ABSTRACT
As these early, and familiar, statements in The Wealth of Nations make clear, Adam Smith sought to ground his argument for widening the exchange nexus on the increase in the production of economic value that extended specialization makes possible. Smith’s primary targets were the restrictions on voluntary exchanges imposed by ill-advised mercantilist policies. The elimination of restrictions on trade effectively extends the market, thereby allowing for the exploitation of previously unrealized gains from specialization. Smith did not, to my knowledge, attend to the prospect for extending the market along the internal workleisure margins of individualized choice.1 If, however, gains are there to be secured by the mere opening up of markets, there must also be gains to be realized from a generalized increase in the quantities of input, specifically labour input, supplied to the exchange or market nexus. By supplying more inputs to the market in exchange for the increments in income that will, in turn, be expended on the goods and services
generated in the market, individuals may, internally, extend the size of the network. An economy in which there are one million workers who supply, on average, forty hours of work per week, is twice the size of an economy, other things being equal, in which the same one million workers supply, on average, twenty hours of work per week.
