Excerpts from Adam Smith’s Wealth of Nations
Book I, Chapter 1. Of the Division of Labor: THE greatest improvement in the productive powers of
labor, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, or
applied, seem to have been the effects of the division of labor....To take an example, therefore, the
trade of the pin-maker; a workman not educated to this business, nor acquainted with the use of the
machinery employed in it, could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part
are likewise peculiar trades. One man draws out the wire, another straights it, a third cuts it, a fourth
points it, a fifth grinds it at the top for receiving, the head; to make the head requires two or three
distinct operations; to put it on is a peculiar business, to whiten the pins is another; it is even a trade
by itself to put them into the paper; and the important business of making a pin is, in this manner,
divided into about eighteen distinct operations, which, in some factories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them.
I have seen a small manufactory of this kind where ten men only were employed, and where some of
them consequently performed two or three distinct operations. But though they were very poor, and
therefore but indifferently accommodated with the necessary machinery, they could, when they
exerted themselves, make among them about twelve pounds of pins in a day. There are in a pound
upwards of four thousand pins of a middling size. Those ten persons, therefore, could make among
them upwards of forty-eight thousand pins in a day. Each person, therefore, making a tenth part of
forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day.
But if they had all wrought separately and independently, and without any of them having been
educated to this peculiar business, they certainly could not each of them have made twenty, perhaps
not one pin in a day; that is, certainly, not the two hundred and fortieth, perhaps not the four thousand eight hundredth part of what they are at present capable of performing, in consequence of a proper
division and combination of their different operations....
The division of labor, so far as it can be introduced, occasions, in every art, a proportionable increase
of the productive powers of labor. The separation of different trades and employments from one
another seems to have taken place in consequence of this advantage. This separation, too, is generally called furthest in those countries which enjoy the highest degree of industry and improvement; what is the work of one man in a rude state of society being generally that of several in an improved one.....This great increase of the quantity of work which, in consequence of the division of labor, the same number of people are capable of performing, is owing to three different circumstances; first, to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and lastly, to the invention of a great number of machines which facilitate and abridge labor, and enable one man to do the work of many....
It is the great multiplication of the productions of all the different arts, in consequence of the division
of labor, which occasions, in a well-governed society, that universal opulence which extends itself to
the lowest ranks of the people. Every workman has a great quantity of his own work to dispose of
beyond what he himself has occasion for; and every other workman being exactly in the same situation, he is enabled to exchange a great quantity of his own goods for a great quantity, or, what comes to the same thing, for the price of a great quantity of theirs. He supplies them abundantly with what they have occasion for, and they accommodate him as amply with what he has occasion for, and a general plenty diffuses itself through all the different ranks of the society....
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By restraining, either by high duties, or by absolute prohibitions, the importation of such goods from
foreign countries as can be produced at home, the monopoly of the home-market is more or less
secured to the domestic industry employed in producing them. Thus the . . . high duties upon the
importation of corn, which in times of moderate plenty amount to a prohibition, give a like advantage to the growers of that commodity. The prohibition of the importation of foreign woolens is equally
favorable to the woolen manufacturers. The silk manufacture, though altogether employed upon foreign materials, has lately obtained the same advantage. The linen manufacture has not yet obtained it, but is making great strides towards it. Many other sorts of manufacturers have, in the same manner, obtained in Great Britain, either altogether, or very nearly a monopoly against their countrymen. . . .
That this monopoly of the home-market frequently gives great encouragement to that particular
species of industry which enjoys it . . . cannot be doubted. But whether it tends either to increase the
general industry of the society, or to give it the most advantageous direction, is not, perhaps,
altogether so evident. . . .
The natural advantages which one country has over another in producing particular commodities are
sometimes so great, that it is acknowledged by all the world to be in vain to struggle with them. By
means of glasses, hotbeds, and hotwalls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland? But if there would be a
manifest absurdity in turning towards any employment, thirty times more of the capital and industry of the country, than would be necessary to purchase from foreign countries an equal quantity of the
commodities wanted, there must be an absurdity, though not altogether so glaring, yet exactly of the
same kind, in turning towards any such employment a thirtieth, or even a three hundredth part more of either. . . . As long as the one country has those advantages, and the other wants (them, it will always be more advantageous for the latter, rather to buy of the former than to make. It is an acquired advantage only, which one artificer has over his neighbor, who exercises another trade; and yet they
both find it more advantageous to buy of one another, than to make what does not belong to their
particular trades. Merchants and manufacturers are the people who derive the greatest advantage from this monopoly of the home market. The prohibition of the importation of foreign cattle, and of salt provisions, together with the high duties upon foreign corn, which in times of moderate plenty amount to a prohibition, are not near so advantageous to the graziers and farmers of Great Britain, as other regulations of the same kind are to its merchants and manufacturers. Manufacturers, those of the finer kind especially, are more easily transported from one country to another than corn or cattle. It is in the fetching and carrying manufacturers, accordingly, that foreign trade is chiefly employed. In manufactures, a very small advantage will enable foreigners to undersell our own workmen, even in the home market. It will require a very great one to enable them to do so in the rude produce of the soil. If the free importation of foreign manufacturers were permitted, several of the home manufactures would probably suffer, and some of them, perhaps, go to ruin altogether, and a considerable part of the stock and industry at present employed in them, would be forced to find out some other employment. But the freest importation of the rude produce of the soil could have no such effect upon the agriculture of the country.
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Every individual is continually exerting himself to find out the most advantageous employment for
whatever capital he can command. It is his own advantage, indeed, and not that of the society, which
he has in view. But the study of his own advantage, naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society….
….As every individual, therefore, endeavors as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value, every individual necessarily labors to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in m any other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for
the public good….
….The statesman who should attempt to direct private people in what manner they ought to employ
their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and
which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it….
It is thus that every system which endeavors, either by extraordinary encouragements to draw
towards a particular species of industry a greater share of the capital of the society than would
naturally go to it, or, by extraordinary restraints, force from a particular species of industry some
share of the capital which would otherwise be employed in it, is in reality subversive to the great
purpose which it means to promote. It retards, instead of accelerating, the progress of the society
towards real wealth and greatness; and diminishes, instead of increasing, the real value of the annual
produce of its land and labor.
All systems either of preference of of restraint, therefore, being thus completely taken away, the
obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way,
and to bring both his industry and capital into competition with those of any other man, or order of
men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society. According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and thirdly, the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society….
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It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner,
but from their regard to their own interest. We address ourselves, not to their humanity but to their
self-love, and never talk to them of our necessities but of their advantages.
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The real price of everything, what everything really costs to the man who wants to acquire it, is the
toil and trouble of acquiring it. What everything is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is
purchased by labor as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labor which we exchange for what is supposed at the time to contain the value of an equal quantity. Labor was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labor, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labor which it can enable them to purchase or command.
15 comments:
In his Wealth of Nations Adam Smith said, “...The obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.” Smith is credited as being the father of modern economics, and he believed that if everyone pursued their own interests it would benefit all of society. I would agree with his thinking, taking into account the key phrase “as long as he does not violate the laws of justice”. In our country this belief led to great strides in economics, capitalism, entrepreneurship, and invention. There were numerous individuals throughout American history that by pursuing their passion benefited all of society. For example, Martin Luther King followed his passion in black rights and in turn influenced all of America, while Jackie Robinson helped break racial boundaries through his love of baseball. Inventors Thomas Edison and Henry Ford each invested in their interests and revolutionized society with the invention of the light bulb and automobiles. By pursuing animation Walt Disney changed the face of American entertainment. Rockefeller’s monopoly on oil changed the economics of 18th century America. And finally Steve Job’s interest in business and technology has affected not only modern Americans, but the whole world. People like these show the validity of Smith’s belief.
Adam Smith supported the idea that man should be free to pursue his own interests. "But the study of his own advantage, naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society…." When man realizes his calling in life and uses what resources to his advantage, in doing so, he benefits society as a whole. However, we must also conclude that man is also evil and will sometimes pursue something that can be wrong. Smith countered this by saying that man cannot "violate the laws of justice" in his interests and pursuits in life. I agree with this idea of thinking. For instance, many of these companies in the world are constantly advancing their technology, trying to help society in their certain field. This way of thinking clearly can help society when each man pursues what he is good at and perfects it for the society's whole benefit.
Smith says that everyone should follow their own interests, and to an extent I agree. I believe someone who does something or pursues something they are interested in is going to excel in that field and probably make more advancements then someone who has no interest in the subject. As Emily pointed out, many great intentions have come from people pursuing what they are interested in. Why I think this idea has flaws though is because man is sinful, and will not always be interested in pursuing something good. Sometimes our desires can be wrong and pursuing them would not be beneficial to society, or could even harm it. Also, what if pursuing ones interest means taking out or plowing through anything or anyone that is in your way? This too could have a negative effect on other people. Smith says, “Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage, naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society….” I believe this statement could only be true in a perfect world.
Smith believes that when people pursue what they are interested in the world is better off. I there is truth in this because I believe that God has given each individual different gifts for them to pursue. I think, as a whole, humans tend to enjoy doing things with those gifts and talents. 1 Peter 1:14 says, “Each of you should use whatever gift you have received to serve others, as faithful stewards of God's grace in its various forms” (NIV). I’ve recently been looking at different majors for college and one of the most common questions I’ve been asked is “what are you good at?” We base our lives on our gifts and interests and I think a lot of the time it is beneficial. We learn how to best use the gifts and if used correctly, can ultimately bring glory to God. However, there are times when our gifts can be misused. I know someone who is very, very intelligent. He is good at making plans, keeping secrets, and working with equipment. He could easily be a criminal mastermind. I seriously doubt though that that was God’s intent for him in giving him the gifts he has. I think that if people pursue what they are interested in and the talents they have been gifted with the world will be a better place.
In Smith’s “Wealth of Nations” he advocates the idea of individuals being better off by pursuing their own interests. I believe that when people do what they feel they were made to do, there is an increased level of happiness and contentment among them. When people are in careers that they find to be restrictive and dull, restlessness and dissatisfaction ensue. There is much to be said as to the importance of expanding one’s interests, and exploring new fields. Oftentimes, one must go against the grain and challenge the social norm in order to do what one loves to do. But I agree, along with Smith, that people would be better off if they pursued their own individual interests.
However, I think it is important to moderate how far we take our self-interest. We live in a world where competition and self-recognition is the primary focus of many. It no longer seems to matter who you are as a person; to our selfish culture, it matters what you are, who you know, and how fast you can rise to the top. Many of us don’t want those things to matter more than learning, growing, and giving, but with the way our culture is, we feel as if we have to be the best of the best in order to be seen as competent, adequate, and successful. Life seems to have become a game, where reputation is valued more highly than character, and where recognition and a high five from the rest of the world is the prize.
So what is my point? In short, I’m saying that individuals will be “better off” mentally, physically, emotionally, and even spiritually if they pursue their own interests rather than buying into the world’s idea of success. True, you may not be rich, famous, or even perceived as successful if you choose to do what you love. But once we free ourselves from the pressure to be perfect, we are happier people.
Smith believed that when one followed his own interests it would be productive to a society, and I certainly agree with his opinion. Smith wrote, "By pursuing his own interests he frequently promotes that of the society more effectually than when he really intends to promote it." He continued saying, "Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men." Smith clearly stated that it was (and still is) more beneficial to a society and culture for man to follow his own interests with regard to his work. This is a principle of simple human nature. If someone is passionate or has a love for a certain line of work then most certainly he will be more productive in his efforts. Because of people like, Thomas Edison, Harriet Tubman and Abraham Lincoln, our government and culture have been greatly furthered because of their pursuit in their own interests.
I would agree with Smith, but we must also remember to keep God in mind at all times while pursuing our interests. We must do everything for the glory of God and make sure we keep His ideals in mind as we seek to better our society.
Over the summer I was talking with my sister who was arguing in favor of robots taking over our jobs and people getting to do what they liked instead of having to work. Smith had a very similar view. He said that people have a lot to offer, more in fact than what they need for themselves. In his own words,
“Every workman has a great quantity of his own work to dispose of beyond what he himself has occasion for.” Smith also said that “Every individual. . . . intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.” This would be great, if it were actually true. But I don’t think people’s hobbies benefit others in a huge way. I do agree that more work could get done by a person if they enjoyed what they were doing. However I don’t agree with the invisible hand. That goes along with the idea that people are naturally good. In a world where you did what you wanted I believe society would develop even more than now into the ‘take what you can get mentality’. And if people did whatever they liked, I’m guessing there wouldn’t be garbage men, and very few plumbers. What if a ton of people really wish they went into the arts. According to Smith they should just up and leave their job because it benefits both themselves and others. Too much of a good thing is a bad thing. If I were free to spend all day every day reading I would not enjoy it nearly as much. People need structure. Freedom is good but I believe we all need work if we are going to improve or even in order to function.
I believe that we are better off pursuing our own interest. Adam Smith said, "By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good….” This basically states that when everyone pursues their own interest it benefits the whole society rather that simply doing something for the sole purpose of public gain. This idea applies to choosing jobs. If we enjoy our jobs because they fit our interest we are more likely to do our work thoroughly and to the best of our abilities. If we choose a job that doesn't fit our interests we are tempted to do the opposite. Something related to Smith’s idea is that idea that we should not follow what our culture deems as an acceptable interest, but be willing to focus on our personal interests because they will benefit our society. Like Emily said, so many people have broken through our country’s stigmas by simply following through with their ideas and beliefs.
Although I believe following our interest is important it should not be done obsessively. Our culture revolves around the line “Follow our dreams” or Disney’s slogan “Dreams do come true.” Over and over we hear that we must make our dreams a reality at all costs because then we will finally be happy. Our culture has idolized this idea. I’m not saying that you should not pursue your dreams, because that does play an important role in one’s life, but to be careful of trying to follow your dreams and thinking it will bring true satisfaction.
I don't believe that there is anything wrong when a given person pursues his own interests, however, when a person becomes too blinded and intoxicated with seeking self-pleasure that he is unable to look outside himself to the needs and interests of others, then I believe that pursuing one self-interests may not be the best for everyone. For example, it is a virtuous thing to work your very hardest to be the very best on a team, but it is not a good thing when someone gets so consumed in their craft that they are too blinded to look outward and see others who may need some help in their own craft. A second example might include the same person working tirelessly over his craft in order to be the very best at it, but he forgets God and turns away from his faith because he has become so captivated and so satisfied in his own pursuits. These are examples of how pursuing one's interests can be good and bad things. Upon occasion, they can help people, but also hurt people. I do not believe that everyone would be better off by simply following their own interests.
I agree that someone would be better off pursuing their interests. I agree because usually when someone pursues his/her own interests it is usually something they are good at. Also it allows the person to pursue something they love. This means they will do it with more enthusiasm than if they did a job they didn't want to do. Also since every one will be doing specific things that will increase the economies status. The only downside to this is sometimes people's interests don't benefit the economy. But I think for the most part people pursuing their own interests would be good for them and the economy.
In Smith’s “Wealth of Nations” he presents the idea that, when an individual pursues his own interests, society as a whole will be “better off.” I think there is a lot of truth in what Smith has to say. He writes, “By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good….” I think people who pursue what their passions and interests are, are inherently happier and more content with their lives. It is for the greater good for the majority of people to feel satisfied with their situation. Pursuing your individual interests allows for innovation, leading to a society based on creativity and development. However, while I do believe that adhering to individual interests is beneficial as a whole, it can consume a culture and make it so individualistic that people no longer have the capability for collaboration. I think Anna made an excellent point that our culture revolves around a Disney-like perspective. We have been told since we were little to “follow our dreams.” But what if those dreams are selfish? It’s unfortunate that I even feel the need to point out, once again, that humans are flawed. Some of our dreams are misguided. That does not mean we should abandon all pursuits. I believe that God has given each of us unique gifts and interests for a reason. But I think we should look at “dreams” from a more analytic point a view in order to determine the motive behind the pursuit.
Smith believes that if each person pursued and followed his or her own interests everyone would be better off. I do not agree fully with Smith’s theory, however I do agree that if every person pursued their interest that they would be able to accomplish a lot. If everyone took a specific interest that they had and worked hard at being successful and doing good with their interest things would look diffrently. God gives each person talents, gifts, and interests to use in their lives. These gifts, talents, and or interests can accomplish or do great things. However, we are all sinful human beings and like our desires our interests can become sinful and be used for the wrong purpose too. We need to make sure our interests are honorable and acceptable in God’s eyes. We can all benefit from each others different interests when they are good and honorable to God. As Christians we are called to notice and except other peoples interests not just our own. If we are so focused on only pursuing and living to accomplish our own interests we don’t realize our need for other people’s talents or interests,“ It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages” (Wealth of Nations). I think that following your own interests can make many circumstances in society for the better as long as they are interests that would be pleasing to God. Unfortunately, at the core of each man’s own interests its usually self-serving and self-prompting without Christ.
In “Wealth of Nations” Smith states that all are better off if they pursed their own interests. I agree with Smith’s statement and believe that our modern society needs to focus more on this sort of ideology. Our culture tends to only think of the maximum results and how fast we can get them instead of the big picture. Without exploring and pursuing one interest how is that person supposed to find true joy in what he is doing? Without true joy our gifts and interests from God lose their light and the dullness of the gift has no effect on anyone. Finding out the particular gifts God has given us can take years to identify and then years of pursuing and exploring that gift. I would like to note that the term interest and desire have two separate meanings. There is a difference between one pursuing an interest and pursuing a desire. An interest is when one wants to know or learn about a certain idea, skill, or talent where as a desire is when one simply wants something and does not want to immerse himself in the makeup of that something. When one focuses on what he/she is good at we tend to enjoy it more because we are succeeding at it. We gain confidence when pursuing our interests because it is often times rewarding. Unfortunately in today’s culture it is a big risk to go after your interests and dreams. There's an underlying belief in our culture that we need to do everything by taking one big leap. One must make a commitment and charge ahead without looking back on the interests and true passions he is leaving behind. This is in stark opposition of Smith’s opinion and does not grasp the fact that when people are content and happy pursuing the interests they love society will be better off for it because a sense of positivity and success radiate from the pursuit of one’s interests. In summation, Smith’s notion that everyone is better off by pursuing their own interests is one of inspiration, calling us to strip ourselves of the world’s definition of success and happiness and follow after our personal interests and God given talents to find His true definition of happiness and success.
“Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.” This is what Adam Smith believed about a man’s interests. This can be true. Sometimes, when people follow their dreams or interests, it leads to benefiting both themselves and others. If no one wanted to be a doctor, then who would heal people? Interests and dreams can be given to men by God, who wants humans to pursue such things because it gives them joy. However, there are times that if people are always just pursuing what they want, then there’s no time for other’s interests. You become so self-absorbed that you don’t help others reach their dreams. You become selfish and greedy. Also, sometimes, people need to sacrifice their own interests so others can be happy. For example, if a father is always concentrating on his own work and trying to have the better job position or the better company, what time does he have for his children? If we live by Smith’s idea, then we can become self-absorbed and not pay attention to others.
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