Question

What consequences did Adam Smith think that the division of labour and specailsation would have on the productivity of labour and on the economic organisation of society?

Answer 1

Division of labour:

It is a concept that the worker focuses on particular work which increases the productivity level. That means if a person who is specialised in a particular work and if that work is given to that worker that the involvement will be so that the productivity level will also be more.

This Division of labour is developed by Adam Smith in An enquiry into the nature and causes of wealth of nations.Division of labor as a motor for generating prosperity, and market systems based on self-interest as a fuel for that motor. The main cause of prosperity, argued Smith, was increasing division of labor. Smith gave the famous example of pin industry where efficiency of production was extremely increased because of the split up of workers and they have a different jobs in making a pin.

Specialisation and dicision of labour:

Specialisation happens when a particular job is assigned for a particular worker in the process of production. They need less training to be efficient in a task. So, it will lead to an increase in production and that will in turn increase the firms economies of scale.