If division of labor is caused and stimulated by the power of exchanging, then the size of the market must limit the degree to which labor can be divided. In a small market, specialization will not develop–one thinks of the American frontier where each homestead had to be, in some measure, self-sufficient. The limiting of specialization will limit the growth of the economy (ie, the productivity of labor).
On page 28: “As by means of water-carriage a more extensive market is opened to every sort of industry then what land-carriage alone afford it, so it us upon the sea-coast and along the banks of navigable rivers, that industry of every kind begins to subdivide and improve itself.” What strikes me here is the relationship of technique–that is, transportation technology–to the impetus for other technologies. I had already known that the better the transportation (as a special form of communication) the more technologies will feed on and inspire each other accross cultures, but I hadn’t considered how the market plays into this. It would seem that, from the 16th Century to the 19th, improvements in transportation (roads, railways, &c) stimulated everything. Cool.
He sort of throws out, on page 29, “…the first improvements of art and industry…” Yes, of course, the development of art and the development of industry always have complex (and fascinating) interrelationships, but I hadn’t considered it in that way before; that is, that art would also be transformed by the same things that transformed industry.
On page 30 he discusses how much of culture and technology (and art!) originated around the Medditeranian, attributing it to the ease of transportation. He ignores a number of other factors that contributed to it (climate, soil, the presence of herd animals), but that doesn’t weaken the point that the ease of transportation along the coast and up and down the various rivers must have been an emormous stimulous.