Excerpt reproduced from the author’s English edition. The complete chapter is available in the e-book.
The Machine Speeds Up the Work. People Turn It into Wealth.
Edinburgh, Panmure House. At a later meeting.
Smith: Well, what have you found? When you were last here, you asked why Europe is not getting richer faster when it has everything it needs to do so.
Author: I found that the word “has” was misleading. Europe has a market, but its companies can reach only part of it. It has savings, but they do not set labour in motion where new industries are being born. It has inventions, but it lacks the stock that would carry them through the time in which they learn to become products. It has people, but it pays for them to sit in courses. And it has money for recovery, but it pays for steps, not for service. Almost always we counted what is easy to count and thought that this gave us what matters.
Smith: That is an old error. The mercantilists thought a nation would grow rich if it piled up gold. Gold is easy to count. Labour, skill and trust are hard to count. And your solutions? I do not want to hear all of them. Tell me the one you are most afraid nobody will approve.
Author: Perhaps that the Union would stop paying for kilometres built and pay only for what actually travels over a connection across the border. A minister who opens a line with ceremony would get the money only after years of operation. Or that every new rule would get a sunset date unless its author proves that it protects what it was meant to protect. Or that the state would pay a course provider most of the money only after a graduate passes an exam in what they have learned.
Smith: All three solutions ask whether an arrangement serves people. For the line and the course, you pay accordingly. For the rule, you decide whether it should go on applying. But you must still find out whether you have gained any additional benefit, and whether, for the sake of an easily measured result, you have neglected something essential. That is what I asked of you when I spoke of the professors at Oxford. But in each of them you have added something I did not have. That tool of yours.
Author: Yes. Artificial intelligence appears in every chapter of the book, and each time it does something different. It can help turn the rules of 27 states into one list of requirements that a company can manage to fill in. It can help draw up a timetable across a border. It can make due diligence on a company from another state cheaper, so that an investor sees it almost as well as the company round the corner. It can shorten the time in which a production line learns to produce without defects. It can help test what a person can really do. It can search the whole body of law for rules whose effect nobody measures. It can read thousands of reports on steps completed and point out where evidence of a result is missing. It can sharpen the forecast of where electricity will flow. And it can show an authority where competitors’ prices are moving suspiciously in step. Whether it will do so more cheaply and reliably than existing methods only pilot tests will show.
Smith: That is a great deal of work. How much of it have you measured?
Author: Less than I would like. Where someone has measured it, it helped: better machine translation increased exports on a large trading platform, advice found by a machine broadened people’s job search, help with writing shortened the work and improved its quality. Once the opposite was measured too, the experiment with the students I told you about. And much of what I propose is still only a proposal. I admit that openly.
Smith: That is honest. And now tell me what the tool will not do.
Author: It will not repeal a rule that makes entry into another state dearer. That must be done by whoever administers the rule. It will not make neighbouring governments agree who pays for a line across the border. It will not take on the risk of loss in the investor’s place. It will not learn to produce without defects for the worker; it can only show him where he goes wrong. It will not bring back to a district town the doctor who left. It will not say who is answerable for the service for which the money was approved. And it will not give the customer the option of going to a competitor when all competitors use the same tool. All of that is the work of people and an agreement between people.
Smith: Then you have found what I knew but could not prove to you in 1776. On the first page of my book there is no gold and there is no machine. There is the annual labour of the nation. And straight after it the skill, dexterity, and judgment with which that labour is applied. I praised machines because they save labour and enable one man to do the work of many. But a machine is only a tool. You cannot put skill, industry and the willingness to cooperate into it. People must bring those.
Author: That is what I wanted to say at the end, but I left it to you, because it is yours. Industry, diligence and cooperation.
Smith: Allow me to take them apart and add parsimony to them. Industry is the willingness to work well even where nobody checks. It is the worker who learns to make the line produce without defects, and the adult who learns even when he no longer has to. Industry and diligence are close to each other: both remind us that a good result requires sustained human labour. Parsimony adds something else. We set aside part of today’s consumption so that there is something to finance labour whose result will come later. Without people who put off consumption and accept risk, the stock we spoke of will not arise. And cooperation joins the efforts of people who could not create a whole product or service on their own. It is the hardest, because it cannot be commanded. The woollen coat of the common day-labourer is the work of the shepherd, the spinner, the dyer, the weaver, the merchant and the sailor, who never saw one another. Each of them worked for himself. And yet together they created something none of them could have made alone.
Author: But you claimed that it is not from the benevolence of the baker that we expect our bread, but from his regard to his own interest. Where is the cooperation in that?
Smith: I am glad you ask. Many people read my sentence about the baker as if the market needed nothing but selfishness. But I also wrote another book, The Theory of Moral Sentiments [94]. There I argued that a person longs to be worthy of others’ esteem, and that society is held together by justice, without which it falls apart. The baker acts in his own interest. But he sells honest bread because he knows the customer will come back to him, and because his neighbours judge him. Exchange is cooperation between people who trust each other enough to trade. Where that trust is missing, no market arises, not even with the best tools.
Author: Then that is also the answer to the question you put to me last time. Whether a person with the tool becomes more skilful, or merely lazier.
Smith: Yes. A tool that gives a person a ready-made answer saves him effort today and may take away his skill tomorrow. A tool that makes him think adds to his skill. The difference does not lie in the tool. It lies in who sets it up and what he wants from it. You who write the rules set what is paid for. If you pay for the exam, not for attendance, people will want a tool that teaches them. If you pay for a step completed, not for service, people will want a tool that reports the step quickly.
Author: So every solution in the book can be boiled down to one question: does this arrangement enable a person to work well, to learn something new and to rely on others?
Smith: Yes. And if it does, your tool will speed that work up. If it does not, it will speed it up too. Only in the opposite direction.
Author: I am not sure Europe will do everything I propose. Some of these proposals will disturb the interests of people who are content today.
Smith: That is always so. When I wrote about merchants who demand protection from competition, I did not expect Parliament to abolish it at once. I wrote that to expect that the freedom of trade should ever be entirely restored in Great Britain is as absurd as to expect that an Oceana or Utopia should ever be established in it. And yet within two generations after my death many of those protections were abolished. Not because the merchants grew wiser. But because enough people understood who was paying for the protection. Write it clearly. Show who pays for today’s arrangement and who benefits from it. The rest will be done by the people who read it.
Author: And what would you do if you lived in 2026?
Smith: What I always did. I would go and look into the workshop. I would ask that engineer from Brno whether he has signed the contract in Vienna yet. And I would ask him who helped him. I wager he will not tell me the name of a machine. He will tell me the name of a person.
At the end of every solution stands a person who works.