Wednesday, February 01, 2006

Escaping the pin factory

Adam Smith’s much quoted story of the pin factory (see e.g. emphasises the importance of specialisation in raising productivity and living standards. But some of the time, we all actively choose to expend our effort in ways that are clearly inefficient. Here’s one example from a few Sundays ago. I spent an hour cooking dinner, and my wife roughly the same amount of time baking a cake.

Why is this inefficient? Well, cooking is something I’m not really very good at, and in comparison with a professional set-up my kitchen is not really ideally equipped. This makes my productivity at cooking laughably low. In contrast, my productivity at work is much, much higher. The same is true for my wife’s baking versus her professional work. Why then, did we not spend Sunday afternoon at work, and then spend some part of the extra money on eating out, or buying a cake, in effect trading our specialised professional output with that of the chef or baker?

The answer of course is because of the joy of novelty. It’s actually fun to do something different, even if it is, in a narrow sense, inefficient. The reductio ad absurdum of specialisation would be horrible: imagine always doing your specialist work, stopping only to consume. No DIY, no cooking, probably not even much childcare, just monotonous, efficient, formal work. Count me out!

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