Division of Labour

… a core concept in Economic Analysis and Atlas102

Concept description

The Economist defines division of labour as people being better off specializing than trying to be jacks of all trades and masters of none.

The Economist elaborates as follows:

“The logic of dividing the workforce into different crafts and professions is the same as that underpinning the case for free trade: everybody benefits from doing those things in which they have a comparative advantage [see Comparative Advantage] and using income from doing so to meet their other needs.”

Division of labour vs. division of work

Wikipedia (reference below) says:

“The division of labour is the separation of tasks in any system so that participants may specialize. Individuals, organizations, and nations are endowed with or acquire specialized capabilities and either form combinations or trade to take advantage of the capabilities of others in addition to their own. Specialized capabilities may include equipment or natural resources in addition to skills and training and complex combinations of such assets are often important, as when multiple items of specialized equipment and skilled operators are used to produce a single product. The division of labour is the motive for trade and the source of economic interdependence.

“In contrast to division of labour, division of work refers to the division of a large task, contract, or project into smaller tasks – each with a separate schedule within the overall project schedule. Division of labour, instead, refers to the allocation of tasks to individuals or organizations according to the skills and/or equipment those people or organizations possess. Often division of labour and division of work are both part of the economic activity within an industrial nation or organization.”

Atlas topic, subject, and course

Trade (core topic) in Economic Analysis and Atlas102 Economic Analysis.


The Economist, Division of Labour, Economics A-Z, at http://www.economist.com/economics-a-to-z/d#node-21529592, accessed 5 May 2016.

Wikipedia, Division of labour, https://en.wikipedia.org/wiki/Division_of_labour, accessed 1 June 2017.

Page created by: Ian Clark, last modified accessed 1 June 2017.

Image: Inflextion Point Consulting, at https://inflexionpointconsulting.wordpress.com/2012/07/03/discretionary-contribution-and-the-philosophers-stone/, accessed 1 June 2017.