Horace Say (1794-1860), the son of Jean-Baptiste Say, took Adam Smith’s story of a domestic pin factory which he used to explain the productivity gains from the division of labor within the factory, to an international level. He showed that there was an international division of labor which took the argument to a whole new level of sophistication and complexity:
If Adam Smith had extended his analysis, he might have shown that many other partial operations are divided among different workmen to complete that small product of human industry the value of which is so little, and which is called a pin. He might have directed attention to the work of the miner who brings to the surface of the earth the ore of copper, and to that of the miner having a different origin and habits, who, in another part of the world perhaps, has had to dig out the ore of tin necessary for alloyage and for whitening the pin. But in addition to the labor necessary to bring these metals to the requisite degree of purity, they must besides have been transported by sea and by land to the pin-maker’s manufactory. How many different operations divided among an infinite number of workmen have not been necessary in the mere construction of the ship employed in carrying the tin from a port of India to England! And what shall we say of the compass which has been used in guiding this vessel across the seas? What an amount of time and of observations of different kinds, by a great number of individuals, was necessary to put mankind in possession of the compass! The imagination is appalled at the extent of the research needed to exhibit all the labor which has been necessary to bring to perfection the most trifling product, in a single branch of any manufacturing industry of our day.
About this Quotation:
Horace Say (the son of Jean-Baptiste) takes Adam Smith’s story of the manufacture of a pin a step further in an article on “The Division of Labour" he wrote for the Dictionnaire de l’Économie politique (1852). Smith had used the story in the Wealth of Nations (1776) to illustrate his idea of the power of the division of labor to increase output in a single factory. By breaking the manufacturing process into smaller parts and having workers specialize in doing just one task instead of many tasks, the total output of the association of workers was increased dramatically. Horace Say correctly pointed out in 1852 that this idea could be extended to include the many aspects of world trade which made the work of the single factory possible: the miners in foreign countries who dug up the ore, the workers who built the ships which transported the ore to Europe, the inventors who created the compass which the ship’s captain used to navigate the ship, and so on in ever widening circles. This proved how dependent a single factory in England was on the actions and decisions of thousands, perhaps millions, of other people who were all part of the world economic system. Say concludes by saying “The imagination is appalled at the extent of the research needed to exhibit all the labor which has been necessary to bring to perfection the most trifling product, in a single branch of any manufacturing industry of our day.” Say’s story is very similar to that of Leonard Read’s “I, Pencil” which he wrote in 1958. Perhaps we should rename Horace Say’s essay “I, Pin” to make the similarity in thinking clearer.