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China has been long one of the richest, that is, one of the most fertile, best cultivated, most industrious, and most populous countries in the world. It seems, however, to have been long stationary. Marco Polo, who visited it more than five hundred years ago, describes its cultivation, industry, and populousness, almost in the same terms in which they are described by travellers in the present times. It had perhaps, even long before his time, acquired that full complement of riches which the nature of its laws and institutions permits it to acquire:The poverty of the lower ranks of people in China far surpasses that of the most beggarly nations in Europe.

Adam Smith#5

EconomicsPolicyWealthHistoryDevelopmentStagnation

About this quote

What does it mean?
China was wealthy but stagnant for centuries, with laws preventing growth. Riches did not prevent extreme poverty among lower ranks.
In plain terms
China stayed rich but stopped growing, leaving many poor due to its laws.
What can you take from it?
Wealth without progress leads to stagnation and inequality.

Where it applies

  • economic development
  • historical study
  • policy review

Putting it to work

  • studying historical economies
  • reform proposals

Questions to consider

  • Why do nations stop growing?
  • Does wealth guarantee progress?

Another view

Stagnation results from many factors beyond just laws.

More from Adam Smith

  1. People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contr…

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  2. China is a much richer country than any part of Europe.

    Permalink to quote #6
  3. We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters …

    Permalink to quote #3

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