Wealth of Nations

1) Why did Smith believe that the division of labor was important to
productivity?
In every other art and manufacture, the effects of the division of labour are
similar to what they are in this very trifling one; though, in many of them,
the labour can neither be so much subdivided, nor reduced to so great a
simplicity of operation. The division of labour, however, so far as it can be
introduced, occasions, in every art, a proportionable increase of the
productive powers of labour.
• 2
2) What are some of the divisions of labor that Smith describes in the
linen and woolen industries?
Each branch of the linen and woolen manufactures from the growers of the
flax and the wool, to the bleachers and smoothers of the linen, or to the
dyers and dressers of the cloth!
• 3
3) What does it mean to "truck, barter, and exchange?"

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. The greater part of his occasional wants are supplied in the
same manner as those of other people, by treaty, by barter, and by
purchase. With the money which one man gives him he purchases
food. The old clothes which another bestows upon him he exchanges
for other old clothes which suit him better, or for lodging, or for food,
or for money, with which he can buy either food, clothes, or lodging, as
he has occasion.
As it is by treaty, by barter, and by purchase that we obtain from one
another the greater part of those mutual good offices which we stand
in need of, so it is this same trucking disposition which originally gives
occasion to the division of labour. In a tribe of hunters or shepherds a
particular person makes bows and arrows, for example, with more
readiness and dexterity than any other. He frequently exchanges them
for cattle or for venison with his companions; and he finds at last that
he can in this manner get more cattle and venison than if he himself
went to the field to catch them. From a regard to his own interest,
therefore, the making of bows and arrows grows to be his chief
business, and he becomes a sort of armourer. Another excels in making
the frames and covers of their little huts or movable houses. He is
accustomed to be of use in this way to his neighbours, who reward him
in the same manner with cattle and with venison, till at last he finds it
his interest to dedicate himself entirely to this employment, and to
become a sort of house-carpenter. In the same manner a third
becomes a smith or a brazier, a fourth a tanner or dresser of hides or
skins, the principal part of the nothing of savages. And thus the
certainty of being able to exchange all that surplus part of the produce
of his own labour, which is over and above his own consumption, for
such parts of the produce of other men's labour as he may have
occasion for, encourages every man to apply himself to a particular
occupation, and to cultivate and bring to perfection whatever talent or
genius he may possess for that particular species of business.
Among men, on the contrary, the most dissimilar geniuses are of use to
one another; the different produces of their respective talents, by the
general disposition to truck, barter, and exchange, being brought, as it
were, into a common stock, where every man may purchase whatever
part of the produce of other men's talents he has occasion for.
• 4
4) Look at this passage in Chapter 2: "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. We address ourselves, not to
their humanity but to their self-love, and never talk to them of our
own necessities but of their advantages." According to Smith, why do
we make certain economic decisions? Is this a good or a bad thing?
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.
We address ourselves, not to their humanity but to their self-love, and
never talk to them of our own necessities but of their advantages.
Nobody but a beggar chooses to depend chiefly upon the benevolence
of his fellow-citizens. Even a beggar does not depend upon it entirely.
The charity of well-disposed people, indeed, supplies him with the
whole fund of his subsistence. But though this principle ultimately
provides him with all the necessaries of life which he has occasion for,
it neither does nor can provide him with them as he has occasion for
them. The greater part of his occasional wants are supplied in the same
manner as those of other people, by treaty, by barter, and by purchase.
With the money which one man gives him he purchases food. The old
clothes which another bestows upon him he exchanges for other old
clothes which suit him better, or for lodging, or for food, or for money,
with which he can buy either food, clothes, or lodging, as he has
occasion.
Notes on 1,2- It is impossible to separate so entirely the business of the
grazier from that of the corn-farmer as the trade of the carpenter is
commonly separated from that of the smith. The spinner is almost always a
distinct person from the weaver; but the ploughman, the harrower, the
sower of the seed, and the reaper of the corn, are often the same. The
occasions for those different sorts of labour returning with the different
seasons of the year, it is impossible that one man should be constantly
employed in any one of them. This impossibility of making so complete and
entire a separation of all the different branches of labour employed in
agriculture is perhaps the reason why the improvement of the productive
powers of labour in this art does not always keep pace with their
improvement in manufactures.
This great increase of 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; first, to the increase of dexterity in
every particular workman; secondly, to the saving of the time which is
commonly lost in passing from one species of work to another; and lastly, to
the invention of a great number of machines which facilitate and abridge
labour, and enable one man to do the work of many.
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. 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. He supplies them abundantly with
what they have occasion for, and they accommodate him as amply with
what he has occasion for, and a general plenty diffuses itself through all the
different ranks of the society.
The woollen coat, for example, which covers the day-labourer, as coarse and
rough as it may appear, is the produce of the joint labour of a great
multitude of workmen. The shepherd, the sorter of the wool, the wool-
comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller,
the dresser, with many others, must all join their different arts in order to
complete even this homely production.

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1) Why did Smith believe that the division of labor was important to

3) What does it mean to "truck, barter, and exchange?"

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