EconAir

Adam Smith - Our Founding Father ADAM SMITH VISITS A PIN FACTORY   Adam Smith’s description of a pin factory is on the first page of  The Wealth of Nations .  (Chapter 1 – “Of the Division of Labour”)  Drawings of pin factories of this period show workers using hand tools. Smith says the process can be broken down into 18 distinct steps, including packaging the pins. Smith mentions that pin factory workers were poorly paid, despite their high productivity.    Adam Smith says he visited a pin factory employing 10 men who produced 48,000 pins per day.  If each of the ten workers had done all the steps themselves, Smith says each worker could produce only 10 or 20 pins per day.  So the pin factory replaces 2,400 to 4,800 pin makers. The increase in labor productivity (output per person per day) is as high as 50 times that of individual pin makers.     This reduction in unit cost or average cost (AC) and the huge i...

SVG  Map_Europe_alliances_1914-fr.svg   ORIGINS OF THE WAR This is an extraordinarily complicated story. One reason is that it is difficult for the modern reader to understand the mentality of the key decision-makers – their prejudices, mental frameworks, how they reacted to threats and stress. Fortunately, there are several excellent books that attempt to describe the key players’ assumptions, mentality and motivations.   World War I was started by the decisions of a very small number of men, often in secret, implementing secret agreements and understandings, who represented the most reactionary or conservative groups in their countries and governments. Most were incompetent, narrow-minded, myopic and/or delusional. They thought going to war - appealing to nationalist sentiments - would solve or subsume social problems and political challenges that were mostly the result of industrialization and rapid economic  and social change. All planned to win in short off...