The Wealth of Nations: The Pin Factory

Adam Smith was a Scottish professor of moral philosophy, and in 1776 he published The Wealth of Nations, the book that founded modern economics.He begins with a simple question: why are some countries rich and others poor?His first answer is found in a small factory that makes pins.

“The greatest improvement in the power of labour seems to have come from the division of labour.Take the trade of a pin maker. A worker who has not been trained in this business could hardly make one pin in a day, and certainly not twenty.But today the work is divided into about eighteen separate steps.One man draws out the wire, another straightens it, a third cuts it, a fourth points it, and a fifth grinds the top to receive the head.

I have seen a small factory of this kind where only ten men were employed.They were poor and did not have good machines, yet together they could make about forty-eight thousand pins in a day.That is four thousand eight hundred pins for each person.If each of them had worked alone, he could not have made twenty, perhaps not even one.

The same is true in every other art and trade.In a rich country, the farmer is only a farmer and the manufacturer only a manufacturer, and the work of one man in a poor society is shared among several.It is this division of labour that brings general wealth to the lowest ranks of the people.”