The Division of Labour
Why I am reading The Wealth of Nations
For some time now I have been reading books which go over different schools of economics, and how each one takes a look at a governments role in a market and the liberties given to an individual. However every book I picked up always made some reference to the The Wealth of Nations (TWON) by Adam Smith.
I had known of the book, however was somewhat discouraged to read it due to it’s 18th Century use of the English language. Now however, it has come to the point where enough is enough. Book after book mentions TWON, so instead of getting a limited understanding of the book via second hand information, I may as well read the bloody book myself (and also understand it properly).
Which brings me to the first chapter: On the Division of Labour.
On the Division of Labour
Smith opens up by stating that “the greatest improvements in the productive powers of labour” is the division of labour, but what does that mean? Luckily Smith is a big fan of explaining through examples, and for this particular one he begins with that of a pin-maker.
Now it is safe to assume that not everyone has the knowledge to make an entire pin. As a result “one who is not educated to the business, and not acquainted with the machinery employed to make pins” could only make one pin a day.
What Smith proposes is that the manufacturing process of making a pin should be divided into a number of branches. Instead of one person making an entire pin, the process can be broken up into different stages. Where a person only focuses on one or two stages, and has no interest in the others. For example:
- one person draws out the wire
- another straightens it
- a third cuts it
- a fourth points it
Overtime each worker becomes much more acquainted with the tools they need to use in order to complete their tasks.
It gets juicier
From Smith’s observations, he has seen a manufacturing firm consisting of 10 workers perform two or three distinct operations. Although each were indifferently accommodated with the necessary machinery, they could among themselves make about 48,000 pins a day.
Therefore, each person might be considered as making 4800 pins in a day. On the other hand, had each of them wrought separately and independently, and without any of them being educated to the business, they certainly could not have made 20 pins each.
Agriculture vs Manufacturing
There are of course forms of labour which cannot be easily subdivided. One example being agriculture.
the spinner is almost always a distinct person from the weaver; but the ploughman, the harrower, the sower of the seed, and the reaper of the corn, are often the same.
Smith opines that one of the reasons why an industry such as agriculture does not keep up to date with manufacturing, is that agricultural work cannot be easily subdivided as work found in manufacturing. As a result agricultural work is much more inefficient hence output being a lot slower.
Three Ways to Increase the Quantity of Production
From Smith’s view the division of labour improves productivity in three ways. He writes:
- To the increase of dexterity in every particular workman
- To the saving of time which is commonly lost in passing from one species of work to another
- To the invention of a great number of machines which facilitate and abridge labour, enabling one worker to do the work of many
To the increase of dexterity in every particular workman
Here, Smith argues that people in more specialised jobs naturally become more skilled and efficient at performing their work. Therefore one should reduce a worker’s business to some simple operation. Through repetition they will become more familiar with the tools, hence faster.
The example given is that of a blacksmith, who though accustomed to handle the hammer and has never made nails, if upon some occasion he is obliged to attempt it, will most likely make two or three hundred bad ones. Therefore it is important to provide the blacksmith with work which requires the hammer.
To saving time which is commonly lost in passing from one species of work to another
When a worker is switching from one task to another means that there is a loss of time. This cost Smith says is widely underestimated.
It is impossible to pass very quickly from one kind of work to another that is carried out in a different place and with quite different tools.
What was of great interest to me, is how Smith takes into account the psychology of someone at work. When a worker first begins new work, they are seldom “very keen and hearty”. Therefore in most cases they spend their time unfocused rather than applying good purpose. Changing your hand in twenty different ways throughout the whole day, renders a worker almost always slothful and lazy, “and incapable of any vigorous application even on the most pressing occasions.
The habit of sauntering and of indolent careless application, which is naturally, or rather necessarily acquired by every country workman who is obliged to change his work and his tools every half hour, and to apply his hand in twenty different ways almost every day of his life, renders him almost always slothful and lazy, and incapable of any vigorous application even on the most pressing occasions.
To the invention of a great number of machines which facilitate and abridge labour, enabling one worker to do the work of many
Even advancements in technology can be attributed to the division of labour, since the more specialised a person’s work is, the more likely they are to discover a mechanical or even an automatic way of doing the work.
Smith states that we are much more likely to discover easier and readier methods of attaining any object when the whole of our attention is directed towards that single object, than when it is dissipated among a great variety of things.
A great part of the machines made use of in those manufactures in which labour is most subdivided, were originally the inventions of common workmen, who, being each of them employed in some very simple operation, naturally turned their thoughts towards finding out easier and readier methods of performing it.
The Division of Labour — philosophers
Towards the end of the chapter Smith moves away from describing the division of labour when it comes to manufacturing, and instead towards the industry of philosophy.
He states that even a domain such as philosophy can be subdivided into a great number of branches, each of which affords occupation to a peculiar class of philosophers. This subdivision of philosophy improves dexterity and saves time. As a result each individual becomes more expert in their own branch, more work is done upon the whole, and the quantity of science is considerably increased by it.
It is important to take into account what era Adam Smith wrote The Wealth of Nations (1776), as a lot may not apply in today’s world. Having said that I plan to publish a modern take on this chapter for my next post.
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