Division of labour
Topic: Schools of Economic Thought and Economic Laws · NCERT: Beyond NCERT
Meaning
Division of labour means splitting production into small, specialised tasks, with each worker doing one task. Adam Smith, in Wealth of Nations (1776), called it the main source of productivity growth. Each worker becomes skilled and quick at one step, and no time is lost switching between tasks. Smith added that division of labour is "limited by the extent of the market". A small market cannot absorb the extra output, so deep specialisation only pays when many buyers exist.
Example
In Smith's pin factory, 10 workers who each did one step (drawing the wire, cutting it, sharpening the point and so on) made about 48,000 pins a day. One worker doing every step alone could make only a handful.
Don't confuse with
- Comparative advantage: Ricardo's idea (1817) about specialisation between nations in trade. Division of labour is about specialisation between workers inside production.
Related concepts
- Mercantilism
- Bullionism
- Physiocracy
- Classical economics
- Laissez-faire
- Night-watchman state
- Labour theory of value
- Say's law
- Malthusian theory of population
- Malthusian trap