Does capitalism, or the market system, actually operate in this way? It did during Smith's time, for the business world was a world of atomistic, or elemental, competition. Yet, there was evidence that a large number of people did not profit from the system. Still, even though more than an eighth of England's population in 1720 was poor, Smith insisted that society could not flourish if "the greater part of the numbers are poor and miserable." In his radical view, society was definitely improving. By comparison, the capitalistic world of today differs greatly with its giant corporations and massive labor unions. However, the twin laws of self-interest and competition still form the basis of the market system.
Adam Smith was optimistic in his vision of the future. To him, the society of the market system was dynamic and progressive. During his lifetime, division and specialization of labor greatly increased productivity. He expressed enthusiasm after his visit to a pin factory which employed only ten people.
Each worker specialized in a single operation; the total daily output was over 48,000 pins. If each worker were to handle all steps involved in the manufacture of pins, the total output per worker would fall to twenty pins per day for a total production of 200 pins. According to Smith, a simple factory worker, in comparison with an African king, lives a more luxurious life as a result of the work of specialized labor.
In his vision of society's economic progress, Smith saw two additional fundamental laws which propelled the market system in an ascending spiral of productivity and away from the "avarice of private greed." These laws he called the law of accumulation and the law of population.
