Excerpt from An Inquiry into
the Nature and Causes of the Wealth of Nations
"The division of labor, however, so far as it can be introduced, occasions, in every art, a proportionate increase of the productive powers of labour."
Adam Smith (1723–1790) was one of the first people to write about what is now called economics, the way a people in a society make a living and spend money. Smith was a professor at the University of Glasgow in 1776 when he published his most famous work, An Inquiry into the Nature and Causes of the Wealth of Nations, usually called simply The Wealth of Nations. His topic was how the British government could increase the wealth of the country by adopting certain policies and avoiding others. Smith believed in laissez-faire (pronounced less-say-FAIR, a French term meaning "free to do") economics, relying on the free market to proceed without government interference. His book has been studied ever since, both by government officials and by economists (people who study how people and nations make a living).
One of Smith's concerns was how to improve the productivity of labor. (Productivity is the measure of how much value a person creates in a period of time, such as a week or a year. Smith thought the best way to maximize productivity was to let individuals focus on specific tasks and become very good at doing just one or two things, a theory he called the division of labor. The notion that workers should specialize in a single task was later used in setting up assembly lines to make complex objects, like a car, by letting each worker do just one thing, such as attach the wheels.
This selection from The Wealth of Nations comes from the very beginning of the book. The example Smith uses to illustrate his point is people who manufacture pins (like those used in sewing). Smith says that if an individual were to try to do the whole job of making pins—from pulling a piece of wire into a very thin strand to putting the head on the pin—the result might be producing one pin a day. But if ten people divided the task into its separate parts, together they could produce about forty-eight thousand pins a day—or about forty-eight hundred pins per individual.
Smith's example describes the way new factories were being set up at the beginning of the Industrial Revolution, the term used to describe the introduction of new water- or steam-powered machines in factories to replace work traditionally done by hand. The Industrial Revolution was getting started at the same time Smith was writing. In the new factories, work was reorganized in the way Smith recommended, with an individual worker assigned part of the overall task. (In the older methods, workers at home were responsible for the whole process of spinning yarn or weaving cloth, for example.) Smith wrote that the division of labor was an important reason that Britain was becoming wealthier than nations where traditional methods were used.