That the Division of Labour is Limited by the Extent of the Market
- So now we've got a division of labor and the exchange of products and services among these specialized people. It seems like there's no limit to what these two things can do. But Smith is quick to remind us that there is a limit, which is what he calls "the extent of the market."
- By this, he means that people can only exchange products or services if other people want them. So yeah, it's great if you love to make steak-flavored cookies. But you won't get far if no one wants them. (We want them. Mmm, steak.)
- In many cases, a person's job is limited by the kind of town they live in. If you're an expert plower of land, you probably won't live in the middle of a huge city because there's no land around to plow. So you move out to the country where people want your services.
- Smith also makes a point about how great it is to be near water, since water allows people to transport goods way more easily than over land. That's why even today, you'll find that most of the world's big cities are found near water that boats can use for shipping.