Division of Labor

The division of labor refers to the specialization in different stages of work that occurs within firms, among firms, and among regions and countries. Although it is not unique to capitalism, the division of labor is most pronounced under commodity production and profit maximization. Rudimentary divisions of labor based on gender appear in hunter–gatherer societies. Similarly, household divisions of labor typically are based on gender, but these vary widely among societies; feminists often point to gender-based divisions of labor in the context of patriarchy. The discovery/ invention of agriculture led to a division of labor based on class, that is, slavery. Under feudalism, a rough differentiation between rural areas and towns began to emerge, as evidenced by the rise of the guild system. However, it is under capitalism that the division of labor reaches its most explicit level. It forms one of the core notions of contemporary economics and economic geography.

Eighteenth-century Scottish economist Adam Smith often is credited with originating the idea of (and the term) the division of labor in his book The Wealth of Nations, published in 1776. Smith noted that in many firms during the Industrial Revolution, different workers engaged in different steps in the production process, allowing each worker to learn his or her task in great detail and become experienced in it. The division of labor results when workers do not attempt to do all tasks but instead are limited to one task that they perform repeatedly. Smith illustrated this process through his famous example of pin manufacturing, where different workers engaged in 18 different steps such as drawing the wire, adding a head to the pin, and sharpening the point. Workers could produce far more collectively than they could as individuals working independently. In short, specialization leads to greater efficiency and allows firms to be as productive as possible. Smith further observed that the ability to specialize was contingent on how large a market firms served; larger markets allowed companies to become more specialized because they were more likely to find relatively rare clients, leading to Smith's maxim that the division of labor is governed by the size of the market. Thus, larger economies sustained more specialization and usually exhibited higher productivity than did smaller ones.

David Ricardo took Smith's line of thought further, adding a geographic dimension to this process in the form of the spatial division of labor as regions and countries specialized around their comparative advantage. Ricardo's contribution was to illustrate how the division of labor was inherently geographic and how countries and regions benefited through unfettered trade among places. Thus, the division of labor was made possible only when regions and countries become interdependent on one another, a process that runs throughout the historical geography of capitalism. The division of labor and the gains from trade are intimately interrelated at the scales of the individual, the firm, and the region or country. The spatial division of labor ranges in scale from the city (e.g., the distinction between central business districts and suburbs) to the global (i.e., the international division of labor). Historically, as groups of firms in similar industries[Page 114] located in proximity to one another to produce and benefit from the fruits of agglomeration, entire districts began to acquire distinct positions within the national and international divisions of labor.

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