Wealth Of Nation Note (Ch.1)
1st sector vs 2nd sector In the first chapter of Wealth of Nations Adam Smith talked about the difference between labour and manufacturer. He believes that manufacturers hold the means of production. Since the increase of a single manufacturer could greatly improve their production while a labourer can’t. Why can't laborers improve their production? Because their production is limited by time and land. While the manufacturer doesn't. Specialization Efficiency Adam Smith then went into detail on why production increased through specialization. He saw a core problem of low production on the micro and macro side. As put it simply: breaking of the flow. First is the change of occupation in the Macro side, when you change an occupation, you also need time to adapt to the new job with learning of new skills. People with multiple occupation would also lose lots of time in commuting. Just like in the micro side, imagine the production of pencils. Suppose 3 people wanted to make a pen...
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