The Division of Labour and the Mainstream Theory of the Firm

Abstract

This paper looks at the influence (or lack of influence) that ideas to do with the division of labour have had on the mainstream economic theory of the firm. The notion of the division of labour goes back, at least, to ancient India, the ancient Greeks and the ancient Chinese but it took two thousand years before the division of labour was used to create a theory of the firm. It was only in the 20th century that such a theory started to be developed.

Keywords: history of economic thought, theory of the firm, division of labour

JEL Classification: B11, B12, D21, D29