Adam Smith lived from 1723 to 1790 and is widely regarded as the father of economics. He was a Scottish moral philosopher and taught at the University of Glasgow. His masterpiece, An Inquiry into the Nature and Causes of the Wealth of Nations was first published in 1776. This book is considered a seminal work in the field of Economics.
Multiplication through Division
One of the most important concepts introduced by Smith is that of the Division of Labor. This term means that greater productivity can be attained by dividing and specializing labor among a variety of trades. Smith observes that various forms of animal breeds (mastiff, greyhound, and spaniel) vary largely in their innate abilities. In contrast, different kinds of laborers (common laborer, truck driver, or engineer) differ substantially in the activities they do. The differences in people are due primarily to opportunity, habit, and education. Smith theorizes that this difference in men contributes to the wealth of a nation. The great benefit of this differentiation lies in the fact that each person can employ the specialties of another to get more stuff done. Animals cannot employ one another’s specialties, despite Walt Disney’s claims to the contrary. Each animal must support itself. In contrast, human society is enriched by the variety of contributions of its members. As Smith says,
Among men, on the contrary, the most dissimilar geniuses are of use to one another: the different produces of their respective talents, by the general disposition to truck, barter, and exchange, being brought, as it were, into a common stock, where every man may purchase whatever part of the produce of other men’s talents he has occasion for.
Before coming to work in Toledo, I worked in a manufacturing plant in New Haven, IN. Our work was highly seasonal, so our labor force had a large temporary component. One summer, our HR manager told me we had over 20 different nationalities working in the production area. Of course there were Hispanic workers from several Latin American countries, but we also had employees from India, Pakistan, and several Southeast Asian nations. It wasn’t uncommon to have engineers and professional people among the production workers, simply because they were eager to get work of any kind. This made for a very vibrant workforce.
I did most of my reading in The Wealth of Nations using a free audio book from LearnOutLoud.com. The free audio edition by Michael Edwards is very well done and made the book much more approachable.