‘One man draws out the wire, another straights it, a third cuts 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; to put it on, is a peculiar business, to whiten the pins is another…

Every little detail can be done more efficiently

 It is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands.’

However insightful and instructive, Adam Smith’s pin factory is seen as a bit silly

ADAM SMITH’S description of the pin factory, with which he begins THE WEALTH OF NATIONS, introduces the fundamental economic concept of the division of labour.

His account is perhaps the most famous description of an industrial process in the history of economic thought. The economic historian Sir John Clapham, however, chided Smith for his use of what Smith himself conceded was ‘a very trifling manufacture’. He wrote, ‘It is a pity that Adam Smith did not go a few miles from Kirkcaldy to the Carron works, to see them turning and boring their cannonades, instead of to his silly pin factory which was only a factory in the old sense of the word‘ (Clapham 1913, p. 401).

How many quality pins could you make from scratch in a day? Start with the mining…

The answer is zero for quite a long time, until you’ve learned to find iron ore, to produce enough heat to melt and refine it to iron, to craft a hardened wire to make the pins from… Division of labor and technology means a single farmer nowadays can produce food for thousands of people rather than just his own family, and that leaves thousands of people free to be equally efficient in producing other things. And soon AI agents promise yet another 10-fold or 100-fold in productivity for knowledge workers. And on it goes. Inbuilt inertia in human minds, however, makes the process slow: down to about 2% higher productivity per year for a modern economy. That still amounts to enough improvement in a hundred years to cut the average work day from 8 hours to just 1 hour without lowering the living standards.

As seen from this headline, mining and geology is an area where there is a lack of specialized pros. The mining industry (commodities) has been underinvested in for the last 10+ years. It is likely that there will be a lack of qualified professionals in this area, which in turn, will delay supply.

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• Do Macroeconomics Really Matter?
• Adam Smith & His Biggest Ideas
• What is a Value Chain?