They who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged. We are delighted to find a person who values us as we value ourselves, and distinguishes us from the rest of mankind, with an attention not unlike that with which we distinguish ourselves.

To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should never be established in it. And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. Smith argued in 1776 that the division of labor was the basis for the separation between mental and manual labor, and therefore between natural philosopher and laborer. And still the Emperor advanced. A reptilian canine leapt at him only to rip through the air where he had been standing. It gurgled molten blood as the Emperor’s sword manifested within its throat. The warlord clutched it in place a second longer before ripping it free and moving on. Every faculty in one man is the measure by which he judges of the like faculty in another. I judge of your sight by my sight, of your ear by my ear, of your reason by my reason, of your resentment by my resentment, of your love by my love. I neither have, nor can have, any other way of judging about them.T]he simple fact is, of course, that in normal trade all parties gain; there exist mutual gains from trade. The great contribution of Adam Smith lay in his popularization of this simple point, but the full import of this conception for democratic political theory does not seem to have yet been appreciated.

True, Smith was a firm believer in the market economy, but he was not a doctrinaire advocate of laissez-faire. His ideas for the role of government were obviously limited by the stage of development reached in the eighteenth century, when the state's activities comprised mainly defence, maintenance of the rule of law and the provision and construction of a transport system of roads, bridges and canals. But in one field he was prepared for the government to intervene to the point of being dictatorial – education. This sprang from his recognition of the social costs of the market economy. The growing phenomenon of the division of labour led, he maintained, to the mental mutilation of those condemned to spend their working lives on a few simple and repetitive operations, which bred "torpor of the mind". And he added, "In every improved and civilized society this is the state into which the labouring poor, that is the great body of the people, must necessarily fall, unless government takes some pains to prevent it." The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another. Letter to Henry Dundas (1 November 1779), quoted in Adam Smith, The Correspondence of Adam Smith, eds. E. C. Mossner and I. S. Ross (1987), p. 241 The virtue of frugality lies in a middle between avarice and profusion, of which the one consists in an excess, the other in a defect of the proper attention to the objects of self–interest.Every man, as the Stoics used to say, is first and principally recommended to his own care; and every man is certainly, in every respect, fitter and abler to take care of himself than of any other person. Every man feels his own pleasures and his own pains more sensibly than those of other people. The former are the original sensations; the latter the reflected or sympathetic images of those sensations. The former may be said to be the substance; the latter the shadow. 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 favor of the workmen, it is always just and equitable; but it is sometimes otherwise when in favor of the masters. It is unjust that the whole of society should contribute towards an expence of which the benefit is confined to a part of the society.