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and finance Allah shmoop What is specialization of labour All

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right people While some of us are simply better at

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math than others some of us are more creatively inclined

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than others And some of us enjoy the social aspect

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of a job While others prefer to be left alone

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Teo titrate their chemicals and be left in peace and

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quiet Well specialization of labour takes advantage of these differences

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creating more value and higher overall output Well then without

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specialization classical economist Adam Smith the guy who made the

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invisible hand a thing saw the specialization of labour as

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the driving force for economic growth Think about it all

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of the engineers designers and marketers who went into creating

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the very device you're on right now because they're able

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to buy what they need to survive rather than fending

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for themselves in the woods Well they can focus on

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specialising their skills providing more value to the economy Hey

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maybe that's myth Guy was on something right to really

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see how much the specialization of labour affects the world

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let's imagine a world without it So first people would

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all be fending for themselves making their own clothes farming

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their own food cutting their cutlery making their own video

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gaming consoles and stuff like that but with specialization of

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labour Well it allows us to focus our individual attention

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in a particular specific area because other people specialize in

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other things taking care of those things for us We

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can also specialized for the rest of the market right

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Well we all become experts of some sort by doing

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our jobs and that activity increases productivity This is how

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specialization of labour gives us absolute advantage in the market

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We'Ll absolute advantages when one group can create a good

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or service using fewer resource is than another group Example

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If sewing Sally can so close with much less time

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than you can it benefits both you and sewing Sally

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If if you just let her make the clothes and

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then buy them from her she's just plain better It's

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sowing than you are so it's best for both of

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you this way on a global scale Specialization of labour

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gives us this absolute advantage For example southeastern Asian countries

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will always be better pineapple and mango producers than North

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American countries Global trade combined with specialization Let's each of

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us produce what we produce best and that benefits everyone

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Okay Second say goodbye to your smartphone computer refrigerator water

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heater air conditioners cars airplanes bikes and the Internet Without

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specialization of labour nobody would have gone deep enough in

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the technological stack to make let alone imagine the technology

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we have today So yesterday's technology breathes could graze the

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much more advanced technology which then breeds more human capital

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or intellectual capital Right Think about labor in terms of

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opportunity Cost Is your time more valuable doing your job

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Or is it more valuable forging steel into the shape

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of a fork Well this is the stuff of comparative

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advantage When a group or person can make a product

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or service at a lower opportunity cost then can another

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group or person Well even if you figured out how

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to whip up a crappy fork how many lost hours

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is that that you could have spent doing your job

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But you're actually good at like how much money did

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you lose tryingto make a four We're not saying you

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shouldn't go fork forging or fishing or whatever thing it

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is that you might do for fun that you aren't

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very good at But we are saying that the value

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that specialization of labour creates can be easily seen Once

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you think about it in terms of opportunity cost well

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a chef can provide a ton of value at a

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restaurant Well that same chef Yeah not very much value

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Add at a technology firm A tech bro can provide

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Aton of value with the tech firm like Keats are

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us But those people well they don't add much value

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at a construction site All right what about a lawyer

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who can type faster than her secretary Should she just

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do all that typing herself No because a lawyer's time

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is better spent loitering than it is typing Which is

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why she hired her secretary in the first place Typing

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is just a bad use of her way more valuable

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time right Even if the lawyer is better a typing

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than her secretary that opportunity costs for her secretary Typing

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is much lower than it is for her loitering Well

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comparative advantage shows us how specialization can help us all

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add value to the market even though each have different

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skills and skill levels Well the more specialized we all

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are at what we d .'Oh well them or others

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are willing to pay for that specialization and the more

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value we're providing to each other within the economy While

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specialization of labour has created a lot of value not

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everyone's a fan Critics have cited that a too high

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a level of specialization can lead Toa unhappy workers and

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burn out probably does In fact the forty hour work

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week became a thing on Lee after factory worker burnout

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at the Ford factory caused extremely high turnover rate As

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benefits of specialization spread globalisation started to make more and

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more economic sense because the specialization of labour provide so

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much more value to the economy than well if we

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were all a bunch of hermits you know forging her

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hone forks it's profitable to make things in one country

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and ship them halfway around the world to be sold

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in another country Absolute and comparative advantage make global trading

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like this oh so worth it So today we can

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see that event Siri's in the extreme With giants like

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Amazon Walmart and Ali expressed facilitating globalization spreading the economic

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fruits of specialisation on the insanely useful and maybe scary

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We've got machines learning algorithms and artificial intelligence in the

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works On the of course that's a thing side While

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we've got heated driveways monster energy sliced ham and eighty

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five dollars rock in a bag a toothpaste squeezer and

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other things you didn't need to know that existed All

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right just moving right along here people Where's

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