An inquiry into the nature and causes of the wealth of

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The Wealth of Nations

own so tedious and expensive education, but of that of more than

twenty others, who are never likely to make any thing by it. How

extravagant soever the fees of counsellors at law may sometimes

appear, their real retribution is never equal to this. Compute, in

any particular place, what is likely to be annually gained, and what

is likely to be annually spent, by all the different workmen in any

common trade, such as that of shoemakers or weavers, and you

will find that the former sum will generally exceed the latter. But

make the same computation with regard to all the counsellors and

students of law, in all the different Inns of Court, and you will

find that their annual gains bear but a very small proportion to

their annual expense, even though you rate the former as high,

and the latter as low, as can well be done. The lottery of the law,

therefore, is very far from being a perfectly fair lottery; and that as

well as many other liberal and honourable professions, is, in point

of pecuniary gain, evidently under-recompensed.

Those professions keep their level, however, with other occupa-

tions; and, notwithstanding these discouragements, all the most

generous and liberal spirits are eager to crowd into them. Two

different causes contribute to recommend them. First, the desire

of the reputation which attends upon superior excellence in any

of them; and, secondly, the natural confidence which every man

has, more or less, not only in his own abilities, but in his own

good fortune.

To excel in any profession, in which but few arrive at medioc-

rity, it is the most decisive mark of what is called genius, or supe-

rior talents. The public admiration which attends upon such dis-

tinguished abilities makes always a part of their reward; a greater

or smaller, in proportion as it is higher or lower in degree. It makes

a considerable part of that reward in the profession of physic; a

still greater, perhaps, in that of law; in poetry and philosophy it

makes almost the whole.

There are some very agreeable and beautiful talents, of which

the possession commands a certain sort of admiration, but of which

the exercise, for the sake of gain, is considered, whether from rea-

son or prejudice, as a sort of public prostitution. The pecuniary

recompence, therefore, of those who exercise them in this man-

ner, must be sufficient, not only to pay for the time, labour, and

expense of acquiring the talents, but for the discredit which at-

tends the employment of them as the means of subsistence. The

exorbitant rewards of players, opera-singers, opera-dancers, etc.

are founded upon those two principles; the rarity and beauty of

the talents, and the discredit of employing them in this manner. It

seems absurd at first sight, that we should despise their persons,

and yet reward their talents with the most profuse liberality. While

we do the one, however, we must of necessity do the other, Should

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Adam Smith

the public opinion or prejudice ever alter with regard to such oc-

cupations, their pecuniary recompence would quickly diminish.

More people would apply to them, and the competition would

quickly reduce the price of their labour. Such talents, though far

from being common, are by no means so rare as imagined. Many

people possess them in great perfection, who disdain to make this

use of them; and many more are capable of acquiring them, if any

thing could be made honourably by them.

The over-weening conceit which the greater part of men have of

their own abilities, is an ancient evil remarked by the philosophers

and moralists of all ages. Their absurd presumption in their own

good fortune has been less taken notice of. It is, however, if pos-

sible, still more universal. There is no man living, who, when in

tolerable health and spirits, has not some share of it. The chance

of gain is by every man more or less over-valued, and the chance

of loss is by most men under-valued, and by scarce any man, who

is in tolerable health and spirits, valued more than it is worth.

That the chance of gain is naturally overvalued, we may learn

from the universal success of lotteries. The world neither ever saw,

nor ever will see, a perfectly fair lottery, or one in which the whole

gain compensated the whole loss; because the undertaker could

make nothing by it. In the state lotteries, the tickets are really not

worth the price which is paid by the original subscribers, and yet

commonly sell in the market for twenty, thirty, and sometimes

forty per cent. advance. The vain hopes of gaining some of the

great prizes is the sole cause of this demand. The soberest people

scarce look upon it as a folly to pay a small sum for the chance of

gaining ten or twenty thousand pounds, though they know that

even that small sum is perhaps twenty or thirty per cent. more

than the chance is worth. In a lottery in which no prize exceeded

twenty pounds, though in other respects it approached much nearer

to a perfectly fair one than the common state lotteries, there would

not be the same demand for tickets. In order to have a better

chance for some of the great prizes, some people purchase several

tickets; and others, small shares in a still greater number. There is

not, however, a more certain proposition in mathematics, than

that the more tickets you adventure upon, the more likely you are

to be a loser. Adventure upon all the tickets in the lottery, and you

lose for certain; and the greater the number of your tickets, the

nearer you approach to this certainty.

That the chance of loss is frequently undervalued, and scarce

ever valued more than it is worth, we may learn from the very

moderate profit of insurers. In order to make insurance, either

from fire or sea-risk, a trade at all, the common premium must be

sufficient to compensate the common losses, to pay the expense

of management, and to afford such a profit as might have been

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