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Division Of Labour And Extent Of Market

Division of Labour and Extent of Market
Adam Smith said that division of labour was limited by the extent of market. If the demand for an article is low, the size of its market will be small. The manufacturer will employ only a small number of workers. Here one worker will perform a number of operations and the division of labour will be small.

If alternatively there is great demand for the product size of the market will be large. In order to meet the large demand, the manufacturer will augment the scale of manufacture.

Subsequently he will split manufacture into diverse procedures and sub procedures which will be functioned by diverse persons. This augments the division of labour. Thus division of labour depends on the extent of the market.

The size of the market also depends upon the division of labour. When there is division of labour, there is specialisation and the manufacture is on a large scale. This leads to lower costs of manufacture and cheap products.

As a result, the demand for products augments and the size of market is extended. Thus division of labour and the extent of the market are interdependent.

Economic Effects of Machinery

Advantages of Machinery
  • Exploitation of Natural Resources - Machines help in the exploitation of natural resources for the benefit of people. Natural wealth of rivers, minerals, land, mountains, seas, etc. can be properly exploited and used for productive purpose with machines.

  • Development of Infrastructure - Machinery helps in the development of infrastructure like roads, railways, power, refineries, communications, etc.

  • Augment in Manufacture - The use of machines help in escalating the manufacture of capital goods, milk, vegetables, fruits, eggs etc. are no longer perishable and are accessible all the year round with the spread of cold storage facilities. This prevents wastages.

  • Variety of Goods - Machines provide a variety of consumer goods like TV, Car, Refrigerator, washing machine, house hold gadgets etc. which make life comfortable and augment the standard of living of the people. The manufacturer of countless consumer goods from the smallest pin to the biggest aeroplane has been made feasible by machines. Machines have in turn, been manufactured by other machines called capital goods.

  • For the Producer - The use of machines helps the producer in many ways which is likely to augment his manufacture and earnings. It leads to large scale manufacture, division of labour and specialisation. These, in turn augment manufacture, reduce costs, raise profits. Machines save time and labour.

  • For the worker - Machine helps the worker in performing his duties in a better way than by hands. The efficiency of the worker augments for the reason that he can work precisely and quicker and produce quality products in larger quantities.

  • For the Economy - By mounting the productivity of all factors of manufacture like land, labour capital etc. machines raise the overall manufacture in the economy. It leads to the development of the industrial agricultural, tertiary and export sectors of the economy. Consequently, employment, national earnings and growth rate of the economy augments.
Disadvantages of Machinery
  • For the workers - Working on the same machine makes the work of a worker tedious. There is no joy and satisfaction for him for the reason that he performs the same work over the years. This tends to reduction efficiency. If the worker wants to travel to some other place, it is hard for him to find the same job in which he experts. Thus machinery lessens the mobility of labour.

  • Evils of Factory System - The use of machinery leads to the growth of the factory system and the evils linked with it. There is mistreatment of men, women and children. Trade unions emerge which lead to class divergence The factory system gives rise to urbanisation with its bad effects like congestion, pollution, slums, dislocation of family life, diseases etc.

  • For the economy - Machinery unfavourably influences the economy in several ways.
    • Class conflicts lead to strikes and lockouts. They manufacture of goods and their prices rise.

    • Inequalities of earnings and wealth augment for the reason that profits rise quickly than the rise in wages.

    • Often goods are produced in anticipation of demand, thereby leading to over manufacture of goods. This leads to recession in the economy.

    • As machines replace men, there is unemployment in the nation. But this is only in the short period.

Most of the adverse economic effects of machinery given above are not to be found except the evils of the factory system and urbanisation in modern times.

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