SOSC 1000 Lecture Notes - Lecture 11: Profit Motive, Workforce Productivity, Capital Accumulation
Document Summary
Adam smith believed that national wealth could be increased by the natural propensities of human nature and that the process of economic growth could lead to the universal opulence which extends to all people. In the wealth of nations, adam smith introduced the idea of division of labour and capital accumulation. He found that people could produce more product together than they could working separately and showed how specialisation boosts human productivity. In this outline, i will explain how division of labour and capital accumulation affect the whole world and labour productivity. Labour productivity can be increased by three main ways: division of labour, investing in capital and increasing the size of output and workers. Division of labour is a natural phenomenon in society. It is a production method which distributed labour into different work. Human wants are unlimited but supplies are limited. Everyone is facing the scarcity, we cannot do and receive everything by ourselves.