Smith 1776

Chapter I: Work Division

• Dividing work improves production.

• Seen in specific industries; easier in small factories.

• Pin-Making Example

  • Unskilled: <1 pin/day; Divided: 4,800 pins/worker/day.

  • Steps: straightening, cutting, etc.

• Division boosts manufacturing, but varies.

• Developed countries specialize more.

• One product involves many trades.

• Farming has fewer divisions due to seasons, limiting improvement.

• Rich countries excel in manufacturing.

• Three Reasons for Increased Output

  • Skill, less task-switching, machines.

• Workers specialize, get better.

• Nail-Making Example

  • Regular smith: few nails; Specialist: 800-1000 nails/day; Boys: >2,300 nails/day.

• Less task-switching saves time; frequent changes reduce productivity.

• Machines ease work; division leads to inventions.

• Early Steam Engine Example

  • Boy automates valve.

• Thinkers connect ideas, improving work.

• Division leads to wealth; workers trade surplus.

• Benefits all, even poor.

• Woolen Coat Example

  • Involves shepherds, weavers, etc.; needs merchants, carriers.

• Even basic items need vast cooperation.

Chapter II: Why Divide?

• Division evolves from trading.

• Humans trade; animals don't contract.

• We get services via self-interest, not kindness.

• Beggars also trade.

• Trading drives division.

• Hunter-Gatherer Example

  • Bow-maker trades for animals, specializes.

• Talents less significant than practice.

• Differences arise from jobs.

• Trading makes talents useful.

• Animals lack trade benefits.

• Humans benefit through trade.

Chapter III: Market Limits

• Division limited by market size; small markets hinder specialization.

• Some industries need big towns.

• Example: Porters need many people.

• Rural areas: farmers self-sufficient.

• Water transport expands markets.

• Land vs. Water: Ships carry far more than