What are the benefits of specialization and division of labor, according to Adam Smith?

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Adam Smith believes that the division of labor and specialization enables people to become adept at their job and therefore more productive. It is important to remember that Smith wrote before manufacturing was as automated as it is today. He writes:

The division of labour, however, so far as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labour.

When people are jacks of all trades and masters of none, they cannot produce as much as if they specialize. This is because in specializing, they learn how to do their specific part of the job quickly and well. Smith's reasoning calls to mind an assembly line pattern where each step in the process provides added value to the production of the final product.

Moreover, if the worker does not specialize, he or she does not learn how to use whatever machinery is required in the production process. With specialization, however, the worker becomes accustomed to the tools of the trade, so to speak, and with all the necessary machinery. Smith provides an example of the pin maker. He says,

the trade of a pin-maker: a workman not educated to this business (which the division of labour has rendered a distinct trade), nor acquainted with the use of the machinery employed in it ...

By becoming skilled and expert in the production of pins, the worker can out-produce another untrained worker who does not specialize. Smith says that without specialization, the worker:

could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty.

With specialization, the work is broken down into specific tasks and the worker becomes adept at whatever small part of the overall manufacturing process he is responsible for. This accelerates the production of the end product. Smith notes that the work “is divided into a number of branches, of which the greater part are likewise peculiar trades." He describes the various tasks involved in the seemingly simple production of a pin. He notes that in some manufacturing plants, "all [work is] performed by distinct hands, though in others the same man will sometimes perform two or three of them.”

By this, Smith is also saying that in small factories that cannot afford to employ many people, workers can specialize in two to three tasks involved in the production process, but they must still specialize. The repetitive completion of two to three tasks will still enable them to become specialists.

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According to Adam Smith’s “The Wealth of Nations," the basis of economic growth is division of labor. Division of labor is defined as the specialization of labor. It refers to the practice of breaking up a job into small discrete tasks, each of which is assigned to a given individual. For example, a car assembly plant can split the car assembly process into several smaller processes, all working simultaneously. When one stage of assembly is completed, the car is passed on to the next stage. Specialization takes place when workers are assigned particular tasks within the production process. Therefore, division of labor leads to specialization, as it allows workers to concentrate and gain skills in particular areas of production.

Some of the benefits of division of labor are:

  • Workers are able to develop expertise in their areas of operation. This, in turn, leads to increased speed and accuracy in performance, hence, increased productivity.
  • It stimulates innovation. Workers who specialize in given tasks develop skills in these areas and are able to discover ways of tackling operational bottlenecks that may arise during the course of their work.
  • It saves time by eliminating the need for workers to transition from one task to the next.
  • It encourages the use of machinery, which leads to increased efficiency of the production process.

Some of the benefits of specialization are:

  • Increased production of goods and services.
  • Specialization allows workers to produce large quantities of diverse products. Consumers are therefore able to access a wide range of goods and services.
  • Specialization allows workers to develop definitive skill sets in specific areas. This gives room for further growth in these areas. Also, a company that employs specialists within its ranks is able to gain the trust of its customers on the quality of goods and services provided.
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Specialization of labor is very important to Adam Smith--so important, in fact, that it is the first subject that he addresses in detail in Wealth of Nations. He claims in the first chapter of the book that specialization provides the "greatest improvement in the productive powers of labour." To illustrate his point, he famously used what he called a "trifling manufacture," the production of pins. One person carrying out all of the tasks necessary to manufacture a pin would have a very low output over the course of a workday. But by dividing this task into a number of very small tasks--drawing out the wire, cutting it, grinding it down, and so on, each performed by a single worker, Smith calculates that thousands of pins can be produced. Smith says that the same principle holds true no matter what is being manufactured:

The division of labour, however, so far as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labour.

The reasons this statement is true, Smith argues, are that there is an "increase in dexterity [skill] in every...workman" that results from practicing the same task over and over; that workers will not waste time by transitioning from one task to another; and that, by allowing people to focus on one task, division of labor allows for people to devise new ways to get better at that task. This includes, Smith argues, the invention of machines equipped to do the task. So the development of technology is in part the result as well as the cause of division of labor. Smith understands, however, that the effects of specialization of labor on workers could be bad inasmuch as the worker is stuck performing a boring task over and over. This is one reason that he insists on public education--to create good citizens as well as good workers. 

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