The firm and the division of labor

posted by
October 5, 2011
Ludwig von Mises Institute
by Per Bylund  
Posted in Commentary

"Economists since Adam Smith have understood the enormous potential for productivity due to the division of labor. Overall productivity increases dramatically by splitting a job into several separate tasks performed by different people, each focused on their specific task. Ricardo further developed this understanding and showed that even in situations where one person outperforms another in every one of these tasks, both are still better off each focusing on the task for which they have a comparative advantage." (10/05/11)  

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