Book 2, Chapter 2 Summary and Analysis

Adam Smith next writes about two types of rents: gross rent and neat rent. Rents are profits obtainable from the land. It is important to notice that this does not mean what it does to contemporary readers who are familiar with rental properties. Repairs and other works to keep the land profitable are included in the gross rent. The neat rent can remain the same even when the gross rent changes.

Circulating capital is the next important concept. When Adam Smith wrote this book, England had 18 Million in "Pound Sterling" currency circulating in the nation. Prior to the creation and use of paper money, the cash value was rooted in the value of the metal from which the coin was made. Next, the author writes about how the amount of circulating currency does not need to be equal to...