So, sometimes #AdamSmith's #WealthOfNations can feel a bit abstract. Not today! Today we're talking jobs! #WealthOfTweets #SmithTweets
If a society has perfect liberty and if workers are perfectly free to choose, they will naturally move to the most advantageous forms of employment. Those are some big ifs, but we can be 𝗯𝗲𝘁𝘁𝗲𝗿 at this, if not perfect. (I.x.a.1) #WealthOfTweets #SmithTweets
There are 5 main factors that affect wages for a given job. (I.x.b.1) #WealthOfTweets #SmithTweets

Is it pleasant to do?
Is it quick and cheap to learn?
Are there lots of jobs?
How much respect/trust does it need?
How likely is success?
Only two of these factors affect the profits of stock: the agreeableness/disagreeableness of the business and the risk of failure. (I.x.a.34) #WealthOfTweets #SmithTweets
Some work, like hunting and fishing, becomes so easy, fun, & plentiful that it becomes a hobby rather than a job. (We don’t SmithTweet for free, but we knit & cook for fun!) (I.x.b.3) #WealthOfTweets #SmithTweets
Workers with expensive educations are like expensive machines. So you’d better expect that PhD to pay off in salary later! (I.x.b.6) #WealthOfTweets #SmithTweets
Smith. Not a fan of apprenticeship. He says apprentices are expensive & often lazy, which is bad for masters & customers. They are bound for a long time, which is bad for apprentices. Everyone loses. (I.x.b.8) #WealthOfTweets #SmithTweets
If that's not enough, compulsory apprenticeships are an extra barrier to entering a trade! REALLY everyone loses. (I.x.b.8) #WealthOfTweets #SmithTweets
“Education in the ingenious arts and the liberal professions is still more tedious and expensive.” SAYS THE COLLEGE PROFESSOR. (I.x.b.9) #WealthOfTweets #SmithTweets
If your work is seasonal, you have to make enough to sustain you when it’s not the right season. But we’re not sure it works that way any more, now that we’re primarily non-agricultural in our work. Seasonal work pays less, not more. (I.x.b.12) #WealthOfTweets #SmithTweets
Oh! Except for holiday workers at, say Target or FedEx. They usually make a premium because of high demand in holiday season. Is that a modern analogue to Smith’s agricultural example? (I.x.b.12) #WealthOfTweets #SmithTweets
If a job is tough and dirty enough (Hi @MikeRoweWorks, we love you like we love Adam Smith) it can pay even more than nice, clean work. (I.x.b.15) #DirtyJobs #WealthOfTweets #SmithTweets
That’s why colliers and coal-heavers make so much—the work is dirty, hard, and dangerous. And the wage has to persuade people to take all that on. Have we mentioned we love @MikeRoweWorks? (I.x.b.15) #WealthOfTweets #SmithTweets
Look. Smith had failings. And one of them is the failure to take the opportunity in I.x.b.15 to mention night soil men: the profession you didn't know you didn't want to miss. They carted off the 💩! (Really.) #DirtyJobs #WealthOfTweets #SmithTweets
If people have to trust you a lot, you get paid more. Bankers, goldsmiths, doctors. etc. (I.x.b.17–20) #WealthOfTweets #SmithTweets
And if the odds against succeeding are high, you get paid more. High risk=high reward. (I.x.b.21–24) #WealthOfTweets #SmithTweets
This sort of falls apart, says Smith, wrt the arts, some of which were considered morally iffy in his time. When artists make it big, they’re paid a lot for their talent, but also to compensate them for doing disreputable work. Like opera. (I.x.b.1) #WealthOfTweets #SmithTweets
(We feel compelled to mention, at this point, that @mikeroweworks used to be an opera singer. Bet he never thought that was a #DirtyJob....but Smith did.) #SmithTweets #WealthOfTweets
Today, the low pay for artists may be because art is treated more like hunting and fishing—considered more fun than joblike. (That may not be kind to artists, but it may be what’s happening.) (I.x.b.25) #WealthOfTweets #SmithTweets
Oh, btw, we all, universally, stink at evaluating risk. We’re awful at it. And the younger we are, the worse we are. (I.x.b.26–33) #WealthOfTweets #SmithTweets
You don’t get crazy rich by just pursuing a trade. That takes speculation and risk. We’re not sure Smith totally approves of that approach, and at any rate he doesn't seem to recommend it. (I.x.b.38) #WealthOfTweets #SmithTweets
Generally you make more money in new kinds of jobs than in old ones. (I.x.b.39) #WealthOfTweets #SmithTweets
All sorts of outside factors influence wages—season, war/peace, price of commodities, etc. (I.x.b.44–47) #WealthOfTweets #SmithTweets
Smith knows about side-gigs! They weren't invented by Uber! (I.x.b.48–52) #WealthOfTweets #SmithTweets
(We do wonder if he could have envisioned a world where everything is a side gig, though... See you tomorrow!) #WealthOfTweets #SmithTweets

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More from @adamsmithworks

14 Jan
Yesterday #AdamSmith said things work pretty well when people have perfect liberty to choose a trade and where to practice it? In this half of the chapter he specifies the ways people aren’t at perfect liberty, and whose fault it is. (I.x.c.1) #WealthOfTweets #SmithTweets
And (spoiler) it's government policy’s fault! They restrain competition in some places, increase it in others, and obstruct free movement of labor. (I.x.c.2) #WealthOfTweets #SmithTweets
Many government restraints on competition are “as foolish as can well be imagined.” Like how coachmakers can’t make the wheels for coaches, but wheelmakers can make coaches. (I.x.c.9) #WealthOfTweets #SmithTweets
Read 18 tweets
12 Jan
Today we're gonna talk about profits. They come from stock! #AdamSmith reminds us that stock is any resource paid for in advance when doing business. In general, profits and wages don't move together. (I.ix.1–2) #WealthOfTweets #SmithTweets
As stock goes up, there's more of it to employ more workers (by paying them or providing machines for them to work or both). This raises wages! But new stock competes with existing stock, which tends to lower profit. (I.ix.2) #WealthOfTweets #SmithTweets
If you thought figuring out the average wages of labor was complicated, don't even think about trying to figure out the average profit of stock. Basically impossible. Luckily, the rate of interest tends to vary with the profits of stock. (I.ix.3–4) #WealthOfTweets #SmithTweets
Read 15 tweets
11 Jan
Good morning, Smithketeers! Time for Book One, Chapter 8 of #AdamSmith's #WealthOfNations. Today, we're talking wages. Not that they're a topic with any contemporary relevance, or anything. #WealthOfTweets #SmithTweets
The things we make by working are the natural wage of our labor. Which is great if SmithTweeters want to get paid in SmithTweets. (I.viii.1) #WeDont #TweetsWontBuyHousesByTheSea #WealthOfTweets #SmithTweets
It’s a state of nature story, like Locke or Hobbes or Rousseau, but Smith’s state of nature is defined by the product of each person’s labor belonging to that person. Sounds great, but again, we don’t want to get paid in SmithTweets. (I.viii.2) #WealthOfTweets #SmithTweets
Read 23 tweets
10 Jan
We know what you're thinking: Yay! All done with #AdamSmith's theory of prices! Labor and gold, that's where it's at. Right? Ha ha! WRONG! All prices have three components: wages, profit, and rent. Let's tweet about them! ( #WealthOfTweets #SmithTweets
(Don't panic. Smith still says the real VALUE of all the parts of a price comes down to how much labor they can purchase or command. But today we're only talking about price.) ( #WealthOfTweets #SmithTweets
So if all we're just hunting/gathering/trading, then all we have to worry about paying for labor (wages). That's where all exchangeable value comes from. But in advanced market societies, there's more going on. ( #WealthOfTweets #SmithTweets
Read 13 tweets
9 Jan
Wages, profits, and rents have “natural rates” regulated by the general conditions of the society in which they exist. (I.vii.1) #WealthOfTweets #SmithTweets
When the price of any commodity = price of rent + profit + labor + price of getting it to market, the commodity is sold at its “natural price.” (I.vii.4–5) #WealthOfTweets #SmithTweets
And that all means the commodity has been sold for what it is worth—what it really costs. (I.vii.5) #WealthOfTweets #SmithTweets
Read 18 tweets
8 Jan
OK! Who's ready to talk at great length and in great detail about prices? #AdamSmith, that's who! (I.v) #BuckleUp because this is the first of three chapters Smith prepped us for yesterday. (I.v) #WealthOfTweets #SmithTweets
We're about get into some #LaborTheoryOfValue. (I.v.1–18) We, the SmithTweeters, are firmly on board with the #MarginalRevolution (and we are fans of @MarginalRevolt). But Smith's theory is more complex than is often recognized. #WealthOfTweets #SmithTweets #ValueHowDoesItWork
The caricature version of the #LaborTheoryOfValue is that the longer you work on a thing, the more it must be worth. This is obviously wrong, and Smith (and Marx, btw) would agree that it's wrong. (I.v.1–18) #WealthOfTweets #SmithTweets
Read 43 tweets

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