The Wealth of Nations. The Theory of Moral Sentiments

Mercantilism is the protectionist economic theory that countries gain wealth by accumulating gold and silver through trade. Mercantilism requires nations to export commodities in exchange for gold and silver, while hoarding their own gold and silver. Because of Smith’s writing, mercantilism has long been out of favor as an economic policy.

Labor is the physical work required to produce exchangeable value from a commodity. Labor can be comprised of a wide variety of tasks, from setting pins to writing study guides. Labor composes one-third part of the price of any good.

This refers to income derived through the employment of capital stock, whether it be raw commodities or machinery. The profits of stock are simply money generated using some asset. The profits of stock are one-third of the price of any good.