Thoughts on The Wealth of Nations: Book 1, Chapter 2: "of the Principle which gives Occasion to the Division of Labour"

Hello everyone! This is the next post in my summer series of reviews on "The Wealth of Nations" by Adam Smith. In this article, we will be reviewing chapter 2. If you missed the first article, the link will be provided at the bottom of this article. Let's get into it!

Here is my review and commentary on Book 1, Chapter 2: "of the Principle which gives Occasion to the Division of Labour":

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Text Source, The Wealth of Nations by Adam Smith

Book 1, Chapter 2: "of the Principle which gives Occasion to the Division of Labour"

The division of labor does not arise from any one human set of beliefs, wisdoms, or knowledges. It comes from the natural compulsion held by humans to trade. This means that trade is not a belief but an instinct.

Trade in Nature?

Smith then makes the point that trade can either come from human nature or be a byproduct of speech and reason. Either way, he makes the point that only humans make rational trades. He then states and example:

“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 endeavours to intercept her when his companion turns her towards himself. This, however, 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 one bone for another with another dog.” - Book 1, Chapter 2, Page 22

The funny thing is, I wonder if Smith even realized that this community sharing idea would become the basis for a completely different economic construct, communism. However, I don't buy what Smith is selling (pun intended). I am almost positive that there are examples of trade amongst different species of animals in nature. For example, here is a video that my father and I found. Here is another example from @davidpakman on the same concept.

Smith then makes the point that in every other species, each individual is independent to a large degree from their counterparts. Any animal can certainly take care of themselves. Humans are the only species which rely heavily on one another to survive. It is this reliance that makes trade possible. As Smith put it:

“Give me that which I want, and you shall have this which you want, is the meaning of every such offer. . . 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.” - Book 1, Chapter 2, Pages 23-24

This again reaffirms that interdependence that Smith pointed out in the chapter we reviewed yesterday. This interdependence stems from the reason and logic behind trade. Reason and logic that is beyond the capabilities of most animals. One thought I have about the cause of this is Maslow's hierarchy. It is not that animals are not able to fulfill ideas such as trade, it's that they do not have the time or energy. I have a feeling that humans were very much like animals until they learned how to farm. When agriculture came around, humans no longer had to focus all of their time and energy on hunting and ideas like trade and interdependence became possible.

Self-Interest -> Division of Labor

Self-interest leads to trade, and trade leads to division of labor. This is an example of transitive reasoning. Smith is making the point that the instinct of self-interest leads to a division of labor. He then provides an example, stating:

“In a tribe of hunters or shepherds a particular 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 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.”

This example shows that the bow and arrow maker divides labor by making weapons for other people to hunt with. This in turn means that he makes the weapons and they bring him the product of his portion of the labor. This highlights the point that trade allows you to do your specialty in order to succeed rather than be forced to do something you are bad at and not be able to eat as a result. This is kind of civilization's solution to the survival of the fittest.

Talent and its Origins

Smith then makes the point that talent is a result of division of labor. Talent is not something that naturally occurs, but rather develops due to the education and experience gained in a specific field. Smith makes the point that talent is a result of habit. Habit which is achieved through a division of labor. Smith uses this to argue that talent is achieved by the same means. Meaning that people are, at first, the same. This is embodied by the quote:

“The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature as from habit, custom, and education. When they came into the world, and for the first six or eight years of their existence, they were perhaps very much alike, and neither their parents nor playfellows could perceive any remarkable difference. About that age, or soon after, they come to be employed in very different occupations. 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 acknowledge scarce any resemblance.” - Book 1, Chapter 2, Page 25

My views on this idea are mixed. I have always said that talent is a product of hard work, efficiency, and passion. I feel that hard work and efficiency are something that come from the division of labor, but I do feel like passion is something which you are born with, and passions may differ. Therefore, people's potential talents must be different from the beginning because their passions will differ. This means that someone who is passionate about art may not necessarily even try to go into a scientific field because it is not where their passion lies.

Talent in Nature

Finally, Smith makes the point that talents do exist amongst other species, but they are not used for advantage by the species. Smith points out that only humans try to benefit from each other’s talents. He gives the example of a dog once again, stating:

“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 swiftness 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 conveniency 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.” – Book 1, Chapter 2, Page 26

This is a very good point. Trade is a method which allows man to live by his talents and still succeed. Though I do feel that talents may be utilized amongst species. For example, a mother, who is built and trained to raise puppies, raises puppies. While a father will go out with the pack to hunt for food. An alpha male, who exceeds in battle and leadership, is chosen and fulfills his role to lead the pack because of his natural strength and inclination to lead. But this is not to the same degree as in humans. A lame dog is left to die, rather than to use what talent he may still possess. Humans are probably the only species who encourage the disadvantaged to fulfill their own natural talents. As I said earlier, trade must be civilization's solution to the survival of the fittest.

Previous Reviews

The Wealth of Nations

Book 1

• Chapter 1: "of the Division of Labor"
• Chapter 2: "of the Principle which gives Occasion to the Division of Labour"

The Confucian Analects

• Table of Contents and Statistics

The Art of War

• Table of Contents and Statistics

Schedule (hopefully)

Friday - Tuesday: "The Wealth of Nations" review
Wednesday: Break/Free write day
Thursday: Weekly7

Closing

Thanks for reading this! I enjoyed writing this article greatly. If you enjoyed reading it, please remember to read the previous article or check back for the next article. Also, please remember that feedback is always appreciated! See you later!

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