The Economics of Gardening – thoughts on Smith and Ricardo

Adam Smith’s principle of the division of labour and Ricardo’s theory of comparative advantage have
revolutionised the global economy. These intuitive principles have a subtle beauty. They can be
applied to the smallest firms and seen in the structures of international trade. Adam Smith describes
a pin factory in which the division of labour causes a great increase in productive capacity. Ricardo
similarly developed the notion of comparative advantage. For any set of persons, companies, or
countries, if they have different relative efficiencies at the production of any set of goods they are
better off if they exchange those goods.

These concepts have informed one of my favourite hobbies – gardening. I work in an allotment (a
small area of public land put aside at low rent for food production) with a few friends from a local
environmentalist group. We grow fruit and vegetables for our own consumption and for a local
homeless shelter. The work is hard, spades do not slip easily through the heavy Leeds clay.

We work irregularly at best, each depending on another to work while we were slacking – a tragedy
of the commons type scenario. So, we made a plan. We decided to reflect on our abilities and
specialise on the things we were best at. Though my friend James was an experienced agronomist
and better than me at everything as he is short and stocky he was better placed to be nearer the
ground to plough with a trowel. Me, taller and thinner was put on weeding duty as I can tread softly
amongst the crops, plucking the plants that might smother them. We worked on our duty alone,
trading the units of work amongst each other.

Countr Weedin Ploughin

y g g
Joe 40 20
James 60 50
TOTAL 100 70
Joe James Total
Half/
Half 50 35 85
Best 40 50 90

A diagram showing the increase in productivity upon specialisation at what we are best at.

Reflecting on how these principles greatly increased our production and reduced our time spent
labouring I thought about how they are expressed throughout the economy. Individuals are
becoming increasingly specialised, job titles suggest this – in the public sector my local council
employs a ‘local community minority engagement consultant.’ Doctors are no longer simply doctors
anymore, they are ‘endocrinologists’ or ‘nephritic cirrhosis specialists.’ In academia, my professors
are experts on their subject area but often know very little about other concerns.

On a national level, whole areas of the country have specialised to a particular industry. The South
East is dedicated to professional and financial services and the businesses that serve them. The
majority of the South-Eest’s economy is composed of tourism. The North provides a well of cheap
labour for manufacturing and industry. Adam Smith’s incredible insight was that this move towards
specialisation happens almost automatically, as capital and consumer spending flow towards those
industries that have a higher productive capacity.

In my reflection on these concepts I noticed that there seems one sphere in the country that seems
immune from the pressures of specialisation. This is Government. In the United Kingdom, politicians
have to be many things. They have to be orators, commanders, administrators, planners and experts
in many fields. They dance from Minister for Health, to the Ministry for Foreign Affairs and on the
Chancellor of the Exchequer. This sometimes happens within a matter of months. Politics does not
seem concerned with maximising productive capacity, or efficiency, or even meritocracy. Political
roles are dispensed based on patronage, rather than profit.

For all the benefit of specialisation according to one’s ability there do so seem to be some problems
with it. Returning to gardening for a moment, the repetitive actions that one performs, strips the
thought, the rationality, and possibly the humanity from production. We found that a day of doing
only one action, though shorter, was considerably more uninteresting. In another example, I had a
friend whose only job was to place cap seals inside the caps of milk cartons. He did this repetitive
action for 9 hours a day. Here he was, with all his productive capacity and potential being reduced to
the state of a mere robot. Additionally, the hundreds of people involved in that production line have
little opportunity for collaboration into the production process. They are not part of a self-evolving
entity with a capacity for improvement.

Similarly with academics, their individual productive capacity has greatly increased though as they
know so little of their colleagues work there is little opportunity for synthesis. A more collaborative
mode of production may decrease their individual productive capacity while greatly increasing their
collective productive capacity.

However, the importance of capitalism is that though one may develop principle to describe it, or to
advise agents within it, it is a completely dynamic system. Possibly soon, systems may become so
complex that it is unable to break them down into small chunks that people could specialise in. The
companies that do not attempt to divide labour may actually have a higher productive capacity, and
avoid problems of alienation. These are the ones that will survive and prosper in the market – while
those that divide labour will be weeded out.

In conclusion, these principles are incredibly useful in informing discussion of behaviour of

individuals, regions and nations. It is interesting to note that those that don’t engage in
specialisation – politicians - are not market players, maybe this goes some way to explain inefficiency
of government. And lastly, though these concepts are useful, they are not necessarily applicable to
the functioning of a dynamic market economy. I’d love the oppourtunity to discuss and think about
these concepts further at the Tikvah-Hertog seminar.