Posted by: erichosemann | December 10, 2009

The Wealth of Nations, Book One, Chapter One

Page 9, Chapter 1  The division of labor is responsible for improving labor productivity.

9, 2 Even in the manufacture of simple goods can the division of labor yield increased productivity.  Observing the effects of the division of labor on the production of simple goods is particularly easy, because their operations can be gathered in one location, whereas the operations of larger enterprises are broken up into several locations.  At such a scale the division of labor masks its own existence and thus goes uninvestigated.

10, 1 Pin making is a good example of an enterprise operating at the scale at which the division of labor can be readily observed; being divided into roughly eighteen different operations.  Often one person will be responsible for two or three operations.  In Smith’s own experience, he saw 10 men produce 12 pounds of pins a day, at approximately 4000 pins per pound.

Had each man attempted all eighteen operations himself, it is doubtful he could have made even one pin a day.

12, 1 The division of labor increases labor productivity in other industries too, and the degree to which it is employed in a society depends on how “improved” is that society.  I take “improved” to mean something similar to “advanced” or “developed,” i.e. possessing of mature governmental and financial infrastructure and a suitable technological and scientific base.

Even with all that, the agricultural sectors of “improved” countries lag behind their industrial sectors in the degree to which the division of labor is applied.  This is due to the seasonal nature of agricultural production: “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.”

While poor countries might match the quality of their agricultural produce to that of rich countries, they can’t measure up in terms of manufactured goods.

14, 1 The division of labor increases productivity for three reasons:

1) Dexterity is improved through repetition.

2) Time spent moving between tasks is reduced or eliminated.

3) Mixing labor with machines allows one person to do the work of many.

14, 2   1) Dexterity is improved through repetition.  The dexterity of the workman increases through repetition; improved dexterity allows the workman to work quickly.  Nail-making as an example: experienced smiths, without nail-making experience, may produce at most two to three hundred nails a day; a smith experience in nail making, though it is not his principal business, may quadruple that amount; “boys under 20 years of age” whose sole occupation is nail making, may produce 2,300 nails a day.

15, 1  2) Time spent moving between tasks is reduced or eliminated.  The advantage gained by saving the time spent moving between tasks is considerable not only because time spent actually moving is reduced, but so too is the time spent mentally adjusting to the different requirements of each task.  [A brief note: In my experience, when people do several things “at once” or multitask, they frequently dawdle between tasks—not out of laziness but because each task demands different tools and different levels of mental acuity.  Because gathering those tools and calling up a new level of mental acuity are tasks in themselves, new, albeit small, logistical problems arise.]

16, 1 3) Mixing labor with machines allows one person to do the work of many.  Not only do machines augment the gains from dividing labor, they are themselves the results of dividing labor.  “Men are much more likely to discover easier and readier methods of attaining any object, when the whole attention of their minds is directed towards that single object, than when it is dissipated among a great variety of things.” [See my note above.]

17, 1 Division of labor begets repetition, which begets exploration into mechanical advantage, which begets the improvement, or outright development of machines.

Improvements to machines are brought about by the “common” workers who may have developed them in the first place, or by engineers whose specialty is designing industry-specific machines, or “philosophers, or men of speculation, whose trade it is not to do any thing, but to observe everything,” i.e. consultants.

Philosophy and science aren’t exempt from the shaping influence of the division of labor; they are practiced by “peculiar tribes” of philosophers, and this division is beneficial to a society; it increases the amount of speculative work that can be done, and thus increases opportunities for improvement.

19, 1 Smith concludes the chapter with a rousing sketch of the economic complexity embodied in the coarse woolen coat of a day laborer.  It reminded me so much of “I, Pencil,” that I want to reproduce it here in its entirety:

“Observe the accommodation of the most common artificer or day-labourer in a civilized and thriving country, and you will perceive that the number of people whose industry a part, though but a small part, has been employed in procuring him this accommodation, exceeds all computation.  The woolen coat, for example, which covers the day-labourer, as coarse and rough as it may appear, is the produce of the joint labour of a great multitude of workmen.  The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production.  How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! how much commerce and navigation in particular, how many ship-builders, sailors, sail-makers, rope-makers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world!  What a variety of labour too is necessary in order to produce the tools of the meanest of those workmen!  To say nothing of such complicated machines as the ship of the sailor, the mill of the fuller, or even the loom of the weaver, let us consider only what a variety of labour is requisite in order to form that very simple machine, the shears with which the shepherd clips the wool.  The miner, the builder of the furnace for smelting the ore, the feller of the timber, the burner of the charcoal to be made use of in the smelting-house, the brick-maker, the brick-layer, the workmen who attend the furnace, the mill-wright, the forger, the smith, must all of them join their different arts in order to produce them.  Were we to examine, in the same manner, all the different parts of his dress and household furniture, the coarse linen shirt which he wears next to his skin, the shoes which cover his feet, the bed which he lies on, and all the different parts which compose it, the kitchen-grate at which he prepares his victuals, the coals which he makes use of for that purpose, dug from the bowels of the earth, and brought to him perhaps by a long sea and a long land carriage, all the other utensils of his kitchen, all the furniture of his table, the knives and forks, the earthen or pewter plates upon which he serves up and divides his victuals, the different hands employed in preparing his bread and his beer, the glass window which lets in the heat and the light, and keeps out the wind and the rain, with all the knowledge and art requisite for preparing that happy invention, without which these northern parts of the world could scarce have afforded a very comfortable habitation, together with the tools of all the different workmen employed in producing those different conveniencies; if we examine, I say, all these things, and consider what a variety of labour is employed in each of them, we shall be sensible that without the assistance and cooperation of many thousands, the meanest person in a civilized country could not be provided, even according to, what we very falsely imagine, the easy and simple manner in which he is commonly accommodated.  Compared indeed, with the more extravagant luxury of the great, his accommodation must no doubt appear extremely simple and easy; and yet it may be true, perhaps, that the accommodation of an European prince does not always so much exceed that of an industrious and frugal peasant, as the accommodation of the latter exceeds that of many and African king, the absolute master of the lives and liberties of ten thousand naked savages.”

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