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A Review Of Selected Literature In The Economics Of Division Of Labor From 5th Century To Wwii: Part I

Listed author(s):
  • Guang-Zhen Sun

First of all, one point seems in order regarding the title: this article is not intended to be comprehensive in its coverage. Rather, it focuses on a deliberately and highly selected body of studies on the division of labor ranging from ancient Greeks to WWII as represented by those reproduced in Sun (2005a), with particular attention paid to what I believe has been relatively unknown even among economists of specialization. A more systematic examination, covering hundreds of studies on the division of labor by ancient Greeks, ancient Chinese, medieval Islamic scholars, medieval Latin scholasticists and Anglo-Europeans of recent centuries is found in Sun (2005b). But what is the (commonly accepted definition of) division of labor? The one that Peter Groenewegen uses for the entry ???division of labor??? in New Palgrave's Dictionary of Economics (1987, p.901) may be accepted by overwhelmingly most, if not all, economists: ???The division of labor may be defined as the division of a process or employment into parts, each of which is carried out by a separate person.??? That is, individuals cooperate, consciously or not, to undertake a divisible process or employment. As such, there naturally emerge two fundamental questions: Why, and how does the separation of employment among persons bear upon important economic and social consequences? In fact, the studies to be surveyed below that emerged over twenty-five centuries or so up to WWII basically centre round the above questions. We will first of all map out the evolution of ideas about division of labor up to the classical political economy in Sections I and II. For the body of economic analysis was considerably enriched since then, with different schools/perspectives simultaneously developing and sometimes competing with one another, we will focus on three themes, explored respectively by three most influential schools that have made contributions of lasting value to the economics of the division of labor. Section III examines the idea of mutual interdependence between increasing returns to the division of labor and the extent of the market originating from Smith, substantiated by Wakefield, Mill, Marshall and culminating in Young (1928). Section IV focuses on the division of labor in society and the division of labor in manufacture, on which Marx offers important insights, foreshadowing some modern theories of the firm well into 1990s. Analyses of unfavorable sociological consequences of the division of labor are also briefly surveyed in this section. Section V examines literature on the overarching theme of the spontaneous order, which can be traced back to Mandeville and was later on elaborated by the Scottish Enlightenment men, and the Austrians especially Hayek. Indeed, the Austrians not only developed a general theory of the spontaneous order but also applied it to analyses of many issues that are concomitant with the division of labor, in particularly the origin of money and the socio-economics of dispersed knowledge. Finally, Section VI concludes.

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Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 01/05.

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Length: 28 pages
Date of creation: 01 Feb 2005
Handle: RePEc:mos:moswps:2005-01
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  1. Gary S. Becker & Kevin M. Murphy, 1994. "The Division of Labor, Coordination Costs, and Knowledge," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 299-322 National Bureau of Economic Research, Inc.
  2. S. M. Ghazanfar, 2000. "The Economic Thought of Abu Hamid Al-Ghazali and St. Thomas Aquinas: Some Comparative Parallels and Links," History of Political Economy, Duke University Press, vol. 32(4), pages 857-888, Winter.
  3. Sugden, Robert, 1989. "Spontaneous Order," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 85-97, Fall.
  4. Hurwicz, Leonid, 1973. "The Design of Mechanisms for Resource Allocation," American Economic Review, American Economic Association, vol. 63(2), pages 1-30, May.
  5. Kiyotaki, Nobuhiro & Wright, Randall, 1991. "A contribution to the pure theory of money," Journal of Economic Theory, Elsevier, vol. 53(2), pages 215-235, April.
  6. Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-954, August.
  7. Becker, Gary S, 1985. "Human Capital, Effort, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 33-58, January.
  8. Rosen, Sherwin, 1983. "Specialization and Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 43-49, January.
  9. Stefan W. Schmitz, 2002. "Carl Menger’s “Money” and the Current Neoclassical Models of Money," Macroeconomics 0211001, EconWPA.
  10. Charles P. Blitch, 1983. "Allyn Young on Increasing Returns," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 5(3), pages 359-372, April.
  11. Barzel, Yoram & Yu, Ben T, 1984. "The Effect of the Utilization Rate on the Division of Labor," Economic Inquiry, Western Economic Association International, vol. 22(1), pages 18-27, January.
  12. Menger, Carl, 1892. "On the Origins of Money," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 2, pages 239-255.
  13. Oliver E. Williamson, 1967. "Hierarchical Control and Optimum Firm Size," Journal of Political Economy, University of Chicago Press, vol. 75, pages 123-123.
  14. Rosenberg, Nathan, 1976. "Another Advantage of the Division of Labor," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 861-868, August.
  15. Groenewegen, P D, 1969. "Turgot and Adam Smith," Scottish Journal of Political Economy, Scottish Economic Society, vol. 16(3), pages 271-287, November.
  16. S. M. Ghazanfar & A. Azim Islahi, 1990. "Economic Thought of an Arab Scholastic: Abu Hamid Al-Ghazali (A.H. 450–505/A.D. 1058–1111)," History of Political Economy, Duke University Press, vol. 22(2), pages 381-403, Summer.
  17. Abdol Soofi, 1995. "Economics of Ibn Khaldun Revisited," History of Political Economy, Duke University Press, vol. 27(2), pages 387-404, Summer.
  18. Xiaokai Yang & Robert Rice, 2006. "An Equilibrium Model Endogenizing The Emergence Of A Dual Structure Between The Urban And Rural Sectors," World Scientific Book Chapters,in: Inframarginal Contributions To Development Economics, chapter 8, pages 167-194 World Scientific Publishing Co. Pte. Ltd..
  19. George Selgin, 2003. "Adaptive Learning and the Transition to Fiat Money," Economic Journal, Royal Economic Society, vol. 113(484), pages 147-165, January.
  20. Xiaokai Yang, 1994. "Endogenous vs. exogenous comparative advantage and economies of specialization vs. economies of scale," Journal of Economics, Springer, vol. 60(1), pages 29-54, February.
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