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The Wealth of Nations | Study Guide

Adam Smith

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The Wealth of Nations | Volume 1, Book 1, Chapter 1 : Of the Division of Labor | Summary

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Summary

"The greatest improvement in the productive powers of labor," Smith announces, is the result of the division of labor. To show how this division works in practice, Smith offers the example of pin-making: someone without any special training might be able to make no more than a single pin in a day, but a team of specialized workmen, each completing a specific step in the process, can churn out thousands of pins, per person, per day. The same increase in productivity, Smith argues, can be observed in "every other art and manufacture" in which labor has been subdivided and specialized.

In Smith's view the division of labor improves productivity in at least three ways. First of all, people in more specialized jobs naturally become more skilled and efficient at performing their work. Second, they save the time it would take to switch between tasks—a cost Smith says is widely underestimated. Third, even advancements in technology can be attributed to the division of labor, since the more specialized a person's work is, the more likely they are to discover a mechanical—or even an automatic way—of doing the work. The ultimate result of such division, Smith opines, is a "universal opulence" that "extends itself to the lowest ranks of the people."

Smith closes the chapter with a remark on the cumulative effects of the division of labor. Even an ordinary workman, he observes, is supported in one way or another by innumerable other artisans, farmers, and merchants. To make his clothes alone requires the interaction of dozens of different kinds of specialized labor, and the same goes for his tools, his residence, and his food and drink. Thus, Smith, concludes, even the supposedly "easy and simple" living standard of the working class requires the "co-operation of many thousands."

Analysis

Living in the early decades of the Industrial Revolution, Smith could hardly have failed to notice the increasingly specialized forms of labor both enabled and necessitated by the new technologies. Textile manufacturing, to which Smith frequently alludes in later chapters, was among the industries most visibly affected by these developments, which included the invention of the spinning jenny (a machine for spinning wool invented in 1764) and the introduction of industrial-scale cotton mills (1760s). Although rudimentary steam engines were well known in Smith's time, their applications were mainly restricted to the mining industry. The true breakthroughs in steam technology came with the development of the Watt engine, developed by Scottish inventor James Watt, just as Smith was completing The Wealth of Nations.

On a more modern note, Smith's remarks about "time lost in passing from one sort of work to another" have proved to be truer than he could have realized. The phenomenon Smith identifies here is now known in cognitive science circles as task switching, and it carries a substantial cost in delayed reaction times and impaired work performance. One review of the research, published in 2006 by the American Psychological Association, shows that repeated task switching "can cost as much as 40 percent of someone's productive time." Smith's casual observation—people get distracted when switching from task to task—is now a well-described psychological principle with implications for workplace safety, management science, and industrial design.

"Pin-making" eventually became a proverbial example of a trade that is seemingly simple but capable of great technological improvement. It was notably reused in Bertrand Russell's "In Praise of Idleness" (1932), a short philosophical essay that provides an interesting counterpoint to Smith's ideas on the nature and purpose of work. Like Smith, Russell saw the technologies of his time as contributing to vastly increased productivity of labor: "Modern technic," he wrote, "has made it possible to diminish enormously the amount of labor necessary to produce the necessaries of life for every one." This was even truer in Russell's day than in Smith's. Russell, however, calls for an embrace of leisure as an essential part of human life, whereas Smith tends to equate idleness with wastefulness.

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