The Wealth of Nations

Book 1, Chapter 3

the Division of Labor Is Limited by the Extent of the Market

Download Preston's Free Checklist

Download Preston's free checklist. His checklist was developed after spending countless hours studying billionaires like, Warren Buffett, Carl Icahn, and Ray Dalio. With his checklist, you can find safe picks that protect and grow your principal. Additionally, Preston reads a lot of books and writes an executive summary for each book he reads. If you download his checklist, you will be added to his monthly e-mail list where he sends his book summaries. There are never any advertisements...ever. Here's an example of one of Preston's executive summaries, based on the book written by Billionaire Charlies Koch.

Chapter 3 Summary

In areas in which the market is very small, the division of labor tends to be limited, with workers often needing to do several jobs rather than focusing on a single trade or task. In a small village, for example, a farmer will often act as the butcher, baker and brewer for his own family.

Let us compare the transportation of goods between London and Edinburgh by land versus by ship. By ship, it would take only six to eight men to transport the same quantity of goods as it would take 100 men, fifty wagons and 400 horses to transport by land. As for expenses, transporting 200 tons of goods by land from London to Edinburgh would incur costs for the upkeep of 100 men and 400 horses for three weeks, as well as the wear and tear to the fifty wagons. Expenses for transportation by water would be for the upkeep of only six to eight men and the wear and tear caused to the ship by the cargo. To this we must add the difference in insurance costs for transport via land versus water.

Plantations in North American colonies have consistently been planted along shorelines or riverbanks.

Next Chapter

Don't get lost in the Wall Street Fee-Factory

It's taken us a few years to finally figure out the right mix of tools that get results and save money. If you click on the toolbox, you'll see an article we wrote that lays-out the brokers and research tools we personally use.

Got Questions?

The Investor's PODcast

Get a free autographed copy of the Warren Buffett Accounting Book or Warren Buffett's Three Favorite Books. Simply submit your question to The Investor's PODcast. If your question gets answered on the air, the founders of this site, Preston Pysh and Stig Brodersen, will send you a free signed copy of their book!

The Warren Buffett Forum

Ask your question at the Buffett's Books money forum and interact with other smart investors like yourself. You won't find any day traders on this forum! Here's the link to The Warren Buffett Forum.