Adam Smith’s Enlightened World

Liberty, understood through free markets, limited government, and the rule of law, is exemplified in the writings of Adam Smith. Begin your exploration of the Smithian tradition of “natural liberty” in one of his most famous examples...

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A project of Liberty Fund, made possible by a grant from the John Templeton Foundation​

  • All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord.

  • One who is master of all his exercises has no aversion to measure his strength and activity with the strongest.

  • It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.

Adam Smith’s Enlightened World

A Trifling Fascination

Adam Smith famously described the manufacture of pins, but he was not alone. The marvelous cooperative production process of pins was also illustrated by Denis Diderot in the most famous of the Encyclopedias of the time. And yet, Adam Smith described the division of labor with a much deeper understanding than his predecessors, and more remains to be explored.

Pin Factory Room One

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Pin Factory Room One

In summary

Step One

Where do pins begin?

Step Two

Washing and Wrapping the Wire

Step Three

Winding the Wire

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Before there can be pins, there must be metal, and Smith reminds us that the pin factory is far from the beginning of the process of their creation. The metal used in Diderot's factory was mined in Sweden or Germany, not the United Kingdom. It may take more than a village...it may take a globe. Smith argues for the "liberal system" of free trade, in contrast to mercantilism of his day. How many countries are involved in the manufacture of other "trifling" objects, such as a pencil? A t-shirt? A sandwich?

Smith describes how an individual can increase the quantity of work performed when a given operation is “the sole employment of his life.” Is this true only of discrete manufacturing operations? What other types of work might be similarly affected by the division of labor? Does division of labor apply equally in the office? The hospital? The college?

Smith praises the increased dexterity that comes from focusing on one particular task. The trade of the pin-maker; a workman not educated to this business...nor acquainted with the use of the machinery employed in it...could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part are likewise peculiar trades." To what extent is manual dexterity still a concern today?


This spindle winds the drawn wire into spools, which are then cut into strands approximately 6 inches in length. It will next be drawn into threads of varying thickness, depending on the type of pin being made.

Is the improvement in dexterity an unqualified benefit of the division of labor?

The Productive Power of Labor

Division of labor allows us to have both more and better finished products than when all are self-sufficient. Why, then, has there been such hostility to this notion throughout history- as well as today? What are its downsides? Do its benefits outweigh its costs?

Pin Factory Room One

In summary

Location, Location, Location

Productivity gained by the firm division of labor accrues benefits for the firm and the individual as well.

Pin Factory Room Two

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Pin Factory Room Two

In summary

Step One

Pulling Lengths of Wire

Step Two

Cutting the Lengths

Step Three

Work-Life Balance

Step Four

Grinding the Heads

Step Five

The Spinning Wheels

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Use of pins was much more widespread in the 18th-century. Can you guess how many different types and uses of pins were common? What would be some analogs in the modern world, in which pins are relatively out of favor? How are the benefits of the division of labor felt beyond the particular factory? Smith was primarily concerned in this book with the wealth of nations...Does the nation or the individual reap the greatest benefits from the division of labor?


If the wire is not placed carefully through these nails, to then be drawn through the turnstile, the resulting thread may be bent or misshapen, and the process will have to be begun again.

“The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labour.”

econlib.org B.I, Ch.1, Of the Division of Labor

The division of labor wasn't important only for pins...Take a look at what this worker is wearing. Smith reminds us, “The woollen coat, for example, which covers the day-labourer, as coarse and rough as it may appear, is the produce of the joint labour of a great multitude of workmen.” Can you list all the steps that would go into the production of such a coat? How about a pencil? A smartphone?

The wire thread is cut into 3-4 further lengths in preparation for the next step. While Smith is focused here on productivity, many agree his greatest concern was with the worker himself. Smith sees a role for education in support of human flourishing, for example. How do you think Smith would have this accomplished? Is this a role for the state?? The firm? The individual?


A guide for cutting wire into varying lengths, depending on the type of pin being made, rests on the worker's thigh. He places the cut lengths into one of the baskets at his side.

In this room we see lots of passing of the product to the next worker in line. Smith comments on the creation of such very "distinct trades" within the manufacture of this one product. If you were an 18th-century laborer, how would you like your day in the factory to look, and why?

Workplace safety is not a new concern. Diderot points out that the seated worker's millstones have a protective shield to keep metal shavings from getting in their eyes. Does divison of labor improve or degrade the working conditions of those in the factory? To what extent did division of labor lead to this sort of innovation?


A millstone is used to grind the end of the pins to a point, making them ready for the head to be attached.

“…the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part are likewise peculiar trades. One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on, is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them.”

The millstones can only grind pins in preparation to receive their heads if these workers operate the attached spinning wheels. In what other ways are the workers in this room interdependent? How can this sort of interdependence be compatible with individualism at the same time? Is all labor equally exchangeable? How are these spinning wheel operators different from say, a street porter?, or an esteemed professor of moral philosophy?

Sloth and Indolence

Smith notes, “...the advantage which is gained by saving the time commonly lost in passing from one sort of work to another, is much greater than we should at first view be apt to imagine it.” What causes the biggest loss of productivity in your own work, even when manual dexterity isn't an issue? What would Smith say about our tendency to “multitask” today? econlib.org B.I, Ch.1, Of the Division of Labor

Pin Factory Room Two

In summary

Heads Up

Attaching the heads to pins is the final step in this factory's process... but it's not the final stop for thinking about the division of labor...

Pin Factory Room Three

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Pin Factory Room Three

In summary

Step One

Bleach and Shake

Step Two

Great Minds?

Step Three

Shaking in the Valve

Step Four

Shaking Sheepskins

Step Five

Mind the Boiler and the Molten Tin

Step Six

Innovation and Ingenuity

Step Seven

The Help of a Machine

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Smith uses a number of examples of division of labor in The Wealth of Nations besides pins...fire engines, woolen coats, and even philosophy are up for consideration. How could such an abstract field as philosophy benefit from division of labor? Isn't the labor of the philosopher of a different kind than the factory worker? How can division of labor bring the two together?


The unfinished pins are bleached in this tub, thirty pounds at a time, in tartar for 30 minutes, with the worker shaking the tub throughout the boiling.

“Observe the accommodation of the most common artificer or day-labourer in a civilized and thriving country, and you will perceive that the number of people of whose industry a part, though but a small part, has been employed in procuring him this accommodation, exceeds all computation.”

econlib.org B.I, Ch.1, Of the Division of Labor

There are a lot of steps in drying the pins and readying them for the final stage of production...a very specific process. But in whose mind did this division of labor originate? Smith tells us that this process, “from which so many advantages are derived, is not originally the effect of any human wisdom...” Where, then, did it come from?

econlib.org B.I, Ch.2, Of the Principle which gives Occasion to the Division of Labour

There certainly were a lot of steps just to wash and dry... Is it possible for people to over-specialize in their work? What sorts of unintended consequences might arise from such intense specialization? How are people, firms, and nations to arrive at the right level of specialization?

It seems as if it wouldn't be possible to divide the tasks of pin-making more than we see here... What else limits the division of labor? Smith tells us that the division of labor is limited by the extent of the market. What does this mean in the case of pins? Must bigger and more urban areas always hold an advantage over those smaller and more rural? How does technology help us expand the extent of our markets today? Is this an unqualified good?

Molten metal is poured in a mold to create the pin heads. A very precise step, with another worker involved in tending the fire to maintain an ideal temperature for the pour. Does division of labor have a greater or lesser degree of effect in more precise jobs than less? What about tasks of an artisanal nature? How might division of labor affect these, and would such an effect be net positive or negative?

We see the most mechanization in this room. Would you rather be this worker, or one of the workers engaged with the great machine behind him? Why? Who has the greatest incentive to introduce labor-saving machinery, factory workers or owners? Who reaps the greatest benefit, and why? To what extent is it possible for production to become too mechanized? Does this apply to non-industrial endeavors as well?

Smith has been criticized for failing to describe innovation, but some disagree. In describing innovations in the design of 18th- century fire engines, he notes that a little boy is responsible for the greatest innovation of all. What do you think is the greatest source of innovation? As we continue to improve our machines, is there a limit to the ways in which they enhance our lives?


This machine, developed especially for the pin factory's “strikers,” can accommodate up to six workers at once. Using the pulleys and anvils in this machine, strikers can attach the heads to several pins at a time, thereby completing the production process.

“A great part of the machines made use of in those manufactures in which labour is most subdivided, were originally the inventions of common workmen, who, being each of them employed in some very simple operation, naturally turned their thoughts towards finding out easier and readier methods of performing it.”

econlib.org B.I, Ch.1, Of the Division of Labor

Man AND Machine

The division of labor was a boon for the pin business...But how much broader is its influence? While Adam Smith wasn't the first to introduce the concept of division of labor, he made a unique and important contribution nonetheless. But Smith also enriched the way we understand human behavior more broadly, and we hope you'll join us in our further Smithian exploration.

Pin Factory Room Three

In summary

What Can We Learn?

“It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions...that universal opulence which extends itself to the lowest ranks of the people." Continue your journey by exploring Smith's Life and Times, reading his texts, or discovering Educational Resources to use with students. We welcome you!

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Room Two Room Three Conclusion

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