Division of Labour (3) - Cities

The division of labour makes life in cities possible. Without the benefits of specialisation and trade, life in a modern city would be impossible, even for those who live simply. Several companies in the city where I live produce top quality electronic equipment that is exported all over the world. However, this city does not have the capital equipment are the range of skills needed to manufacture the full range stuff that people need to survive in a modern city. The only way that we can maintain a city lifestyle is to specialise in manufacturing and exporting a very limited range of products and import the other goods and services that we need.

What is true for a city is also true for a large country. Even the United States does not have sufficient capital and skills to produce the full range of goods and services needed to sustain life in and American city. If America attempted to be self sufficient, living standards would suffer as the benefits of the division of labour and specialisation disappeared. Life in the city would be terrible.

Self-sufficiency is not a practical for a city or country, but it is even less practical for an individual. An individual who attempts to be self-sufficient loses all the benefits that have come through trade and the division of labour. A man fending for himself will be hard pressed to produce enough food and clothing for his own family, even if he was very industrious. He will not have time to produce all the things that we need to live in a city.

In difficult economic times, trade declines. A reduction in the division of labour and a decline in living standards inevitably follow. We will have to deal with this, if it happens, but we must understand that a total collapse of trade and return to total self sufficiency would be a total disaster for people living in a modern city.

A collapse of trade would severely damage the lifestyles of people living in the country. Most country people in the Western world are dependent on the division of labour and lack the skills and equipment needed to be self-sufficient.

People in some parts of the world may be forced into subsistence and self sufficiency, but that should never be our first response to crisis. Whatever our circumstances, we should always attempt to specialise and trade as much as is practicable. We should always maintain as much division of labour as possible. Being dependent on other people will strengthen our community and enlarge our lifestyles.

Tomorrow, I will start thinking about preparaton for crisis.