"Smith believed that economic growth is good and is achieved by the application of the division of labor, which is organized within markets and driven by rational self-interest. Nations that allow market forces to generate such growth will become wealthier than those that follow the mercantile model of trade. Smith lays out the role for state activity, he maintains that there are three areas for legitimate governmental activity in society: defense against internal or external security threats, the formation of laws that prevent individuals from oppressing one another and the provision of public good that the market would not supply" (Kilcullen 4).
For Smith, labour was a very important aspect in the economy of a country; it is a way by which most society lives. The working class must perform labour in order to survive. Smith believes that labour is "the real measure of the exchangeable value of all commodities" (Smith 68).
Smith is most widely known for using his metaphor of the invisible hand. This metaphor was used as a description of the market's ongoing process. Smith stated, "He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand, to promote an end which was no part of his own intention. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good"(Smith 292). Smith begins to make visible the miracle of the invisible hand by describing a simple woolen coat and begins to speak of how this product is the joint labor of a great multitude of workmen.