Tag: The Wealth of Nations

Smith attributes a great deal of the increase in the productivity of labor to division of labor, and presents a good case for it.; at least, I’m convinced.   His comments on agriculture are intriguing.  P12: “The nature of agriculture, indeed, does not admit of so many subdivisions of labor, nor of so complete a separation of one business from another, as manufactures.”  It makes me wonder if this might change in the future; if a more rational and planned production might reduce this gap.  That speculation aside, however, the point is inarguable and significant.

I also found convincing his discussion, pp 15-16, of how much more significant training and specialization (“dexterity”) are compared to innate skill.  Of course, I may only have been convinced because it agrees with my prejudices.

On the top of page 16 is introduced the implication that the measure of labor is time.  I agree here, too, but wonder if he’ll go into more detail later.  Further on 16: “Men are much more likely to discover easier and readier methods of attaining any object, when the whole attention of their minds is directed towards that single object, than when it is dissipated among a great variety of things.”  This fits very well with the idea of capitalism ushering in the age of specialization; my own belief is that this age will end when capitalism ends, but that is just more speculation.  On pages 17-18 he quite rightly observes that some inventions have been the product of those who specialize in inventions and in machines, and, later, he hints at the importance of those who “are often capable of combining together the powers of the distant and dissimilar objects.”

He loses precision and credibility on page 19, when he tries to include his ideas of division of labor into pre-capitalist, and especially primitive communist societies.  I would guess this has to do with the infancy of anthropology in his time, but it seems clear that, in fact, there is very little division of labor in hunter-gatherer societies (eg, cf Turnbull, The Forrest People).

His mention at the bottom of page 19 of sailors immediately made me think of the degree of specialization in an 18th or 19th century man-of-war, compared to the very little division of labor in, for example, a trireme or a proa.

I’m going to need to take notes as I read this, so I figured I may as well do it here as anywhere else–especially because doing it here gives Smart People a chance to point out where I’m being stupid.

I’m using the Bantom Dell paperback edition, March 2003, edited and annotated by Doug Fraser, ISBM 0-553-58597-5

Introduction: The title is The Wealth of Nations.  Later, I may have some thoughts about wealth, but what intrigues me right away is that in the very title  he makes reference to nations–that is, to a very specific organization of the State, and one closely associated with the economy of commodity-exchange, as opposed to, for example, the Kingdom, the City-State, the Tribe, &c.  I wonder, therefore, to what degree his intention is to talk about general economic laws, and to what extent he intends to limit his discussion to the specifics of a market economy.

In the introuction itself, the first sentence reads as follows: “The annual labor of every nation is the fund which originally supplies with all the necessaries and conveniences of life.”  So then, what would later come to be called the Labor Theory of Value, appears here as a given.  Is he going to establish this later, or is it merely assumed?

In the second paragraph, he is already entering into a discussion of the productivity of labor–in other words, he is setting aside (at least for the moment) the material wealth with which a given region is endowed, and instead concentrating on the degree to which labor can multiply that wealth.  To my mind, this seems perfectly reasonable.

He returns to this with more force on page 3, although I’ve now run into the term “capital stock” in the sentence, “The number of useful and productive labourers, it will hereafter appear, is every where in propotion to the quantity of capital stock which is employed in setting them to work, and to the particular way in which it is so employed.”  I think I’m going to have a real problem if I can’t figure out what he means by “capital stock.”  Raw material?  Capital in the sense of wealth for investment?  Hope I figure it out.

Later on page 3 he makes the interesting point that Europe has concentrated (since the fall of the Roman Empire) on industry of the town as opposed to industry of the country.  Here he refers to it as a matter of “policy,” which seems arbitrary absent discussion of the material causes of that policy, but I trust he’ll expand on that later.

On to Book One