and other producers' goods. That would be necessary even in a communistic society. In our present economic system any individual who can live on less than his income may spend the balance of it on tools and other producers' goods. That which he spends for consumers' goods virtually hires men to produce that class of goods, while that which he spends for producers' goods virtually hires men to produce that class of goods. The more money there is spent for producers' goods, the more rapidly they will accumulate. This means that the more thrifty the people are, and the more inclined they are to live on less than their incomes and to spend the remainder for tools, the better equipped with tools they will be.

We now see how definitely the prosperity, power, and greatness of a nation depend upon the three factors-labor, land, and capital. A nation whose people are possessed of high ability (especially for those fields of work where ability is most needed), which has an abundance of rich land, and which accumulates capital rapidly so as to supply itself with the best of tools and other equipment has all that is needed on the physical side to make it prosperous. But much remains to be said in detail about each of these factors and the ways in which they are to be combined.

CHAPTER X

ECONOMIZING LABOR

BY THE DIVISION OF LABOR

As suggested in Chapter IX, labor, land, and capital are the elements out of which national prosperity is built. Of these by far the most important, in the aggregate, is labor, since we include under that term both mental and physical exertion, the labor of management, of direction, and of investment as well as manual skill and muscular strength. It was also stated that the efficiency of labor depends upon two factors: the natural ability of the people and their training. But there are many things involved in training which are not taught in schools or learned in shops or business houses. The general attitude of mind of the whole people, their outlook on life, their personal habits, their systems of morals, and even their religion, all have their share in the efficiency of the people. The efficiency of labor depends also, to a large degree, upon its organization and the opportunity for specialization.

Adam Smith begins his great "Inquiry into the Nature and Causes of the Wealth of Nations" with a discussion of the division of labor. Other writers, both ancient and modern, had commented on the great fact of interdependence of individuals in society, but no one had gone into such detail or shown so clearly just why a minute division of labor was so advantageous. His statement of the case has scarcely been improved upon up to the present day, though many of his illustrations are out of date.

Meaning of the division of labor. By a division of labor he means, first, a system under which no one produces everything he needs, but each one confines himself to the production of

that one thing or those few things for the production of which he is best fitted, exchanging his surplus product for the surplus products of others who are specializing on other things; second, the process of dividing the work involved in the making of a given article (each man performing a single part) and then assembling all the parts, thus producing a complete whole. He mentions the nail-makers of his day as illustrations of the first form. A common blacksmith, having many other kinds of work to do, could never become very skillful at nail-making, but one who did nothing else except to make nails became very skillful and could make in the course of a day several times as many as a common blacksmith. He mentions boys under twenty who had never learned any other trade and who could make, each of them, upwards of two thousand three hundred nails in a day; whereas a common smith, even though he were accustomed to making nails occasionally, could seldom make over eight hundred or a thousand in a day. The second form of the division of labor was found in his day in the making of pins. The work of making a pin was divided into eighteen different operations, each operation being performed by a different workman. Of course neither nails nor pins are made nowadays as they were in his day, but the division of labor has been carried even farther. They are turned out by automatic machines, but the machines are made by one set of men, and the metal is mined, smelted, and prepared by different groups; all are performing parts of the work of making nails or pins, as the case may be. Thousands of other illustrations may be found all about us if we choose to look for them.

Advantages. Adam Smith names three distinct advantages which result from the division of labor :

First, the improvement in the dexterity of the workman necessarily increases the quality of the work he can perform; and the division of labor, 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. . . . 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. . . . Thirdly and lastly, everybody must be sensible how much labor 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 labor is so much facilitated and abridged, seems to have been originally owing to the division of labor. 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 labor, the whole of every man's attention comes naturally to be directed towards some one very simple object. It is naturally to be expected, therefore, that some one or other of those who are employed in each particular branch of labor should soon find out easier and readier methods of performing their own particular work, wherever the nature of it admits of such improvement. A great part of the machines made use of in those manufactures in which labor is most subdivided, were originally the inventions of common workmen.1

Adam Smith's opinion that the third and last of these advantages was of special importance has been fully justified by subsequent experience. Those special phases of the division of labor which he so aptly illustrated by the nail-makers and the pin-makers of his day scarcely exist now except in some minor industries. The nail-makers and pin-makers actually made their products with their own hands, using only such tools as could be handled and driven by their own muscles. Machines have now taken the place of the simple tools of that day. Sometimes these machines are directed and fed by attendant laborers, but sometimes they are so perfected as to require very little attention, feeding themselves automatically and stopping automatically when anything goes wrong. In these cases the work of the attendant is reduced to a minimum, consisting

1 Wealth of Nations, chap. i.

merely in starting the machines and putting them in order when anything goes wrong.

There are penalties, however, to be paid for the extreme division of labor to which we have become accustomed. It is undoubtedly efficient and economical-without it many articles which are now enjoyed by great masses of people would be so scarce as to be available only for the very few-but it puts a great strain upon those who specialize. The ability to give close attention to one thing for a long time is not very widely distributed. Only the superior races possess it; and even within these races there are many individuals who lack it, especially in their early youth. They easily become discontented and restless if required to work under conditions of extreme specialization. They would be much better satisfied with more desultory work, even though such work accomplished less. This is one of the reasons why the quality of the population is such an important factor in national prosperity. A nation whose workers cannot stand specialized work will easily be left behind by a superior nation whose workers can.

Differences between a tool and a machine. The difference between a tool and a machine is fairly clear. The working part of a tool is not only driven but guided by human muscles. A machine may be driven by human muscles, but the working part is guided by the machine itself. Besides, the power is not applied directly to the working parts, but indirectly through a series of mechanical devices such as wheels, pulleys, levers, cranks, etc. For example, the working parts of a sewing machine are the needle and the bobbin. These are guided by the other parts of the machine, and the power is applied indirectly. It is, therefore, a machine, even though it is propelled by the muscles of the operator; on the other hand, the needle of the tailor or seamstress is not only propelled but guided by the worker. The hammer of the blacksmith is a tool; a steam hammer is a machine, not so much because it is driven by steam as because the working part (that is, the hammer itself) is controlled, guided, and made to strike accurately by other parts