Wealth of Nations Summary

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AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS by
Adam Smith
(Chapters I-VIII Summary)

Submitted to: Sir Lemuel P. Del Rosario
Submitted by: Rian Karlo Z. Punzalan
Section:2B-G2

CHAPTER I
THE DIVISION OF LABOUR.
When a work is broken down into much smaller work and distributed into individuals that specialize in that work, we can achieve maximum productivity. For example the work of making a computer program can be divided up into these assignments. 1. The main programmer handles the Coding.

2. A debugger scans for errors and bugs within the program. 3. The designer designs the interface of the program.
By using this example we can show how productivity works, because if all of those tasks will be given to one person only, the productivity will suffer thus it takes too much time to complete the program, unlike when it is divided into smaller tasks. The fruits of division of labor: It decreases the effort of every workman to produce a product. It also saves time because the work is passed down from one division into another. Single Purpose machines can be used to perform a specific task in a work division. Knowledge is also divided into workmen, the ways and techniques for increased productivity that are specifically designed for their divisions. They don't need to know all the process of production but only to focus on their division. And when that knowledge is gathered, it will represent the whole manufacturing process itself.

It is proven that Increased Productivity may result into a Wealthy Society. Because Division of Labor leads to High Productivity, which means more excess products that is beyond what the society needs and then opens the opportunity of Trading. Trading = Wealth.

The Division of Labor was already in our civilization from the most ancient times, one example is the building of Pyramids in Egypt. One slave could not achieve such success alone, thus Division of Labor comes in action. It is applied from the biggest manufacturing company to the basic household chores. Maximum productivity can be achieved through The Division of Labor.

CHAPTER II
THE PRINCIPLE WHICH GIVES OCCASION TO THE DIVISION OF LABOUR

Adam Smith states that division of labor results increased productivity. This principle states how does division of labor came into reality. Division of labor came to as a move of man's disposition to trade Since he can trade for goods, a man doesn't need to make everything he needs. Thus, there is an emergence of a division of labor. Because a man can trade for many goods, he realized that he didn't need to make those goods anymore and buying them would be hassle free. Thus the division of labor aroused. He developed a specialty for the goods he produces, which results into product excess(more than he needs). These goods can be traded for the goods he needs. He then realized that he is does not specialize on every part of production, so he hires a worker to specialize on that particular work. His decision resulted into more wealth, from there we can conclude that the desire to trade more and the ability to do it produces the division of labor.

CHAPTER III
THE DIVISION OF LABOUR IS LIMITED BY THE EXTENT OF THE MARKET The presence of trading gives opportunity to the division of labor. The length of the division of labor is limited by the extent of trade which means it is limited by the extent of the market. Because Smaller market means that an individual must do many tasks because there insufficient people he can trade with to get the goods he wants or needs. In our old times in the Philippines, every farmer must be a harvester, planter and other work. There are not enough people to keep, a farmer occupied full-time. So, there are few farmers. The family of the farmer lives far from a market. So the farmer does its own farming, which reinforces the inability to specialize in their work because very few will enter farming due to lack of traders to trade...
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