Smith thought the key was to encourage the division of labor. Smith argued that workers could produce more if they specialized. Smith argued that if all production could be specialized like the pin factory, workers could produce more of everything.

Adam Smith is generally regarded as the founder of modern economics. Adam Smith advocated the capitalist free enterprise system, based on the belief that men are motivated by rational self-interest. His book “Wealth of Nations” became a standard text book for economists throughout the Western world.

Smith argued that by giving everyone freedom to produce and exchange goods as they pleased (free trade) and opening the markets up to domestic and foreign competition, people’s natural self-interest would promote greater prosperity than with stringent government regulations.

Definition: Division of labour is an economic concept which states that dividing the production process into different stages enables workers to focus on specific tasks. Adam Smith noted how the efficiency of production was vastly increased because workers were split up and given different roles in the making of a pin.

Adam Smith is known primarily for a single work—An Inquiry into the Nature and Causes of the Wealth of Nations (1776), the first comprehensive system of political economy—which included Smith’s description of a system of market-determined wages and free rather than government-constrained enterprise, his system of “ …

The Wealth of Nations may be worth reading if you wish to understand the history and evolution of economic thought. However, focus on the latest and more scholarly grounded work on economics if you seek to inform yourself about how industrial economies function.

People are the real wealth of nations. Development is thus about expanding the choices people have to lead lives that they value. And it is thus about much more than economic growth, which is only a means — if a very important one — of enlarging people’s choices.

Harvard (18th ed.) SMITH, A., & CANNAN, E. (2003). The wealth of nations. New York, N.Y., Bantam Classic.

The Wealth of Nations

950 pages

The only use of “invisible hand” found in The Wealth of Nations is in Book IV, Chapter II, “Of Restraints upon the Importation from Foreign Countries of such Goods as can be produced at Home.” The exact phrase is used just three times in Smith’s writings.

five books

Non-fiction

The closest modern school of economics to Adam Smith’s original work is Austrian economics. Given that, he would probably support abolishing minimum wage entirely. Adam Smith would probably have opposed a minimum wage, though no such thing existed in his time.