The Relationship Between The Division Of Labor And The...

Adam Smith was a famous philosopher and political thinker known for his work The Wealth of Nations that revealed the relationship between the division of labor and the extent of the market. David Ricardo was also a philosopher, who contributed to economy and politics by writing his study, entitled On the Principles of the Political Economy. Consequently, both thinkers wanted to explain the pattern of economic specialization under free trade. However, there were distinctions between them. Thus, this paper intends to explain how Smith understands the relationship between deepening divisions of labor and the extent of markets, to explore whether Smith is right, and to reveal the distinction in approaches, provided by Smith and Ricardo. Smith’s Understanding of the Relationship between Divisions of Labor and the Extent of Markets According to Smith, the relationship between the division of labor and the extent of the market is direct, as the division of labor appears in result of the human necessity to exchange (Smith 2000). Thus, this interdependence leads to the specialization of production and international trade among nations or individuals. Adam Smith insists that the scope of the division of labor is preconditioned by the market and human talents that operate there (Smith 2000). One should mention that Smith’s vision of market is related to the improvement of infrastructure. Smith regards the division of labor as the list of advantages, which provide the predisposition toShow MoreRelatedThe Relationship Between Division Of Labor And The Extent Of Market Essay2128 Words   |  9 Pagesthe relationship between the division of labor and the extent of the market. David Ricardo was a prominent philosopher, who majorly contributed to the field of political economy, namely by one of his works On the P rinciples of the Political Economy. Consequently, both political economists wanted to explain the pattern of economic specialization under free trade. Although, their perspectives did differ on some aspects. Thus, this paper intends to explain how Smith understands the relationship betweenRead MoreThe Theory Of The Division Of Labor959 Words   |  4 PagesIf I were Smith, I think the theory of the division of labor can still apply to this â€Å"on-demand† economy. With the concept of the independent worker who controls the product he or she produces, it promotes the division of labor, as workers are assigned to specialize in different fields so that they might become experts in making something specific, and then having ample surplus to trade. 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