Principle which gives occasion to the Division of Labour

t THIS division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to [20] which it gives occasion, t It is the necessary, though very slow and gradual consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another. 2

2 Whether this propensity be one of those original principles in human nature, of which no further account can be given; or whether, as seems more probable, it be the necessary consequence of the faculties of reason and speech, it belongs not to our present subject to enquire. 3 It is common to all men, and to be found in no other race of animals, which seem to know neither this nor any other species of contracts. Two greyhounds, in running down the same hare, have sometimes the appearance of acting in some sort of concert. Each turns her towards his companion, or en- deavours to intercept her when his companion turns her towards himself. This, however, is not the effect of any contract, but of the accidental

t LJ (B) 2xS–x9, ed. Cannan t68 reads: ‘We cannot imagine this to have been an effect of human prudence. It was indeed made a law by Sesostratis that every man should follow the employment of his father. But this is by no means suitable to the dispositions of human nature and can never long take place. Everyone is fond of being a gentleman, be his father what he would.’ The law is also mentioned in LJ (A) vi.54. See below, I.vii.3x and IV.ix.43. 2This paragraph closely follows the first three sentences in ED 2.×2. The propensity

to truck and barter is also mentioned in LJ (A) vi.44., 48 and LJ (B) 2×9 If., ed. Carman I69. Cf. LJ (B) 3oo–x, ed. Carman 232: ‘that principle in the mind which prompts to truck, barter and exchange, tho’ it is the great foundation of arts, commerce and the division of labour, yet it is not marked with any thing amiable. To perform any thing, or to give any thing without a reward is always generous and noble, but to barter one thing for another is mean.’ In a Letter from Governor Pownall to Adam Smith, being an Examination of Several Points of Doctrine laid down in his Inquiry, into the Nature and Causes of the Wealth of Nations (London, x776), the author objected that the analysis of this chapter stopped short in ascribing the division of labour directly to a propensity to barter (4-5). Pownall, a former Governor of Massachusetts, also criticized Smith’s views on labour as a measure of value, paper money, the employments of capital, colo- nies, etc. Smith acknowledged Pownall’s work in Letter x8a addressed to Pownall, dated x9 January x777. In Letter 208 addressed to Andreas Holt, dated 26 October x78o Smith remarked that: ‘In the second edition I flattered myself that I had obviated all the objections of Governor Pownal. I find however, he is by no means satisfied, and as Authors are not much disposed to alter the opinions they have once published, I am not much surpdzed at it.’ There is very little evidence to suggest that Smith materially altered his views in response to Pownall, but see below, p. 50, n. xS. 3 In LJ (B) 22I, ed. Carman x7x, Smith argued in referring to the division of labour

that ‘The real foundation of it is that principle to persuade which so much prevails in human nature.’ The same point is made in LJ (A) vi.56.

26 The Nature and Causes of [I.ii

concurrence of their passions in the same object at that particular time.4 Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its ges- tures and natural cries signify to another, this is mine, that yours; I am willing to give this for that. When an animal wants to obtain some- thing either of a man or of another animal, it has no other means of persuasion but to gain the favour of those whose service it requires. A puppy fawns upon its dam, and a spaniel endea-[2I]vours by a thousand attractions to engage the attention of its master who is at dinner, when it wants to be fed by him. Man sometimes uses the same arts with his breth- ren, and when he has no other means of engaging them to act according to his inclinations, endeavours by every servile and fawning attention to obtain their good will. He has not time, however, to do this upon every occasion. In civilized society he stands at all times in need of the co- operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons. In almost every other race of animals each individual, when it is grown up to maturity, is in- tirely independent, and in its natural state has occasion for the assistance of no other living creature,s But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only.° He will be more likely to prevail if he can interest their self-love in his favour, and shew them that it is for their own ad- vantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from

4 The example of the greyhounds occurs in LJ (B) 2×9, ed. Carman I69. LJ (A) vi.44 uses the example of ‘hounds in a chace’ and again at 57. Cf. LJ (B) e22, ed. Carman XTt: ‘Sometimes, indeed, animals seem to act in concert, but there is never any thing like a bargain among them. Monkeys when they rob a garden throw the fruit from one to another till they deposit it in the hoard, but there is always a scramble about the divi- sion of the booty, and usually some of them are killed.’ In LJ (A) vi.57 a similar example is based on the Cape of Good Hope. s In ED _.12 an additional sentence is added at this point: ‘When any uncommon mis-

fortune befals it, its piteous and doleful cries will sometimes engage its fellows, and sometimes prevail even upon man, to relieve it.’ With this exception, and the first sentence of this paragraph, the whole of the preceding material follows ED 2.t2 very closely and in places verbatim. The remainder of the paragraph follows ED 2.I2 to its close. 6 ‘To expect, that others should serve us for nothing, is unreasonable; therefore all

Commerce, that Men can have together, must be a continual battering of one thing for another. The Seller, who transfers the Property of a Thing, has his own Interest as much at Heart as the Buyer, who purchases that Property; and, if you want or like a thing, the Owner of it, whatever Stock of Provision he may have of the same, or how greatly soever you may stand in need of it, will never part with it, but for a Consideration, which he likes better, than he does the thing you want.’ (Mandeville, The Fable of the Bees, pt. ii. 4_x-2, ed. Kaye, ii.349.)

I.ii] the Wealth of Natiom 27

the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their [22] regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.7 Nobody but a beggar chuses to depend chiefly upon the benevolence of his fellow- citizens. Even a beggar does not depend upon it entirely. The charity of well-disposed people, indeed, supplies him with the whole fund of his subsistence. But though this principle ultimately provides him with all the necessaries of life which he has occasion for, it neither does nor can provide him with them as he has occasion for them. The greater part of his occasional wants are supplied in the same manner as those of other people, by treaty, by barter, and by purchase. With the money which one man gives him he purchases food. The old cloaths which another bestows upon him he exchanges for other old cloaths which suit him better, or for lodging, or for food, or for money, with which he can buy either food, cloaths, or lodging, as he has occasion.

3 As it is by treaty, by barter, and by purchase, that we obtain from one another the greater part of those mutual good offices which we stand in need of, so it is this same trucking disposition which originally gives occa- sion to the division of labour. In a tribe of hunters or shepherds aparticular person makes bows and arrows, for example, with more readiness and dexterity than any other. He frequently exchanges them for cattle or for venison with his companions; and [23] he finds at last that he can in this manner get more cattle and venison, than if he himself went to the field to catch them. From a regard to his own interest, therefore, the making of bows and arrows grows to be his chief business, and he becomes a sort of armourer,s Another excels in making the frames and covers of their

Cf. LJ (B) 2zo, ed. Cannan x69: ‘The brewer and the baker serve us not from bene- volence but from selflove. No man but a beggar depends on benevolence, and even they would die in a week were their entire dependance upon it.’ Also LJ (A) vi.46: ‘You do not adress his [the brewer’s and baker’s] humanity but his self-love. Beggars are the only persons who depend on charity for their subsistence; neither do they do so aUtogether. For what by their supplications they have got from one, they exchange for something else they more want. They give their old cloaths to a one for lodging, the mony they have got to another for bread, and thus even they make use of bargain and exchange.’ s CL LJ (A) vi.46: ‘This bartering and trucking spirit is the cause of the separation of

trades and the improvements in arts. A savage who supports himself by hunting, having made some more arrows than he had occasion for, gives them in a present to some of his companions, who in return give him some of the venison they have catched; and he at last finding that by making arrows and giving them to his neighbour, as he happens to make them better than ordinary, he can get more venison than by his own hunting, he lays it aside unless it be for his diversion, and becomes an arrow-maker.’ Similar points are made in LJ (B) 22o, ed. Cannan I69-7o, and a similar passage occurs in ED 2.t3. Mandeville (The Fable of the Bees, pt. ii. 335–6, ed. Kaye ii.284) also noted that: ‘Man’, as I have hinted before, naturally loves to imitate what he sees others do, which is the reason that savage People all do the same thing: This hinders them from meliorating their Condition, though they are always wishing for it: But if one will wholly apply him- self to the making of Bows and Arrows, whilst another provides Food, a third builds

28 The Nature and Causes of [I.ii

little huts or moveable houses. He is accustomed to be of use in this way to his neighbours, who reward him in the same manner with cattle and with venison, till at last he finds it his interest to dedicate himself entirely to this employment, and to become a sort of house-carpenter. In the same manner a third becomes a smith or a brazier, a fourth a tanner or dresser of hides or skins, the principal part of the clothing of savages. 9 And thus the certainty of being able to exchange all that surplus part of the produce of his own labour, which is over and above his own con- sumption, for such parts of the produce of other men’s labour as he may have occasion for, encourages every man to apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business. 1°

4 The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause, as the effect of the divi- sion of labour, tt The difference between the [24] most dissimilar charac- ters, between a philosopher and a common street porter, for example, Huts, a fourth makes Garments, and a fifth Utensils, they do not only become useful to one another, but the Callings and Employments themselves will in the same Number of Years receive much greater Improvements, than if all had been promiscously follow’d by every one of the Five.’ 9 Cf. Hutcheson (System, i.288-9): “Nay ’tis well known that the produce of the

labours of any given number, twenty, for instance, in providing the necessaries or con- veniences of life, shall be much greater by assigning to one, a certain sort of work of one kind, in which he will soon acquire skill and dexterity, and to another assigning work of a different kind, than if each one of the twenty were obliged to employ himself, by turns, in all the different sorts of labour requisite for his subsistence, without sufficient dexterity in any. In the former method each procures a great quantity of goods of one kind, and can exchange a part of it for such goods obtained by the labours of others as he shall stand in need of. One grows expert in tillage, another in pasture and breeding cattle, a third in masonry, a fourth in the chace, a fifth in iron-works, a sixth in the arts of the loom, and so on throughout the rest. Thus all are supplied by means of barter with the work of complete artists. In the other method scarce any one could be dextrous and skilful in any one sort of labour.’ 10 This paragraph is based on ED 2.13, which it follows very closely. tt ‘When we consider how nearly equal all men are in their bodily force, and even

in their mental powers and faculties, till cultivated by education; we must necessarily allow, that nothing but their consent could, at first, associate them together, and subject them to any authority.’ (D. Hume, ‘Of the Original Contract’, in Political Discourses (t752); Essays Moral, Political and Literary, ed. T. H. Green and T. H. Grose (London, i882), i.444-5.) Cf. Treatise of Human Nature, III.i: ‘The skin, pores, muscles, and nerves of a day-labourer, are different from those of a man of quality: so are his sentiments, actions, and manners. The different stations of life influence the whole fabric, external and internal; and these different stations arise necessarily, because uniformly, from the necessary and uniform principles of human nature.’ On the other hand, Harris (Essay, i. 15) believed that: ‘Men are endued with various talents and propensities, which natur- ally dispose and fit them for different occupations; and are.., under a necessity of betaking themselves to particular arts and employments, from their inability of otherwise acquiring all the neceq._aries they want, with ease and comfort. This creates a depen- dance of one man upon another, and naturally unites men into societies.’

I.ii] the Wealth of Nations 29

seems to arise not so much from nature, as from habit, custom, and educa- tion. 12When they came into the world, and for the first six or eight years of their existence, they were a, perhaps, a very much alike, and neither their parents nor play-fellows could perceive any remarkable difference. About that age, or soon after, they come to be employed in very different occupa- tions. The difference of talents comes then to be taken notice of, and widens by degrees, till at last the vanity of the philosopher is willing to acknow- ledge scarce any resemblance. But without the disposition to truck, barter, and exchange, every man must have procured to himself every necessary and conveniency of life which he wanted. All must have had the same duties to perform, and the same work to do, and there could have been no such difference of employment as could alone give occasion to any great difference of talents. 13

5 As it is this disposition which forms that difference of talents, so remarkable among men of different professions, so it is this same disposi- tion which renders that difference useful. Many tribes of animals acknow- ledged to be all of the same species, derive from nature a much more remarkable distinction of genius, than what, antecedent to custom and _a I, 4e-6

12 Cf. V.i.f 51. LJ (A) vi.47-8 reads: ‘No two persons can be more different in their genius as a philosopher and a porter, but there does not seem to have been any original difference betwixt them. For the five or six first years of their lives there was hardly any apparent difference: their companions looked upon them as persons of pretty much the same stamp. No wisdom and ingenuity appeared in the one superior to that of the other. From about that time a difference was thought to be perceived in them. Their manner of life began to affect them, and without doubt had it not been for this they would have continued the same.’ Similar arguments appear in LJ (B) 220, ed. Carman XTO. There is an interesting variant on this point in LJ (B) 327, ed. Cannan 253, where Smith com- mented on the fact that ‘probity and punctuality’ generally accompany the introduction of commerce. He added that varying degrees of these qualities were ‘not at all to be imputed to national character as some pretend. There is no natural reason why an English- man or a Scotchman should not be as punctual in performing agreements as a Dutchman. It is far more reduceable to self interest, that general principle which regulates the actions of every man…’ 13The whole of the preceding paragraph follows ED 2.I4 to this point. In ED, how-

ever, the sentence ends with ‘… any great difference in character’ and goes on: ‘It is upon this account that a much greater uniformity of character is to be observed among savages than among civilized nations. Among the former there is scarce any division of labour and consequently no remarkable difference of employments; whereas among the latter there is an almost infinite variety of occupations, of which the respective duties bear scarce any resemblance to one another. What a perfect uniformity of character do we find in all the heroes described by Ossian ? And what a variety of manners, on the con- trary, in those who are celebrated by Homer? Ossian plainly describes the exploits of a nation of hunters, while Homer paints the actions of two nations, who, tho’ far from being perfectly civilised, were yet much advanced beyond the age of shepherds, who cultivated lands, who built cities, and among whom he mentions many different trades and occupations, such as masons, carpenters, smiths, merchants, soothsayers, priests, physicians.’ The texts then assume a similar form until the end of the following para- graph of the WN. The uniformity of character found among savages is also mentioned in LJ (A) vi.48 , LJ (B) 22i, ed. Carman x7o.

3o The Nature and Causes of the Wealth of Nations [].ii

education, appears to take place among men. By nature a philosopher is not in genius and disposition half so different from a street porter, as a mastiff is from a greyhound, or a greyhound from a spaniel, or this [25] last from a shepherd’s dog. Those different tribes of animals, however, though all of the same species, are of scarce any use to one another. The strength of the mastiff is not, in the least, supported either by the swift- ness of the greyhound, or by the sagacity of the spaniel, or by the docility of the shepherd’s dog. The effects of those different geniuses and talents, for want of the power or disposition to barter and exchange, cannot be brought into a common stock, and do not in the least contribute to the better accommodation and convenieney of the species. Each animal is still obliged to support and defend itself, separately and independently, and derives no sort of advantage from that variety of talents with which nature has distinguished its fellows. Among men, on the contrary, the most dissimilar geniuses are of use to one another; the different produces of their respective talents, by the general disposition to truck, barter, and exchange, being brought, as it were, into a common stock, where every man may purchase whatever part of the produce of other men’s talents he has occasion for. 14

t4The text of ED continues beyond this point to include an additionalfolio(N8) which elaborateson the interdependence between the philosopher and the porterand the ad- vantages to be gained from these separate trades. This passage opens with the statement that ‘Every thing would be dearer if before it was exposed to sale it had been carried packt and unpackt by hands less able and less dexterous, who for an equal quantity of work,would have taken more time, and must consequently have requiredmorewages. which must have been chargedupon the goods.’ It is interesting to note that FA begins with the words ‘… who for an equal quantity of work’ and then continues in parallel with ED for some z5 lines. The fragment then proceedsto elaborateon the linkbetween the division of labour and the extent of the market (a subject which is not mentioned in ED) whereasED continueswith the precedingtheme. It is possible that the fragments represent an alternative,and a later, rewritingof this section of Smith’s work.The inter- dependence of philosopher and porter is brieflymentioned in LJ (A) vi.49, LJ (B) 2ax, ed. Carmanx7x.

456 The Nature and Causes of [IV.ii

precisely the same thing with that exchangeable value,x2As every individ- ual, therefore, endeavours as much as he can both to employ his capital in the support of domestick industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. a3He gen- erally, indeed, neither intends to promote the publick interest, nor knows how much he is promoting it. By preferring the support of domestiek to that of foreign industry, he intends only his own security; and by di- reefing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other eases, led by an invisible hand to promote an end which was no part of his intention, x4Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the publick good. It is an [ISz] affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it. 15

xo What is the species of domestick industry which his capital can employ, and of which the produce is likely to be of the greatest value, every indi- vidual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him. The stateman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.a6

I To give the monopoly of the home-market to the produce of domestick industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must, in almost all cases, be either a useless or a hurtful regulation. If the produce of domestick can be brought there as cheap as that of foreign industry, the regulation is evidently useless. If it cannot, it must generally be hurtful. It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The taylor does not attempt to make his own shoes, but buys them of the 12A similar point is made at I.vi.t7, I.xi.p.7, and II.ii.x. 13See below, IV.vii.c.88. 14Cf. TMS IV.i.x.xo, where Smith also uses the concept of the ‘invisible hand’ in an

economic context. is There is an interesting variation on this theme in Steuart’s Prin_’ples, i. x65, ed. Skinner

i._43-4. 1¢Similar sentiments are expressed in IV.v.b.x6 and IV.ix.sx , where intervention is

said to be presumptuous and impolitic, not to mention unjust. The argument is also applied at I.x.c.xa.

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