Putting the Record Straight: Adam Smith, Allyn Young and the Division of Labour

A comparison has recently, and indeed repeatedly, been made of the thinking of Adam Smith (1776) and Allyn Young (1928) on the subject of the division of labour. It is alleged that Smith’s understanding of the concept was only at the most elementary level, and that it was Young rather than Smith who extended the basic notion of craft specialisation to comprehend industrial specialisation, who recognised that the degree of industrial specialisation increased with economic development and that it was he who perceived that an increased degree of specialisation in one sector of the economy, by inducing further developments elsewhere, could promote a cumulative process of expansion. The purpose of this note is to demonstrate that that interpretation, in greatly exaggerating Young’s contribution relative to that of Smith, seriously misrepresents the latter’s depth of insight into the nature and implications of the division of labour.