Chapter 2

The Cause of the Division of Labour

by Adam Smith Icon

The Propensity to Trade, Arising from Reason and Speech, Creates the Division of Labour

1 This division of labour is not originally the effect of any human wisdom. It is the necessary, very slow, gradual, consequence of the propensity in human nature to exchange one thing for another.

2 This propensity to trade probably arises from our faculty for reason and speech more than it being an original principle of human nature.

  • It is common to all humans.
  • It is not found in animals, as they do not know how to trade nor create contracts. hare

Two greyhounds chasing a hare, seem to act in concert in taking turns to intercept it. But their cooperation is not the effect of any contract, but of the accidental concurrence of their passions in the same object at that particular time.

Nobody ever saw a dog make a fair and deliberate exchange of bones with another dog. Nobody ever saw one animal signify to another=

  • this is mine, that yours, and
  • I am willing to give this for that.

When an animal wants something from a man or another animal, it tries to gain its favour.

  • A puppy fawns upon its mother.
  • A spaniel tries to attract its master if it wants to eat.

Man sometimes does the same with other men, sometimes trying every servile and fawning attention to obtain their good will. However, he cannot do this all the time.

In a civilized society, he always needs the cooperation of so many people. But he can only maintain friendship with a few people in his entire life.

Most animals are totally independent after maturity. But man must always depends on others.

He will likely get help more successfully if he can use their self-love to his favour, instead of their benevolence. He must show them that it is for their own advantage to do for him what he requires.

Whoever offers a bargain of any kind, proposes to do this. The meaning of every such offer is= ‘Give me that which I want, and you shall have this which you want’

In this way, we get most of what we need. 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.*

*Superphysics note: Here Smith refers to own interest as svadharma and not selfishness

We address, not their humanity but their self-love. We never talk to them of our own necessities but of their advantages.

Only a beggar chooses to depend chiefly on the benevolence of others.

  • But even a beggar does not depend on it entirely.

Donors supply him with his subsistence, but not always when he wants it. Most of his wants are supplied in the same way as those of other people, by treaty, by barter, and by purchase.

He uses the donated money to buy food. He exchanges the old clothes donated to him for the following items that he might need=

  • other kinds of clothes,
  • lodging,
  • food, or
  • money.

3 We obtain what we need from one another:

  • by treaty
  • by barter
  • by purchase. *

*Superphysics Note: Our points-based system is a hybrid of treaty and barter.

This trucking disposition is the origin of the division of labour.

A tribal person makes bows and arrows better than any other.

  • He exchanges them for cattle from people who can catch them better.
  • From a regard to his own interest, bows and arrows becomes his chief business.
  • Another excels in building huts and also trades this service for cattle and meat until carpentry becomes his employment.
  • In the same way, a third becomes a smith
  • a fourth becomes a tanner.

Thus, the certainty of being able to exchange their surplus produce for the produce of other men’s labour, encourages every man to: *

  • have an occupation, and
  • cultivate whatever talent he might have.

*Superphysics Note: This is why a points-based system requires long-term investment

4 The difference in the natural talents in men is much less than we think.

The different levels of skill of different men in different professions is the effect of the division of labour*.

*Superphysics Note: The natural human ability to communicate and trade is the cause, skill and specialization is the effect. However, we go deeper and assign the root cause as a living mind’s ability to express

The difference between a philosopher and a street porter seems to arise not so much from nature, but from habit, custom, and education.*

  • They were perhaps very much alike when they were 6-8 years old.
  • As they got older, the difference in their talents widened until their employments became totally different.

*Superphysics Note: This matches David Hume’s assertion that ’nurture’ is more important than ’nature'

Without the disposition to truck, barter, and exchange:

  • everyone must have had the same duties and work to do
  • there could have been no difference of employment and talents.

5 This disposition to trade creates the difference of talents and renders them useful to society.

Animals of the same species have more talents than humans who have not yet been educated. From nature’s perspective, a philosopher’s genius is not so different from that of a street porter. Likewise:

  • a mastiff is not so different from a greyhound,
  • a greyhound is not so different from a spaniel,
  • a spaniel is not so different from a shepherd’s dog.

But their talents are not useful to each other because they lack the power to barter and exchange.

The mastiff’s strength cannot be supported by=

  • the greyhound’s swiftness,
  • the spaniel’s sagacity, or
  • the shepherd’s dog’s docility.

These talents:

  • cannot be brought into a common stock, and
  • do not contribute to improve the accommodation and conveniency of their species.

Each animal:

  • works only for itself and
  • gets no benefit from the talents of other animals.

Among men, on the contrary, the most dissimilar talents are useful to one another.

  • The disposition to truck, barter, and exchange allows the produce of their different talents to be brought into a common stock where everyone can buy what they need.


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