Division of Labor

Division of Labor

“The greatest improvements in the productive powers of labor…have been the effects of the division of labor.  To take an example…the trade of the pinmaker, a workman not educated to this business, nor acquainted with the use of the machinery employed in it 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…it is divided into a number of branches…One man draws out the wire, another straightens 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 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.”


In the Wealth of Nations Adam Smith describes how the division of labor increases production.  He tells us that the pinmaker’s job is divided into roughly 18 separate tasks.  In a non-factory setting where a pinmaker was a craftsman and did all 18 tasks, the pinmaker could make at most 20 pins a day.

But in factories the tasks are divided up and each laborer is responsible for only one or two tasks.  According to Smith these small pinmaker factories could produce 4800 pins per worker.

INCREDIBLE!  Using the factory system production has increased from 20 pins per worker to 4800 pins per worker!  To see the implications of this, do the following exercise.


Division of Labor EXERCISE


#1. Imagine that a pinmaker factory of 18 workers provided all the pins demanded by society


18 workers X 4800 pins per worker = 86400 pins for society


Now using the old craft system where each craftsman did all the tasks, how many workers would it take to produce 86400 pins?


________workers X 20 pins per worker = 86400 pins for society


How many workers are freed from producing pins when a craft system is replaced by a factory system? ____________________


#2. Now go to www.econlib.org/library/Essays/rdPncl1.html and read “I, Pencil” by Leonard Read. Use the pencil example to explain why the division of labor is also a division of knowledge. Give at least three jobs mentioned in this division of labor and knowledge.


LESSON:  greater productivity frees labor to produce other products for society and raise our standard of living.  It is through the accumulation of capital and the division of labor that the rich nations have become wealthy.  This is what Adam Smith observed in his Wealth of Nations.

Last Updated on February 11, 2019 by EssayPro