Linking the insights of Smith, Marx, Young and Hirschman on the division of labour: implications for economic integration and uneven development

P. Sai-wing Ho

Cambridge Journal of Economics, 2016, vol. 40, issue 3, 913-939

Abstract: This article distinguishes between two types of division of labour discussed by Smith. The final-product-specialisation type has been adopted as the basis of mainstream trade models that champion the benefits of free trade. The division-of-production-operations type can be extended through the works of Marx (transition to modern industry based on forms of manufacture), Young (industrial differentiation) and Hirschman (linkages). Through this some countries started reaping more benefits from increasing returns, engendering incipient uneven development that aggravates under unrestricted economic integration between them and the trailing countries. In the modern era the leading countries’ trans-national corporations have further shaped the international division of production operations, resulting in different forms of enclave development when their activities are unregulated. Under recently reached multi-lateral agreements that limit the use of subsidies and investment measures and strengthen the protection of intellectual property rights, uneven development would be sustained. Some future research directions are considered.

Date: 2016
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