Inherently, natural ability allows one to specialize in that area to produce more goods for exchange. He discusses use value and exchange value as natural rules in exchanging, and believes the basis for exchange is rooted in self-interest. Though money— “a universal instrument of commerce”—facilitates exchange, labor is the true measure of value, not money, because the value of money changes (Smith 31). The division of labor allows one to exchange at a more productive rate so that laborers can gain a surplus in production. This surplus, if not exchanged, can be accumulated, like how capital would be. Capital can be saved or reinvested into society. Smith addresses that the problem with division of labor is that being skilled in one area may discourage workers and also create ignorant people. Though division of labor may cause inequality and low-skilled workers, Smith believes that it raises the overall wealth and happiness of a …show more content…
Self-interest drives a society to become a Commercial Society, which, according to Smith, is rooted in human nature. Through the division of labor, laborers will be able to drastically increase their productions, stimulating the growth of the economy. A growing economy is parallel to growth in capitals, therefore the overall wellness of the nation. Under Capitalism, self-interest, as part of human nature, signifies self-improvement. By reinvesting capital, the overall capital of the nation will grow and therefore increasing the wages of the workers. This increases the wealth of a nation as a whole because a society cannot be deemed as successful and happy if laborers are poor. Through the division of labor, productivity increases; therefore, laborers are richer and happier. Division of labor can yield efficiency, and efficiency allows people to produce at a higher rate. What this implies is that Capitalism drives people to produce more and compete because if one individual is making more than another, that individual would have the intention to surpass the other because it is in human nature to work for self-interest. Through competition, laborers are able to further their productions. The market works because competition balances it with self-interest as the motivator for exchange. The market in a Capitalist’s world is regulated by self-interest and