OPINION7 January 2016

The division of attention

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Behavioural economics Impact Opinion UK

Adam Smith’s theory on the division of labour first appeared in 1776, in the Wealth of Nations. The idea was later revived by The Coasters in their late-50s B-side My Baby Comes to Me.

Well, she go to see the baker when she wants some cake

She go to see the butcher when she wants a steak

She go to see the doctor when she’s got a cold

She go to see the gypsy when she wants her fortune told

But when she wants good loving my baby comes to me

When she wants good loving my baby comes to me.

As the song suggests, rather than dividing his efforts between the supply of cake and fortune-telling, the baker would do better to concentrate on the former.

Similarly, the doctor is better off not diversifying into the provision of ‘good loving’ and leaving that market niche to the narrator, who seems to enjoy a healthy competitive advantage.

What is interesting about the division of labour is not just that it works, but that it works in many different ways. It arises from the simple insight that 10 people, each ...