40 lines
1.5 KiB
Markdown
40 lines
1.5 KiB
Markdown
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# Division of Labour
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## Definition
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The separation of a work process into a number of distinct tasks, each performed
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by a specialised worker, resulting in a significant increase in the productive
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powers of labour. Smith identifies it as the principal cause of improvement in
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the productive capacity of any trade, art, or manufacture. The effect arises
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from three circumstances: increased dexterity, saved time in transition between
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tasks, and the invention of labour-saving machinery.
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## Source Chapter
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Book I, Chapter 1: "Of the Division of Labour"
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## Context
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The division of labour is the central argument of the chapter. Smith opens by
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asserting that it is the greatest source of improvement in productive powers,
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then illustrates it through the pin-factory example, explains its three causal
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mechanisms, and concludes by showing how it generates universal opulence through
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exchange.
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## Economic Domain
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Production
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## Smith's Original Wording
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"The greatest improvements in the productive powers of labour, and the greater
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part of the skill, dexterity, and judgment, with which it is anywhere directed,
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or applied, seem to have been the effects of the division of labour."
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## Modern Interpretation
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The division of labour remains a foundational concept in economics and
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organisational theory. Modern extensions include specialisation theory,
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comparative advantage (Ricardo), and the study of transaction costs that
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determine the boundaries between internal division and market exchange (Coase).
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