Smith then inquired into wealth’s causes. He didn’t inquire into the causes of poverty. Smith understood that that poverty is humanity’s default mode. Nearly all people before Smith’s time — and still most people during his time — were mired in poverty. Poverty is simply the condition we suffer when wealth isn’t created. Wealth, not poverty, demands explanation because wealth, not poverty, has causes.
For Smith, the principal cause of wealth is the division of labor — specialization. The more each worker and firm specializes, the more productive they are. The jack of all trades, mastering none, produces relatively little of each output. But let each of those trades become the task of specialized workers or firms, and the resulting mastery raises the output of all the trades. The economic pie grows, with more output available per person.
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