Study Guide

The Wealth of Nations Book I, Chapter 1

By Adam Smith

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Book I, Chapter 1

Of the Division of Labour

  • For starters, Adam Smith wants us to know that one of the biggest achievements of many wealthy countries is something called the "division of labor." In other words, the fact that we have specialized people for specialized tasks makes us much more productive than having a bunch of people who try to do every job well.
  • Adam Smith uses the example of pin-makers in England to illustrate his point. An amateur who doesn't know anything about pin making could probably make one decent pin per day. But when you bring in someone who is specialized at stretching a wire, another one at cutting it, another one at pointing it, etc., then you can make thousands of pins a day.
  • That's the secret of specialization and the division of labor. Any advanced system of manufacturing works this way.
  • By dividing labor up into simple, specialized roles, we also give ourselves more opportunity to invent new machines that can do certain tasks for us (like the way robots weld metal onto cars today).
  • For this reason, Smith believes that even the lower classes of developed countries are still better off than the richest people in some less developed ones. In his mind, much of this is due to the division of labor.

The Wealth of Nations Book I, Chapter 1 Study Group

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