In The Wealth of Nations, Adam Smith makes contradictory arguements about innovation and education in relation to the division of labor between Books I and V. In Book I, Smith contends that the division of labor is both a natural and necessary consequence of man’s innate propensity for exchange, as well as a practice that leads to innovation by the worker due to his close association with such a particular task. In Book V, Smith claims that this very tight binding between a man and his trivial engagement so deprives the man of his mental faculties that he becomes a ‘degenerate’. On the one hand, Smith posits that the division of labor is able to manifest great material wealth through its promotion of inovation, while on the other claiming that the division of labor destroys a man’s capacity to innovate.
Having established the concept of the division of labor, Smith lays out its three fundemental benefits as being improved dexterity at the worker’s given task, time savings due to lack of context switching, and the application of the worker’s innovative talents towards improving his simple process. After presupposing the division of labor, he immediately jumps to the extremity of its application-namely, a world in which every worker has been charged with performing one or two very specific and unskilled actions. He claims that “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” (9) because of the sheer amount of time that man spends in front of that task. He argues that the singular focus the worker can have because of the division of labor enables him to 'discover’ innovations that make his work easier, an idea he attempts to reinforce with an untrue story of one such innovation, one ascribed entirely to the division of labor.
This conception of the division of labor as a force towards innovation is directly contradicted in Book V by the notion that division of labor corrupts the mind of the worker and limits his mental capacities. According to Smith’s theory of the division of labor, improved dexterity in a field can be solely attributed to the sheer number of hours spent on a singular task. However, he also equates that amount of time spent on menial undertakings with an extreme atrophying of the mind, that there is “no occasion [for the worker] to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur” (840) because the worker has lost all sense both of the context in which his parcel of work is performed, and of the concept that his labor can, in fact, be replaced by an easier means of production. It is precisely because he has become so adept at performing his singular task that the worker is unable to conceive of any innovations that would make his task easier, or his occupation obsolete.
In fact, Smith himself believes that the innovations necessary for the division of labor to be successful are more frequently found among the barbaric societies that do not exist at a level of life beyond subsistence. having concluded that man’s capacity for innovation is stifled in a civilized society, he then posits that “it is otherwise in the barbarous societies… [where] invention is kept alive” (840), precisely because the hunter must be able to switch between contexts, and have a broad range of general knowledge in all of those tasks which he must maintain some level of proficiency in order to survive. In other words, the hunter is able to innovate because he is not bound by the shackles of the division of labor. Why, then, is he unable to innovate his way towards a society of divided labor? It is here that Smith’s base contradiction is encountered. It is impossible for the division of labor to stifle innovation so much, yet be able to foster the innovations that make its presence beneficial. From the opposite perspective, it is likewise impossible for man in the barbarous society to be more capable of innovation, yet be unable to apply those innovations towards a society of divided labor.
Ultimately, the fundemental contradiction in The Wealth of Nations arises simpy because Smith has no conception of enough division of labor, nor a conception of any position interposed between that of the unskilled laborer and that of the master. Just as he understands that supply and demand must eventually coincide at an equilibrium point, so too must the need for unskilled labor and the need for innovation settle at a happy medium. Lacking the perspective provided by the industrial revolution, Smith has no concept of the value of the immaterial innovations that he professes to be such a key component of the benefits of the division of labor. This perspective introduces the concepts of automation and permanent gains in productivity that reduce the amount of labor-power that is spent upon the most menial of tasks.