The Wealth of Nations
Book 1, Chapter 1
the Division of Labor
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Chapter 1 Summary
The greatest improvements in the productive power of labor, as well as the development of specialized skills, dexterity, and judgment, occur when there is division of labor (specialization).
Let us look at the example of a pin-maker. An unskilled tradesman could perhaps produce one pin a day. But if we divide the work involved into a number of different trades—one man draws out the wire, another straightens it, a third cuts it, a fourth points it, etc.—separating the production of the pin into about eighteen distinct operations, then ten men could produce 48,000 pins in a day.
There are three reasons for this exponential increase in productivity:
Firstly, this division of labor increases each workman’s dexterity; since each man is working on a sole task, his specialized knowledge of that task will grow, thus increasing his dexterity.
Secondly, division of labor in this way will save time for each worker. Since the worker is focusing on an individual task, he does not have to pass from one task to another in order to change tools, for example. This will save time and thus increase each worker’s productivity.
Thirdly, workers who spend large amounts of time on a single, repetitive operation often come up with ideas for machines to streamline the equipment and tools used, thus increasing productivity. Further improvements have been made thanks to the ingenuity of the manufacturers of these machines.
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