Division of Labor and the Wealth of Nations

Explore Adam Smith's pin factory, build mini sheds, and read Wealth of Nations to gain a better understanding of the division of labor.  Adjustments to this lesson plan to make it appropriate for online teaching are included.

Need Resources for Online Teaching?


This lesson plan can use one or both of the following videos and discussion of the extension article and podcast in place of the in-person shed building game, then continue with the excerpts from Wealth of Nations for online text-based discussion. We have also prepared online teaching versions of the slide deck and handout.

Video: Adam Smith Works, An Animal That Trades: Division of Labor
Video: I, Pencil: The Movie
Econlib: Division of Labor (includes a link to a podcast interview of the author)

Online Teaching: Division of Labor and the Wealth of Nations handout
Online Teaching: Division of Labor and the Wealth of Nations slide deck

Other teaching materials are linked below with the formal lesson plan.

Check out our tips for online teaching, including text-based discussion, here



Division of Labor and the Wealth of Nations

Objective

This lesson explores Adam Smith's development of the concept of the division of labor through the example of the pin factory that he uses in Wealth of Nations through four activities: 
  1. Explore the pin factory
  2. Build a shed
  3. Readings from An Inquiry into the Nature and Causes of the Wealth of Nations, discussion and reflection questions
  4. Optional extension: Discuss Econlib's encyclopedia article on Division of Labor by Michael Munger

This lesson can be taught using the included slide deck or with a handout to students, both available in Materials. Readings from Wealth of Nations are available both online and as a handout. 

Materials


Optional Extension Materials

Lesson: Day 1

Display quote:

"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."
An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter 1, Paragraph 1

Adam Smith was not the first person to use the term “division of labour”. It appeared in a footnote by Sir Walter Petty, who was writing about the shipping trade, in 1690. What Adam Smith did do is develop the concept and what it means for modern market society in his sweeping, two-volume An Inquiry into the Nature and Causes of the Wealth of Nations. Smith emphasized the significance of this human behavior, which leads to specialization and the growing wealth of nations. 
The Pin Factory
In Wealth of Nations, Adam Smith uses the example of a pin factory to illustrate how the work of making pins could be broken down to dramatically increase the productivity of each worker in the factory. 
This may seem like an odd example, but pins were used for many more things in 18th century England than we use them for today. Virginia Postrel writes, “In Smith's time and for a century after, pins were a multipurpose fastening technology. Straight pins functioned as buttons, snaps, hooks and eyes, safety pins, zippers, and Velcro. They closed ladies' bodices, secured men's neckerchiefs, and held on babies' diapers.”
In another article, we see,
"Pins were essential in 18th century England
"
Silver and brass straight pins were commonly used for mending and sewing but were also purchased in milliner’s shops to fasten a gentleman’s neckcloth,  to secure the bodice of a woman’s gown and to pin baby diapers.
"While pins and needles have been made for thousands of years out of materials such as iron and bone, Adam Smith described in detail the 18 distinct steps involved in the manufacture of pins including the packaging.
"John Ireland Howe created the first pin making machine in Connecticut in 1832."
(Source: Loretta Chase & Susan Holloway Scott)

Ask your students to explore the rooms of The Pin Factory.  How many steps are involved in pin production? 
Optional Extension: You may choose to share the full article, Adam Smith Needs a Paper Clip (Virginia Postrel, Reason Magazine) with your students to expand on the importance of pins in Adam Smith's time. 

Build a Shed

Concepts:
  • Division of labor
  • Specialization
Time Required: One class period.

Materials Required:
  • Tables for student work—one table for every four to five students or have students move their desks close together
  • One container of raisins per table of students (mini marshmallows also work) 
  • One box of toothpicks per table of students
  • 8.5" x 11" paper. You may need more than one piece per student.

Preparation
Room set up:  individual desks near each other or tables of 3 or 4 students to start. 
Place the toothpicks and raisins on a central desk in the room from which the students must retrieve them. Leave the raisins and toothpicks in their boxes.

Activity
Exploring the Pin Factory website individually or as a guided presentation illuminates the complexity of producing a simple “trifling” object.

This Shed Building Activity enables students to negotiate and determine time-saving aspects of “dividing the labor” as well as improving their dexterity in an effort to build four sheds faster than their peers. After building sheds individually, students are grouped in trios and then in a group of 10, where the speed with which they build the four sheds on the fixed capital “land” (a piece of paper) is the “employment” goal.

A rough 3D drawing on the board as a model works well. Each shed is built with 9 raisins and 12 toothpicks.


Students will build sheds individually and in groups and will need enough space on an empty desk or another surface to build and arrange four sheds on an 8.5 x 11 piece of paper. 

Instruct students to go to the central desk to retrieve their materials, collecting 12 toothpicks and 9 raisins at a time, to complete as many sheds as they can in the timed session, with a goal of four sheds per piece of paper. Do not count out the toothpicks and raisins for them. This is an important step in the production line and one where they may choose to divide their labor as the exercise goes on. 

As employees, the project is paid upon completion (four sheds on a piece of paper) and must meet standard requirements (sheds must be built according to the plan).  Give the students each a piece of paper at the beginning of the first round and whenever they come up for supplies after completing the fourth shed on their last piece of paper.

At the start of the timed session, students should come forward to get materials for their first shed (9 raisins and 12 toothpicks) and one piece of paper. When the first shed is built, they can return to get materials (9 raisins and 12 toothpicks) for the second shed, then the third, then the fourth. If they complete the task within the five minutes, offer a second piece of paper (property) to build a second set of four sheds in addition to the material for the next shed. 

Each round is a timed five-minute session. Have students take a picture of their results at the end of each round. (Possible reward for the first student who completes an ideal set of four sheds).  Dismantle and clear the first sheds. Toothpicks and raisins should be returned to the containers and re-used for the second round. 

Round 1: 5 minutes

First, students will build sheds individually. Instruct students to complete as many sheds as they can in the timed session, with a goal of four sheds per piece of paper, using the specifications and methods above.

Time a five-minute session. Have students take a picture of their first result. You may choose to reward the student who completes the most sheds.*

Dismantle and clear the first sheds. Toothpicks and raisins can be returned to the containers and re-used for the second round. 

Round 2: 5 minutes

Assign students to groups of three and allow for conversation (but no practice) before a second round. The goal is still to build four sheds per piece of paper, but now the trio works together to compete against other trios. The same set of rules (one set of materials per shed at a time) apply.

Time a five-minute session. Have students take pictures of this second result. Dismantle and clear the second round of sheds. (Again, if desired you may reward the fastest group.*)

Round 3: 5 minutes

Have 10 students gather around a table as one working group. Extra students can observe unless there is a second or third group of ten to work as a team. The four sheds will be built on one piece of paper with everyone participating. Only once four sheds have been completed on one paper can the students get materials to begin the next set. 

Repeat a timed session. Photograph the finished project.

Debrief
Guide students through a discussion of the activity with these general questions, then, on a new day, through the Wealth of Nations “excerpt” readings and questions. Students can create a shared document answering the questions and inserting their photos.
  1. What was challenging about the first round of building sheds on your own?
  2. What changed when you built sheds in groups of three?
  3. How did 10 people working together affect shed production?

*Rewards could be a piece of candy, a pencil, etc. 

Lesson: Day 2


Text-based Discussion 
Have students take turns reading out loud to the class the 18th-Century English of Chapter 1 of Wealth of Nations on Division of Labor.  A class discussion question follows each excerpt. 

The following excerpts can be distributed as a handout (available in Materials), accessed online, or read directly from Wealth of Nations Book 1, Chapter 1. You may want to give copies of the readings to student readers the day before to give them a chance to look the text over ahead of time and practice. 

Reading 1

“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. 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.”
- Adam Smith, “An Inquiry into the Nature and Causes of the Wealth of Nations”, Book 1, Chapter 1, Paragraph 3. 1776.
Discuss
  1. Was there a “consequence of a proper division and combination of their different operations” as sheds were built in groups of three? Describe this. 
  2. Was labor divided into different tasks? If so, how?
     

Reading 2

‘I have seen a small manufactory of this kind where ten men only were employed, and where some of them consequently performed two or three distinct operations. But though they were very poor, and therefore but indifferently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds of pins in a day. There are in a pound upwards of four thousand pins of a middling size. Those ten persons, therefore, could make among them upwards of forty-eight thousand pins in a day. Each person, therefore, making a tenth part of forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day; that is, certainly, not the two hundred and fortieth, perhaps not the four thousand eight hundredth part of what they are at present capable of performing, in consequence of a proper division and combination of their different operations.”
- Adam Smith, “An Inquiry into the Nature and Causes of the Wealth of Nations”, Book 1, Chapter 1, Paragraph 3. 1776.
Discuss
  1. How does Smith’s description of pin factory production with 1, 2, and 10 laborers relate to the 1, 3, and 10 person production in the shed building activity?
     

Reading 3

“The division of labour, however, so far as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labour. The separation of different trades and employments from one another, seems to have taken place, in consequence of this advantage.”
- Adam Smith, “An Inquiry into the Nature and Causes of the Wealth of Nations”, Book 1, Chapter 1, Paragraph 4. 1776.
Discuss
  1. Consider a real-world circumstance of house building perhaps in an urban area near a major city anywhere in the world. What are the different “trades” or “employments” that participate in the production process?  Can you name ten in addition to 1) electricians 2) architects 3) chefs…   
  2. Why are individual laborers' skills likely not interchangeable between industries?

Reading 4

“This great increase of the quantity of work which, in consequence of the division of labour, the same number of people are capable of performing, is owing to three different circumstances; first to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and lastly, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many.
“First, the improvement of the dexterity of the workman necessarily increases the quantity of the work he can perform; and the division of labour, by reducing every man's business to some one simple operation, and by making this operation the sole employment of his life, necessarily increases very much the dexterity of the workman.”
- Adam Smith, “An Inquiry into the Nature and Causes of the Wealth of Nations”, Book 1, Chapter 1, Paragraph 5–6. 1776. 
Discuss
  1. What specific jobs for both skilled (salaried) and low skilled (wage) work require trained hand dexterity in the shed or house-building trade? 
  2. Does the term “dexterity” have meaning beyond manual labor skills? 
  3. How did your dexterity change in building sheds over the three rounds?
     

Reading 5

“Secondly, 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. It is impossible to pass very quickly from one kind of work to another; that is carried on in a different place, and with quite different tools. A country weaver, who cultivates a small farm, must lose a good deal of time in passing from his loom to the field, and from the field to his loom. When the two trades can be carried on in the same workhouse, the loss of time is no doubt much less. It is even in this case, however, very considerable. A man commonly saunters a little in turning his hand from one sort of employment to another. When he first begins the new work he is seldom very keen and hearty; his mind, as they say, does not go to it, and for some time he rather trifles than applies to good purpose. The habit of sauntering and of indolent careless application, which is naturally, or rather necessarily acquired by every country workman who is obliged to change his work and his tools every half hour, and to apply his hand in twenty different ways almost every day of his life; renders him almost always slothful and lazy, and incapable of any vigorous application even on the most pressing occasions. Independent, therefore, of his deficiency in point of dexterity, this cause alone must always reduce considerably the quantity of work which he is capable of performing.”
- Adam Smith, “An Inquiry into the Nature and Causes of the Wealth of Nations”, Book 1, Chapter 1, Paragraph 7. 1776.
Discuss
  1. Does what Adam Smith said here apply to shed building? 
  2. Does what he said apply to your daily class schedule? 
  3. Is Smith’s claim extreme or accurate? 

Reading 6

“Thirdly, and lastly, everybody must be sensible how much labour is facilitated and abridged by the application of proper machinery. It is unnecessary to give any example. I shall only observe, therefore, that the invention of all those machines by which labour is so much facilitated and abridged, seems to have been originally owing to the division of labour. Men are much more likely to discover easier and readier methods of attaining any object, when the whole attention of their minds is directed towards that single object, than when it is dissipated among a great variety of things. But in consequence of the division of labour, the whole of every man's attention comes naturally to be directed towards some one very simple object.”
- Adam Smith, “An Inquiry into the Nature and Causes of the Wealth of Nations”, Book 1, Chapter 1, Paragraph 8. 1776.
Discuss
  1. What “machinery” or tool would have increased production in the shed building activity? 
  2. Can you name, or search for, examples of how the specialization of workers in specific industries has led to inventions of machinery, tools, and equipment

Extension exercise: 

Read and discuss Michael Munger's Econlib Encyclopedia entry on Division of Labor. You may also want to discuss the linked EconTalk podcast with your students. 
  • How does this modern discussion add to what you've learned over the past few days? 
  • Do you think Adam Smith's insight remains relevant today?