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WEEK 8

THEORY OF PRODUCTION: Division of Labour and Specialization

Content:

1. Division of Labour
2. Specialization
3. Advantages and Disadvantages
4. Limitations of Division of Labour

Sub-Topic 1:  DIVISION OF LABOUR

THE ORIGIN OF MODERN DIVISION OF LABOUR

It was one of the forefathers of Economics – Adam Smith who enunciated the theory of division of labour in 1776 in his book titled “THE WEALTH OF NATIONS”. Adams Smith visited a place where pins were made and found that pin-making involved eighteen different processes at that time. He also found that one man was coordinating all the processes of pin-making all alone. As a result of this rigorous and slow process involved in the processes of making pins, that man was producing 20 pins a day. Adam Smith came to a conclusion that if these eighteen pin-making processes were handled by different individuals instead of one man, more pins will be produced. This idea of division of labour thought out by Smith was then applied; as a result, 48,000 pins were produced per day. This is how the application of modern division of labour came to existence in our present day.

DEFINITION—Division of labour may be defined as a system of breaking down production processes into different stages so that each stage is undertaken or handled by an individual. This division of production processes will depend on the type, size of industry and goods produced. It should be known that in modern times, division of labour is more applicable in an industrial economy than in agricultural economy. Example: Textile industry which is subdivided into, spinning, weaving and dyeing, warping, beaming, drafting and denting.

EVALUATION

1. What is division of labour?
2. Why is division of labour more applicable in industrial economy than in agricultural economy?

Sub-Topic 2: SPECIALIZATION

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