Wednesday, January 19, 2011

Adam Smith - The Division of Labor and The Wealth of Nations

Thesis: The division of labor was one of the most time-saving innovations of the Industrial Revolution.

I. Greatest Improvement in the Productivity of Labor: Division of Labor

a. Same number of people are capable of performing

b. Owing to three different circumstances

i. Increase of dexterity in every particular workman

ii. Saving of time commonly lost in passing from one species of work to another

iii. The invention of a great number of machines which facilitate and abridge labour

c. Example of Pin Making

Thesis: In Smith’s The Wealth of Nations, Smith argued that the key to economic prosperity was laissez faire economics, the theory that the government should intervene as little as possible in economic affairs.

I. Laissez faire – government should intervene as little as possible in economic affairs

a. Advocates liberation of economic production

II. Spot for national interest as well in his economic theories

a. Defense of Navigation Acts

III. In short, Smith believed that economic cooperation among nations could be a source of peace

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