ECONOMIC PROGRESS AND ADAM SMITH’S DILEMMA

Abstract

Abstract Adam Smith saw the division of labour and specialisation as the driver of ‘universal opulence’, a process limited by the scope of the market. He also believed that competition was essential to ensure growth benefited the public. Yet eventually there could be a trade-off between these two mechanisms. In today’s era of global production networks, the markets at certain links in supply chains may support just one specialised supplier; and in winner-take-all digital markets there is a single supplier even at global scale. When the scope of the market is global, there may be a trade-off between specialisation and competition.