SPECIALISATION AND MOBILITY Specialisation and Exchange
A system of specialised production, no matter how simple, cannot exist without exchange. When people become specialists they are dependent upon some system of exchange to provide them with the variety of goods and services required to satisfy their wants. Without some means of exchange, the farmers would have too much corn for their personal needs, but would have no coal, oil, electricity, or machinery. There must be some means whereby the outputs of specialist producers can be exchanged. In addition to this need for a highly developed mechanism for carrying out exchanges, there is another important factor governing the degree of specialisation. The principle of the division of labour can only be applied extensively when there is a large market for a standardised product. Automatic and semiautomatic machinery and highly specialised workers are equipped to produce large outputs of identical products. Specialisation, therefore, is limited by the extent of the market. Specialisation and the size of the market The work of engineers and scientists continues to provide increasing scope for wider applications of the principle
of the division of labour. The most striking evidence of this fact is the increasing use being made of robots in mass production industries. These methods of production are only worthwhile if there is a market (i.e. a potential demand) large enough to keep this expensive capital equipment fully employed. The size of the market, therefore is an economic limit to the degree of specialisation. On a more simple level, a person in a remote village could not earn a living by becoming a specialist cabinet maker or tailor. The size of the market would be too small to provide such a highly specialised worker with an adequate income. The great expansion in the size of markets for most consumer goods and services, made possible by rising real incomes, increasing populations and by improvements in transport and communications, has been a major factor in the development of specialisation in the methods of production. Specialisation and economic change We live in a world of specialists. Many people are trained for highly specialised roles in the economic system. Doctors, lawyers, accountants, physicists, chemists, surveyors, civil engineers — the list of specialised occupations seems endless. All of these people may be extremely productive in their particular fields, but the fact that each of them concentrates on a narrow range of skills makes them occupationally immobile. They can do one thing very well, but they cannot do much else. A shortage of labour in one profession cannot be overcome by moving people from another profession; a chemist cannot do the work of an accountant. But it is not only labour which is highly specialised. Capital equipment is usually designed for a specific task. A modem blast furnace is a very effective means of producing iron, but it cannot be used for any other purposes; a petrol tanker cannot carry coal, and a combine harvester cannot dig ditches. Much of our capital equipment, therefore, is also occupationally immobile. These may be very obvious points but they have important economic implications. These are times of rapid economic change and economic progress depends very much on the community's ability to adapt quickly and smoothly to changes in consumer demand, in technology, in world trade, and so on. When economic resources are highly specialised (i.e. specific to a particular task), it may be extremely difficult to transfer such resources from one use to another. The mobility of the factors of production is clearly an important economic problem. Let us now examine some of the causes of economic change. Wars Modern wars completely disrupt the economic life of a country. They increase the pace of economic and social change and in particular they speed up the rate of technological progress. Some industries undergo great expansion (e.g. chemicals, electronics, engineering), while many industries are forced to change the nature of their outputs. Large numbers of workers change their jobs and learn new skills. The structure of world trade is distorted and the pattern of exports and imports which develops after a major war is sometimes very different from that which existed before the war. The British economy has been particularly affected by export markets lost during wars (e.g. in cotton and coal). While the prosecution of the war itself calls for a high degree of mobility of labour and capital, so does the need to adjust to the very different economic situation which emerges after the war.
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