Specialization and the Division of Labor
Read Chapter 1 (Book 1) of Adam Smith's Wealth of Nations.
Question:
- Explain in your own words why Smith argues that specialization and division of labor increases a nation's productive capacity
Solution:
The answers, of course, will vary, but the major topics that might be addressed include:
- the famous "pin factory" example in which each individual becomes proficient in a small and relatively simple task,
- the "improvement in dexterity" as workers repeat the same tasks,
- the reduction in lost time switching from task to task, and
- the introduction of capital makes it possible for one person "to do the work of many." (Smith argues that the introduction of specialized capital is partly an outgrowth of the division of labor since the workers' minds are focused on better ways of improving their productivity - and reducing their effort. He also argues that having individuals specialize in the role of inventor increases the total amount of innovation that occurs in society.)
It is probably safe to argue that these arguments are as applicable today as they were in 1776.
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