...Stuart Mill) followed the competitive assumptions and quietly dropped Smith's boldly-stated proposition that "the division of labour is limited by the extent of the market", division of labour having been shown to lead to increased productivity. (Arrow. 1994 p. IX)...

...common stock, where every man may purchase part of the produce of other men's talents. CHAPTER III. THAT THE DIVISION OF LABOUR IS LIMITED BY THE EXTENT OF THE MARKET. As it is the power of exchanging that gives occasion to the division of labour, so the extent...

...instruments. This was first investigated by Stigler (1968), who, building on Adam Smith's proposition that the division of labour is limited by the extent of the market, argued that the change in the size of the final goods market could affect the decision to integrate...

...rising labour productivity in each successive round of production from the supply side, his observation that the division of labour is limited by the extent of the market assumes special significance. It suggests that he assigned to demand the role of setting the...

...Adam Smith's argument, in his An Inquiry into the Nature and Causes of the Wealth of Nations (1776), that 'the division of labour is limited by the extent of the market', which the German philosopher Friedrich Naumann utilized to propose in 1915 that European nation...

...cit., p. 416. This is an application of the well-known principle elaborated earlier in his chapter "That the Division of Labour is Limited by the Extent of the Market" (pp. 17 ff). 3 Op. cit., p. 415 and pp. 420 ff. * Op. cit., esp. pp. 436-7. Smith too emphasises...