--- ENTITY: division-of-labour ---

# Division of Labour

## Definition

The separation of a work process into a number of distinct tasks, each performed
by a specialised worker, resulting in a significant increase in the productive
powers of labour. Smith identifies it as the principal cause of improvement in
the productive capacity of any trade, art, or manufacture. The effect arises
from three circumstances: increased dexterity, saved time in transition between
tasks, and the invention of labour-saving machinery.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

The division of labour is the central argument of the chapter. Smith opens by
asserting that it is the greatest source of improvement in productive powers,
then illustrates it through the pin-factory example, explains its three causal
mechanisms, and concludes by showing how it generates universal opulence through
exchange.

## Economic Domain

Production

## Smith's Original Wording

"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."

## Modern Interpretation

The division of labour remains a foundational concept in economics and
organisational theory. Modern extensions include specialisation theory,
comparative advantage (Ricardo), and the study of transaction costs that
determine the boundaries between internal division and market exchange (Coase).

--- ENTITY: productive-powers-of-labour ---

# Productive Powers of Labour

## Definition

The capacity of human labour to produce output, measured in terms of the
quantity and quality of goods a given number of workers can produce within
a given time. Smith argues that the division of labour is the primary cause
of increases in productive power, and that differences in productive power
explain differences in national wealth.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Smith introduces productive powers as the dependent variable that the division
of labour improves. He contrasts the output of an unskilled individual worker
(one pin per day) with the output of a coordinated team under division of
labour (4,800 pins per person per day) to demonstrate the scale of improvement.

## Economic Domain

Production

## Smith's Original Wording

"This great increase in the quantity of work, which, in consequence of the
division of labour, the same number of people are capable of performing, is
owing to three different circumstances."

--- ENTITY: dexterity-of-the-workman ---

# Dexterity of the Workman

## Definition

The skill and speed a worker acquires through repeated performance of a single
specialised operation. Smith identifies the increase in dexterity as the first
of three causes by which the division of labour improves productive power.
Specialisation reduces each worker's task to one simple operation, making it
the sole employment of their life, and thereby dramatically increasing their
proficiency.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Presented as the first of three mechanisms explaining why the division of labour
increases output. Smith illustrates it with the example of nail-making: an
unskilled smith makes 200-300 nails per day, while a specialised nailer can
produce over 2,300.

## Economic Domain

Production

## Smith's Original Wording

"First, the improvement of the dexterity of the workmen, necessarily increases
the quantity of the work he can perform; and the division of labour, by reducing
every man's business to some one simple operation, and by making this operation
the sole employment of his life, necessarily increases very much the dexterity
of the workman."

--- ENTITY: saving-of-time ---

# Saving of Time

## Definition

The elimination of time lost when a worker passes from one kind of work to
another. Smith identifies this as the second mechanism by which the division of
labour increases productive power. Time is lost both in physical transition
(moving between locations and tools) and in mental transition (the sauntering
and inattention that follows switching tasks).

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Presented as the second of three mechanisms. Smith argues the loss is greater
than commonly supposed, encompassing not only travel time but a psychological
cost: workers who constantly switch tasks develop habits of "sauntering" and
"indolent careless application" that reduce their output even during active work.

## Economic Domain

Production

## Smith's Original Wording

"Secondly, the advantage which is gained by saving the time commonly lost in
passing from one sort of work to another, is much greater than we should at
first view be apt to imagine it."

--- ENTITY: invention-of-machinery ---

# Invention of Machinery

## Definition

The development of machines that facilitate and abridge labour, enabling one
person to do the work of many. Smith identifies this as the third mechanism
by which the division of labour increases productive power, and argues that
the division of labour itself stimulates invention, because workers focused
on a single operation naturally discover improvements to their specific task.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Presented as the third mechanism. Smith provides the anecdote of the boy who
automated the valve on a fire engine to free himself for play. He extends the
argument beyond workers to include machine-makers and philosophers (men of
speculation), whose own specialised observation enables them to combine
knowledge from distant fields.

## Economic Domain

Production

## Smith's Original Wording

"Thirdly, and lastly, everybody must be sensible how much labour is facilitated
and abridged by the application of proper machinery. It is unnecessary to give
any example."

--- ENTITY: separation-of-trades ---

# Separation of Trades

## Definition

The process by which distinct occupations emerge as separate specialisations,
each performed by dedicated practitioners rather than by a single person who
performs all tasks. Smith presents the separation of trades as both a
consequence and an indicator of the division of labour, noting that it
advances furthest in the most industrious and improved countries.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Smith transitions from the pin-factory example to the economy-wide observation
that in improved societies, "the farmer is generally nothing but a farmer; the
manufacturer, nothing but a manufacturer." He contrasts manufacturing, where
trades separate extensively, with agriculture, where seasonal demands prevent
full separation.

## Economic Domain

Production

## Smith's Original Wording

"The separation of different trades and employments from one another, seems to
have taken place in consequence of this advantage."

--- ENTITY: the-workman ---

# The Workman

## Definition

The individual labourer who performs productive work, whether in manufacturing
or agriculture. In the context of the division of labour, the workman is the
operative unit whose dexterity, time, and inventiveness are the channels through
which specialisation increases output. Smith portrays the workman both as a
beneficiary of the division of labour (higher output) and as its agent
(inventing machinery through focused attention).

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

The workman appears throughout the chapter as the primary actor: the pin-maker,
the nailer, the country weaver, the boy at the fire engine. Smith attributes
both the productive gains and many mechanical inventions to ordinary workmen.

## Economic Domain

Production

--- ENTITY: the-philosopher ---

# The Philosopher

## Definition

A person whose occupation is observation and speculation rather than direct
production — "men of speculation, whose trade it is not to do any thing, but
to observe every thing." Smith treats the philosopher as an economic actor
whose specialised function is combining knowledge from diverse fields to
produce innovations and improvements, analogous to how the workman improves
their own narrow task.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Introduced near the end of Smith's discussion of the third mechanism (invention
of machinery). Smith notes that as society progresses, philosophy itself becomes
a specialised trade, subdivided into branches, with each philosopher becoming
expert in their field — the division of labour applied to intellectual work.

## Economic Domain

General Theory

## Smith's Original Wording

"In the progress of society, philosophy or speculation becomes, like every other
employment, the principal or sole trade and occupation of a particular class of
citizens."

--- ENTITY: universal-opulence ---

# Universal Opulence

## Definition

The general material well-being that extends across all ranks of society,
including the lowest, as a consequence of the division of labour and the
resulting multiplication of production. Smith argues that through exchange,
every workman can supply others abundantly with their specialised product
and receive in return the products of others' specialisation, creating a
"general plenty" that benefits even the poorest members of a civilised society.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

The concluding argument of the chapter. Smith illustrates universal opulence
by examining the "accommodation of the most common artificer or daylabourer,"
showing that even a coarse woollen coat requires the cooperation of shepherds,
wool-combers, dyers, weavers, merchants, sailors, and many others — a vast
chain of interdependent labour that would be impossible without specialisation
and exchange.

## Economic Domain

Distribution

## Smith's Original Wording

"It is the great multiplication of the productions of all the different arts,
in consequence of the division of labour, which occasions, in a well-governed
society, that universal opulence which extends itself to the lowest ranks of
the people."

--- ENTITY: exchange ---

# Exchange

## Definition

The act of trading one's surplus production for the goods produced by others.
Smith presents exchange as the mechanism by which the division of labour
translates into universal opulence: each workman disposes of their surplus
output and receives in return the surplus of others, so that all are
supplied beyond what any individual could produce alone.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Exchange appears in the chapter's conclusion as the connecting mechanism
between specialised production and general welfare. Smith implicitly treats
it as prerequisite to the division of labour (explored further in Chapter 2),
since specialisation only benefits workers if they can trade their surplus.

## Economic Domain

Exchange

## Smith's Original Wording

"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."

--- ENTITY: co-operation-of-labour ---

# Co-operation of Labour

## Definition

The interdependent collaboration of many workers across different trades and
locations to produce a single finished good. Smith demonstrates that even the
simplest consumer goods in a civilised society require the combined efforts of
thousands of workers — shepherds, miners, sailors, smiths, weavers — who
collectively make possible what no individual could achieve alone.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Smith's extended example of the day-labourer's woollen coat serves to illustrate
the vast scope of co-operation. He traces the supply chain from raw materials
through manufacture and transport to show that civilised consumption depends on
an immense network of specialised, interdependent labour.

## Economic Domain

Production

## Smith's Original Wording

"Without the assistance and co-operation of many thousands, the very meanest
person in a civilized country could not be provided, even according to, what we
very falsely imagine, the easy and simple manner in which he is commonly
accommodated."

--- ENTITY: manufactures ---

# Manufactures

## Definition

The sector of production in which raw materials are transformed into finished
goods through a series of distinct operations, each typically performed by
specialised workers. Smith contrasts manufactures with agriculture, noting that
the former admits of far greater subdivision of labour and separation of trades,
and therefore exhibits far greater improvements in productive power.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Manufactures serve as the primary setting for Smith's analysis of the division
of labour. The pin factory is a manufacture; so are the linen, woollen, and
hardware trades he references. Smith uses the greater divisibility of
manufacturing work to explain why rich countries excel more conspicuously over
poor countries in manufactures than in agriculture.

## Economic Domain

Production

--- ENTITY: agriculture ---

# Agriculture

## Definition

The sector of production concerned with the cultivation of land and the raising
of crops and livestock. Smith argues that agriculture does not admit of as many
subdivisions of labour as manufactures, because seasonal rhythms prevent workers
from specialising year-round in a single task. As a result, agricultural
productivity improves less dramatically with the division of labour than
manufacturing productivity.

## Source Chapter

Book I, Chapter 1: "Of the Division of Labour"

## Context

Agriculture is introduced as a counterpoint to manufactures. Smith notes that
the ploughman, harrower, sower, and reaper are often the same person, and that
this is why even rich countries do not surpass poor countries in agricultural
output as dramatically as in manufacturing output.

## Economic Domain

Production

## Smith's Original Wording

"The nature of agriculture, indeed, does not admit of so many subdivisions of
labour, nor of so complete a separation of one business from another, as
manufactures."
