Example of the Division of Labour: Pin Factory in Wealth of Nations
One of Adam Smith's key insights was that the division of labor, also known as specialization, is a major driver of prosperity, although its potential is limited by the 'extent of the market'. To illustrate this, Smith presented the case of a pin factory. He reported that ten men, each specializing in one or two of the eighteen distinct steps of pin-making, could together produce nearly 50,000 pins daily. In contrast, he argued that if each worker performed all the steps independently, they would struggle to produce even twenty pins, and possibly not a single one, in a day.
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