Is Liberal Theory of Labour Division Convincing?


Before entering into interesting and though provoking discussions on the matter on how effective liberal theory of division of labour (dol) and how its many ramifications and interpretations could impact current and future research on this interesting subject, it is first of all, also necessary to understand, what is division of labour in its scope and context, and secondly, to fully understand and appreciate liberal theory of division of labour as it is practised in the modern economic world.

Coming first to the division of labour, it could mean allotment of specialised work to various members of work force, in terms of their knowledge, education, inclinations, experience and skill sets. The final production of any finished product requires several processes and operation to be performed, at different stages and by different specialist, skilled and experienced in providing specialised services.

Thus a product is a sum total of materials and specialised labour incurred on them. In economic terms, division of labour recognises that if the constituents of work force perform specialised functions, not only would consistency of quality and standards be maintained, but economic costs would also be lowered in terms of excellent products with minimum defectives, spoilages and wastages. Division of labour and its fulfilment through “increases in the degree of specialization for individuals” are thus two sides of the same coin, used to render maximum efficiencies at lowest costs. (Yang 1994).

The division of labour that is practiced in today’s society is a refinement of class groupism that has been in vogue, since time immemorial. References to division of labour is found even in Plato’s, book,’ The Republic’, wherein he makes allusions to guardians, auxiliary and trading classes.

The highest class- the guardians exercised their mental faculties, wisdom and intellect, while for the warriors it was honour and courage; for the business or trading class it was business ethics and fiscal matters. Thus, it was virtually impossible for a soldier to perform a trader’s job or for a merchant to assume the role of the guardian.

Thus the perception of justice emanated from the fact that these classes, or even characteristics were results of division of labor, and each faculty managed its own business, peacefully- without intrusion and on concept of Justice- taking care of one’s own occupation and not interfering in other’s business. (Plato the Republic: Guardians and Auxiliaries – Source: Plato, The Republic: Penguin Books: Second Edition (revised) 1974: ISBN 0-14-04.40488

Plato the Republic: Guardians and Auxiliaries. Trans. Desmond Lee. New York and London: Penguin Classics, 1974.

This only goes to prove that no administrative order could be realised without a strong measure of division of labour, which is what is the liberalism theory affirms.

The liberal theory of the division of labour advocates free trade among countries, without superfluous trade restrictions and commercial barriers. Besides, this theory also emphasises that political elements that impinge on free trade needs to be removed, as also enhanced movement of goods, services and labour within the ambit of internal and external trade within trade partners. Thus one of the major interpretations of the liberal theory would be in terms of “adjusting to the shifting pattern of comparative advantage in all trading nations” (Kitamura n.d).

Unless the benefits and advantages derived from liberal theory are distributed towards the common good of its constituent trading partners, it would cease to uphold the goals of its initiation, and would sooner or later, collapse under the weight of its own undoing. In real terms, a liberalised theory of division of labour would entail greater wealth producing efforts between countries to improve their balance of trade and balance of payment surpluses. However, there are many aspects that impact upon liberal theory, like the balance of payment situation, which determines how much trade business, could be carried out without adversely affecting BoP situation.

Again, aspects like currency fluctuations, Interest rate movements and quantum of trade surplus/deficits are also important considerations that need to be considered. “In the liberal market economies, these features of ownership, finance, and governance are said to influence management decision-making and practices in several ways” (Pendleton 2009, p.137).

Research Hypothesis/Question

The benefits of pursuing the liberal theory of division of labour.

Claims and perspectives put forth by Liberal theory of Division of Labour (DOL)

The Liberal theory or liberalism stems from seminal works of Adam Smith (1723- 1790) during the 18th Century, along with the works of other economists like his predecessors, John Locke (1623- 1704) and later works of John Stuart Mill. (1806-1873). The works of these precursors of modern economics are indeed considered to be path breaking in applications of economic theories and precepts during 18th and 19th centuries. According to Adam Smith, individual rights and privileges allow persons to accumulate wealth and hold properties. Unlike the Marxist doctrines (which we shall presently come to), there is nothing wrong in accumulating wealth and use it for self aggrandisement and more wealth creation, as long as it is not carried out by trampling over the rights and privileges others, especially poorer segments of the society. According to the Liberalism views of DOL, a person is well entitled to the fruits of his labour, and to use it in the manner best judged by him. There is no truth in arguing that individual wealth is also the wealth of the state, as long as it is accumulated through legitimate means and without detriment to the State. “A legal government based on the recognition of such rights allows for the development of wealth through the division of labor. People’s specialization in different tasks could lead to immense gains in productivity” (Dolhenty 2003).

The seminal works of Smith in terms of Liberal theory of DOL lays particular emphasis on the individual and his/her actions in wealth accumulating processes. It does not consider contribution of the State in the wealth generated by individuals or groups. Nor does it perhaps consider metaphysical aspects of the existence of citizens. At the time his book, “The Wealth of Nations” was published, arguably, it indeed revolutionised contemporary thinking and enjoined major reforms in improved use of technology. For instance he states that the division of labour has resulted in “increase of dexterity” of line workers, besides contributing to “saving of the time” (Smith 2009, p.9). Besides, through the use of machines, one person is now able to do the work of many, thus reducing costs and increasing productivity and outputs.

According to a Journal Article written by Tom Bottomore of the University of Sussex, entitled,” A Marxist Consideration of Durkheim”, it is believed that Durkheim considered that the afflictions seen in European society today not been caused by class conflict arising out of division of labour, but is due to lack of moral regulation in the new genre of industrialised society today. Class conflict, according to the author, was based on the fact that social occupation did not commensurate with social talents, and that the fruits of division of labour could work for the system instead of against it, and if division of labour were to be properly controlled and harnessed for benefit of society, it could serve for good and not detriment of societal interests. (Tom Bottomore, University of Sussex, A Marxist Consideration of Durkheim)

Compare liberalist theory with Marxist thinking

That being said, it is now necessary to consider the liberalism concept of division of labour with that advocated in Marxist concepts and tenets. The main areas that differentiates the liberalism theory with that of Marxian concepts lies in the following:

The importance given to operating machinery

According to Marxism, the advent of mechanised means of production was the precursor for major changes that could transform not only the final outputs of production, but also the very character of manufacturing. In an agrarian economy, the produce was made and used within the community itself, but in an industrial scenario, it is possible that the benefits and profits may accrue to a bourgeois owner residing in some other place, who, not by virtue of having worked on the produce, but by virtue of owing the factory, could claim benefits over it. One of main aspects of mechanization resulting from division of labour is that it has polarised industry from agriculture and introduced a new social order.

Alienation from desired occupation

According to Marxist theories, division of labour has entrapped people in occupations which they do not prefer, let alone enjoy. Thanks to division of labour and specialisation, he now needs to work -day in and day out in the same mechanised and monotonous method, without any deviation, if he wishes to maintain his means of livelihood. Rather than man utilising machines for productive uses, according to Marxism, the hard truth is that machines have enslaved men and made human beings their vassals.

Social division of labour

Marxism is of the considered opinion that with the advent of division of labour, this has become a pre requisite for production of goods, but the reverse is not true. Since ancient times, there has been the concept of social division of labour through which it was possible to gain social gains, without having any kind of production of goods or services. Without the use of division of labor, and through workmen working at their pace and suitability, it is possible to have employment, without the rigours of division of labour. “Marx wrote that “with this division of labour”, the worker is “depressed spiritually and physically to the condition of machines” (Marx n.d).

Perhaps one of the most disconcerting aspects when considering liberalist theories with Marxism is that mass production concepts, which form the mainstay of Smith’s defence for economic liberalism through division of labour has not found much favour with Marxist ideologies. On the contrary, it is believed by them that these result in overproduction, which is also bad. Workers are forced to produce more, for fear of their jobs and livelihoods, and are exploited by overzealous bourgeois mill owners. Much of the products they produce are not done out of their own free will and volition but are forced upon them by their masters.

Compare liberalist theory with economic nationalism

Nationalism lies at the heart of most actions of nations, yet paradoxically, it has not been able to garner the recognition which liberalism advocated by Adam Smith, Ricardo, Stuart Mill and other eminent economist have gained, or even Marxist socialism has been able to acquire. Nevertheless, economic nationalism has been at the vanguard of most economic and political manoeuvring in most countries of the world. It was first introduced by the German political economist Friedrich List ( 1789-1846) and embodies the view that, essentially be a theory of the nexus between politics and economics, it advocates that the citizens of a country largely share a common economic destiny and emphasises that since politics is more significant than economics, the following precepts apply: “(a) the autonomous nation-state should be the basic unit of analysis in both international and national politics (b) nationalism plays a prominent role in the shaping of the world’s order, as well as of the politics of nations;(c) the state has a crucial positive role in the fostering and nourishing of the productive powers of its nation; and finally (d) conflicts between economic forces on the one hand, and societal needs and wants on the other, are (should be) regulated by state” (Levi-Faur 1995, p.10).

The main aspect that is stressed in economic nationalism is also interdependence between producers and consumers. For instance, even taking the case of division of labour, just as the baker is dependent on the doctor for his medicines, similarly the doctor is also depending on baker for bread. While viewed on a broader plane, trading partners of different nations are dependent on each other for commercial transactions, which is what Adam Smith had referred to as materialistic notion of economic changes However, List cautions that the “term ‘free trade’ has become popular without drawing the necessary distinction between freedom of internal trade within the State and freedom of trade between separate nations, notwithstanding that these two in their nature and operation are as distinct as the heaven is from the earth” (List 1885).

Sexual division of labour

By far, this is also a major contributor in division of labour wherein work is segregated on gender basis. There are certain tasks that women folk cannot undertake- like working on high rise construction sites, in underground mining depths, etc. The sexual division of work would consider segregation of division of labour based on gender factors. Besides, in women, the aspect of reproductive needs are also present, which make it more difficult to work for considerable length of time, without maternity breaks. “Sexual division of labour is the allocation of work task, either in the private household or in the public economy, on the basis of the sex of the person. Women may cook the meals and men wash the dishes, or women may perform caring roles such as nursing or social work in the public economy, while men perform the tasks of driving trucks, fighting fires, or manufacturing goods” (Sexual division of labour, 2009). The liberalism theory also considers the sexual division of labour during the course of its applications.


The father of modern economics, Adam Smith had first proposed the liberalism theory of the division of labour. Despite its professed inadequacies, this theory has remained at the core of even the present day interpretations of division of labour, especially in capitalist countries wherein productivity and performance are not just keywords, but also key factors for work force. The fact that this theory has endured for nearly three centuries after it was first conceived by Smith is indeed ample testimony of its public appeal and empirical applications in today’s corporate world and proves its conviction without an iota of doubt or misgiving.


Dolhenty, J., 2003. Classical liberalism, libertarianism, and individualism. The Radical Academy. Web.

Kitamura, H., n.d. International division of labour and industrial administration: Relevance of theory to policy analysis. The Developing Economies. Web.

Levi-Faur, D., 1995. The European Union and economic nationalism- from antithesis to synthesis. p.10. Web.

List, F., 1885. The national system of political economy. Web.

Marx, K., n.d. Division of labour. Global Oneness. Web.

Pendleton, A., 2009. The liberal market model of finance, ownership, and governance: An evaluation of its effects on labour. SAG Journals Online, p.137.

Sexual division of labour. 2009. Sociology Index. Web.

Smith, A., 2009. The wealth of nations. Amazon. p.9. Web.

Yang, X., 1994. Endogenous vs. exogenous comparative advantage and economies of specialization vs. economies of scale. Springer Link. Web.

Cite this paper

Select style


BusinessEssay. (2022, December 12). Is Liberal Theory of Labour Division Convincing? Retrieved from


BusinessEssay. (2022, December 12). Is Liberal Theory of Labour Division Convincing?

Work Cited

"Is Liberal Theory of Labour Division Convincing?" BusinessEssay, 12 Dec. 2022,


BusinessEssay. (2022) 'Is Liberal Theory of Labour Division Convincing'. 12 December.


BusinessEssay. 2022. "Is Liberal Theory of Labour Division Convincing?" December 12, 2022.

1. BusinessEssay. "Is Liberal Theory of Labour Division Convincing?" December 12, 2022.


BusinessEssay. "Is Liberal Theory of Labour Division Convincing?" December 12, 2022.