Division of labour

In the era of industrialisation, specialisation was the driver. It’s improvement of productivity was unsurpassed. The author of my textbook uses the well known example of the worker who could make 20 pins a day if he did all the stages in pin-making himself, whereas the same person can make 4,800 pins when he and nine others divide the work. This is virtuous when production needs to grow and labour and capital are scarce – it is then essential to increase labour productivity and the rate of capital utilisation. But what if labour is not scarce?

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