The Butcher, the Brewer, the Baker — Adam Smith quote

One of the most famous lines from Adam Smith's The Wealth of Nations is:

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

—Adam Smith

One interpretation is that this quote underpins capitalism: people trade because it benefits them, which is true. But what I like about this passage is that it hints at something else, too.

There is a two-way benefit in effective trade. To help ourselves, we have to help others. And to help others, we have to understand what they want. Good trade depends not just on self-interest but on the ability to take another person's perspective. The magic of trade is that both sides are better off when it works well—a genuine win-win.

You can find more interpretation on this short passage at the OLL .

I first read the passage in The Invisible Hand , part of Penguin's Great Ideas Series. It makes a good introduction to Adam Smith.

Freakonomics also did a great two-part podcast series on Adam Smith: In Search of the Real Adam Smith .

Related Ideas to the Butcher, the Brewer, the Baker

Also see:

• Rival and Non-Rival Goods
• Fungible and Non-Fungible Goods
• Veblen Goods
• The Bullwhip Effect
• Recession vs Depression
• The Business Flywheel