AdamSmithWealthoNations

Chapter1
Smithbeginshisbookbystatingthatthedivisionoflaborhas
resultedinthegreatestimprovementsinindustry.Henotesthat
whiledivisionoflaborcanbeseeinmostindustries,itismuch
morenoticeableinthebigones.Hethengoesontousethe
exampleofasewingpinmanufacturer.Henotesthatwhileany
oftheindividualsintheplantmightbeabletomakeperhapsone
pininadaybythemselves,tenofthemiftheydivideupthe
labor,theycanmakethousandsinaday.
Hethennotesthatinanyindustrywheredivisionoflaborcan
takeplace,gainsinproportiontothatofthepinmanufacturer
areseen:however;therearesomeindustrieswheredivisionof
laborisjustnotpossibleinthemagnitudeofthepins.Smith's
exampleofthisisthefarmer,andhowthetasksofplowingthe
fieldandreapingtheharvestcannotbedividedbecausetheyare
seasonalinnature.Usingthishenotesthatbecauseagricultural
laborcannotbevastlymoreproductivewiththedivisionof
labor,corninundevelopedcountriesisalmostthesamepriceas
thoseindevelopedcountries,whilemanufacturedgoodare
muchcheaperinthedeveloped.
Smithstatesthattherearethreemaincontributorstowhythe
divisionoflaborworksaswellasitdoes.Thefirstisthatwhen
peoplespendtheirentirelivesdoingonespecificfocusedtask,
theybecomeverygoodatit,andcancompletethatparticular
taskfasterthenanybodywhotriestomasterotherskillsaswell.
Thesecondisthelossintimeofswitchingtasks.Thisdoesnot
justmeanthetimeittakestodropahammerandpickupa
screwdriver,butalsothementaladjustmentthathastotake
placeinordertobeworking100%atthattask.Thethirdis
whenpeoplearefocusedonasimpletask,theyaremoreaptto
discoverabetterwayofdoingthattask.Smithstatesthat
wheneverhewalksintoafactory,heisconstantlyshown

contraptionsdevelopedbyworkerstosavetimeandlabor.Asa
smalladdition,Smithalsostatesthatthedivisionoflaborin
philosophyandsciencewillyieldmoreefficientmethodsof
doingthings.
Hethenmakesanotethatinawelloffsociety,whenmore
peoplehaveproducedmoregoods,theywillasawholebea
richersociety.Hethenconcludesthischapterbyspeakingabout
howmuchlaborandindustrymustbeemployedtofurnisha
workerwithasimplewoolencoat,andhoweventhoughthisis
asimpledress,itisreallyalmostascomplicatedasaprince's
coat.
Chapter2
ThischapteropenswiththeargumentthattheDivisionof
Labourisnottheconsequenceofsomebodieswisdom,but
resultsinthepropensityofhumanstoexchangegoods.Smith
findsnoevidenceofanyanimalsinnature(exceptforhumans)
whereanybarteringgoeson.Ratheranimalsiftheywant
somethingmustbegtobothhumansandotheranimalsifthey
wantsomethingthatsomebodyelsehas.(Thatoroutrighttake
it).Thedifferencebetweenhumansandanimalsisthatanimals
canexistindependentlyinthewild,whilehumansneed
assistancefromothers,butcannotexpectthisassistanceoutof
goodwillalone.Hethenstatesthatwedonotgetmeatfroma
Butcherbecauseweneedthemeat,butbecausethebutcheris
lookingoutforhisownselfinterestandwantswhatwehavein
return.Inahuntergathersociety,amanmayfindthatheisadept
atmakingbowsandarrows,andfindshecantradetheseitems
toanotherhunterformeat.Soonthismanrealizeshecanget
moremeatbytradingbowsandarrowsthenifhewenthunting,
andthusdivisionoflaborisfoundedoutofselfinterest.From
thattherestofthesocietybeginstodividethemselvesupinto
varyingprofessionsbasedonwhateachisgoodat.Thischapter
isconcludedwiththeremarksthatwhileanimalsmighthave
differingtalents,thosedifferingtalentsareofnousetotheother

animals.Withhumanshowever,thosewithvastlydifferent
talentsareveryusefultoeachother.
Chapter3
Divisionoflaborcanonlytakeplacewherethereisalarge
population,thatwillgenerateenoughofademandfor
specializedservices.Someserviceswillonlybeabletofind
constantemploymentintowns.Andthosethatliveinremote
villagesandinthehighlandsofScotland,cannotrelyon
specializedservices,andthusmustlearntoprovidefor
themselves.Inthoseareasevencommontradeswillseldomfind
amarketforevenadaysworthoftheirwork.
Coastalareas,andcitiesonrivershavebeenthefastestto
develop,astheirgoodscanbeverycheaplytransportedacross
waterversusland.Thuswhilecitiesonwaterwilldevelop,those
landlockedwillbestifled,aslandtransportationisvastlymore
expensivetheseatransportation.Andsincelandlockedareas
arelimitedintheirpotentialforwealthbytheneighboringland,
thosewithnavigationavailablearenotsolimited.
Thisisprobablywhytheancientcivilizationsformedaroundthe
Mediterranean,withit'seasynavigationtheycouldgrowfast.
Thisisespeciallytrueofcountriesthathadgreatinland
navigation,suchasEgypt,China,andIndia.Whilecountries
thatarelandlocked(orwithriversthatdonotflowintoausable
oceanorthroughanothercountry)seemtobestuckina
barbarousstate.