Smith addressed both in The Wealth of Nations.20 His answer to the first question was simple but powerful: economic value is created when people take raw materials from their environment and then, through their labor, turn those materials into something that people want. For example, a pottery might take clay from the ground and use it to create a bowl. Smith’s great insight was that the secret to wealth creation was improving the productivity of labor. The more bowls a potter can make in an hour, the richer he or she will be. The secret to greater productivity in turn was the division of labor and the specialization that it enables.21 Smith famously cited the example of a pin factory, where he observed ten men at work, each of whom specialized in one or two steps of the pin-making process.22 Smith noted that this specialization and cooperation enabled the group to make 48,000 pins per day, or 4,800 pins per man. Without this division of labor, he estimated, the factory would have only been able to make twenty pins per man per day, or in the case of the less-skilled men, none." —Eric Beinhocker, Origin Of Wealth