WEALTH OF NATIONS BOOK I CHAPTER 3

 Division of Labor Requires Large Market

 

That the Division of Labour is Limited by the Extent of the Market

In small markets people cannot be too specialised.

 

     As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited , by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, .

 

In very small villages every farmer must be butcher, baker and brewer.

 

      There are some sorts of industry, even of the lowest kind, which can be carried on nowhere but in a great town. A porter, A village is by much too narrow a sphere for him; In the lone houses and very small villages every farmer must be butcher, baker and brewer for his own family. In such situations we can scarce expect to find even a smith, a carpenter, or a mason, within less than twenty miles of another of the same trade.

Cheap transportation can extend the size of the market.

 

 As by means of water-carriage a more extensive market is opened to every sort of industry ...  so it is upon the sea-coast, and along the banks of navigable rivers, that industry of every kind naturally begins to subdivide and improve itself, ..

Sea transportation can extend the market over the whole world.

 

 What goods could bear the expense of land-carriage between London and Calcutta? Those two cities, however, at present carry on a very considerable commerce with each other, and by mutually affording a market, give a good deal of encouragement to each other's industry....  it is natural that the first improvements of art and industry should be made where this conveniency opens the whole world for a market to the produce of every sort of labour, and that they should always be much later in extending themselves into the inland parts of the country.

Civilization developed first around the Mediterranean Sea.

 

The nations that, according to the best authenticated history, appear to have been first civilised, were those that dwelt round the coast of the Mediterranean Sea.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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