Division of Labour is based on the principle that industry can be best carried on when each man has a special work to do. Constant practice in doing the same thing leads to a perfection which could not otherwise be attained. The classical illustration of it in the history of political economy is that of pin-making as given by Adam Smith: 'One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on is a peculiar business; to whiten the pin is another; it is even a trade by itself to put them into a paper; and the important business of making a pin is in this manner divided into above eighteen distinct operations, which in some manufactures are all performed by distinct hands.' In this way ten men could make about 48,000 pins in a day, whereas, if they worked separately and independently, they certainly could not each of them have made twenty, perhaps not one pin in a day. Adam Smith offers the following reasons why the division of labour secures greater efficiency: 'First, the increase of dexterity in every particular workman; secondly, the saving of the time which is commonly lost in passing from one species of work to another; and lastly, the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many.' Economists believe, however, that Smith has laid too great stress on both the second and third of the above reasons.
Though the name of Adam Smith has been so closely associated with the principle of the division of labour, the importance of it had been recognised before, notably by Plato in his Republic, and by Adam Ferguson in his History of Civil Society. And it is hardly necessary to say that the invention of labour-saving machinery has rendered the example of the principle which he drew from pin-making almost entirely obsolete as an illustration of the existing methods of industry. (A good example of division of labour is given under CUTLERY: an ordinary three-bladed pocket-knife goes through more than a hundred processes. See also NEEDLES.) Pins, which were made in thousands through the co-operation of human hands, are now turned out in millions by the aid of machinery. In modern industry very little is due to the direct operation of the human hand; almost everything is done by a machine. The development of steam and electricity as the motive powers, both of production and exchange, has along with the parallel development of machinery completely revolutionised the conditions of industry, necessitating a division of labour on a far wider basis than that contemplated by Adam Smith. At the present day it is not a mere question of personal adaptation, but of local, national, and international fitness and specialisation for carrying on different forms of industry. Differences of climate and of other natural conditions, as well as differences of industrial development, impose upon nations a most comprehensive division of labour.
This division of labour, it must be obvious, has as its necessary complement an elaborate combination or organisation of labour. In every large industrial undertaking, whether it be a factory, railway company, or any other, the highest efficiency can be attained only when, every man having his proper work to do, each man's work effectually contributes towards the general result. It is only through the wise selection of the fittest persons for each class of work, and their special adaptation to it, that such an organisation can be maintained. Thus the division of labour is only a factor in the wider problem of the organisation of labour, necessary to the success of every great industrial undertaking. See LABOUR.
But while the division of labour is necessary towards an efficient industry, economists recognise that it has many disadvantages. It is attended with a monotony of occupation, which is not favourable to the development of the general intelligence and capacity of the workmen. Each man can perform his own narrow function, and beyond that his skill does not go. The monotony itself is most painful, especially under the long hours of work which prevail in so many countries. But the worst feature of all is that through the changes which so frequently occur in the industrial world, owing to the introduction of new machinery and other causes, the class of work to which the men have been trained may be entirely superseded. The most striking instances of this in the history of English industry was hand-loom weaving, rendered obsolete by the introduction of the power-loom. Workmen thus trained and specialised have a great difficulty in finding, and in adapting themselves to, any other form of occupation.