1. Direct distinction from the reading:
Parenti explains the difference in terms of how they earn their income:
“One should distinguish between those who own the wealth of society and those who must work for a living.”
Owners: People whose income mainly comes from the labor of others e.g., “the very rich families and individuals who compose the owning class live mostly off investments, which include stocks, bonds, rents, mineral royalties, and other property income.”
Example: A wealthy shareholder who earns dividends from the corporation that employs workers.
Employees: Those who live mostly off wages, salaries, or fees for their own labor.
Example: A factory worker or office employee who sells their labor in exchange for a paycheck.
Parenti also notes these categories aren’t perfectly neat (some managers or professionals earn high wages and may later live off investments), but the key difference is where the income comes from: wages vs. income generated by others’ labor.

2.Smith is emphasizing that the fundamental value in an economy comes from human labor, not money itself. Money is just a symbol or representation (“nominal price”), but the true value of any good or service is grounded in the amount and effort of labor that produced it.
So it means that labor is the real source of wealth = the work people perform to turn raw materials into usable products is what really gives things their worth. Money doesn’t create value; labor does.

3. In Reading 4.4, Parenti rejects the idea that class is simply like race or gender, something you are. Instead, class is defined by your relationship to economic production and to others in the economy, especially in capitalism.
Rather than being about personal traits or cultural identity, class is about structural roles, who controls productive resources and who must sell their labor. Under this view, class explains not just differences in lived experience but differences in interests, power, and dependencies within society.
I understand this argument to mean:
Class isn’t a fixed “identity category” like ethnicity or gender.
It’s a structural position that shapes what people can do, how they’re treated, and what they must do to survive especially in relation to production and access to wealth.
This helps explain why class has political and economic implications beyond personal identification because it’s about where power lies in society.

4.When Parenti (and Marxist/class analysis generally) says class is about dependency, it means workers depend on owners for the basic means of survival (income through wage labor), while owners depend on workers’ labor to generate profit.
This is a mutual but unequal dependency:
Workers must sell their labor because they don’t own the means of production, things like factories, land, machines, so they need wages to live.
Owners must have workers produce goods and services if they want profits and continued wealth.
But the power in this relationship is skewed: owners have control over work conditions, profits, and hiring decisions. Workers have little choice but to accept employment terms.
Example:
A manufacturing plant:
The company owner owns the machinery and factory.
Workers don’t own these things, so they must work for wages.
The owner’s profit depends on workers’ labor, while workers must labor in order to be paid.
This is the “close form of dependency,” each class is structurally tied to the other, but not equally.