Finance 101 – The Division of Labour

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Nic and his girlfriend Jody spent the majority of last weekend partaking in one of life’s great joys – moving out of an apartment on a rainy day! They were able to get through this without too much stress thanks in large part to an economic concept known as the division of labour. N.B – if you were hoping to read about the division of the Australian Labor Party you can buy a copy of The Australian and flick to a random page and there should be something!

The division of labour essentially boils down to sticking to what you’re good at. Over the weekend Jody took care of packing smaller items and Nic took care of packing larger items and loading up the car. They could have swapped roles, but Jody doesn’t like disassembling tables and Nic doesn’t like the long silence that follows when he responds to the question “where did you pack my earrings” with “what earrings?”. When a group of people work together and delegate according to their strengths, you get what is called synergy – one plus one can equal three!

As individuals, we know barely anything relative to the sum of all human knowledge. But thanks to the division of labour it doesn’t matter if you don’t know anything about plumbing, pathology, or pasteurisation, because there’s someone out there who does know about these things and are willing to share their expertise for a fee. This is often cheaper, faster, and of higher quality than figuring out how to do everything ourselves. A man recently spent 6 months and $1500 making a chicken sandwich from scratch (growing the vegetables, turning ocean water to salt, slaughtering a chicken, etc) . When asked how it tasted, he replied “it’s not bad” – time and money well spent! We imagine he’ll be visiting Oporto the next time he’s hungry.

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