The market division of labor

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Chapter 2 in The Economics of Prosperity, 2023, pp 34-58 from Edward Elgar Publishing

Abstract: Voluntary exchange is socially productive opening the door to tremendous social benefits via the market division of labor. Production for exchange is more productive than direct-use production. The division of labor is specialization of production according to efficiency. It allows people and societies to be more productive and allows them to obtain more goods to satisfy more ends according to the Law of Association. These benefits are made possible by variety in people and nature and by economies of scale. The market division of labor builds society. It needs coordination by entrepreneurs using market prices to calculate profit and loss. Because benefiting from the market division of labor requires voluntary exchange and economic calculation, anything that hampers trade will restrict specialization according to efficiency. The division of labor, therefore, requires private property and sound money to flourish. The market division of labor is the economic foundation for society and civilization.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2023
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