1) The major distinction between the owning and working class is how they earn their livelihood. To be a part of the owning class, your income has to be dependent on other people’s labor. Even if the majority of your income comes from investments, that money is not made from thin air. Buying shares of a company means you own a small piece of that corporation, and its value is influenced by the performance of production and market rivalry. These are all reliant on the working class’s labor and consumption. Meanwhile, the working class barely survives off wages paid to them by the capitalists. These wages are not equivalent to the labor they contributed to the company, it is only a small fraction of the value they created, and the rest of it is paid out to the business owner as “profits”. For example, imagine you work in a factory that produces a product sold for x amount of dollars, and you help produce 100 items per shift. You are not going to be paid 100x dollars per shift, you will be paid what the business owner decides is the least amount they can pay you while still covering business expenses and creating maximum profits for themselves. Essentially, the exploitation of the working class is what earns capitalists their livelihood while the working class cannot survive without giving away “free” labor. 
2) Adam Smith’s quote discusses the true value of goods, which is not determined by the monetary value, but the real value equating to the amount of labor and time put into producing said goods. In other words, the price of something is meaningless if it is not equal to the work put in to create that item or service. The cost of producing something depends on the costs workers take on to create it. 
3) I agree with the reading’s stance on class not being an identity because class is an objective position you hold in society. Individuals should not be able to self-interpret their economic status as they can with social identities. Race, religion, and gender, for instance, are deeply ingrained in an individual’s identity and should not be on the same level as one’s class. The way a capitalist economy is structured leaves you with only two options, you’re either in the working class or you are a capitalist. The terms “upper, lower, and middle” are only there to keep people thinking they are on their way up and that there is more economic potential waiting for them. Sort of like when you get a corporate job and you have to “climb the corporate ladder”, making your goal in life to be a more productive laborer so that your employers can see that you add surplus value. Yes, you may get paid more, but still not worth anything close to what you’re making for the CEO. If you focus hard enough on moving up the “social class” scale, you fail to notice that you are still being exploited for your work, and that is what helps capitalists sleep at night.

4) Class structures are built on dependency because the working class depends on the capitalist class and vice versa. For capitalists to create “profits” they first need somebody else’s labor to exploit, aka the working class. The working class depends on the wages paid to them by capitalists to survive. The issue arises when we realize how much more power and control the capitalist class holds over the working class. It is true that without laborers there is no profit to be made, but the working class does not get much of a choice when they need to sell their labor to be able to afford housing, food, healthcare, education, and transportation. Unfortunately, many working-class people don’t get to achieve self-fulfillment because they spend most of their day already stressing over their physiological needs being met (Maslow’s hierarchy of needs). The sad reality of capitalism is that there will always be wealth inequality and suffering as long as it exists as it cannot exist without exploitation. Landlords and tenants are a great example of close-form dependency in capitalism. The landlord depends on the tenants paying their rent to generate passive income, the tenant relies on the landlord to have a place to live. There is still an unequal distribution of power since the landlord has total control over rent prices and housing availability. This directly affects the lives and physiological needs of tenants.