The Wealth of Nations

Adam Smith's inquiry into why some nations are rich begins with something you could lose between the floorboards: a pin.

His opening claim is bold. The greatest improvement in what human work can produce, he says, and most of the skill and judgment with which work is done anywhere, came from one thing: the division of labour.

Why a pin? Because in a small trade the whole process fits under one roof, where a visitor can watch every step at once. In the great trades that clothe and feed a country, the work is split up even further, but it is scattered across farms, mills and ports, so nobody ever sees it whole. The pin is simply the version of the story you can actually watch.

Picture a worker who was never trained as a pin-maker and has never used the trade's machines. Smith reckons that, working as hard as he can, he could scarcely make one pin a day, and certainly not twenty.

Now look at how the trade was really run. One man draws out the wire, another straightens it, a third cuts it, a fourth points it, a fifth grinds the top to receive the head. Making the head takes two or three operations of its own. Fixing it on is a separate job, whitening the pins is another, and even wrapping them in paper is a trade by itself.

In all, about eighteen distinct operations. What looks like a single object turns out to be a chain of small, separate skills.

Smith had seen one small workshop himself. Only ten men worked there, so some of them handled two or three operations each. They were poor and badly supplied with machinery. Still, when they pushed, they turned out about twelve pounds of pins a day.

A pound held upwards of four thousand middling pins, so those ten men made upwards of forty-eight thousand pins a day, roughly 4,800 each.

Working alone and untrained, each of them might have made twenty, or perhaps not a single one. Smith does the sum for you: the workshop produced at least 240 times, and possibly 4,800 times, what the same people could manage separately. Same hands, same hours, same poverty. The only thing that changed was how the work was arranged.

In Smith's ten-man workshop, what explains the jump from perhaps twenty pins per person to about 4,800?

• The way the operations were divided and combined among them✓Correct answer
• Longer working hours than an independent pin-maker kept
• Better machinery than other pin workshops of the day had
• Stronger and more experienced men hired for the trade

Smith credits a proper division and combination of the operations. Machinery is the tempting answer, but he stresses that these men were poor and badly equipped with it, which is exactly what makes the example so striking.

Smith gives three reasons why the same people get so much more done. The first is dexterity: a person who does one simple thing all day becomes astonishingly quick at it.

His example is nails. An ordinary smith, used to the hammer but not to nail-making, might manage two or three hundred nails a day, and bad ones. A smith who makes nails now and then might reach eight hundred or a thousand. But Smith had seen boys under twenty who had never done anything else, and each could make upwards of two thousand three hundred.

And nail-making is not even simple: the same boy works the bellows, tends the fire and changes tools for the head. Break a job down further, as with pins, and the speed goes beyond what an onlooker would believe a human hand could learn.

The second reason is less obvious, and Smith says it matters more than we would first guess: the time lost switching tasks.

Some of that loss is plain walking. A country weaver who also farms a little plot keeps going from his loom to the field and back again. But even when two jobs sit under one roof, something leaks away. A man saunters a little, Smith observes, when he turns from one kind of work to another. For a while his mind does not go to it, and he trifles rather than works.

Then Smith goes further. A country workman who must change his work and his tools every half hour, day after day, picks up a habit of sauntering that leaves him sluggish, unable to apply himself hard even when it really counts.