Free To Choose Network | The Real Adam Smith
The Real Adam Smith
Key Concepts
Division of Labor/Specialization
People trade what they do well for what they can’t do as well. (i.e. I’m good at growing things, but terrible at fishing, so I will trade some corn I grow for fish caught by people who are better at fishing. Or a more contemporary example, I’m good at graphic arts, so I will trade my skills at graphic arts for money, which in turn will allow me to purchase other things created by other people.) This “specialization” leads to greater productivity and benefits society as a whole. By breaking down a larger task into smaller components, each person does one piece and becomes masterful at that portion of the task. Think about today’s doctors. Most of them “specialize.” They focus on one specific area of the body so that they become more knowledgeable about that specific set of organs or functions.
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