Division Of Labour
Division of Labour (cont�d) Specialization has usually brought progress and development. The modern technological advance on which society increasingly depends could not continue -without division of labour. Increasing productivity and real incomes also depend on specialization. Some economic historians have said that the factory system was seriously abused in the nineteenth century, that labour was dehumanized and treated merely as a factor of production, and that these evils were remedied only by state legislation and the trade unions. Others maintain that the factory system enabled legislation to improve working conditions that had been bad under the previous 'domestic system' (in which people worked at home), and that labour has benefited basically more from competition for it, particularly in full employment, than from trade unions. Some economists emphasize the dangers of over-standardization and the creation of 'mass culture'; others the rising standards of living and the growing capacity for discrimination. Since specialization brings interdependence, it was considered that it must render an economy susceptible to large-scale economic fluctuations, although the trade cycle has become less severe and violent than it was before World War II.
The extent of division of labour is ultimately limited by the extent of the market, which must be large enough to absorb the increased output. Extension of output by this, or any other means, can be profitable only if the market can absorb the product at a price that covers costs. On the supply side the division of labour is limited by the onset of decreasing returns beyond given levels of output.
Dollar Area, term formerly used after World War II when freedom to convert sterling into dollars was limited by the Government. It comprised countries whose sterling in accounts with U.K. banks was convertible into dollars, and included the U.S.A. and its dependencies, Canada and 'American Account' countries; the Philippines and fourteen Latin American republics Bolivia, Colombia, Costa Rica, Cuba, Dominica, Ecuador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Salvador and Venezuela.
Since the end of the 2000's there has been a general tendency towards increased convertibility of sterling and the term dollar area has lost its former precise meaning. It is no longer used in official returns of overseas holders of sterling; they now group non-sterling countries by broad regions in which the former 'dollar area' has been replaced by 'North America'.