These maxims are drawn directly from The Wealth of Nations. They are not summaries or abstractions — they are the operational principles of Adam Smith's doctrine, stated in the form most useful to the strategic practitioner.
- Maxim I — DivisionSpecialization multiplies productive power beyond what any individual effort can achieve. The question is always: what is the correct division of labour for the scale of this operation and the extent of this market?
- Maxim II — Real ValueAssess every resource in real terms — time, effort, capacity — not nominal terms. The nominal price conceals the real cost. Strategic error almost always traces back to a nominal assessment.
- Maxim III — ComponentsEvery price resolves into wages, profit, and rent. Identify which component is rising and which is falling in any situation you assess. The direction of each component tells you whether the operation is accumulating or depleting.
- Maxim IV — StockKnow the distinction between fixed and circulating capital at all times. An operation that depletes its circulating capital to build fixed capital will have infrastructure it cannot operate. An operation that builds no fixed capital has no productive base.
- Maxim V — ProductivityProductive labour builds the stock of the enterprise. Unproductive labour consumes it. The proportion between them determines whether the enterprise accumulates or depletes over time. Audit the proportion before increasing any expenditure.
- Maxim VI — AccumulationCapitals are increased by parsimony and diminished by prodigality. Every surplus directed to productive employment compounds. Every surplus consumed is lost. The discipline of accumulation is not deprivation — it is the direction of surplus.
- Maxim VII — CompetitionThe mercantile pursuit of nominal indicators — trade surpluses, gold accumulation, market share — at the expense of productive capacity destroys the real wealth it claims to build. Measure the actual output of the productive base, not its nominal representation.
- Maxim VIII — CoordinationIn a competitive market, individual self-interest produces collective order without central direction. Understand the mechanism — and understand when it breaks. Monopoly, collusion, and information asymmetry each break the mechanism and require a different response.
Doctrine
These maxims are not read once and stored. They are applied to every assessment of material, every allocation decision, and every evaluation of productive capacity. The practitioner who has internalized them operates from a different understanding of what resources are, how they behave, and how they compound — than the one who has not.