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The following excerpts were taken from The Project Gutenberg EBook of An Inquiry into the Nature

and Causes of the Wealth of Nations, by Adam Smith.

BOOK I. OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE

ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE DIFFERENT

RANKS OF THE PEOPLE.

CHAPTER I. OF THE DIVISION OF LABOUR.

Paragraphs 1-3

The greatest improvements in the productive powers of labour, 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 labour. The effects of the division of labour, in the general business of society, will be

more easily understood, by considering in what manner it operates in some particular manufactures. It

is commonly supposed to be carried furthest in some very trifling ones; not perhaps that it really is

carried further in them than in others of more importance: but in those trifling manufactures which are

destined to supply the small wants of but a small number of people, the whole number of workmen

must necessarily be small; and those employed in every different branch of the work can often be

collected into the same workhouse, and placed at once under the view of the spectator.

In those great manufactures, on the contrary, which are destined to supply the great wants of the great

body of the people, every different branch of the work employs so great a number of workmen, that it is

impossible to collect them all into the same workhouse. We can seldom see more, at one time, than

those employed in one single branch. Though in such manufactures, therefore, the work may really be

divided into a much greater number of parts, than in those of a more trifling nature, the division is not

near so obvious, and has accordingly been much less observed.

To take an example, therefore, from a very trifling manufacture, but one in which the division of labour

has been very often taken notice of, the trade of a pin-maker: a workman not educated to this business

(which the division of labour has rendered a distinct trade), nor acquainted with the use of the

machinery employed in it (to the invention of which the same division of labour has probably given

occasion), 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 manufactories, 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.

CHAPTER II. OF THE PRINCIPLE WHICH GIVES OCCASION TO THE DIVISION OF LABOUR.

Paragraph 1

This division of labour, from which so many advantages are derived, is not originally the effect of any

human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the

necessary, though very slow and gradual, consequence of a certain propensity in human nature, which

has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for

another.

CHAPTER V. OF THE REAL AND NOMINAL PRICE OF COMMODITIES, OR OF THEIR PRICE IN LABOUR, AND

THEIR PRICE IN MONEY.

Paragraph 17

Labour, therefore, it appears evidently, is the only universal, as well as the only accurate, measure of

value, or the only standard by which we can compare the values of different commodities, at all times,

and at all places. We cannot estimate, it is allowed, the real value of different commodities from century

to century by the quantities of silver which were given for them. We cannot estimate it from year to

year by the quantities of corn. By the quantities of labour, we can, with the greatest accuracy, estimate

it, both from century to century, and from year to year. From century to century, corn is a better

measure than silver, because, from century to century, equal quantities of corn will command the same

quantity of labour more nearly than equal quantities of silver. From year to year, on the contrary, silver

is a better measure than corn, because equal quantities of it will more nearly command the same

quantity of labour.

BOOK IV. OF SYSTEMS OF POLITICAL ECONOMY.

CHAPTER II. OF RESTRAINTS UPON IMPORTATION FROM FOREIGN COUNTRIES OF SUCH GOODS AS CAN

BE PRODUCED AT HOME.

Paragraph 9

But the annual revenue of every society is always precisely equal to the exchangeable value of the whole

annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As

every individual, therefore, endeavours 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 maybe of the greatest value; every

individual necessarily labours 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 many 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. It is an affectation, indeed, not very common among merchants, and very few words need

be employed in dissuading them from it.

Paragraph 12

What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom. If

a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it

of them with some part of the produce of our own industry, employed in a way in which we have some

advantage. The general industry of the country being always in proportion to the capital which employs

it, will not thereby be diminished, no more than that of the abovementioned artificers; but only left to

find out the way in which it can be employed with the greatest advantage. It is certainly not employed

to the greatest advantage, when it is thus directed towards an object which it can buy cheaper than it

can make. The value of its annual produce is certainly more or less diminished, when it is thus turned

away from producing commodities evidently of more value than the commodity which it is directed to

produce. According to the supposition, that commodity could be purchased from foreign countries

cheaper than it can be made at home; it could therefore have been purchased with a part only of the

commodities, or, what is the same thing, with a part only of the price of the commodities, which the

industry employed by an equal capital would have produced at home, had it been left to follow its

natural course. The industry of the country, therefore, is thus turned away from a more to a less

advantageous employment; and the exchangeable value of its annual produce, instead of being

increased, according to the intention of the lawgiver, must necessarily be diminished by every such

regulation.