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Better Division

July 4, 2008

In this previous post I went over the good kind of “division of labor”, the spontaneous kind that arises from the free market. But there’s more. “Division of labor” is not the same as “specialization”: it also implies a repartition of tasks, i.e. it entails new and innovative coordination mechanisms. The break-down and fragmentation of production steps requires systems of re-aggregation: firms, organizations, Coasean deals, market solutions, etc…So in the end “division of labor” could safely be replaced by the term “multiplication of labor”.

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