Reply To: Division of Labor


This ambiguity in the phrase “division of labor” has existed since Adam Smith used the pin factory example to illustrate the concept. David Ricardo did much to clear up the ambiguity with his exposition of comparative advantage. He demonstrated that specialization of labor according to efficiency raises productivity. Since Ricardo, then, economists tend to refer to the division of labor as the social arrangement of labor in which each person specializes in his area of comparative advantage. The assignment of tasks among different workers working with a given capital capacity is not, strictly speaking, the division of labor, but a technical condition of the capital capacity itself. An assembly line with six working stations is designed to operate with six workers, each one working at one station.

So, you are correct. The division of labor refers to a society in which each person forgoes self-sufficiency and produces for the consumptive ends of other people by specializing in his area of efficiency.