The Wealth of Nations and the Division of Labor

Published in March 1776, Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations asked why some countries grow richer than others. Smith began with a pin factory: one worker alone might make barely one pin a day, but ten workers dividing the tasks could make about 48,000. The division of labor, he argued, multiplies productivity, and its extent is limited by the size of the market.

Individuals pursuing their own gain in competitive markets could, as if led by an 'invisible hand', promote the public good, a phrase he used only once in the book. Smith attacked mercantilism, the system of tariffs, monopolies and colonial trade restrictions that he believed served merchants rather than consumers. Yet he also warned that repetitive work could dull workers' minds, supported public education and defense, and distrusted business owners who conspire to raise prices.

His work became a foundation of modern economics, interpreted very differently across the political spectrum.