Adam Smith Division Of Labor Summary

This system was lined out in Adam Smith’s book, Inquiry into the Nature and Causes of the Wealth of Nations, where he criticized the mercantilism system. In the book, Smith expressed three basic principles of economics, while attacking mercantilism. First, Smith criticized the use of tariffs to protect industries. He believed that if a country was able to produce a product cheaper than it was better to buy it from them then to produce it yourself and that free trade was a fundamental economic principle. Second, Smith believed in the labor theory of value. This theory expressed that the nation’s wealth should not determined by the amount of silver, gold, land it possessed, but by the labor of individual farmers, artisans, and merchants. Third, Smith suggested the state should not interfere with economic matters; instead they needed to fulfill three basic functions: protect society from individuals, defend individuals from injustice and oppression, and maintain public

Adam Smith and Karl Marx are both famous for their philosophies on economics, more specifically the division of labor. For each of them the division of labor is rather similar in its definition, but the outcome of the division of labor differs drastically from Smith to Marx. For Smith the division of labor leads to mass production and allows large amounts of people to get things that were once available only to the rich. Smith believes that small specialized tasks leads to the invention of new technologies, and that individuals working selfishly to better themselves in the capitalistic world is beneficial to everyone. For Marx the division of labor is more about the relationship between the employee and the employer. He believes that

In fact, he believed that the division of labor was conducive to the wealth of state and brings efficiency to the economic labor system. While Marx believed the division of labor to be the inhibitor of self-realization, Smith believed would be what produced efficiency and fostered a productive economy that produces more wealth. His example in his work The Wealth of Nations, of a pin factory, Smith clearly proves this fact of efficiency that division of labor produces. He writes of two workers working in this system and that if one worker makes a whole pin, it takes longer and only produces 200 pins in a day. Yet, when the production of one pin is divided into several parts, the workers are able to make 48,000 pins in a day (Smith WN: 45). Unlike, Marx and Engels, Smith believes that this work is allocated based on peoples’ in-born talents. While Marx believes that this sort of work strays away from man’s realization of his species being and that his work is something that is not natural to him, Smith believes the opposite and that the division of labor caters to peoples’ specific, natural

The first book, “Of the causes of improvement…,” talks about the division of labor and the wage of labors. According to Smith, there are three advantage of division of labor. First, it increases the employees’ dexterity; second it decreases the amount of time it consumes to make the product; and third reason is that because of the many inventions of machine, each employee can perform the work of many. Smith thought division of labor is important because labors can be more efficient if they are specialized in specific work.

One thing that Marx and Smith seems to have agreed upon is something economists call the Labor Theory of Value. While they would ultimately come to different conclusions on the use of the value, the basic assumption is this theory is that value is ultimate derived in an object from the labor necessary to produce it. ("Labor Theory", 2008) In chapter 5 of book I of The Wealth of Nations,

Polanyi’s describes Adam Smith’s idea of the “economic man”, as a notion of human nature in which we are meant to exchange (Polanyi, 1957). Since we are living in a market society, people must adopt a capitalistic mindset that seeks individual advantage that puts individual needs over social needs. This mindset supports the capitalist mode of production, as we concern ourselves with making money so we can buy things, which is essentially capitalisms goal. With this mindset, workers strive to work longer hours on clock time, to earn a wage in order to buy things for their own satisfaction.

Adam Smith, the father of economics, published The Wealth of Nations in 1776. Although it made little impact in its time, it conceptualised the economy in a radical new way: in terms of individual agents, acting out of self-interest. From an individualist perspective, he argued that people produced goods in order to make money, and made money in order to purchase goods they valued most. The exchange takes place in a market, where prices are set according to costs and the demand for the good. This was a self-regulating system which he described it as being controlled "as if by an invisible hand".

Marx expanded on the Labor Theory of Value to show that according to the Labor Theory of Value, which was the theory of value that was used by Adam Smith,

He begins by making a basic statement, saying that he's going to talk about what counts as the "wealth" of a country and how certain countries tend to have more wealth per person than others. Smith wanted to figure out how many modernized countries have fared differently when it comes to producing wealth. He says “The nation will be better or worse supplied with all the necessaries and conveniences for which it has occasion”. Saying that if the country has everything they need they will be successful. He says that everyone who is able to work, should be working. He starts stating that the greatest improvements in the productive power of labor lie in the division of labor. He gives reasons behind the increase in productivity, “The effects of the division of labour, in the general business of society, will be more easily understood, by considering in what manner it operates in some particular manufactures”. The division of labor creates specific meaning of particular trades or tasks. That makes the laborers more dedicated to their work. With the division of labor, time is being saved. While they are focusing on one task it will get done better. Rather than it having to be done over and over again until it is perfect. The time spent on one task leads to innovation in the ways it gets done and the tools that are being used. Since productivity is now being increased, there are more jobs becoming available. With the

Both Adam Smith and Karl Marx see division of labor to be an important aspect to modern society. Division of labor is the process of assigning different specialized tasks to different workers in order to improve efficiency. Although both Smith and Marx believed that the division of labor played an important role in modern society, ultimately they had different views on the effects that it would have on society. Smith saw the division of labor to be a positive source of growing productiveness for capitalist markets. He believed that by dividing the labor force, that there would be a growth in not only goods, but also in profit.

The introduction of the division of labor changed all this, boosting production to new heights. Adam Smith discussed the advantages of the division of labor; Instead of having one person knowing how to make the whole pin, the work could be divided into different jobs where each worker could specialize in one profession. The Revolution brought an increase in the hours per day of labor compared to before, where it was slightly less. With the increase of trade came the increase of cultural diversity. “In Japan, for example, sashimi and sushi, one known in only a few fishing towns, became popular dishes across the nation.”

Operating under the assumption that laborers are self-interested agents, Smith lists the overall desirability of an occupation as the

There is perhaps not a more famous ongoing dialectic argument in the field of political economy than the one between Adam Smith and Karl Marx in regards to capitalism. The two thinkers, although coming to radically different conclusions about the outcomes of the capitalist system for all parties involved, agree on a surprising number of ideas such as labor being the source of commodities’ value, as well as the fact that the division of labor increases productivity. However, their different conceptions of what determines the price of a commodity, the driving force behind and the effects of the division of labor, and the purpose of the capitalist system have widespread implications that cause their holistic arguments to diverge considerably.

Smith gives 3 reasons as to why division of labour increase’s productivity. First, division of labour would allow the worker to have specialised knowledge of the task he is

The first book of The Wealth of Nations begins with discussions on the division of labor, which Smith considers to be “the greatest improvements” for the productivity of labor. To illustrate his point, Smith gives an example of the pin-making industry as a case where division of labor does not just increase productivity proportionally to how much the tasks have been split, but exponentially. Smith explains that, a singular pin-maker unknowledgable of most tasks required in pin-making could not make more than twenty pins in one day; whereas, ten pin-makers each taking over some portion of the process can make upwards of 48,000 pins in one day. In the same way that the division of labor applies to pin-making so too does it apply to all industries. Smith goes on to give three