Smith argued that mercantilists monopolistic polices were wrong, that the economy could reach competition markets leading …show more content…
The wealth of nation depends on productivity of labor and proportion of laborers that are productively employed. Labor was considered to be productive and service was unproductive labor. “Smith’s interpretation of the division of labour was not confined to job specialization. It also referred to the division of the labour force between those employed in useful labour and those not so employed.” According to Barber Ch.1. For example, an hour of skilled labor might be worth twice as much as an hour of unskilled labor. Wages depended on multiple factors such as the individual’s agreeableness or disagreeableness to work, their geographical situation, expected duration, knowledge, and alternative employment. Smith believed that just like goods, wages would be affected by the natural rate and reach actual