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Since Plato's Republic (ca. 830 BC), the division of labor has occupied an important space in social and political thought. However, it was given its decisive modern formulation in Adam Smith's The Wealth of Nations (1776). The story here is as follows: prior to the Industrial Revolution, the predominant unit of production was the family, and each family was responsible for producing the vast majority of what it consumed. With the advent of the Industrial Revolution, however, the factory became the primary unit of production, and individual workers specialized in distinct and discrete productive tasks. Smith suggested that this brought about increases in productivity and efficiency. To illustrate: imagine two workers who are both producing bread and beer for themselves. If one were to specialize in the production of bread and the other in the production of beer, it is likely that they will become better at producing the commodity in which they have specialized such that more bread and more beer are produced. Consequently, they could both enjoy increased consumption of both commodities. From an economist's perspective, specialization creates specialists who are in a position to get better at their respective tasks through learning and repetition just as they can acquire the technologies that help improve productivity for a particular task. Indeed, it is much more cost effective to purchase the equipment required for one specialized task than it is to try to purchase several sets of equipment in an attempt to be a jack-of-all-trades. Similarly, no time is lost or wasted by having to move between tasks or learn new ones, just as there is no need to waste time or effort on tasks for which one has no aptitude. By contrast, economists recognize several problems with the division of labor, including the monotony and boredom that results from occupational specialization and the reductions in productivity that this might bring about. Similarly, there is the possibility of being left with a highly skilled but very inflexible workforce. Finally, the shift from family to factory as the primary productive unit might involve a move toward an impersonal and rigid working environment dominated by the “tyranny of the clock” and industrial rhythms of work.

In addition to the economic division of labor, it is important to recognize that a social division of labor arises as a result of occupational specialization. On the one hand, a situation in which the family or household is no longer the primary unit of production will necessarily bring about the fragmentation of social life into different institutions. For example, it means that the family becomes distinct from the workplace, which is distinct from the state, which is distinct from the economy, and so on. More importantly, it is not difficult to see that an occupational division of labor will bring about occupational hierarchies and, in turn, various forms of social stratification. Most notably, social class has traditionally been defined in relation to the position of individuals within occupational hierarchies, and it is well understood that a good deal of inequality exists across social classes. It follows that the division of labor produces and reproduces social inequalities. Furthermore, these inequalities are not limited to differences in social class. Sociologists have also focused on ethnic divisions alongside the ways in which gender inequalities are manifest in the relative positions of men and women in the occupational structure and gendered differences in access to the higher positions within this structure. On the topic of gender, it is important to note that inequalities exist in terms of the domestic division of labor, especially in light of more women entering the workplace. Finally, in the context of globalization, there is a spatial (international and national) division of labor through which further inequalities can be found. For example, low-waged, low-status, and even dangerous work tends to be located in less-developed countries and disadvantaged or marginal regions within affluent societies. Occupational specialization raises questions about what a socially just division of labor might look like. Most commonly, it is thought that this would resemble a meritocracy in which one's specialism is determined by one's ability and aptitude. However, from Karl Marx onward, it has been suggested that it is not a level playing field insofar as powerful groups in society can exploit the division of labor to ensure that they remain in their position of privilege. For example, a wealthy family whose social class is a reflection of its relatively high position within an occupational hierarchy is likely to be in a position to ensure that the children get a good education that will equip them for roles in similar positions. Similarly, their children are likely to be equipped with the social skills required—manners, speech, and disposition—to make a good impression and secure a privileged post. Furthermore, it is likely that those in privileged positions are well connected to other people in privileged positions and that these connections will help their children into similar positions.

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