Final answer:
Division of labor can increase production efficiency not only for complex goods but also for simpler ones, by allowing specialization, saving time between task transitions, and facilitating the use of specialized machinery.
Step-by-step explanation:
I would partially disagree with the statement that Adam Smith's idea of the gains from division of labor only makes sense when the good being manufactured is complex. While it's true that complex goods can benefit greatly from specialization due to the intricacies involved in their production, the principles of division of labor can also apply to less complex goods.
Adam Smith noted that specialization and division of labor in a pin factory allowed a group of 10 workers to produce a dramatic increase in output compared to workers who did not specialize. This productivity boost is attributed to three primary reasons:
- Workers become highly skilled in their specific tasks, reducing the time taken to produce each good.
- Time is saved as workers do not need to switch between tasks, which involves setting up different tools or adjusting to different processes.
- Specialized machinery can be developed for each separate task, further increasing efficiency and output.
Therefore, even with less complex goods, division of labor can result in significant productivity enhancements. The efficiency gains are not solely dependent on the complexity of the good, but rather on the ability to streamline and perfect discrete tasks within the production process. The principles of allocating tasks and expertise can universally increase production, whether it be in making pins, assembling electronics, or baking bread.