Key Arguments

• Smith explicitly links the propensity to exchange to the emergence of the division of labour: ‘As it is by treaty, by barter, and by purchase, that we obtain from one another the greater part of those mutual good offices which we stand in need of, so it is this same trucking disposition which originally gives occasion to the division of labour.’
• He illustrates this in ‘a tribe of hunters or shepherds’ where ‘a particular person makes bows and arrows, for example, with more readiness and dexterity than any other’ and ‘frequently exchanges them for cattle or for venison, with his companions’.
• This specialist then ‘finds at last that he can, in this manner, get more cattle and venison, than if he himself went to the field to catch them’, so ‘From a regard to his own interest’ bow‑making ‘grows to be his chief business, and he becomes a sort of armourer.’
• Smith repeats the pattern with other trades: a person who excels at making ‘the frames and covers of their little huts or moveable houses’ is ‘accustomed to be of use in this way to his neighbours, who reward him in the same manner with cattle and with venison’, until he ‘finds it his interest to dedicate himself entirely to this employment, and to become a sort of house-carpenter.’
• Similarly, ‘a third becomes a smith or a brazier; a fourth, a tanner or dresser of hides or skins’, showing how multiple distinct occupations emerge from repeated advantageous exchanges in a simple economy.
• Smith then generalizes that ‘the certainty of being able to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he may have occasion for, encourages every man to apply himself to a particular occupation’.
• This certainty of exchange also ‘encourages’ each person ‘to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business’, linking specialization in employment with the development of individual abilities.
• Thus, division of labour is portrayed as an unplanned outcome of repeated self‑interested exchanges in early societies, amplified by the assurance that surplus output can be traded for needed goods.

Source Quotes

The old clothes which another bestows upon him he exchanges for other clothes which suit him better, or for lodging, or for food, or for money, with which he can buy either food, clothes, or lodging, as he has occasion. As it is by treaty, by barter, and by purchase, that we obtain from one another the greater part of those mutual good offices which we stand in need of, so it is this same trucking disposition which originally gives occasion to the division of labour. In a tribe of hunters or shepherds, a particular person makes bows and arrows, for example, with more readiness and dexterity than any other.

As it is by treaty, by barter, and by purchase, that we obtain from one another the greater part of those mutual good offices which we stand in need of, so it is this same trucking disposition which originally gives occasion to the division of labour. In a tribe of hunters or shepherds, a particular person makes bows and arrows, for example, with more readiness and dexterity than any other. He frequently exchanges them for cattle or for venison, with his companions; and he finds at last that he can, in this manner, get more cattle and venison, than if he himself went to the field to catch them.

In a tribe of hunters or shepherds, a particular person makes bows and arrows, for example, with more readiness and dexterity than any other. He frequently exchanges them for cattle or for venison, with his companions; and he finds at last that he can, in this manner, get more cattle and venison, than if he himself went to the field to catch them. From a regard to his own interest, therefore, the making of bows and arrows grows to be his chief business, and he becomes a sort of armourer.

He frequently exchanges them for cattle or for venison, with his companions; and he finds at last that he can, in this manner, get more cattle and venison, than if he himself went to the field to catch them. From a regard to his own interest, therefore, the making of bows and arrows grows to be his chief business, and he becomes a sort of armourer. Another excels in making the frames and covers of their little huts or moveable houses.

Another excels in making the frames and covers of their little huts or moveable houses. He is accustomed to be of use in this way to his neighbours, who reward him in the same manner with cattle and with venison, till at last he finds it his interest to dedicate himself entirely to this employment, and to become a sort of house-carpenter. In the same manner a third becomes a smith or a brazier; a fourth, a tanner or dresser of hides or skins, the principal part of the clothing of savages.

In the same manner a third becomes a smith or a brazier; a fourth, a tanner or dresser of hides or skins, the principal part of the clothing of savages. And thus the certainty of being able to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he may have occasion for, encourages every man to apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business. The difference of natural talents in different men, is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause, as the effect of the division of labour.

Key Concepts

• As it is by treaty, by barter, and by purchase, that we obtain from one another the greater part of those mutual good offices which we stand in need of, so it is this same trucking disposition which originally gives occasion to the division of labour.
• In a tribe of hunters or shepherds, a particular person makes bows and arrows, for example, with more readiness and dexterity than any other.
• he finds at last that he can, in this manner, get more cattle and venison, than if he himself went to the field to catch them.
• From a regard to his own interest, therefore, the making of bows and arrows grows to be his chief business, and he becomes a sort of armourer.
• till at last he finds it his interest to dedicate himself entirely to this employment, and to become a sort of house-carpenter.
• And thus the certainty of being able to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he may have occasion for, encourages every man to apply himself to a particular occupation,
• and to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business.

Context

Middle to later part of Chapter II, where Smith moves from the general propensity to exchange to a conjectural history of how occupational specialization emerges in early hunting or shepherd societies through mutually beneficial trade.