The Wealth of Nations Chapter 2: Of the Principle Which Gives Occasion to the Division of Labour

I asked last time, “Left to your own skill and only what Mother Nature provides (no tools you don’t make yourself), is there a single thing you use today that you’d be able to make on your own?” My answer is simple: No. I could not make my car, let alone the rear view mirror. I could not make my clothes, let alone the thread to stitch fabric together. I could not make my oven, let alone the cast iron used to fry my eggs this morning.

Thinking of Friedman’s pencil, it’s likely that no single person has the ability to exactly duplicate any good (i.e. an item sold, rather than a service), at least not apart from tools that they couldn’t make themselves. So if it takes hundreds or thousands of people to get a pin in the Walmart isle, how many tens or hundreds of thousands (or millions) of people have served me by designing, crafting, and building my house, my car, my kitchen appliances, my laptop, my clothes, my books, my phone, not to mention the roads I drive on, the cellular service I use, the hospitals my children were born in? The list could go on and on. Am I the ruler of the world such that I can command millions to do all these things for me? Thankfully for your sake and mine, no. Smith shows us, “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.”

These millions of people have served me because it was in their interest to do so. They have made their goods and services so efficiently that they can sell them in mass at such a remarkably low price that I can afford them. If I can simply trade 6 seconds at minimum wage to get a pin, I do not need to spend a lifetime learning one aspect of the pin-making process. Likewise, they can focus their energy on their one task, and with the compensation they get, trade their money to purchase things they would never be able to do themselves. Far from being left to ourselves, we operate in a world where people have a tendency to “truck, barter, and exchange” such that both parties leave better off. When this division of labor continues in the way it has in our current market environment, nearly every person can afford to be served by millions.

Let us know

• What is one thing you have purchased that you would be happy to purchase again?

• In your current or former line of work, how many people in total do you think your work benefited?

Until next time, happy reading!