The tercentenary of Adam Smith’s birth is an opportunity to consider how his insights into the dynamics of economic growth continue to shape our understanding of the world today. But what if the division of labor that underpinned Smith’s theory of growth has reached its limit?
CAMBRIDGE – This year marks the 300th anniversary of the birth of Adam Smith, the founding father of modern economics. It comes at a time when the global economy faces several daunting challenges. Inflation rates are the highest since the late 1970s. Productivity growth across the West remains sluggish or stagnant. Low- and middle-income countries are teetering on the brink of a debt crisis. Trade tensions are rising. And market concentration has increased among OECD countries.
Against this backdrop, Smith’s tercentenary is an opportunity to reflect on his invaluable insights into the dynamics of economic growth and consider whether they can help us understand the current moment.
At the heart of Smith’s theory of economic growth, outlined in the first chapter of his seminal work The Wealth of Nations, is the specialization facilitated by the division of labor. By breaking down production into smaller tasks – a process illustrated by Smith’s famous example of the pin factory – industrialization enabled enormous gains in productivity.
CAMBRIDGE – This year marks the 300th anniversary of the birth of Adam Smith, the founding father of modern economics. It comes at a time when the global economy faces several daunting challenges. Inflation rates are the highest since the late 1970s. Productivity growth across the West remains sluggish or stagnant. Low- and middle-income countries are teetering on the brink of a debt crisis. Trade tensions are rising. And market concentration has increased among OECD countries.
Against this backdrop, Smith’s tercentenary is an opportunity to reflect on his invaluable insights into the dynamics of economic growth and consider whether they can help us understand the current moment.
At the heart of Smith’s theory of economic growth, outlined in the first chapter of his seminal work The Wealth of Nations, is the specialization facilitated by the division of labor. By breaking down production into smaller tasks – a process illustrated by Smith’s famous example of the pin factory – industrialization enabled enormous gains in productivity.