The Wealth of Nations

The Wealth of Nations

by

Adam Smith

Division of Labor Term Analysis

The division of labor, the central concept in Book I, is the system of economic specialization that drives long-term growth. As Smith’s famous pin factory example illustrates, specialists are more productive than generalists because focusing more intensely on fewer tasks helps them save time, build dexterity, and find opportunities for automation. Over time, as this advantage helps specialists carve out niches in the market for themselves, a society’s overall division of labor becomes more complex, and its economy grows. Notably, Smith does not limit this concept to traditional labor activities: he also talks about how investors divide the employment of their capital, different countries learn to specialize in different kinds of trade, and so on.

Division of Labor Quotes in The Wealth of Nations

The The Wealth of Nations quotes below are all either spoken by Division of Labor or refer to Division of Labor. For each quote, you can also see the other terms and themes related to it (each theme is indicated by its own dot and icon, like this one:
Labor, Markets, and Growth Theme Icon
).
Book 1, Chapter 1 Quotes

To take an example, therefore, from a very trifling manufacture, but one in which the division of labour has been very often taken notice of, the trade of a pin-maker: a workman not educated to this business (which the division of labour has rendered a distinct trade), nor acquainted with the use of the machinery employed in it (to the invention of which the same division of labour has probably given occasion), could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part are likewise peculiar trades. [...] The important business of making a pin is, in this manner, divided into about eighteen distinct operations.

Related Characters: Manufacturers
Related Symbols: The Pin Factory
Page Number: 11
Explanation and Analysis:
Book 1, Chapter 5 Quotes

Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniencies, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man’s own labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour therefore, is the real measure of the exchangeable value of all commodities.

Page Number: 43
Explanation and Analysis:
Book 5, Chapter 1 Quotes

The man whose whole life is spent in performing a few simple operations [...] has no occasion to exert his understanding, or to exercise his invention, in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging; and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war.

Page Number: 987
Explanation and Analysis:
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Division of Labor Term Timeline in The Wealth of Nations

The timeline below shows where the term Division of Labor appears in The Wealth of Nations. The colored dots and icons indicate which themes are associated with that appearance.
Introduction and Plan of Work
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Institutions and Good Governance Theme Icon
Mercantilism and Free Trade Theme Icon
Money and Banking Theme Icon
Book I will explain how societies achieve this complexity through a division of labor . The proportion of people who work depends on a nation’s capital stock, so Book... (full context)
Book 1, Chapter 1
Labor, Markets, and Growth Theme Icon
Laborers become more skilled and productive primarily because of the division of labor . While the division of labor is most powerful at the scale of the whole... (full context)
Labor, Markets, and Growth Theme Icon
The division of labor can make every kind of manufacturing more productive in this way, which is why the... (full context)
Labor, Markets, and Growth Theme Icon
The division of labor increases productivity for three reasons. First, it improves dexterity: each worker repeatedly performs the same... (full context)
Labor, Markets, and Growth Theme Icon
A society with an advanced division of labor can achieve “universal opulence” because everyone can trade their own specialized products for everyone else’s.... (full context)
Book 1, Chapter 2
Labor, Markets, and Growth Theme Icon
Institutions and Good Governance Theme Icon
The division of labor comes from humans’ natural disposition to trade, which other animals do not share. People help... (full context)
Book 1, Chapter 3
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Mercantilism and Free Trade Theme Icon
Human exchange (or the market) creates the division of labor . Thus, the size of the market determines how much the division of labor can... (full context)
Book 1, Chapter 4
Labor, Markets, and Growth Theme Icon
Institutions and Good Governance Theme Icon
Mercantilism and Free Trade Theme Icon
Money and Banking Theme Icon
Most people obtain far more through trade than their own labor. When the division of labor is first developing, people start bartering, but they often find that they don’t need what... (full context)
Book 1, Chapter 8
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
...the state of nature, laborers own what they produce, and as humans figure out the division of labor , everything gets cheaper. But two key developments prevent this from happening in the real... (full context)
Labor, Markets, and Growth Theme Icon
...higher wages may slightly increase the price of provisions, but the productivity gains from the division of labor more than compensate for this effect. (full context)
Book 1, Chapter 11
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
...enough clothing and lodging to support population growth, but food is the limiting factor. The division of labor enables some people to take up other occupations while others remain farmers. While all people... (full context)
Labor, Markets, and Growth Theme Icon
...cheaper as a nation develops, as the efficiency benefits of new machinery and the advancing division of labor more than compensate for the growth in wages. In a few trades, like carpentry, the... (full context)
Book 2, Introduction
Capital Accumulation and Investment Theme Icon
Before the division of labor , there is no need for stock: people simply do what they can to get... (full context)
Book 4, Chapter 1
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Institutions and Good Governance Theme Icon
Mercantilism and Free Trade Theme Icon
Money and Banking Theme Icon
Foreign trade’s main benefit is that it advances the division of labor by replacing a nation’s surplus—the produce for which it doesn’t have demand—with products it actually... (full context)
Book 4, Chapter 4
Institutions and Good Governance Theme Icon
Mercantilism and Free Trade Theme Icon
...exports. Drawbacks, or tax refunds, are desirable for domestic goods because they keep the natural division of labor in place. So are drawbacks on import taxes for goods to be re-exported. These drawbacks... (full context)
Book 5, Chapter 1
Institutions and Good Governance Theme Icon
As society advances and the division of labor progresses, people spend less and less time on military exercise, so the state has two... (full context)
Labor, Markets, and Growth Theme Icon
Institutions and Good Governance Theme Icon
The more the division of labor advances, the more the state needs to educate the public. This is because most people... (full context)
Labor, Markets, and Growth Theme Icon
Institutions and Good Governance Theme Icon
In advanced societies, the division of labor means that a few people can spend all of their time on contemplation. If they... (full context)