How Breaking Work Into Pieces Creates Wealth — The Wealth of Nations

Smith starts by saying the biggest jumps in what workers can make come from splitting jobs into small steps. His famous example is a pin factory. One worker alone might make one pin a day, or maybe none at all. But ten workers can split about eighteen steps. Together they can make about forty-eight thousand pins in a day.

Smith gives three reasons this works. First, people get faster when they do the same task over and over. A boy who only makes nails can make thousands in a day. Second, workers waste less time switching from one kind of work to another. Third, focused workers invent better tools. He tells of a boy who tied a string to a steam-engine valve so the machine opened and closed without him, which left him free to play.

Then Smith zooms out. Even a poor worker's rough wool coat needs help from shepherds, dyers, spinners, weavers, merchants, sailors, and miners. These people never meet, but trade links them. Farms cannot split work as finely as factories can, which is one reason manufacturing often grows faster than farming.

His closing point is striking. An ordinary worker in a rich trading country may live better than an African king who commands thousands of people. The king has more power, but division of labor and exchange multiply what a society can produce.