3.12. Presentation slides and commentary.

Let us make slides and commentaries

(paraphrasing written text into oral speech).

Slide1	Commentary to Slide 1
Adam Smith on the Division of Labor	The topic of my today’s presentation is Adam Smith’s views on the division of labor. Like modern economists, Smith believed that the standard of living could rise only if the productivity of labor would rise. For Smith, the most important force leading to a rising standard of living was division of labor. [2]
Slide 2	Commentary to Slide 2
The Wealth of Nations ‘invisible hand’ of the market; the division of labor.	It will be worthwhile to digress a bit and review what the founder of economics said about the division of labor. [1] Most people associate the idea of ‘invisible hand’ with Adam Smith. According to that idea, free markets restrain prices to some natural level and assure the supply of goods and services at the natural price. But before taking up this idea, Smith turned to the division of labor. [3]
Slide 3	Commentary to Slide 3
Increasing the division of labor results in increasing productivity	Smith argues that increasing the division of labor increases productivity. In one of the most famous passages in the book, Smith illustrates this tendency describing work in a pin factory.[4] The production progress is divided into several operations. {QUOTE} I would like to quote: ‘One man draws out the wire, another straights it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations…’ And that is only a part of the process. The workers earned much more money daily as they produced more than they would do if they had worked separately.[5]
Slide 4	Commentary to Slide 4
Division of labor & specialization are aspects of cooperative production	The quoted passage shows what Smith meant by the division of labor, and by the claim that increasing division of labor increases the productivity of labor. What I want to add is that the division of labor and specialization are aspects of what we might call cooperative production. [6]
Slide 5	Commentary to Slide 5
In a pin factory each worker takes his part of work; cooperates with other workers; relies on the others; takes different roles.	In the pin factory, each worker is taking a different part of the work, and in doing his part he is working along with – co-operating with – the other workers in the pin factory. Each relies on the others for the part he or she does not do. They take different roles in production, and the roles are complementary. Classical economists of the nineteenth century extended this idea, until Richard Ely, a founder of the American Economic Association, argued that cooperation in production is the primary source of high standards of living. Unfortunately, this vision was lost in the twentieth century. Perhaps it will be recovered in the twenty-first. [6]
Slide 6	Commentary to Slide 6
Cooperative production increases productivity. Adam Smith	Smith's first great insight is that cooperative production increases productivity. {QUOTE} Smith wrote: ‘It is the great multiplication of the productions of all the different arts, in consequence of the division of labor, which occasions, in a well-governed society, that universal wealth which extends itself to the lowest ranks of the people’. [7]
Slide 7	Commentary to Slide 7
The division of labor into different trades is another aspect of the division of labor.	According to Adam Smith, in very small villages in deserted areas every farmer must be butcher, baker and brewer for his own family. This is in contrast to a more developed region. The laborer’s work usually contributes to meeting needs of many others in society. [8]
Slide 8	Commentary to Slide 8
The division of labor in the 21st century is the key cause of growth in the wealth of nations. Do you agree?	To end up my little presentation I would like to say that the division of labor is so characteristic of modern society that we may fail to notice it, as a fish fails to notice the water in which it swims. It was newer in Smith's time. Probably it was more noticeable then. Economists have had little to say about it in the twentieth century. Just recently, in the 1990's, a number of economists specializing in economic growth have again come to see the division of labor as a key cause of growth in the wealth of nations.[9] I would like to ask you to prove or oppose my point of view. You are welcome with questions or opinions.