901 B
Division of Labour
Definition
The separation of a work process into distinct tasks performed by specialised workers, increasing productivity through greater dexterity, saved time, and the invention of labour-saving machinery, originally arising from the propensity to truck, barter, and exchange.
Source Chapter
Book I, Chapter 2
Context
The chapter's central concept, described as the necessary consequence of human propensity to exchange, which allows individuals to specialise in particular occupations and thereby increase overall productivity and wealth.
Economic Domain
Production
Original Wording
Smith describes the division of labour as arising from the power of exchange and as a source of increased productive powers.
Modern Interpretation
Specialisation increases throughput by improving skill, reducing switching costs, and encouraging process innovation.