The most important book that Adam Smith wrote is called An Inquiry into the Nature and the Causes of the Wealth of Nations. The question of that book is fairly simple. Why has England become such a wealthy country? How can we explain that we have become so rich. Is it because our farmers are working harder, making longer days. Or is it maybe because we now can exploit gold mines and diamond mines in our colonies? Adam Smith comes up with an entirely different answer. In the very first pages of his book, and it is here that he employs the expression that I mentioned before, the division of labor. In fact, it's the title of his first chapter on the division of labor. In modern manufacturers, the precursor as you could say of the modern industrial factories, we see that the work is divided and subdivided in a very peculiar way. And that is the cause of the spectacular rising productivity. This is what Adam Smith says in the first sentence of his famous book. 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, seemed to have been the effects of the division of labor. He then takes the reader by the hand, and has him enter a factory where pins are made. He tells us that making those little pins is a complicated business, and that somebody who is not used to it might maybe produce one pin per day. Whereas somebody who has learned the trick might make 20 pins a day. Now in this pin factory that he invites us to visit, we see ten workers who are doing their job. So, you might expect them to produce all together at least ten pins a day, and in the best case scenario, maybe 200 pins a day. But that is not what happens. Those ten guys producing in fact, day in day out, 48,000 pins. 48,000? How is that possible? The answer is they divide their labor in a very clever way. Adam Smith describes the process in detail. He says, one man draws out the wire, another straightens it, a third cuts it, the fourth points it, the fifth grinds it at the top for receiving the head. To make that head requires two or three distinct operations, and so on, and so on. By dividing the relatively simple task of producing a pin into several subtasks, the labor productivity explodes. Adam Smith tries to understand why this is the case. He says, first of all, everybody's dexterity is improved. When you have nothing else to do, but just to cut small parts from a wire, then you can train yourself to do it very quickly and very meticulously. He marvels, in fact, at the repetitive of the hands of the workers in those manufacturers. He says that people who never saw them at work cannot imagine that human beings are capable of developing that kind of dexterity. Who are those people? Well, the people he addresses are of course the readers of his book. Adam Smith here is a kind of a journalist. He gives his audience a look, a peek behind the walls of the modern factory, a place that they are not likely to visit. Well, maybe Adam Smith did not observe a real pin factory first hand. But it is very likely that he read about a social organization of pin factories in the famous French Encyclopédie, that book edited by the philosophers Diderot and d'Alembert. In volume five, there's a chapter dedicated to the bin [FOREIGN]. The beautiful illustrations of that book give us even today a very good impression of the things he described. Secondly, Adam Smith says, the workers save time because they do not have to pass from one type of task to another one. They can stay all day long in the same place, in the same room, behind the same machine. They keep completely focused on their simple task. And then, there is a third advantage. Workers who are completely focused on one kind of work all day long may discover even better ways to do the job more efficiently. Adam Smith believes that many of the smart inventions that you find in those manufacturers were developed by the people who worked there, and who came up with clever suggestions that made the whole process still more efficient.
