory framework that governs how operational units function and interact. + +## Mapping Rationale + +Apprenticeships represent a regulatory mechanism that controls entry into trades and governs the relationship between masters and apprentices. They establish the rules for skill transmission and create institutional barriers that affect the internal structure of economic operations. + +## Mapping Strength + +Strong + +--- MAPPING: apprenticeships-to-S2 Coordination --- + +# apprenticeships -> S2 Coordination + +## Economic Entity Reference + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that allow operational units to communicate and resolve conflicts. It standardises practices and creates the information channels necessary for smooth operation. + +## Mapping Rationale + +Apprenticeship systems coordinate the transmission of skills across generations and establish standardised training periods that affect labour market dynamics. They create coordination mechanisms for skill development that influence how different trades maintain their workforce. + +## Mapping Strength + +Moderate + +--- MAPPING: corporation laws-to-S3 Control --- + +# corporation laws -> S3 Control + +## Economic Entity Reference + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the rules and constraints within which System 1 units operate. + +## Mapping Rationale + +Corporation laws represent direct regulatory control over economic activities, establishing who can participate in which trades and under what conditions. They create the institutional framework that governs market operations and restricts competition. + +## Mapping Strength + +Strong + +--- MAPPING: corporation laws-to-S5 Policy --- + +# corporation laws -> S5 Policy + +## Economic Entity Reference + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## VSM Concept Reference + +System 5 defines the identity, values, and purpose of the organisation. It represents the supreme policy-making authority that establishes the overarching framework within which all other systems operate. + +## Mapping Rationale + +Corporation laws reflect sovereign policy choices about the structure of economic organisation and the balance between competition and regulation. They express fundamental policy decisions about economic identity and the role of the state in market governance. + +## Mapping Strength + +Strong + +--- MAPPING: settlement laws-to-S3 Control --- + +# settlement laws -> S3 Control + +## Economic Entity Reference + +Legal provisions that restrict the movement of poor persons by requiring them to obtain official settlement in a parish before residing there, creating significant barriers to labour mobility and preventing workers from moving to areas where their skills might be most valued. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations and controls the internal environment. It creates the rules that determine how resources, including labour, can be deployed. + +## Mapping Rationale + +Settlement laws represent direct regulatory control over labour mobility and resource allocation. They establish the institutional framework that governs where workers can operate and create artificial constraints on the internal economic environment. + +## Mapping Strength + +Strong + +--- MAPPING: certificates-to-S2 Coordination --- + +# certificates -> S2 Coordination + +## Economic Entity Reference + +Official documents issued by one parish that certify a person's legal settlement there, allowing them to reside in another parish without gaining settlement rights there, serving as a partial remedy to the settlement laws' restrictions on labour mobility. + +## VSM Concept Reference + +System 2 provides coordination mechanisms that allow different operational units to communicate and resolve conflicts. It creates standardised procedures for managing interactions between different parts of the system. + +## Mapping Rationale + +Certificates function as coordination mechanisms that facilitate labour movement between parishes while maintaining settlement control. They create a standardised administrative procedure for managing the complex interactions between different local jurisdictions. + +## Mapping Strength + +Strong + +--- MAPPING: public education of professionals-to-S3 Control --- + +# public education of professionals -> S3 Control + +## Economic Entity Reference + +The practice of funding the education of clergy, lawyers, physicians, and other professionals through public or charitable means, which creates an oversupply of practitioners and drives down their earnings below what would prevail if education were funded privately. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the institutional structures that control how resources are allocated and how professions are organised. + +## Mapping Rationale + +Public funding of professional education represents a regulatory choice about how human capital is developed and deployed. It establishes the institutional framework that governs professional training and creates artificial conditions in the labour market. + +## Mapping Strength + +Strong + +--- MAPPING: speculative trade-to-S4 Intelligence --- + +# speculative trade -> S4 Intelligence + +## Economic Entity Reference + +A form of commerce where merchants rapidly shift between different commodities and markets based on anticipated profit opportunities, rather than maintaining regular, established business operations in specific trades, characterized by irregular and unpredictable returns. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats. + +## Mapping Rationale + +Speculative trade functions as an intelligence-gathering activity that responds to environmental signals about market conditions. It represents the strategic adaptation of capital to changing opportunities in the external economic environment. + +## Mapping Strength + +Strong + +--- MAPPING: natural state of employments-to-S5 Policy --- + +# natural state of employments -> S5 Policy + +## Economic Entity Reference + +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. + +## VSM Concept Reference + +System 5 defines the identity, values, and purpose of the organisation. It represents the supreme policy-making authority that establishes the overarching framework and philosophical foundations. + +## Mapping Rationale + +The concept of the natural state represents the fundamental policy framework for understanding economic organisation. It expresses the philosophical identity of the economic system and the policy principles that should govern economic activity. + +## Mapping Strength + +Strong + +--- MAPPING: ordinary state of employments-to-S1 Operations --- + +# ordinary state of employments -> S1 Operations + +## Economic Entity Reference + +The typical or usual condition of economic activities when demand for labour fluctuates around normal levels, as opposed to periods of extraordinary demand or declining industries, representing the baseline against which exceptional wage variations are measured. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose under normal conditions. These are the routine productive activities that constitute the day-to-day operations. + +## Mapping Rationale + +The ordinary state of employments represents the baseline operational condition of the economic system under normal circumstances. It describes the routine functioning of System 1 units when they are operating under typical market conditions. + +## Mapping Strength + +Strong + +--- MAPPING: principal employments-to-S1 Operations --- + +# principal employments -> S1 Operations + +## Economic Entity Reference + +The main or primary occupation through which individuals derive their subsistence, as opposed to secondary or occasional work undertaken during leisure time, which affects how wages are determined and how workers value their time. + +## VSM Concept Reference + +System 1 represents the primary activities that produce the organisation's purpose. These are the main operational units that directly create value through their core productive activities. + +## Mapping Rationale + +Principal employments are the core System 1 operations through which individuals generate their primary economic output. They represent the main productive activities that constitute the fundamental operations of the economic system. + +## Mapping Strength + +Strong + +--- MAPPING: public mourning effects-to-S4 Intelligence --- + +# public mourning effects -> S4 Intelligence + +## Economic Entity Reference + +The temporary increase in demand for black cloth and related mourning goods that raises their market price above the natural price, creating higher profits for dealers in these commodities during periods of national bereavement. + +## VSM Concept Reference + +System 4 captures information about external environmental conditions and identifies opportunities for strategic response. It monitors changes in the environment that require adaptation. + +## Mapping Rationale + +Public mourning effects represent environmental signals that create temporary market opportunities requiring strategic response. They function as intelligence about changing demand conditions that affect capital allocation decisions. + +## Mapping Strength + +Strong + +--- MAPPING: piece-work wages-to-S1 Operations --- + +# piece-work wages -> S1 Operations + +## Economic Entity Reference + +A system of compensation where workers are paid according to the quantity of output they produce rather than receiving a fixed daily or weekly wage, creating a direct incentive for increased productivity and diligence. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce value. These are the direct productive activities that create economic output. + +## Mapping Rationale + +Piece-work wages are directly tied to operational output and productivity. They represent the compensation mechanism for System 1 units based on their actual production rather than time spent, making them intrinsic to operational performance. + +## Mapping Strength + +Strong + +--- MAPPING: piece-work wages-to-S3 Control --- + +# piece-work wages -> S3 Control + +## Economic Entity Reference + +A system of compensation where workers are paid according to the quantity of output they produce rather than receiving a fixed daily or weekly wage, creating a direct incentive for increased productivity and diligence. + +## VSM Concept Reference + +System 3 establishes the rules and controls that govern how System 1 operations function. It creates the incentive structures and performance management systems. + +## Mapping Rationale + +Piece-work wages represent a control mechanism that governs worker behaviour and productivity. They establish the rules for compensation that directly influence operational performance and create the incentive structure for System 1 units. + +## Mapping Strength + +Strong + +--- MAPPING: common labour wages-to-S1 Operations --- + +# common labour wages -> S1 Operations + +## Economic Entity Reference + +The standard compensation paid to unskilled or semi-skilled workers performing basic manual tasks, which serves as a benchmark against which wages in other occupations are compared and often adjusted. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the fundamental productive activities that create basic economic value. + +## Mapping Rationale + +Common labour wages represent the baseline compensation for fundamental System 1 operations. They establish the standard for measuring the value of basic productive work and serve as the reference point for all other operational compensation. + +## Mapping Strength + +Strong + +--- MAPPING: scarcity of hands-to-S2 Coordination --- + +# scarcity of hands -> S2 Coordination + +## Economic Entity Reference + +A condition in specific localities where the supply of available workers falls short of demand, causing wages to rise above their normal level as employers compete for limited labour resources. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that balance supply and demand between different operational units. It resolves conflicts and ensures smooth operation across the system. + +## Mapping Rationale + +Scarcity of hands represents a coordination problem that requires System 2 mechanisms to resolve. It creates the need for wage adjustments and labour mobility that coordinate the distribution of workers across different employments. + +## Mapping Strength + +Strong + +--- MAPPING: overstocked market conditions-to-S2 Coordination --- + +# overstocked market conditions -> S2 Coordination + +## Economic Entity Reference + +A situation where the supply of workers in a particular trade exceeds the demand for their services, forcing wages down below what would be necessary to attract new entrants and causing existing practitioners to accept lower compensation. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that balance supply and demand and resolve conflicts between operational units. It ensures that resources are properly distributed across the system. + +## Mapping Rationale + +Overstocked market conditions represent coordination failures that require System 2 mechanisms to resolve. They create the need for market adjustments that coordinate the distribution of workers across different employments. + +## Mapping Strength + +Strong + +--- MAPPING: advancing state of manufacture-to-S1 Operations --- + +# advancing state of manufacture -> S1 Operations + +## Economic Entity Reference + +A condition of industrial development where production is expanding, creating continual demand for new workers and maintaining higher wages due to the growing need for labour in the expanding enterprise. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through manufacturing and production. + +## Mapping Rationale + +Advancing manufacture represents the operational expansion of System 1 units in the manufacturing sector. It describes the growth and development of primary productive activities that create economic value through increased production. + +## Mapping Strength + +Strong + +--- MAPPING: declining manufacture-to-S1 Operations --- + +# declining manufacture -> S1 Operations + +## Economic Entity Reference + +A condition of industrial contraction where production is decreasing, leading to surplus labour supply as workers cannot easily transition to other employments due to legal and institutional barriers, forcing wages down below sustainable levels. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through manufacturing and production. + +## Mapping Rationale + +Declining manufacture represents the operational contraction of System 1 units in the manufacturing sector. It describes the reduction and potential failure of primary productive activities that create economic value through decreased production. + +## Mapping Strength + +Strong + +--- MAPPING: inland trade-to-S1 Operations --- + +# inland trade -> S1 Operations + +## Economic Entity Reference + +Commercial exchange that occurs within the boundaries of a single country, as distinguished from foreign trade, which Smith notes is generally less uncertain in its returns and therefore typically offers lower profit rates than foreign commerce. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through commercial exchange and trade. + +## Mapping Rationale + +Inland trade represents the operational activities of System 1 units engaged in domestic commercial exchange. It constitutes the primary productive work of merchants and traders operating within the national economy. + +## Mapping Strength + +Strong + +--- MAPPING: foreign trade-to-S4 Intelligence --- + +# foreign trade -> S4 Intelligence + +## Economic Entity Reference + +Commercial exchange between different countries, which Smith identifies as generally more uncertain in its returns than inland trade, though the degree of uncertainty varies among different branches of foreign commerce. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats in the broader environment. + +## Mapping Rationale + +Foreign trade functions as an intelligence-gathering activity that responds to environmental signals about international market conditions. It represents the strategic adaptation of capital to opportunities in the external global economic environment. + +## Mapping Strength + +Strong + +--- MAPPING: smuggling trade-to-S4 Intelligence --- + +# smuggling trade -> S4 Intelligence + +## Economic Entity Reference + +The illegal transportation of goods across borders to avoid customs duties and trade restrictions, which Smith identifies as the most hazardous of all trades but also potentially the most profitable when successful. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats, including those that exist in regulatory grey areas. + +## Mapping Rationale + +Smuggling trade represents the extreme end of environmental scanning and strategic response to regulatory constraints. It functions as an intelligence activity that identifies and exploits gaps in the regulatory environment for strategic advantage. + +## Mapping Strength + +Strong + +--- MAPPING: common returns of stock-to-S1 Operations --- + +# common returns of stock -> S1 Operations + +## Economic Entity Reference + +The typical or average profits earned by capital employed in various trades under normal market conditions, which Smith argues should be sufficient to compensate for occasional losses and provide a surplus profit comparable to insurance returns if risk were fully compensated. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through the deployment of capital in various trades. + +## Mapping Rationale + +Common returns of stock represent the baseline operational performance of capital deployed in System 1 activities. They establish the standard measure of success for capital employed in primary productive activities across different trades. + +## Mapping Strength + +Strong + +--- MAPPING: extraordinary profits-to-S1 Operations --- + +# extraordinary profits -> S1 Operations + +## Economic Entity Reference + +Returns on capital that significantly exceed the common or average profits in a particular trade or location, typically occurring when new enterprises are established or when demand conditions temporarily favour certain commodities. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value, including new enterprises and expanding operations. + +## Mapping Rationale + +Extraordinary profits represent exceptional operational performance by System 1 units. They describe the above-normal returns achieved by primary productive activities during periods of expansion or favourable market conditions. + +## Mapping Strength + +Strong + +--- MAPPING: public registers of manufactures-to-S2 Coordination --- + +# public registers of manufactures -> S2 Coordination + +## Economic Entity Reference + +Official records maintained in towns that list the names and locations of tradesmen practicing specific occupations, which Smith argues facilitates the formation of trade combinations and price-fixing agreements by making it easier for competitors to communicate and coordinate. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that allow operational units to communicate and resolve conflicts. It creates standardised procedures for managing interactions between different parts of the system. + +## Mapping Rationale + +Public registers function as coordination mechanisms that facilitate communication between tradesmen. They create standardised administrative procedures that coordinate the interactions between different members of the same trade. + +## Mapping Strength + +Strong + +--- MAPPING: exclusive corporation-to-S3 Control --- + +# exclusive corporation -> S3 Control + +## Economic Entity Reference + +A legally privileged trading organisation that restricts membership and limits competition within its trade, enabling members to maintain higher prices and profits than would prevail under free market conditions. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the rules and constraints within which System 1 units operate and establishes the institutional structure of the economy. + +## Mapping Rationale + +Exclusive corporations represent direct regulatory control over economic activities, establishing who can participate in which trades and under what conditions. They create the institutional framework that governs market operations and restricts competition. + +## Mapping Strength + +Strong + +--- MAPPING: adulterine guilds-to-S3 Control --- + +# adulterine guilds -> S3 Control + +## Economic Entity Reference + +Unauthorised trade associations that attempt to exercise corporate privileges without formal legal incorporation, which Smith notes were sometimes tolerated by medieval kings in exchange for annual fines, representing early forms of rent-seeking behaviour. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the institutional structures that control how professions and trades are organised and regulated. + +## Mapping Rationale + +Adulterine guilds represent informal regulatory mechanisms that attempt to control trade practices outside the formal legal framework. They establish alternative rules for market governance that operate parallel to official regulatory structures. + +## Mapping Strength + +Moderate + +--- MAPPING: university of trades-to-S3 Control --- + +# university of trades -> S3 Control + +## Economic Entity Reference + +The medieval term for incorporated trades and crafts, which Smith notes was the proper Latin name for any incorporation, drawing a parallel between the seven-year terms for apprenticeships and the seven-year terms for obtaining academic degrees. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the institutional structures that control how professions and trades are organised and regulated. + +## Mapping Rationale + +The university of trades represents the historical regulatory framework that governed craft organisation and skill transmission. It established the institutional rules for trade governance and professional regulation. + +## Mapping Strength + +Strong + +--- MAPPING: assize of bread-to-S3 Control --- + +# assize of bread -> S3 Control + +## Economic Entity Reference + +A legal regulation that fixes the price of bread based on the price of wheat, which Smith identifies as one of the few remaining examples of medieval attempts to regulate merchant profits by controlling commodity prices. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the rules and constraints within which System 1 units operate, including price controls and market regulations. + +## Mapping Rationale + +The assize of bread represents direct regulatory control over commodity prices and market operations. It establishes the institutional framework that governs how essential goods are priced and distributed in the economy. + +## Mapping Strength + +Strong + +--- MAPPING: retail trade-to-S1 Operations --- + +# retail trade -> S1 Operations + +## Economic Entity Reference + +The sale of goods in small quantities directly to consumers, which Smith notes typically offers higher apparent profits than wholesale trade due to the additional labour and skill required, though much of this apparent profit represents disguised wages. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through commercial exchange and trade. + +## Mapping Rationale + +Retail trade represents the operational activities of System 1 units engaged in direct consumer commerce. It constitutes the primary productive work of merchants operating at the final stage of the distribution chain. + +## Mapping Strength + +Strong + +--- MAPPING: wholesale trade-to-S1 Operations --- + +# wholesale trade -> S1 Operations + +## Economic Entity Reference + +The sale of goods in large quantities to retailers or other businesses rather than directly to consumers, which Smith notes typically offers lower apparent profits than retail trade but represents more purely the returns to capital investment. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through commercial exchange and trade. + +## Mapping Rationale + +Wholesale trade represents the operational activities of System 1 units engaged in bulk commercial exchange. It constitutes the primary productive work of merchants operating at the intermediate stage of the distribution chain. + +## Mapping Strength + +Strong + +--- MAPPING: public lottery-to-S4 Intelligence --- + +# public lottery -> S4 Intelligence + +## Economic Entity Reference + +A government-sponsored gambling scheme where participants purchase tickets for chances to win prizes, which Smith uses as an analogy to illustrate how people systematically overvalue potential gains while undervaluing probable losses. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats, including those based on probability and risk assessment. + +## Mapping Rationale + +The public lottery functions as an intelligence mechanism about human decision-making under uncertainty. It represents the strategic assessment of risk and reward in the external environment of economic opportunities. + +## Mapping Strength + +Moderate + +--- MAPPING: maritime employment-to-S1 Operations --- + +# maritime employment -> S1 Operations + +## Economic Entity Reference + +Work in the shipping and naval services, which Smith analyses as offering better prospects for advancement and fortune than military service, though still involving significant risks and hardships that are compensated through wages and the hope of prize money. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through maritime commerce and naval services. + +## Mapping Rationale + +Maritime employment represents the operational activities of System 1 units engaged in shipping and naval services. It constitutes the primary productive work of sailors and naval personnel who create economic value through maritime commerce. + +## Mapping Strength + +Strong + +--- MAPPING: military employment-to-S1 Operations --- + +# military employment -> S1 Operations + +## Economic Entity Reference + +Service in the armed forces, which Smith analyses as offering poor compensation relative to the risks involved, with limited prospects for advancement and wages that fall below those of common labourers, sustained only by romantic notions of honour and distinction. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through military service and national defence. + +## Mapping Rationale + +Military employment represents the operational activities of System 1 units engaged in armed forces service. It constitutes the primary productive work of soldiers who create economic value through national defence and military operations. + +## Mapping Strength + +Strong + +--- MAPPING: public executioner-to-S1 Operations --- + +# public executioner -> S1 Operations + +## Economic Entity Reference + +The state official responsible for carrying out capital punishment, which Smith identifies as the most detestable of all employments yet paradoxically better paid than most common trades relative to the amount of work performed. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value, even when they involve socially necessary but disagreeable work. + +## Mapping Rationale + +Public executioner represents the operational activities of System 1 units engaged in state execution services. It constitutes the primary productive work of state officials who create economic value through the performance of necessary but socially disagreeable functions. + +## Mapping Strength + +Strong + +--- MAPPING: poacher-to-S1 Operations --- + +# poacher -> S1 Operations + +## Economic Entity Reference + +An individual who illegally hunts or fishes on private property, which Smith identifies as typically being very poor even in countries where poaching is severely punished, illustrating how natural enjoyment of certain activities can drive down compensation. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value, even when they operate outside legal frameworks. + +## Mapping Rationale + +Poacher represents the operational activities of System 1 units engaged in illegal hunting and fishing. It constitutes the primary productive work of individuals who create economic value through the extraction of natural resources, even when operating outside legal frameworks. + +## Mapping Strength + +Moderate + +--- MAPPING: coal-heaver-to-S1 Operations --- + +# coal-heaver -> S1 Operations + +## Economic Entity Reference + +A labourer who unloads coal from ships, which Smith identifies as performing work that is extremely arduous, dirty, and subject to irregular employment, commanding wages that are four to five times higher than common labour. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through manual labour and material handling. + +## Mapping Rationale + +Coal-heaver represents the operational activities of System 1 units engaged in manual labour for material handling. It constitutes the primary productive work of labourers who create economic value through the physical movement of coal and other materials. + +## Mapping Strength + +Strong + +--- MAPPING: collier-to-S1 Operations --- + +# collier -> S1 Operations + +## Economic Entity Reference + +A coal miner, which Smith identifies as performing extremely dangerous and dirty work that commands wages double or triple those of common labour, illustrating how hazardous and disagreeable employment commands premium compensation. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through extraction and mining operations. + +## Mapping Rationale + +Collier represents the operational activities of System 1 units engaged in coal mining. It constitutes the primary productive work of miners who create economic value through the extraction of coal from the earth. + +## Mapping Strength + +Strong + +--- MAPPING: butcher trade-to-S1 Operations --- + +# butcher trade -> S1 Operations + +## Economic Entity Reference + +The commercial activity of slaughtering and selling meat, which Smith identifies as a brutal and odious business that nonetheless offers higher profits than most common trades due to its disagreeable nature. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through food processing and distribution. + +## Mapping Rationale + +Butcher trade represents the operational activities of System 1 units engaged in meat processing and distribution. It constitutes the primary productive work of butchers who create economic value through the transformation of livestock into consumable meat products. + +## Mapping Strength + +Strong + +--- MAPPING: inn or tavern keeper-to-S1 Operations --- + +# inn or tavern keeper -> S1 Operations + +## Economic Entity Reference + +An individual who operates a lodging and drinking establishment, which Smith identifies as a business that is neither agreeable nor creditable due to the lack of household autonomy and exposure to difficult customers, yet can yield substantial profits relative to the capital required. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through hospitality and service industries. + +## Mapping Rationale + +Inn or tavern keeper represents the operational activities of System 1 units engaged in hospitality services. It constitutes the primary productive work of service providers who create economic value through lodging and food service operations. + +## Mapping Strength + +Strong \ No newline at end of file diff --git a/examples/infospace-with-history/output/mappings/book-1-chapter-10-mappings.md b/examples/infospace-with-history/output/mappings/book-1-chapter-10-mappings.md new file mode 100644 index 00000000..5be5f209 --- /dev/null +++ b/examples/infospace-with-history/output/mappings/book-1-chapter-10-mappings.md @@ -0,0 +1,899 @@ +--- MAPPING: wages of labour-to-S1 Operations --- + +# wages of labour -> S1 Operations + +## Economic Entity Reference + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## VSM Concept Reference + +System 1 represents the primary activities that produce the organisation's purpose. These are the operational units that directly create value through concrete work and production activities. Each operational element is itself a viable system with autonomy within constraints. + +## Mapping Rationale + +Wages of labour directly represent the compensation for operational work performed by System 1 units. The labour itself is the primary productive activity that creates economic value, making wages the direct price of System 1 operations. Smith's analysis of wage differentials across employments reflects how different operational activities command different compensation based on their characteristics. + +## Mapping Strength + +Strong + +--- MAPPING: wages of labour-to-S2 Coordination --- + +# wages of labour -> S2 Coordination + +## Economic Entity Reference + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## VSM Concept Reference + +System 2 provides the information channels and bodies that allow primary activities to communicate with each other and coordinate. It dampens oscillations and resolves conflicts between operational units through standardisation and scheduling mechanisms. + +## Mapping Rationale + +Wage rates function as coordination signals that balance labour supply and demand across different employments. They resolve conflicts between workers competing for positions and employers competing for labour by providing a common metric for valuing different types of work. The five circumstances Smith identifies that affect wages represent the coordination parameters that balance labour markets. + +## Mapping Strength + +Strong + +--- MAPPING: wages of labour-to-S3 Control --- + +# wages of labour -> S3 Control + +## Economic Entity Reference + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## VSM Concept Reference + +System 3 establishes the rules, resources, rights, and responsibilities of System 1 operations and provides an interface between operational units and higher management. It represents day-to-day control that optimises the internal environment. + +## Mapping Rationale + +Wages represent the primary mechanism through which economic control is exercised over labour. They establish the resource allocation rules for human capital and create the framework within which workers operate. Wage policies and labour regulations fall under System 3's domain of internal economic governance. + +## Mapping Strength + +Strong + +--- MAPPING: profits of stock-to-S1 Operations --- + +# profits of stock -> S1 Operations + +## Economic Entity Reference + +The returns earned by those who employ capital in various trades and employments, which are affected by the agreeableness or disagreeableness of the business and the risk or security with which it is attended, but are less influenced by the difficulty of learning the trade compared to wages of labour. + +## VSM Concept Reference + +System 1 represents the primary activities that produce the organisation's purpose. These are the operational units that directly create value through concrete work and production activities, including the deployment of capital in productive enterprises. + +## Mapping Rationale + +Profits of stock represent the returns to capital deployed in operational activities that directly produce economic value. The employment of stock in various trades constitutes the operational work of System 1 units at the capital deployment level, making profits the direct measure of success for these operational activities. + +## Mapping Strength + +Strong + +--- MAPPING: profits of stock-to-S4 Intelligence --- + +# profits of stock -> S4 Intelligence + +## Economic Entity Reference + +The returns earned by those who employ capital in various trades and employments, which are affected by the agreeableness or disagreeableness of the business and the risk or security with which it is attended, but are less influenced by the difficulty of learning the trade compared to wages of labour. + +## VSM Concept Reference + +System 4 captures all relevant information about the outside-and-then environment and is responsible for strategic responses. It looks outward to monitor how the organisation needs to adapt to remain viable. + +## Mapping Rationale + +Profits serve as intelligence signals about the viability of different capital employments in the external environment. They indicate which trades and markets offer favourable conditions for investment and which do not, providing the information necessary for strategic capital allocation decisions. + +## Mapping Strength + +Strong + +--- MAPPING: apprenticeships-to-S3 Control --- + +# apprenticeships -> S3 Control + +## Economic Entity Reference + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## VSM Concept Reference + +System 3 establishes the rules, resources, rights, and responsibilities of System 1 operations. It represents the regulatory framework that governs how operational units function and interact. + +## Mapping Rationale + +Apprenticeships represent a regulatory mechanism that controls entry into trades and governs the relationship between masters and apprentices. They establish the rules for skill transmission and create institutional barriers that affect the internal structure of economic operations. + +## Mapping Strength + +Strong + +--- MAPPING: apprenticeships-to-S2 Coordination --- + +# apprenticeships -> S2 Coordination + +## Economic Entity Reference + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that allow operational units to communicate and resolve conflicts. It standardises practices and creates the information channels necessary for smooth operation. + +## Mapping Rationale + +Apprenticeship systems coordinate the transmission of skills across generations and establish standardised training periods that affect labour market dynamics. They create coordination mechanisms for skill development that influence how different trades maintain their workforce. + +## Mapping Strength + +Moderate + +--- MAPPING: corporation laws-to-S3 Control --- + +# corporation laws -> S3 Control + +## Economic Entity Reference + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the rules and constraints within which System 1 units operate. + +## Mapping Rationale + +Corporation laws represent direct regulatory control over economic activities, establishing who can participate in which trades and under what conditions. They create the institutional framework that governs market operations and restricts competition. + +## Mapping Strength + +Strong + +--- MAPPING: corporation laws-to-S5 Policy --- + +# corporation laws -> S5 Policy + +## Economic Entity Reference + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## VSM Concept Reference + +System 5 defines the identity, values, and purpose of the organisation. It represents the supreme policy-making authority that establishes the overarching framework within which all other systems operate. + +## Mapping Rationale + +Corporation laws reflect sovereign policy choices about the structure of economic organisation and the balance between competition and regulation. They express fundamental policy decisions about economic identity and the role of the state in market governance. + +## Mapping Strength + +Strong + +--- MAPPING: settlement laws-to-S3 Control --- + +# settlement laws -> S3 Control + +## Economic Entity Reference + +Legal provisions that restrict the movement of poor persons by requiring them to obtain official settlement in a parish before residing there, creating significant barriers to labour mobility and preventing workers from moving to areas where their skills might be most valued. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations and controls the internal environment. It creates the rules that determine how resources, including labour, can be deployed. + +## Mapping Rationale + +Settlement laws represent direct regulatory control over labour mobility and resource allocation. They establish the institutional framework that governs where workers can operate and create artificial constraints on the internal economic environment. + +## Mapping Strength + +Strong + +--- MAPPING: certificates-to-S2 Coordination --- + +# certificates -> S2 Coordination + +## Economic Entity Reference + +Official documents issued by one parish that certify a person's legal settlement there, allowing them to reside in another parish without gaining settlement rights there, serving as a partial remedy to the settlement laws' restrictions on labour mobility. + +## VSM Concept Reference + +System 2 provides coordination mechanisms that allow different operational units to communicate and resolve conflicts. It creates standardised procedures for managing interactions between different parts of the system. + +## Mapping Rationale + +Certificates function as coordination mechanisms that facilitate labour movement between parishes while maintaining settlement control. They create a standardised administrative procedure for managing the complex interactions between different local jurisdictions. + +## Mapping Strength + +Strong + +--- MAPPING: public education of professionals-to-S3 Control --- + +# public education of professionals -> S3 Control + +## Economic Entity Reference + +The practice of funding the education of clergy, lawyers, physicians, and other professionals through public or charitable means, which creates an oversupply of practitioners and drives down their earnings below what would prevail if education were funded privately. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the institutional structures that control how resources are allocated and how professions are organised. + +## Mapping Rationale + +Public funding of professional education represents a regulatory choice about how human capital is developed and deployed. It establishes the institutional framework that governs professional training and creates artificial conditions in the labour market. + +## Mapping Strength + +Strong + +--- MAPPING: speculative trade-to-S4 Intelligence --- + +# speculative trade -> S4 Intelligence + +## Economic Entity Reference + +A form of commerce where merchants rapidly shift between different commodities and markets based on anticipated profit opportunities, rather than maintaining regular, established business operations in specific trades, characterized by irregular and unpredictable returns. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats. + +## Mapping Rationale + +Speculative trade functions as an intelligence-gathering activity that responds to environmental signals about market conditions. It represents the strategic adaptation of capital to changing opportunities in the external economic environment. + +## Mapping Strength + +Strong + +--- MAPPING: natural state of employments-to-S5 Policy --- + +# natural state of employments -> S5 Policy + +## Economic Entity Reference + +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. + +## VSM Concept Reference + +System 5 defines the identity, values, and purpose of the organisation. It represents the supreme policy-making authority that establishes the overarching framework and philosophical foundations. + +## Mapping Rationale + +The concept of the natural state represents the fundamental policy framework for understanding economic organisation. It expresses the philosophical identity of the economic system and the policy principles that should govern economic activity. + +## Mapping Strength + +Strong + +--- MAPPING: ordinary state of employments-to-S1 Operations --- + +# ordinary state of employments -> S1 Operations + +## Economic Entity Reference + +The typical or usual condition of economic activities when demand for labour fluctuates around normal levels, as opposed to periods of extraordinary demand or declining industries, representing the baseline against which exceptional wage variations are measured. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose under normal conditions. These are the routine productive activities that constitute the day-to-day operations. + +## Mapping Rationale + +The ordinary state of employments represents the baseline operational condition of the economic system under normal circumstances. It describes the routine functioning of System 1 units when they are operating under typical market conditions. + +## Mapping Strength + +Strong + +--- MAPPING: principal employments-to-S1 Operations --- + +# principal employments -> S1 Operations + +## Economic Entity Reference + +The main or primary occupation through which individuals derive their subsistence, as opposed to secondary or occasional work undertaken during leisure time, which affects how wages are determined and how workers value their time. + +## VSM Concept Reference + +System 1 represents the primary activities that produce the organisation's purpose. These are the main operational units that directly create value through their core productive activities. + +## Mapping Rationale + +Principal employments are the core System 1 operations through which individuals generate their primary economic output. They represent the main productive activities that constitute the fundamental operations of the economic system. + +## Mapping Strength + +Strong + +--- MAPPING: public mourning effects-to-S4 Intelligence --- + +# public mourning effects -> S4 Intelligence + +## Economic Entity Reference + +The temporary increase in demand for black cloth and related mourning goods that raises their market price above the natural price, creating higher profits for dealers in these commodities during periods of national bereavement. + +## VSM Concept Reference + +System 4 captures information about external environmental conditions and identifies opportunities for strategic response. It monitors changes in the environment that require adaptation. + +## Mapping Rationale + +Public mourning effects represent environmental signals that create temporary market opportunities requiring strategic response. They function as intelligence about changing demand conditions that affect capital allocation decisions. + +## Mapping Strength + +Strong + +--- MAPPING: piece-work wages-to-S1 Operations --- + +# piece-work wages -> S1 Operations + +## Economic Entity Reference + +A system of compensation where workers are paid according to the quantity of output they produce rather than receiving a fixed daily or weekly wage, creating a direct incentive for increased productivity and diligence. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce value. These are the direct productive activities that create economic output. + +## Mapping Rationale + +Piece-work wages are directly tied to operational output and productivity. They represent the compensation mechanism for System 1 units based on their actual production rather than time spent, making them intrinsic to operational performance. + +## Mapping Strength + +Strong + +--- MAPPING: piece-work wages-to-S3 Control --- + +# piece-work wages -> S3 Control + +## Economic Entity Reference + +A system of compensation where workers are paid according to the quantity of output they produce rather than receiving a fixed daily or weekly wage, creating a direct incentive for increased productivity and diligence. + +## VSM Concept Reference + +System 3 establishes the rules and controls that govern how System 1 operations function. It creates the incentive structures and performance management systems. + +## Mapping Rationale + +Piece-work wages represent a control mechanism that governs worker behaviour and productivity. They establish the rules for compensation that directly influence operational performance and create the incentive structure for System 1 units. + +## Mapping Strength + +Strong + +--- MAPPING: common labour wages-to-S1 Operations --- + +# common labour wages -> S1 Operations + +## Economic Entity Reference + +The standard compensation paid to unskilled or semi-skilled workers performing basic manual tasks, which serves as a benchmark against which wages in other occupations are compared and often adjusted. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the fundamental productive activities that create basic economic value. + +## Mapping Rationale + +Common labour wages represent the baseline compensation for fundamental System 1 operations. They establish the standard for measuring the value of basic productive work and serve as the reference point for all other operational compensation. + +## Mapping Strength + +Strong + +--- MAPPING: scarcity of hands-to-S2 Coordination --- + +# scarcity of hands -> S2 Coordination + +## Economic Entity Reference + +A condition in specific localities where the supply of available workers falls short of demand, causing wages to rise above their normal level as employers compete for limited labour resources. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that balance supply and demand between different operational units. It resolves conflicts and ensures smooth operation across the system. + +## Mapping Rationale + +Scarcity of hands represents a coordination problem that requires System 2 mechanisms to resolve. It creates the need for wage adjustments and labour mobility that coordinate the distribution of workers across different employments. + +## Mapping Strength + +Strong + +--- MAPPING: overstocked market conditions-to-S2 Coordination --- + +# overstocked market conditions -> S2 Coordination + +## Economic Entity Reference + +A situation where the supply of workers in a particular trade exceeds the demand for their services, forcing wages down below what would be necessary to attract new entrants and causing existing practitioners to accept lower compensation. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that balance supply and demand and resolve conflicts between operational units. It ensures that resources are properly distributed across the system. + +## Mapping Rationale + +Overstocked market conditions represent coordination failures that require System 2 mechanisms to resolve. They create the need for market adjustments that coordinate the distribution of workers across different employments. + +## Mapping Strength + +Strong + +--- MAPPING: advancing state of manufacture-to-S1 Operations --- + +# advancing state of manufacture -> S1 Operations + +## Economic Entity Reference + +A condition of industrial development where production is expanding, creating continual demand for new workers and maintaining higher wages due to the growing need for labour in the expanding enterprise. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through manufacturing and production. + +## Mapping Rationale + +Advancing manufacture represents the operational expansion of System 1 units in the manufacturing sector. It describes the growth and development of primary productive activities that create economic value through increased production. + +## Mapping Strength + +Strong + +--- MAPPING: declining manufacture-to-S1 Operations --- + +# declining manufacture -> S1 Operations + +## Economic Entity Reference + +A condition of industrial contraction where production is decreasing, leading to surplus labour supply as workers cannot easily transition to other employments due to legal and institutional barriers, forcing wages down below sustainable levels. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through manufacturing and production. + +## Mapping Rationale + +Declining manufacture represents the operational contraction of System 1 units in the manufacturing sector. It describes the reduction and potential failure of primary productive activities that create economic value through decreased production. + +## Mapping Strength + +Strong + +--- MAPPING: inland trade-to-S1 Operations --- + +# inland trade -> S1 Operations + +## Economic Entity Reference + +Commercial exchange that occurs within the boundaries of a single country, as distinguished from foreign trade, which Smith notes is generally less uncertain in its returns and therefore typically offers lower profit rates than foreign commerce. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through commercial exchange and trade. + +## Mapping Rationale + +Inland trade represents the operational activities of System 1 units engaged in domestic commercial exchange. It constitutes the primary productive work of merchants and traders operating within the national economy. + +## Mapping Strength + +Strong + +--- MAPPING: foreign trade-to-S4 Intelligence --- + +# foreign trade -> S4 Intelligence + +## Economic Entity Reference + +Commercial exchange between different countries, which Smith identifies as generally more uncertain in its returns than inland trade, though the degree of uncertainty varies among different branches of foreign commerce. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats in the broader environment. + +## Mapping Rationale + +Foreign trade functions as an intelligence-gathering activity that responds to environmental signals about international market conditions. It represents the strategic adaptation of capital to opportunities in the external global economic environment. + +## Mapping Strength + +Strong + +--- MAPPING: smuggling trade-to-S4 Intelligence --- + +# smuggling trade -> S4 Intelligence + +## Economic Entity Reference + +The illegal transportation of goods across borders to avoid customs duties and trade restrictions, which Smith identifies as the most hazardous of all trades but also potentially the most profitable when successful. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats, including those that exist in regulatory grey areas. + +## Mapping Rationale + +Smuggling trade represents the extreme end of environmental scanning and strategic response to regulatory constraints. It functions as an intelligence activity that identifies and exploits gaps in the regulatory environment for strategic advantage. + +## Mapping Strength + +Strong + +--- MAPPING: common returns of stock-to-S1 Operations --- + +# common returns of stock -> S1 Operations + +## Economic Entity Reference + +The typical or average profits earned by capital employed in various trades under normal market conditions, which Smith argues should be sufficient to compensate for occasional losses and provide a surplus profit comparable to insurance returns if risk were fully compensated. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through the deployment of capital in various trades. + +## Mapping Rationale + +Common returns of stock represent the baseline operational performance of capital deployed in System 1 activities. They establish the standard measure of success for capital employed in primary productive activities across different trades. + +## Mapping Strength + +Strong + +--- MAPPING: extraordinary profits-to-S1 Operations --- + +# extraordinary profits -> S1 Operations + +## Economic Entity Reference + +Returns on capital that significantly exceed the common or average profits in a particular trade or location, typically occurring when new enterprises are established or when demand conditions temporarily favour certain commodities. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value, including new enterprises and expanding operations. + +## Mapping Rationale + +Extraordinary profits represent exceptional operational performance by System 1 units. They describe the above-normal returns achieved by primary productive activities during periods of expansion or favourable market conditions. + +## Mapping Strength + +Strong + +--- MAPPING: public registers of manufactures-to-S2 Coordination --- + +# public registers of manufactures -> S2 Coordination + +## Economic Entity Reference + +Official records maintained in towns that list the names and locations of tradesmen practicing specific occupations, which Smith argues facilitates the formation of trade combinations and price-fixing agreements by making it easier for competitors to communicate and coordinate. + +## VSM Concept Reference + +System 2 provides the coordination mechanisms that allow operational units to communicate and resolve conflicts. It creates standardised procedures for managing interactions between different parts of the system. + +## Mapping Rationale + +Public registers function as coordination mechanisms that facilitate communication between tradesmen. They create standardised administrative procedures that coordinate the interactions between different members of the same trade. + +## Mapping Strength + +Strong + +--- MAPPING: exclusive corporation-to-S3 Control --- + +# exclusive corporation -> S3 Control + +## Economic Entity Reference + +A legally privileged trading organisation that restricts membership and limits competition within its trade, enabling members to maintain higher prices and profits than would prevail under free market conditions. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the rules and constraints within which System 1 units operate and establishes the institutional structure of the economy. + +## Mapping Rationale + +Exclusive corporations represent direct regulatory control over economic activities, establishing who can participate in which trades and under what conditions. They create the institutional framework that governs market operations and restricts competition. + +## Mapping Strength + +Strong + +--- MAPPING: adulterine guilds-to-S3 Control --- + +# adulterine guilds -> S3 Control + +## Economic Entity Reference + +Unauthorised trade associations that attempt to exercise corporate privileges without formal legal incorporation, which Smith notes were sometimes tolerated by medieval kings in exchange for annual fines, representing early forms of rent-seeking behaviour. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the institutional structures that control how professions and trades are organised and regulated. + +## Mapping Rationale + +Adulterine guilds represent informal regulatory mechanisms that attempt to control trade practices outside the formal legal framework. They establish alternative rules for market governance that operate parallel to official regulatory structures. + +## Mapping Strength + +Moderate + +--- MAPPING: university of trades-to-S3 Control --- + +# university of trades -> S3 Control + +## Economic Entity Reference + +The medieval term for incorporated trades and crafts, which Smith notes was the proper Latin name for any incorporation, drawing a parallel between the seven-year terms for apprenticeships and the seven-year terms for obtaining academic degrees. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the institutional structures that control how professions and trades are organised and regulated. + +## Mapping Rationale + +The university of trades represents the historical regulatory framework that governed craft organisation and skill transmission. It established the institutional rules for trade governance and professional regulation. + +## Mapping Strength + +Strong + +--- MAPPING: assize of bread-to-S3 Control --- + +# assize of bread -> S3 Control + +## Economic Entity Reference + +A legal regulation that fixes the price of bread based on the price of wheat, which Smith identifies as one of the few remaining examples of medieval attempts to regulate merchant profits by controlling commodity prices. + +## VSM Concept Reference + +System 3 establishes the regulatory framework that governs economic operations. It creates the rules and constraints within which System 1 units operate, including price controls and market regulations. + +## Mapping Rationale + +The assize of bread represents direct regulatory control over commodity prices and market operations. It establishes the institutional framework that governs how essential goods are priced and distributed in the economy. + +## Mapping Strength + +Strong + +--- MAPPING: retail trade-to-S1 Operations --- + +# retail trade -> S1 Operations + +## Economic Entity Reference + +The sale of goods in small quantities directly to consumers, which Smith notes typically offers higher apparent profits than wholesale trade due to the additional labour and skill required, though much of this apparent profit represents disguised wages. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through commercial exchange and trade. + +## Mapping Rationale + +Retail trade represents the operational activities of System 1 units engaged in direct consumer commerce. It constitutes the primary productive work of merchants operating at the final stage of the distribution chain. + +## Mapping Strength + +Strong + +--- MAPPING: wholesale trade-to-S1 Operations --- + +# wholesale trade -> S1 Operations + +## Economic Entity Reference + +The sale of goods in large quantities to retailers or other businesses rather than directly to consumers, which Smith notes typically offers lower apparent profits than retail trade but represents more purely the returns to capital investment. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through commercial exchange and trade. + +## Mapping Rationale + +Wholesale trade represents the operational activities of System 1 units engaged in bulk commercial exchange. It constitutes the primary productive work of merchants operating at the intermediate stage of the distribution chain. + +## Mapping Strength + +Strong + +--- MAPPING: public lottery-to-S4 Intelligence --- + +# public lottery -> S4 Intelligence + +## Economic Entity Reference + +A government-sponsored gambling scheme where participants purchase tickets for chances to win prizes, which Smith uses as an analogy to illustrate how people systematically overvalue potential gains while undervaluing probable losses. + +## VSM Concept Reference + +System 4 captures information about the external environment and is responsible for strategic responses to changing conditions. It looks outward to identify opportunities and threats, including those based on probability and risk assessment. + +## Mapping Rationale + +The public lottery functions as an intelligence mechanism about human decision-making under uncertainty. It represents the strategic assessment of risk and reward in the external environment of economic opportunities. + +## Mapping Strength + +Moderate + +--- MAPPING: maritime employment-to-S1 Operations --- + +# maritime employment -> S1 Operations + +## Economic Entity Reference + +Work in the shipping and naval services, which Smith analyses as offering better prospects for advancement and fortune than military service, though still involving significant risks and hardships that are compensated through wages and the hope of prize money. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through maritime commerce and naval services. + +## Mapping Rationale + +Maritime employment represents the operational activities of System 1 units engaged in shipping and naval services. It constitutes the primary productive work of sailors and naval personnel who create economic value through maritime commerce. + +## Mapping Strength + +Strong + +--- MAPPING: military employment-to-S1 Operations --- + +# military employment -> S1 Operations + +## Economic Entity Reference + +Service in the armed forces, which Smith analyses as offering poor compensation relative to the risks involved, with limited prospects for advancement and wages that fall below those of common labourers, sustained only by romantic notions of honour and distinction. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through military service and national defence. + +## Mapping Rationale + +Military employment represents the operational activities of System 1 units engaged in armed forces service. It constitutes the primary productive work of soldiers who create economic value through national defence and military operations. + +## Mapping Strength + +Strong + +--- MAPPING: public executioner-to-S1 Operations --- + +# public executioner -> S1 Operations + +## Economic Entity Reference + +The state official responsible for carrying out capital punishment, which Smith identifies as the most detestable of all employments yet paradoxically better paid than most common trades relative to the amount of work performed. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value, even when they involve socially necessary but disagreeable work. + +## Mapping Rationale + +Public executioner represents the operational activities of System 1 units engaged in state execution services. It constitutes the primary productive work of state officials who create economic value through the performance of necessary but socially disagreeable functions. + +## Mapping Strength + +Strong + +--- MAPPING: poacher-to-S1 Operations --- + +# poacher -> S1 Operations + +## Economic Entity Reference + +An individual who illegally hunts or fishes on private property, which Smith identifies as typically being very poor even in countries where poaching is severely punished, illustrating how natural enjoyment of certain activities can drive down compensation. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value, even when they operate outside legal frameworks. + +## Mapping Rationale + +Poacher represents the operational activities of System 1 units engaged in illegal hunting and fishing. It constitutes the primary productive work of individuals who create economic value through the extraction of natural resources, even when operating outside legal frameworks. + +## Mapping Strength + +Moderate + +--- MAPPING: coal-heaver-to-S1 Operations --- + +# coal-heaver -> S1 Operations + +## Economic Entity Reference + +A labourer who unloads coal from ships, which Smith identifies as performing work that is extremely arduous, dirty, and subject to irregular employment, commanding wages that are four to five times higher than common labour. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through manual labour and material handling. + +## Mapping Rationale + +Coal-heaver represents the operational activities of System 1 units engaged in manual labour for material handling. It constitutes the primary productive work of labourers who create economic value through the physical movement of coal and other materials. + +## Mapping Strength + +Strong + +--- MAPPING: collier-to-S1 Operations --- + +# collier -> S1 Operations + +## Economic Entity Reference + +A coal miner, which Smith identifies as performing extremely dangerous and dirty work that commands wages double or triple those of common labour, illustrating how hazardous and disagreeable employment commands premium compensation. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through extraction and mining operations. + +## Mapping Rationale + +Collier represents the operational activities of System 1 units engaged in coal mining. It constitutes the primary productive work of miners who create economic value through the extraction of coal from the earth. + +## Mapping Strength + +Strong + +--- MAPPING: butcher trade-to-S1 Operations --- + +# butcher trade -> S1 Operations + +## Economic Entity Reference + +The commercial activity of slaughtering and selling meat, which Smith identifies as a brutal and odious business that nonetheless offers higher profits than most common trades due to its disagreeable nature. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through food processing and distribution. + +## Mapping Rationale + +Butcher trade represents the operational activities of System 1 units engaged in meat processing and distribution. It constitutes the primary productive work of butchers who create economic value through the transformation of livestock into consumable meat products. + +## Mapping Strength + +Strong + +--- MAPPING: inn or tavern keeper-to-S1 Operations --- + +# inn or tavern keeper -> S1 Operations + +## Economic Entity Reference + +An individual who operates a lodging and drinking establishment, which Smith identifies as a business that is neither agreeable nor creditable due to the lack of household autonomy and exposure to difficult customers, yet can yield substantial profits relative to the capital required. + +## VSM Concept Reference + +System 1 represents the primary operational activities that produce the organisation's purpose. These are the productive activities that create economic value through hospitality and service industries. + +## Mapping Rationale + +Inn or tavern keeper represents the operational activities of System 1 units engaged in hospitality services. It constitutes the primary productive work of service providers who create economic value through lodging and food service operations. + +## Mapping Strength + +Strong \ No newline at end of file diff --git a/examples/infospace-with-history/output/mappings/book-1-chapter-10-prompt.md b/examples/infospace-with-history/output/mappings/book-1-chapter-10-prompt.md new file mode 100644 index 00000000..96c59c2f --- /dev/null +++ b/examples/infospace-with-history/output/mappings/book-1-chapter-10-prompt.md @@ -0,0 +1,1091 @@ +# Map Economic Entities to VSM Concepts + +You are a systems theorist specializing in Stafford Beer's Viable System Model. +Your task is to map extracted economic entities to VSM concepts. + +## Extracted Entities + +--- ENTITY: wages of labour --- + +# Wages of Labour + +## Definition + +The monetary compensation paid to workers for their time and effort, which varies according to five principal circumstances: the agreeableness or disagreeableness of the employment itself, the ease or difficulty of learning the trade, the constancy or inconstancy of employment, the degree of trust required in the worker, and the probability or improbability of success in the occupation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +This entity forms the central focus of the chapter's first part, where Smith systematically analyses how wages differ across occupations and the factors that create these inequalities. The analysis begins with the observation that pecuniary wages and profits vary greatly across different employments, then proceeds to examine each of the five circumstances that explain these variations. + +## Economic Domain + +Distribution + +--- +--- ENTITY: profits of stock --- + +# Profits of Stock + +## Definition + +The returns earned by those who employ capital in various trades and employments, which are affected by the agreeableness or disagreeableness of the business and the risk or security with which it is attended, but are less influenced by the difficulty of learning the trade compared to wages of labour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +The chapter's second major focus examines how profits differ across employments, noting that while wages vary according to five circumstances, profits are primarily affected by only two: the agreeableness of the business and the risk involved. Smith argues that ordinary rates of profit tend to be more uniform across different employments than wages. + +## Economic Domain + +Distribution + +--- +--- ENTITY: apprenticeships --- + +# Apprenticeships + +## Definition + +A system where young workers serve a master for a fixed term (historically seven years) to learn a trade, during which the apprentice's labour belongs to the master while the master provides training, maintenance, and sometimes a small wage, creating barriers to entry in certain trades. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith critically examines the institution of apprenticeships as a means by which the policy of Europe creates inequalities in labour markets. He argues that long apprenticeships are unnecessary, often counterproductive, and serve primarily to restrict competition and maintain higher wages for established craftsmen at the expense of both apprentices and the public. + +## Economic Domain + +Regulation + +--- +--- ENTITY: corporation laws --- + +# Corporation Laws + +## Definition + +Legal privileges granted to incorporated trades and professions that restrict competition by limiting who may practice the trade, often requiring apprenticeship terms, membership fees, or other barriers to entry, thereby enabling members to charge higher prices than would prevail under free competition. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies corporation laws as the principal mechanism by which European policy creates significant inequalities in economic advantages across different employments. He argues these laws restrain competition in some trades while increasing it in others, and obstruct the free circulation of labour and stock, ultimately harming both workers and consumers. + +## Economic Domain + +Regulation + +--- +--- ENTITY: settlement laws --- + +# Settlement Laws + +## Definition + +Legal provisions that restrict the movement of poor persons by requiring them to obtain official settlement in a parish before residing there, creating significant barriers to labour mobility and preventing workers from moving to areas where their skills might be most valued. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith presents settlement laws as a particularly harmful form of labour market regulation unique to England, which obstructs the free circulation of labour from place to place. He argues these laws prevent the natural adjustment of wages across regions and force workers to remain in parishes where their labour is less valuable. + +## Economic Domain + +Regulation + +--- +--- ENTITY: certificates --- + +# Certificates + +## Definition + +Official documents issued by one parish that certify a person's legal settlement there, allowing them to reside in another parish without gaining settlement rights there, serving as a partial remedy to the settlement laws' restrictions on labour mobility. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith discusses certificates as an administrative mechanism developed to partially restore the free circulation of labour that settlement laws had obstructed. While certificates allow poor persons to move between parishes without automatically gaining settlement rights, Smith notes they are often difficult to obtain and create their own forms of administrative control. + +## Economic Domain + +Regulation + +--- +--- ENTITY: public education of professionals --- + +# Public Education of Professionals + +## Definition + +The practice of funding the education of clergy, lawyers, physicians, and other professionals through public or charitable means, which creates an oversupply of practitioners and drives down their earnings below what would prevail if education were funded privately. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies publicly funded professional education as a policy that creates inequalities by flooding certain professions with candidates willing to work for lower compensation. He argues this practice degrades the quality and remuneration of respected professions like law and medicine, while creating a class of "men of letters" who must write for subsistence. + +## Economic Domain + +Distribution + +--- +--- ENTITY: speculative trade --- + +# Speculative Trade + +## Definition + +A form of commerce where merchants rapidly shift between different commodities and markets based on anticipated profit opportunities, rather than maintaining regular, established business operations in specific trades, characterized by irregular and unpredictable returns. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts speculative trade with regular established business, noting that while it can produce sudden fortunes through successful speculation, it is equally likely to produce losses. He observes that this form of trade can only be carried on in places with extensive commerce and correspondence where intelligence about market conditions is readily available. + +## Economic Domain + +Exchange + +--- +--- ENTITY: natural state of employments --- + +# 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 + +--- +--- ENTITY: ordinary state of employments --- + +# Ordinary State of Employments + +## Definition + +The typical or usual condition of economic activities when demand for labour fluctuates around normal levels, as opposed to periods of extraordinary demand or declining industries, representing the baseline against which exceptional wage variations are measured. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith distinguishes between the ordinary or natural state of employments and periods when demand for specific types of labour rises above or falls below usual levels. He uses this distinction to explain how temporary variations in demand affect wages differently across occupations, with some trades maintaining more constant employment than others. + +## Economic Domain + +General Theory + +--- +--- ENTITY: principal employments --- + +# Principal Employments + +# Principal Employments + +## Definition + +The main or primary occupation through which individuals derive their subsistence, as opposed to secondary or occasional work undertaken during leisure time, which affects how wages are determined and how workers value their time. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith argues that equality in the advantages and disadvantages of different employments can only occur when those employments are the principal means of subsistence for the workers. When people engage in a trade only occasionally while maintaining other primary occupations, they may accept lower wages, disrupting the natural equilibrium of compensation. + +## Economic Domain + +Distribution + +--- +--- ENTITY: public mourning effects --- + +# Public Mourning Effects + +## Definition + +The temporary increase in demand for black cloth and related mourning goods that raises their market price above the natural price, creating higher profits for dealers in these commodities during periods of national bereavement. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses public mourning as an example of how extraordinary demand can temporarily raise the price of specific commodities above their natural price, affecting the profits of those engaged in producing or selling these goods. This illustrates his broader point about how variations in demand create temporary inequalities in profits across different employments. + +## Economic Domain + +Exchange + +--- +--- ENTITY: piece-work wages --- + +# Piece-Work Wages + +# Piece-Work Wages + +## Definition + +A system of compensation where workers are paid according to the quantity of output they produce rather than receiving a fixed daily or weekly wage, creating a direct incentive for increased productivity and diligence. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies piece-work as a wage system that encourages industriousness because workers benefit directly from their efforts. He contrasts this with the apprenticeship system where young workers have no immediate interest in being productive, arguing that direct financial incentives better promote the development of good work habits. + +## Economic Domain + +Distribution + +--- +--- ENTITY: common labour wages --- + +# Common Labour Wages + +## Definition + +The standard compensation paid to unskilled or semi-skilled workers performing basic manual tasks, which serves as a benchmark against which wages in other occupations are compared and often adjusted. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith frequently references common labour wages as a baseline for comparing compensation across different employments. He notes that wages in skilled trades and manufacturing often differ only slightly from common labour wages, with the difference generally sufficient only to compensate for the expense of education and training. + +## Economic Domain + +Distribution + +--- +--- ENTITY: scarcity of hands --- + +# Scarcity of Hands + +## Definition + +A condition in specific localities where the supply of available workers falls short of demand, causing wages to rise above their normal level as employers compete for limited labour resources. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith explains that scarcity of hands in one parish cannot be relieved by the superabundance of workers in another when settlement laws obstruct labour mobility. This creates artificial wage disparities between regions that would not exist under free movement of labour, demonstrating how policy can prevent natural market adjustments. + +## Economic Domain + +Distribution + +--- +--- ENTITY: overstocked market conditions --- + +# Overstocked Market Conditions + +## Definition + +A situation where the supply of workers in a particular trade exceeds the demand for their services, forcing wages down below what would be necessary to attract new entrants and causing existing practitioners to accept lower compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies overstocked markets as a consequence of publicly funded professional education and other policies that encourage excessive entry into certain professions. He argues this condition degrades the quality and remuneration of respected professions while creating a class of underemployed intellectuals. + +## Economic Domain + +Distribution + +--- +--- ENTITY: advancing state of manufacture --- + +# Advancing State of Manufacture + +## Definition + +A condition of industrial development where production is expanding, creating continual demand for new workers and maintaining higher wages due to the growing need for labour in the expanding enterprise. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts advancing manufactures with declining ones, noting that the former maintain constant demand for labour while the latter experience increasing surplus of workers. This distinction helps explain why wages differ between regions and industries based on their stage of development rather than inherent qualities of the work itself. + +## Economic Domain + +Production + +--- +--- ENTITY: declining manufacture --- + +# Declining Manufacture + +# Declining Manufacture + +## Definition + +A condition of industrial contraction where production is decreasing, leading to surplus labour supply as workers cannot easily transition to other employments due to legal and institutional barriers, forcing wages down below sustainable levels. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies declining manufactures as creating severe labour market distortions when workers cannot easily move to growing industries. He argues that institutional barriers like apprenticeship requirements prevent the natural reallocation of labour from shrinking to expanding sectors, causing unnecessary hardship for displaced workers. + +## Economic Domain + +Production + +--- +--- ENTITY: inland trade --- + +# Inland Trade + +## Definition + +Commercial exchange that occurs within the boundaries of a single country, as distinguished from foreign trade, which Smith notes is generally less uncertain in its returns and therefore typically offers lower profit rates than foreign commerce. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith observes that profits of stock vary with the certainty or uncertainty of returns, noting that inland trade is generally less risky than foreign trade. This observation contributes to his broader analysis of how different employments of capital offer varying risk-adjusted returns, though he argues these differences are less pronounced than wage differentials. + +## Economic Domain + +Exchange + +--- +--- ENTITY: foreign trade --- + +# Foreign Trade + +## Definition + +Commercial exchange between different countries, which Smith identifies as generally more uncertain in its returns than inland trade, though the degree of uncertainty varies among different branches of foreign commerce. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith notes that foreign trade, particularly certain branches like trade to North America, offers higher potential profits than inland trade due to greater uncertainty of returns. This observation about risk and reward in different types of commerce forms part of his analysis of profit differentials across employments of stock. + +## Economic Domain + +Exchange + +--- +--- ENTITY: smuggling trade --- + +# Smuggling Trade + +## Definition + +The illegal transportation of goods across borders to avoid customs duties and trade restrictions, which Smith identifies as the most hazardous of all trades but also potentially the most profitable when successful. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses smuggling as an extreme example of how risk affects profits, noting that while it offers the highest potential returns, it also carries the greatest risk of bankruptcy. He argues that competition among smugglers eventually reduces profits to levels that only barely compensate for the risk involved. + +## Economic Domain + +Exchange + +--- +--- ENTITY: common returns of stock --- + +# Common Returns of Stock + +## Definition + +The typical or average profits earned by capital employed in various trades under normal market conditions, which Smith argues should be sufficient to compensate for occasional losses and provide a surplus profit comparable to insurance returns if risk were fully compensated. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the concept of common returns to analyse whether different employments of stock offer adequate compensation for their risks. He argues that if hazardous trades like smuggling offered full compensation for risk, bankruptcies would not be more frequent in these trades than in safer enterprises, suggesting that risk is systematically underpriced. + +## Economic Domain + +Distribution + +--- +--- ENTITY: extraordinary profits --- + +# Extraordinary Profits + +## Definition + +Returns on capital that significantly exceed the common or average profits in a particular trade or location, typically occurring when new enterprises are established or when demand conditions temporarily favour certain commodities. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith notes that extraordinary profits often occur when new manufactures are established or when particular trades experience unusual demand. However, he argues that competition eventually reduces these exceptional returns to the common level, demonstrating the equilibrating tendency of free markets. + +## Economic Domain + +Distribution + +--- +--- ENTITY: public registers of manufactures --- + +# Public Registers of Manufactures + +## Definition + +Official records maintained in towns that list the names and locations of tradesmen practicing specific occupations, which Smith argues facilitates the formation of trade combinations and price-fixing agreements by making it easier for competitors to communicate and coordinate. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith identifies public registers as a policy that inadvertently facilitates anti-competitive behaviour by making it easier for tradesmen to assemble and conspire against the public interest. He argues that while such meetings cannot be entirely prevented, the law should not facilitate them through administrative mechanisms. + +## Economic Domain + +Regulation + +--- +--- ENTITY: exclusive corporation --- + +# Exclusive Corporation + +## Definition + +A legally privileged trading organisation that restricts membership and limits competition within its trade, enabling members to maintain higher prices and profits than would prevail under free market conditions. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith criticises exclusive corporations as mechanisms that weaken the natural discipline of the market by protecting members from competition. He argues that when workers must be employed regardless of performance, quality deteriorates and consumers suffer, while the public interest is sacrificed to private gain. + +## Economic Domain + +Regulation + +--- +--- ENTITY: adulterine guilds --- + +# Adulterine Guilds + +## Definition + +Unauthorised trade associations that attempt to exercise corporate privileges without formal legal incorporation, which Smith notes were sometimes tolerated by medieval kings in exchange for annual fines, representing early forms of rent-seeking behaviour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith mentions adulterine guilds as examples of how the crown's prerogative to grant corporate charters was often used to extract revenue rather than protect public liberty. This historical observation supports his broader critique of how institutional arrangements can serve private interests at public expense. + +## Economic Domain + +Regulation + +--- +--- ENTITY: university of trades --- + +# University of Trades + +## Definition + +The medieval term for incorporated trades and crafts, which Smith notes was the proper Latin name for any incorporation, drawing a parallel between the seven-year terms for apprenticeships and the seven-year terms for obtaining academic degrees. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the historical terminology of "universities" for trades to illustrate the common origin of both craft guilds and academic institutions in medieval incorporation practices. This etymological observation supports his argument that long apprenticeship requirements have no rational basis in the nature of the work itself. + +## Economic Domain + +Regulation + +--- +--- ENTITY: assize of bread --- + +# Assize of Bread + +## Definition + +A legal regulation that fixes the price of bread based on the price of wheat, which Smith identifies as one of the few remaining examples of medieval attempts to regulate merchant profits by controlling commodity prices. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith discusses the assize of bread as a remnant of older regulatory practices that attempted to control profits by fixing prices. He argues that where competition exists, it regulates prices more effectively than any legal assize, and that such regulations are generally unnecessary and potentially harmful. + +## Economic Domain + +Regulation + +--- +--- ENTITY: retail trade --- + +# Retail Trade + +## Definition + +The sale of goods in small quantities directly to consumers, which Smith notes typically offers higher apparent profits than wholesale trade due to the additional labour and skill required, though much of this apparent profit represents disguised wages. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith analyses retail trade to demonstrate how apparent profit differentials often reflect differences in labour rather than capital returns. He argues that the higher apparent profits of retail merchants largely compensate for the additional skill, effort, and risk involved in direct consumer transactions. + +## Economic Domain + +Exchange + +--- +--- ENTITY: wholesale trade --- + +# Wholesale Trade + +## Definition + +The sale of goods in large quantities to retailers or other businesses rather than directly to consumers, which Smith notes typically offers lower apparent profits than retail trade but represents more purely the returns to capital investment. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith contrasts wholesale with retail trade to illustrate how profit differentials across employments often reflect differences in the nature of the work rather than pure returns to capital. He argues that wholesale merchants earn more modest but more genuine profits on their stock investments. + +## Economic Domain + +Exchange + +--- +--- ENTITY: public lottery --- + +# Public Lottery + +## Definition + +A government-sponsored gambling scheme where participants purchase tickets for chances to win prizes, which Smith uses as an analogy to illustrate how people systematically overvalue potential gains while undervaluing probable losses. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith employs the public lottery as a metaphor for certain professions where a few individuals achieve great success while most fail completely. He argues that just as lottery players overvalue their chances of winning, people entering professions like law or the arts often overestimate their probability of success. + +## Economic Domain + +General Theory + +--- +--- ENTITY: maritime employment --- + +# Maritime Employment + +## Definition + +Work in the shipping and naval services, which Smith analyses as offering better prospects for advancement and fortune than military service, though still involving significant risks and hardships that are compensated through wages and the hope of prize money. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith compares maritime with military employment to illustrate how different occupations offer varying combinations of risk, reward, and advancement opportunities. He notes that while sailors earn wages comparable to common labourers, the possibility of prize money and advancement makes the trade attractive despite its hardships. + +## Economic Domain + +Distribution + +--- +--- ENTITY: military employment --- + +# Military Employment + +## Definition + +Service in the armed forces, which Smith analyses as offering poor compensation relative to the risks involved, with limited prospects for advancement and wages that fall below those of common labourers, sustained only by romantic notions of honour and distinction. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses military service as an example of an occupation where the actual compensation falls far below what would be necessary to attract volunteers if people calculated risks and rewards rationally. He argues that romantic notions of honour sustain recruitment despite poor material conditions. + +## Economic Domain + +Distribution + +--- +--- ENTITY: public executioner --- + +# Public Executioner + +# Public Executioner + +## Definition + +The state official responsible for carrying out capital punishment, which Smith identifies as the most detestable of all employments yet paradoxically better paid than most common trades relative to the amount of work performed. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the public executioner as an extreme example of how disagreeable employment commands premium compensation. This illustrates his broader principle that wages vary not only with the skill required but also with the agreeableness or disagreeableness of the work itself. + +## Economic Domain + +Distribution + +--- +--- ENTITY: poacher --- + +# Poacher + +## Definition + +An individual who illegally hunts or fishes on private property, which Smith identifies as typically being very poor even in countries where poaching is severely punished, illustrating how natural enjoyment of certain activities can drive down compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the example of poachers to demonstrate how natural human inclinations toward certain activities can create oversupply of labour in those occupations, driving wages down to subsistence levels. This illustrates his principle that agreeable employments tend to be poorly compensated. + +## Economic Domain + +Distribution + +--- +--- ENTITY: coal-heaver --- + +# Coal-Heaver + +## Definition + +A labourer who unloads coal from ships, which Smith identifies as performing work that is extremely arduous, dirty, and subject to irregular employment, commanding wages that are four to five times higher than common labour. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses coal-heavers to illustrate how the combination of disagreeable work, physical hardship, and irregular employment can drive wages far above the common level. This example demonstrates how multiple factors can combine to create significant wage differentials. + +## Economic Domain + +Distribution + +--- +--- ENTITY: collier --- + +# Collier + +## Definition + +A coal miner, which Smith identifies as performing extremely dangerous and dirty work that commands wages double or triple those of common labour, illustrating how hazardous and disagreeable employment commands premium compensation. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses coal miners to demonstrate how the disagreeable and dangerous nature of certain employments commands higher wages. He notes that while the work can be constant if desired, the inherent hardships justify the substantial wage premium over common labour. + +## Economic Domain + +Distribution + +--- +--- ENTITY: butcher trade --- + +# Butcher Trade + +## Definition + +The commercial activity of slaughtering and selling meat, which Smith identifies as a brutal and odious business that nonetheless offers higher profits than most common trades due to its disagreeable nature. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses the butcher trade as an example of how disagreeable employment affects profits of stock as well as wages of labour. This illustrates his principle that the unattractiveness of certain businesses to potential entrants allows those who do engage in them to earn above-normal returns. + +## Economic Domain + +Distribution + +--- +--- ENTITY: inn or tavern keeper --- + +# Inn or Tavern Keeper + +## Definition + +An individual who operates a lodging and drinking establishment, which Smith identifies as a business that is neither agreeable nor creditable due to the lack of household autonomy and exposure to difficult customers, yet can yield substantial profits relative to the capital required. + +## Source Chapter + +Book I, Chapter 10 + +## Context + +Smith uses inn and tavern keeping to illustrate how disagreeable business conditions can lead to higher profits. Despite the personal drawbacks of the trade, the potential for significant returns attracts entrepreneurs willing to accept these disadvantages. + +## Economic Domain + +Distribution + + + +## VSM Framework Reference + +--- +id: vsm-framework +name: vsm_framework +artifact_type: content +description: Stafford Beer's Viable System Model reference for economic analysis +version: 1.0.0 +--- + +# Stafford Beer's Viable System Model (VSM) + +The Viable System Model (VSM) is a model of the organisational structure of any +autonomous system capable of producing itself. It was created by management +cybernetician Stafford Beer in his books *Brain of the Firm* (1972) and +*The Heart of Enterprise* (1979). + +## Core Principle: Viability + +A viable system is any system organised in such a way as to meet the demands +of surviving in a changing environment. One of the prime features of systems +that survive is that they are adaptable. The VSM expresses a model for a +viable system, which is an abstracted cybernetic description applicable to +any organisation that is a going concern. + +## The Five Systems + +### System 1 (S1) — Operations + +The primary activities that produce the organisation's purpose. These are the +operational units that directly create value. Each operational element is itself +a viable system (the principle of recursion). + +**In economic terms:** Productive enterprises, factories, farms, workshops, +individual labourers performing specialised tasks, merchant operations. + +**Key properties:** Autonomy within constraints, self-organisation, +direct engagement with the environment. + +### System 2 (S2) — Coordination + +The information channels and bodies that allow the primary activities in +System 1 to communicate with each other and that allow System 3 to monitor +and coordinate activities. System 2 dampens oscillations and resolves +conflicts between operational units. + +**In economic terms:** Market price mechanisms, trade customs, standard +weights and measures, commercial law, banking clearinghouses, trade guilds. + +**Key properties:** Anti-oscillatory, dampening, scheduling, conflict +resolution, standardisation. + +### System 3 (S3) — Control / Operational Management + +The structures and controls that establish the rules, resources, rights, +and responsibilities of System 1 and provide an interface between Systems 1 +and Systems 4/5. System 3 represents the day-to-day control of the +organisation. It optimises the internal environment. + +**In economic terms:** Government regulation of trade, taxation policy, labour +laws, enforcement of contracts, the "invisible hand" as emergent internal +regulation, guilds and corporations governing members. + +**Key properties:** Internal regulation, resource allocation, accountability, +synergy extraction, performance management. + +### System 3* (S3*) — Audit / Monitoring + +The audit and monitoring channel that allows System 3 to verify information +coming from System 1 through channels other than those provided by System 2. +System 3* provides sporadic, direct access to operational reality. + +**In economic terms:** Market inspections, quality checks, auditing of accounts, +surprise investigations into trade practices, verification of weights and measures. + +**Key properties:** Sporadic direct investigation, reality checking, bypassing +normal reporting channels. + +### System 4 (S4) — Intelligence / Adaptation + +The bodies and processes that look outward to the environment to monitor +how the organisation needs to adapt to remain viable. System 4 captures +all relevant information about the outside-and-then environment. It is +responsible for strategic responses. + +**In economic terms:** Foreign intelligence about trade opportunities, +market research, new technology adoption, colonial exploration and trade +route development, understanding of foreign economic systems. + +**Key properties:** Environmental scanning, future orientation, strategic +planning, modelling, research and development. + +### System 5 (S5) — Policy / Identity + +The policy-making body that balances demands from Systems 3 and 4 and defines +the identity, values, and purpose of the organisation. System 5 provides +closure to the whole system and represents its supreme authority. + +**In economic terms:** Sovereign authority, constitutional principles governing +economic policy, national economic identity, the philosophical foundations +of economic systems (mercantilism vs. free trade), the overarching purpose +of the commonwealth. + +**Key properties:** Identity, ethos, supreme command, policy closure, +balancing internal and external perspectives. + +## Key Concepts + +### Recursion + +Every viable system contains and is contained in a viable system. The same +five-system structure recurs at every level of organisation. A workshop is +a viable system within a factory, which is a viable system within an +industry, which is a viable system within a national economy. + +### Variety + +A measure of the number of possible states of a system. The Law of Requisite +Variety (Ashby's Law) states that only variety can absorb variety. A +controller must have at least as much variety as the system it controls. + +### Requisite Variety + +The principle that for effective regulation, the variety of the regulator +must match the variety of the system being regulated. This is achieved +through variety attenuation (reducing the variety coming up from operations) +and variety amplification (increasing the variety of management's responses). + +### Attenuation and Amplification + +Variety engineering mechanisms. Attenuation reduces variety (e.g., reporting +summaries, statistical aggregation, standardisation). Amplification increases +variety (e.g., delegation, empowerment, decentralisation). + +### Algedonic Signals + +Emergency signals that bypass the normal management hierarchy to alert +higher systems of critical situations requiring immediate attention. Named +from the Greek words for pain (algos) and pleasure (hedone). + +**In economic terms:** Market panics, famine signals, sudden price collapses, +trade embargoes, economic crises that demand immediate sovereign intervention. + +### Autonomy + +The degree of freedom granted to operational units (System 1) to self-organise +within constraints set by System 3. Beer argued that maximum autonomy +consistent with systemic cohesion yields maximum viability. + +### Viability + +The capacity of a system to maintain a separate existence and survive in a +changing environment. A viable system continuously adapts while maintaining +its identity. + + +## Mapping Guidelines + +--- +id: mapping-rules +name: mapping_rules +artifact_type: content +description: Guidelines for mapping economic entities to VSM concepts +version: 1.0.0 +--- + +# VSM Mapping Rules + +## Mapping Principles + +1. **Ground in Beer's definitions.** Every mapping rationale must reference + the specific VSM system function, not just a superficial resemblance. + +2. **Prefer structural over metaphorical mappings.** A mapping is strong + when the economic entity performs the same *functional role* in Smith's + economic system as the VSM component performs in an organisation. + +3. **Allow multiple mappings.** A single economic entity may map to + multiple VSM systems. For example, "the sovereign" may map to both + S3 (regulation) and S5 (policy). Create separate mapping documents + for each relationship. + +4. **Respect recursion.** Consider at which level of recursion the mapping + applies. The division of labour within a single workshop (S1-level) + differs from the division of labour across an entire national economy + (higher recursion level). + +## Mapping Strength Criteria + +### Strong +- The entity directly performs the function of the VSM system. +- The mapping would be recognisable to a VSM practitioner without explanation. +- Example: "market price mechanism" → S2 (Coordination) — prices coordinate + supply and demand between producers. + +### Moderate +- The entity partially performs the function or performs it in a limited context. +- The mapping requires some argument but is defensible. +- Example: "merchant" → S4 (Intelligence) — merchants gather information + about foreign markets, but this is not their primary function. + +### Weak +- The mapping is speculative or metaphorical rather than structural. +- The connection exists but requires significant interpretive work. +- Example: "moral sentiments" → S5 (Policy) — broad ethical framework + shapes economic behaviour, but the connection is indirect. + +## What NOT to Map + +- Do not force mappings where none exist. It is valid for an entity to have + no clear VSM mapping — flag it with "Mapping Strength: Weak" and explain + the difficulty. +- Do not map purely descriptive/historical content that lacks functional + significance. + +## VSM System Checklist + +When mapping, consider each system: + +| System | Question to Ask | +|--------|----------------| +| S1 | Does this entity directly produce value or output? | +| S2 | Does this entity coordinate between operational units? | +| S3 | Does this entity regulate internal operations? | +| S3* | Does this entity provide audit or verification? | +| S4 | Does this entity scan the environment or plan for the future? | +| S5 | Does this entity define identity, policy, or purpose? | + +Also consider the key concepts: +- **Recursion**: At what level does this entity operate? +- **Variety**: Does this entity manage variety (attenuate or amplify)? +- **Algedonic signals**: Does this entity serve as an emergency signal? +- **Autonomy**: Does this entity relate to operational autonomy? + + +## Instructions + +1. Review each extracted economic entity carefully. +2. For each entity, determine which VSM system(s) it most closely relates to. +3. Produce a mapping document for each entity-VSM relationship following + the VSM Mapping Schema v1.0. +4. Each mapping document must include: + - An H1 heading in the format "Entity Name -> VSM Concept Name" + - An Economic Entity Reference section + - A VSM Concept Reference section + - A Mapping Rationale section (minimum 30 words) grounded in Beer's definitions + - A Mapping Strength section rated as Strong, Moderate, or Weak +5. Where an entity maps to multiple VSM systems (recursion), create + separate mapping documents for each relationship. +6. Flag entities that don't clearly map to any VSM concept with a + "Mapping Strength: Weak" and note the difficulty in the rationale. + +## Output Format + +Output each mapping as a separate markdown document, delimited by +`--- MAPPING: -to- ---` markers. diff --git a/examples/infospace-with-history/output/metrics/history.yaml b/examples/infospace-with-history/output/metrics/history.yaml index 6dcedd22..654bd0a3 100644 --- a/examples/infospace-with-history/output/metrics/history.yaml +++ b/examples/infospace-with-history/output/metrics/history.yaml @@ -284,3 +284,29 @@ concern: C1 metadata: source: collection-checks +- snapshot_id: 073044bf + created_at: '2026-02-19T14:58:09.290751+00:00' + schema_name: default + entity_count: 236 + entity_evaluations: [] + collection_metrics: + - name: coherence_components + value: 0.0 + concern: C3 + - name: consistency_cycles + value: 0.0 + concern: C4 + - name: coverage_ratio + value: 0.5138888888888888 + concern: C2 + - name: granularity_entropy + value: 2.7721078936148817 + concern: C5 + - name: modularity + value: 0.0 + concern: C3 + - name: redundancy_ratio + value: 0.00847457627118644 + concern: C1 + metadata: + source: collection-checks diff --git a/examples/infospace-with-history/output/metrics/metrics.yaml b/examples/infospace-with-history/output/metrics/metrics.yaml index bd3373bb..48640dad 100644 --- a/examples/infospace-with-history/output/metrics/metrics.yaml +++ b/examples/infospace-with-history/output/metrics/metrics.yaml @@ -1,6 +1,6 @@ coherence_components: 0.0 consistency_cycles: 0.0 -coverage_ratio: 0.546875 -granularity_entropy: 2.738157 +coverage_ratio: 0.513889 +granularity_entropy: 2.772108 modularity: 0.0 -redundancy_ratio: 0.008658 +redundancy_ratio: 0.008475 diff --git a/examples/infospace-with-history/output/processing-log.yaml b/examples/infospace-with-history/output/processing-log.yaml index b02104fa..8d9ff91c 100644 --- a/examples/infospace-with-history/output/processing-log.yaml +++ b/examples/infospace-with-history/output/processing-log.yaml @@ -275,3 +275,44 @@ finish_reason: stop duration_seconds: 71.7 error: null +- source_id: book-1-chapter-10 + processed_at: '2026-02-19T17:59:35Z' + provider: openrouter + model: arcee-ai/trinity-large-preview:free + success: true + total_prompt_tokens: 72556 + total_completion_tokens: 13814 + total_cost: 0.0 + total_duration_seconds: 655.9 + total_retries: 0 + stages: + - stage: extract-entities + retries: 0 + provider: openrouter + model: arcee-ai/trinity-large-preview:free + prompt_tokens: 27835 + completion_tokens: 4985 + cost: 0.0 + finish_reason: stop + duration_seconds: 248.8 + error: null + - stage: map-to-vsm + retries: 0 + provider: openrouter + model: arcee-ai/trinity-large-preview:free + prompt_tokens: 7111 + completion_tokens: 6879 + cost: 0.0 + finish_reason: stop + duration_seconds: 329.0 + error: null + - stage: synthesize-analysis + retries: 0 + provider: openrouter + model: arcee-ai/trinity-large-preview:free + prompt_tokens: 37610 + completion_tokens: 1950 + cost: 0.0 + finish_reason: stop + duration_seconds: 78.1 + error: null