Wednesday, May 6, 2020

The Relationship Between Division Of Labor And The Extent...

Introduction Adam Smith was a famous philosopher and political thinker known for his work The Wealth of Nations that revealed the relationship between the division of labor and the extent of the market. David Ricardo was a prominent philosopher, who majorly contributed to the field of political economy, namely by one of his works On the Principles of the Political Economy. Consequently, both political economists wanted to explain the pattern of economic specialization under free trade. Although, their perspectives did differ on some aspects. Thus, this paper intends to explain how Smith understands the relationship between deepening divisions of labor and the extent of markets, to explore whether Smith is right, and to reveal the distinction in approaches, provided by Smith and Ricardo. Smith’s Understanding of the Relationship between Division of Labor and the Extent of Market In beginning to understand the viewpoints of each individual, it is important to understand how they each define the relationship between division of labor and the extent of market. According to Smith, the relationship is direct, as the division of labor appears in result of the human necessity to exchange (Smith 2000). Hence, this interdependence leads to the specialization of production and international trade among nations or individuals. Following Smith’s evaluation on the scope of the division of labor it is preconditioned by the market and human talents that operate within the system (SmithShow MoreRelatedThe Relationship Between The Division Of Labor And The Extent Of Markets Essay2170 Words   |  9 Pagesrevealed the relationship between the division of labor and the extent of the market. 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