Meaning of Division of Labour
Vinod Anand | 24 Aug 2013

Meaning of Division of Labour (Vinod Anand) The concept of division of labour was introduced by Adam Smith (1723-90) in his masterpiece ‘The Wealth of Nations’ (1776). Division of labour, as the phrase suggests refers to a situation in an act of production where the amount of physical effort is shared by many people. In other words it amounts to increasing differentiation of labour processes, and the breaking up of complex operations into a series of consecutive small and simple operations which can be performed even by unskilled workers. Division of labour is an aspect of specialization where human labour is increasingly diversified and specialized. It is thus the division of labour which ultimately leads to specialization, which implies the narrowing and intensifying of human activity. Division of labour is sometimes used as a synonym for specialization. Division of labour can either be local, national, or international. In the next section we shall study the importance of division of labour in the field of international trade. Factors Encouraging and Discouraging Division of Labour: The extent to which we can allow specialization of labour in jobs depends upon the following factors (a) The size of the market A large market implies, among other things, a large demand for the product. It, therefore, becomes useful to produce on a mass scale through division of labour. A large market thus encourages the division of labour; small size discourages it. Markets for quite a number of commodities (like radios, transistors, matches watches, bicycles, cars etc.) are large in this sense, and allow for a good degree of division of labour. Adam Smith emphasized this fact by saying that the ‘Division of Labour is limited by the size of the market.’ (b) The development of the commercial sector Specialization is not possible in a subsistence economy where everyone produces what he wants. Specialization occurs in an exchange economy where trade has developed to a considerable extent. The development of the commercial sector therefore also imposes a limit to the application of division of labour. (c) The nature of production In certain acts of production it is not possible to divide work into many different jobs; in certain others it is much easier to break down work into a series of separate processes. Division of labour is thus encouraged or discouraged according to the nature of work involved in a given act of production. It is encouraged in industrial and factory production, but is discouraged in the case/Personal services and farming. Advantages of Division of Labour: Division of Labour leads to 1. Economies of scale; 2. The development of an exchange economy; 3. An increase in skill and speed of operation; 4. increased output and productivity; 5. Economy in the use of equipment; 6. Economy of time; 7. Mechanization; 8. An improvement in the quality of the product; 9. Inventiveness; 10. Less physical strain and tiredness; 11. Localized pool of skilled labour. Disadvantages of Division of Labour Division of labour may have these disadvantages: 1. Through specialization it may lead to unemployment; 2. Through specialization it may also lead to lesser mobility of labour; 3. It may sometimes lead to monopoly power. 4. It involves repetitive operations and may thus lead to monotony of work; 5. It leads to overcrowded urban areas; 6. Division of labour on a very large scale requires the uses of money; hence all the disadvantages of the money economy (as mentioned in the chapter on Money and Banking) can be assigned to division of labour and specialization. Conclusion From the point of view of economic growth, the advantages of division of labour and specialization far outweigh their disadvantages. The extent to which division of labour can go is limited by the extent of the market (according to Adam Smith). It is also limited if the diminishing returns set in at an early stage (as happens in the field of agriculture).     PAGE  PAGE 1