This video covers the first full chapter of Adam Smith's The Wealth of Nations in which he discusses the division of labor. Smith starts out by giving the concrete
This video covers the first full chapter of Adam Smith's The Wealth of Nations in which he discusses the division of labor. Smith starts out by giving the concrete example of division of labor among workers in a pin factory. He uses this to illustrate the 3 reasons that division of labor leads to greater productivity: it increases dexterity, saves time in which a worker would normally switch from one task to another, and focuses a worker so that they're more innovative within their specialty. This realization is the basis for Smith's theory of productivity and theory of economic growth.
Smith illustrates the relationship between division of labor, market exchange, and coordination of market activities by providing another example — this time about the production of a woolen coat. There are many laborers who are a part of producing the coat — the shepherd, the individuals who sort, comb and die the wool, the spinner, the weaver. But, beyond those directly involved with making the coat, there is a much larger network from around the world brought together by trade. The die, for instance, may have come from, in Smith's words, the "remotest corners of the world."