§ 9. Division of labor and exchange. The term "division of labor" is simple, but the thought is a complex one. Its full discussion would cover the whole field of political economy, but only its most essential aspects can here be touched upon. Division of labor is a term expressing that complex arrangement of industrial society whereby individual workers are enabled to apply themselves to the production of certain kinds of goods, securing others by trade. Division of labor and exchange are counterparts and mutually determine each other. On Robinson Crusoe's island there could be no division of labor. Division of labor depends on the extent of the market, and in turn widens its limits. The number of articles that any one would care to produce at one time and place depends on the opportunity to exchange them. Those two aspects of industry thus are inseparable in thought and practice. The worker finds division of labor existing as a social institution and, according as he adapts himself to it wisely or foolishly, it increases more or less his efficiency. Division of labor necessitates variety of regular occupations, and the practice of special trades and professions. Speciali zation is the individual aspect of division of labor. It is doing one comparatively limited kind of task with the purpose of becoming more expert in it. The term division of labor, however, suggests more broadly the situation where two or more persons are specializing and are trading directly or in directly with each other.
§ 10. Individual and territorial division. Division of labor may be between individuals in the same community or between those in different territories and nations. In divi sion of labor between occupations, each worker applies him self to the production of some product or group of products and secures other goods by trade. When a number of workers in a locality engage in the fabrication of one kind of prod uct to trade with persons in another community, it is terri torial division of labor. This trade may be between persons living in different localities in the same country (called local ization of industry) or between the citizens of two nations, in foreign trade. Division of labor usually begins in some nat ural differences, of soil, climate, mineral and forest resources, or water-power (see Chapter 6, section 11, on origin of mar kets). Whatever its origin it leads to individual specialization which becomes fixed by habit and training. To the original nat ural advantage are thus added the advantages of a larger and regular labor-supply, of nearness to related and tributary in dustries, and of the greater chance to use waste products, and frequently the economics of large-scale production (see below, Chapter 31). The natural advantages in another district
must be large to enable it to start successfully against these acquired economies, and territorial division of labor thus tends to continue for long periods when once established.
§ 11. Advantages of specialization. There is a tradition that an ingenious lecturer in one of our universities was ac customed to give to his class eighty reasons why division of labor was of advantage. It is none too many, as every reason for the modern, as contrasted with the primitive, organization of industry should be included. Apart from natural differ ences in localities, most of these relate to specialization. Specialization increases efficiency by : (a) saving time ; (b) saving tools and materials ; (c) improving quality ; (d) in creasing skill; (e) increasing knowledge; (f) stimulating in vention; (g) encouraging enterprise; (h) economizing talent. The headings just given may serve to suggest the leading phases of this subject.
(a) Specialization saves time by making unnecessary the physical change of place for the worker, the frequent shifting of tools, and the mental readjustment required for the under taking of a new task.
(b) Specialization saves tools, for either each kind of work must be most ineffectively done, or there must be provided for each worker a complete set of tools which thus will be used rarely and will rust out rather than wear out. If a few tools are thoroly used, they yield a larger income and require less care and repairs in proportion to their uses. In fact, this fuller economic use of machinery and plant where a large product is turned out at one place, is a prime factor in the advantages of large production (a subject to be treated else where, Chapter 31, much more fully than is here possible).
(c) By specialization is made possible a quality of goods never to be secured by the less skilled efforts of the Jack-of all-trades.
(d) Specialization develops skill, as repetition of the same task trains the muscles, forms a mental habit, and gives swift ness and deftness of touch.
(e) The specialist is able to give much longer time to educa tion and training for his lifework, and he continues to grow in knowledge of his materials and of the best processes, and he gains a power of delicate observation and facility in meeting new difficulties that are impossible when attention is divided among a number of tasks.
(f) By dividing and simplifying processes, specialization stimulates invention. The most complex machines have been developed gradually by combinations and adaptations of sim ple tools, and the more a process is subdivided, the greater is the chance of hitting upon a device to repeat mechanically the few simple movements.