Division of Labour: the Pin Factory

Myth: Adam Smith in the Wealth of Nations (1776) was the first to write about division of labour. There's just one problem: Adam Smith never set foot in a pin factory.

In fact we need to go back 3 steps to Jean-Rodolphe Perronet in the 1740s, the only person in this story to have actually visited a pin factory! 

Image of a pin factory, Diderot's Encyclopédie (1755)

(1) Adam Smith (1776): The Economist

Smith's description of a pin factory in The Wealth of Nations (1776) introduces the concept of division of labour and is perhaps the most famous description of a Way of Working in history. However, Smith never went near a pin factory. 

Smith’s writing was based, verbatim, on a description in Diderot’s Encyclopédie (1755). 

(2) Denis Diderot (1755): The Philosopher and Enlightenment Writer

Diderot, son of a sword maker, was a writer and philosopher who believed in dignifying the mechanical arts, elevating them to the same level as philosophy and theology. Diderot advocated atheistic materialism, which was radical for the time. He was a key figure in the Enlightenment, influencing the French and American Revolutions.

The Catholic Church formally condemned the Encyclopédie in 1758 and the French monarchy withdrew the royal licence to publish it in 1759, both feeling their power being under threat. Nevertheless the work continued to be published clandestinely, despite frequent police raids and Diderot spending a short time in jail for his writing.

The text in the Diderot’s Encyclopédie (1755) and in Smith’s Wealth of Nations (1776, 21 years later) is almost identical: 

Encyclopédie (1755):

“One man draws 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; it is even a trade by itself to put them into the paper. Thus 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.”

Wealth of Nations (1776): 

“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 particular business, to whiten the pins is another; it is even a trade by itself to put them into the paper. The important business of making a pin is, in this manner, divided into about eighteen distinct operations.”

However, the article in the Encyclopédie was not written by Diderot, it was written by Jean-Baptiste-Rene Deleyre.

(3) Deleyre (1755): The 'man of letters' 

Deleyre was a writer and philosopher, coming from a privileged background and having studied law. His articles often combined technical descriptions with a philosophical or moral gloss. He was not a craftsman or engineer by background. Deleyre never visited a pin factory either, the article was compiled from existing accounts and stylised into a narrative for the Encyclopédie. There is further evidence of this when we trace Deleyre’s source. 

Deleyre’s article was based on the research and notes of Jean-Rodolphe Perronet, which were circulating in the 1740s (and later published in 1761).

(4) Perronet (1740s): The Only Eyewitness 

Finally we reach the source: Perronet, born 1708, was a trained engineer and the first director of the elite ‘École des Ponts et Chaussées’ engineering school in Paris. Perronet was in close contact with Diderot’s circle, and his technical expertise was used in other Encyclopédie articles. 

Perronet investigated the French pin industry, visiting workshops and documenting each step. Crucially, he described the manufacture of pins in 18 distinct operations, the source for Deleyre in 1755 and then Smith in 1776 (about 30 years after Perronet). The engravings of pin manufacture in the Encyclopédie are drawn from Perronet’s data.

Peronnet is the only person in this entire chain who had even been near a pin factory. 

The forests of Normandy contained several hundred pin factories throughout the eighteenth century. Most employed only a handful of workers; ten would have been a large plant. 

The Industrial Reality Check

Here's the deeper irony: by the time Smith published The Wealth of Nations in 1776, his pin factory example was already obsolete. Five years earlier, in 1771, Sir Richard Arkwright had established the world's first factory system at Cromford Mills in Derbyshire. This cotton mill employed over a thousand workers and represented division of labor at scale, not the small craft workshops of Normandy that each employed between three and ten workers.

Smith, writing as an economist rather than an engineer, had missed the beginning of the first Industrial Revolution happening in his own backyard while citing pre-industrial examples from the 1740s.

Why This Matters Today

And here we are today, approximately 285 years later, still applying division of labor concepts designed for repetitive, knowable, manufacturing tasks to today's complex, unknowable, knowledge work. We continue to have teams in role-based silos, passing work from functional specialist to functional specialist, with functional incentives, with invisible knowledge work stacked up in queues, leading to work waiting 90% of the time and a lack of shared incentives for end-to-end value ('done my bit').

Many organisations are still partying like it's 1740.