A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

The boy & the fire-engine

A favourite quote from Adam Smith’s Wealth of Nations:

“Men are much more likely to discover easier and readier methods of attaining any object, when the whole attention of their minds is directed towards that single object, than when it is dissipated among a great variety of things. But in consequence of the division of labour, the whole of every man’s attention comes naturally to be directed towards some one very simple object. It is naturally to be expected, therefore, that some one or other of those who are employed in each particular branch of labour should soon find out easier and readier methods of performing their own particular work, wherever the nature of it admits of such improvement. A great part of the machines made use of in those manufactures in which labour is most subdivided, were originally the inventions of common workmen, who, being each of them employed in some very simple operation, naturally turned their thoughts towards finding out easier and readier methods of performing it. Whoever has been much accustomed to visit such manufactures, must frequently have been shown very pretty machines, which were the inventions of such workmen, in order to facilitate and quicken their own particular part of the work. In the first fire-engines, a boy was constantly employed to open and shut alternately the communication between the boiler and the cylinder, according as the piston either ascended or descended. One of those boys, who loved to play with his companions, observed that, by tying a string from the handle of the valve which opened this communication, to another part of the machine, the valve would open and shut without his assistance, and leave him at liberty to divert himself with his play-fellows. One of the greatest improvements that has been made upon this machine, since it was first invented, was in this manner the discovery of a boy who wanted to save his own labour”. (my bold).

This is a form of learning-by-doing as described by Kenneth Arrow 200 years later in 1962.  Note that Smith sees the division of labour as an institution favouring such innovations.

Smith was a great economist not because he diligently learnt mathematical models or the cut-and-dried models of dreary textbooks but because he had the extraordinarily intelligence to observe the world, introspect and draw conclusions.

Was the same skill evident in John Maynard Keynes’ views of financial markets? I think it probably was in two senses.  Keynes’ both learnt-by-investing and had the intelligence to express as new theories.

1 comment to The boy & the fire-engine

  • Jim Rose

    Stigler’s law says that no scientific discovery is named after its original discoverer. Stigler attributed his law to Robert Merton, acknowledging that Stigler’s law obeys Stigler’s law.

    Stigler argued that credit for a scientific discovery should go to the discoverer who made sure the idea stayed discovered. mentioning an idea in passing is not enough.