Adam Smith, division of labour and Stigler’s Law

Adam Smith was born 300 years ago this Friday, on 16 June, 1723. Now that we are in the month of his birth, tercentenary birthday parties are picking up pace. Adam Smith was known for his unassuming manner, and quite conceivably, he would have marked the occasion of his anniversary with his favourite leisure activity, a solitary walk on the Scottish coast, rather than with having toasts raised in his honour at a gala.

Adam Smith might have kept a low profile personally, but he did not shy from starting out with a bang in his writing. The first chapter of the first book of The Wealth of Nations, On the Division of Labour, catches the reader’s attention on the first page with a practical demonstration:

“To take an example, … the  trade of the pinmaker; a workman not educated to this business … nor acquainted with the use of the machinery employed in it … could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on … the important business of making a pin is divided into about eighteen distinct operations … I have seen a small manufactory of this kind where ten men only were employed, and … they could, when they exerted themselves, make among them about twelve pounds of pins in a day.”

The Wealth of Nations is one of only a handful of books where even readers who do not care much for economics can name its author offhand. In economics, The Wealth of Nations has become something of a Bible. In some ways, in fact, The Wealth of Nations even outdoes the Bible. For example, in length. Adam Smith’s magnum opus comes to 950,000 words, comfortably ahead of the King James Bible at under 800,000. Hence, for all the name recognition of the book and its author, there must be very few readers, including many of those deeply immersed in economics, who have ever read it cover to cover.

Adam Smith’s description of how to speed up the manufacture of pins is so vivid, and his inference so intuitive, that he is commonly credited with the discovery of the benefits of the division of labour. This attribution is questionable, but serves to illustrate Stigler’s Law of Eponymy. Stephen Stigler, a statistician whose interests include the history of his discipline, examined the naming of scientific laws and noticed a pattern: many scientific laws are named after someone other than the discoverer. Stephen Stigler offered some examples, and since then others have added more. Compilations of Stigler’s Law by now have accumulated an almost endless list of instances.

Measured out with the yardstick of Stigler’s Law, Adam Smith’s reputation runs ahead of his achievement. As David Graeber has pointed out, long before Adam Smith the medieval Arabic historian Ibn Khaldun described how the division of labour benefits the gathering of food:

“It is beyond the power of one man alone to do all that, or (even) part of it, by himself. Thus, he cannot do without a combination of many powers from among his fellow beings, if he is to obtain food for himself and for them. Through cooperation, the needs of a number of persons, many times greater than their own (number), can be satisfied.”

Adam Smith could not have known about the works of Ibn Khaldun, which did not yet circulate in Europe when he was writing The Wealth of Nations. But in any event, he would not have needed to look as far afield as medieval Islam to come across a description of the workings of division of labour. All he had to do was reach for back issues of The Spectator.

Joseph Addison (1672 – 1719), the principal writer of The Spectator, put these words into the mouth of his fictive Whig porte-parole Andrew Freeport:

“It is certain that a single Watch could not be made so cheap in Proportion by one only man, as a hundred Watches by a hundred… If an hundred Watches were to be made by a hundred Men, the Cases may be assigned to one, the Dials to another, the Wheels to another, the Springs to another, and every other part to a proper Artist … and the hundred Watches would be finished in one fourth Part of the Time of the first one, and every one of them at one-fourth Part of the Cost, though the wages of every Man were equal.”

These remarks appeared in November 1711. At that time, Joseph Addison must have been conscious of treading on unfamiliar ground, because he has Andrew Freeport cite his source, the admirable William Petty. By 1776, the year of publication of The Wealth of Nations, enough time had elapsed for the concept of division of labour to have become well understood by general readers.

Indeed Adam Smith acknowledged as much, since he wrote in the prequel to his famous example that the division of labour has been very often taken notice of. That it might be thought he would have liked to pass off his description as an original insight, therefore, would have taken him by surprise.

The exposition of division of labour in pin manufacture redounds to the stature of Adam Smith in other ways. Anyone setting out to write close to a million words on economics had better think of ways to get and keep the attention of the reader. Whereas no business school would today consider teaching a case study based on the pin industry, Adam Smith’s picture of pin manufacture still is a timeless lesson of business economics in a nutshell. If the kudos for pointing out the workings of division of labour go to Adam Smith rather than to anyone else, then applying Stigler’s Law shows that not the least of Adam Smith’s skills was his ability to engage his readers.

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