The Wealth of Nations: Book I Chapter 1

Memorable Quotes:
"The division of labor ... as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labour."
"It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people."
"[T]he accommodation of an European prince does not always so much exceed that of an industrious and frugal peasant, as the accommodation of the latter exceeds that of many an African king, the absolute master of the lives and liberties of ten thousand naked savages."

The Basic Idea:
Division of labor is the great cause of its [labor's] increased powers, as may be better understood from a particular example, such as pin-making. The effect is similar in all trades and also in the division of employments.The advantage is due to three circumstances: 1) improved dexterity [ability]; 2) saving of time; and 3) application of machinery, invented by workmen, or by machine-makers, or by philosophers. Hence, the universal opulence of a well-governed society, even the day-laborer's coat being the produce of a vast number of workmen.

Reflections:
Well, the basic idea is simple enough. Specialization allows for greater productivity as well as greater innovation, which in turn provides for greater specialization and productivity and further innovation. This process is supposed to result in greater material well-being of everyone in society. We should be very clear that this is a book about the material well-being of society. There very well may be many other values which must be balanced with material well-being, but Adam Smith does not purport to address those issues, at least not here. Therefore, we should bear in mind as we proceed that Smith is not providing a complete picture of how society should function. Furthermore, he asserts that even the poorest in society are benefited by the general economic progress of society. This claim may or may not be true, but he certainly has not provided enough evidence in Book I Chapter 1. It is commonly said that a rising tide lifts all boats. This is true enough, at least until those boats which happen to be moored become overwhelmed and sink.