 Ladies and gentlemen, boys and girls, children of all ages, it is time to begin. It's one o'clock and today, right at this moment, we will be discussing the division of labor and social order. And I want to begin by positing two sort of conflicting views. One is by Herb Thompson, who's a professor of economics at Murdoch University in Australia, or at least he was at the time of this quote. Rather than seeing conflict as an anomaly, it is concluded that conflict is an essential and inherent component of the social relations found in capitalism. And we can contrast that with an earlier quotation from an economist you may have heard of, Ludwig von Mises, from his book Socialism published in 1922, which he says, quote, the greater productivity of work under the division of labor is a unifying influence. It leads men to regard each other as comrades in a joint struggle for welfare rather than as competitors in a struggle for existence. It makes friends out of enemies, peace out of war, society out of individuals. So we have two very distinct and contrary views. And today we're going to talk about what does economics tell us about the division of labor and how it actually does promote society and it forms a social order and not conflict and chaos. But to understand how the division of labor contributes to society and the social order, we first need to understand the nature of production. And so we're going to review just a handful of some principles, some of which you've already learned this morning or you've heard before, no doubt. One is that production itself is an action. It's not something that just happens. It's not just behavior. It's not instinct, but it's action. It's purposeful. And so although the laws of human action apply to production just as they apply to consumption or any other human action, brushing your teeth, for example. Why do people act? They act to achieve their ends. Why do producers produce then? They produce to achieve their end, which is profit, economic profit. Now to do so to achieve their end of economic profit, producers seek to economize just as consumers do. They seek to apply their means to achieve their most highly valued ends. And so they economize. And that then with that sort of backdrop in mind, it allows us to investigate the two main modes of production. There are two main modes of production. One we could call direct use production. This is a taxonomy laid out very nicely by Milton Shapiro. And he notes in direct use production, that's the mode of production where none of the production is exchanged in a market. Because people are producing so that they could use their goods directly. This is an economy or a mode of production of self-sufficiency. Have you ever seen the old PBS series called Good Neighbors? The whole premise of that show was that the main characters wanted to get out of the corporate advertising rat race and be self-sufficient on their plot of land. And of course the theme was even though they were very poor, they were happy. And of course it's possible, but that's what self-sufficiency is. You produce so that you will consume your goods yourself. So there's a direct correspondence between what you produce and what you consume. People grow a garden so they can eat the vegetables. They build a hut to live in. They raise a cow to milk and a steer to butcher and eat. People make a few pieces of clothing so they themselves can wear them. Now this mode of production is found mainly in poorer, less well-developed countries. Because it's not very productive compared to the other mode of production which is production for exchange. Production for exchange is a mode of production which is much more common in modern economies where production is oriented toward what can be sold in the market. Towards what can be exchanged with other people. People produce goods not because they want to consume them, but because they think that they can trade these goods for other things that they want more. So I am not lecturing in economics just because I want to hear myself talk about the Division of Labor for who knows how many a time. But I'm doing it as a service to students, as a service to the Mises Institute. So I am producing goods not because I want to consume them, but because I'm producing a good I can trade away for other things that I want more. And so production for exchange is production in the market division of labor. Production for exchange is production in the market division of labor. And this is the primary mode of production in more developed, more wealthier societies. And it is because it's more productive. And so let's talk about the Division of Labor, or we could say Division of Labor, what it is. The definition of the Division of Labor, we can define it as specialization of production according to efficiency. That's what the Division of Labor is, a specialization of production according to efficiency. And in that definition there are two important words. One is specialization, the other is efficiency. And specialization simply means that each person produces a particular good or set of goods in excess of his personal consumption. Now one of my favorite examples of a man who specializes is James P. Snee. James P. Snee is the CEO of Hormel. Hormel is a processed foods company. My uncle, my dad's twin brother, retired from Hormel. And a lot of people know Hormel for bacon, but really their flagship product is spam. And by that I don't mean excessive email. I mean the canned food product. And by the way, spam is like the good as a, oh, spam. Everybody hates spam so much that everybody eats it. It turns out that they produce 94 million cans of spam a year. 94 million cans, and they don't do it for fun. So somebody's eating all this spam. In fact, it's estimated that 12.8 cans of spam are eaten every second somewhere on the globe. That is a lot of spam. So people are eating the product that is being produced. And over the course of their Hormel's lifetime, they have sold about 8 billion cans of spam. That's a lot of spam. Now I would offer that James P. Snee did not oversee the production of 94 million cans of spam a year because he wanted to eat it all. Which is a very good thing, right? Because if he'd eat that much, he would no longer be with us, right? He would have had a stroke a long time ago. There is tremendously high sodium content. Even in the low sodium spam, it still is very salty. So he is producing spam for other people. He produces spam for other people. At the same time, his consumptive ends are met by others as he exchanges his excess supply of what he produces, the spam, for part of the excess supply of what other people produce. So he is specialized in the production of spam because he is producing this good in excess of his personal consumption of spam. Now who produces what within the division of labor will be determined by efficiency, right? That's the second keyword in this definition, efficiency. The different tasks in the division of labor will be taken up by the efficient producers. Well what is an efficient producer? The efficient producer is a producer who is the lowest opportunity cost producer of that good, right? So the efficient producer has the lowest opportunity cost of production for a particular good. Now while economists often call this principle the division of labor, it actually applies to all factors of production. So we could say there's a division of capital goods according to efficiency, and there's a division of land according to efficiency as well. In fact I think someplace Mises says it would have been more aptly titled the division of production rather than the division of labor, but it is what it is. So that's what the division of labor is by definition. Mises also refers to the division of labor in human action on page 157 if you're interested in the scholars edition. He calls it the fundamental, by the way I had to have that in my notes, I'm not like David Gordon, David Gordon I know, oh yes 157, but no I'm, it's right here. So Mises calls it the fundamental social phenomena. The fundamental social phenomena is the division of labor and human cooperation. And it's socially fundamental we can say I think in two ways. One, it has been with us since the beginning of human history. It seems like it's fundamentally human. As far back as we have written history, we find evidence of at least some division of labor. If you look at the ancient history of the ancient Near East, say Mesopotamia or ancient Greece or ancient Rome, we find evidence of the division of labor. If you go back to the early chapters of Genesis, we find the division of labor in the first family labeled dairy. Abel was a keeper of sheep, Cain was a tiller of the ground, and then they had a little altercation. That didn't work so well, right? And it's interesting, all the descendants of Cain are identified primarily as different things that they did, right? Jubal had cattle, Jubal was a musician, Tubal Cain was a metalsmith, which I always thought would make for a great heavy metal band named Tubal Cain, you know. That's what they're about, metalsmith. At any event, we see in the very early parts of human history, we see the division of labor at work, right? And so that's one way I think we could say that the division of labor is a fundamental social phenomena. But what Mesas like to emphasize is that the division of labor is the great impetus for the formation of society, right? People form society, and they move to certain communities so they can integrate with that region's division of labor. I move to where I live, not just for the weather, not just for the gray skies of western Pennsylvania. But no, I move to where I move because that's where there was a job for me. That's where I could fulfill my calling. I could plug myself into that part of the division of labor. That was where the niche was, right? And so Mesas emphasizes that society is only possible. Society is only possible because of two things. One, the greater productivity of the division of labor, which provides the impetus to participate in the division of labor and hence form society. So the greater productivity of the division of labor, and two, people's recognition of this fact, right? People must recognize that by specializing according to efficiency, that's more productive. And as more people recognize this, they begin to engage in it, and then they begin to realize the benefits, the actual benefits of increased productivity according to the division of labor. And then that creates an incentive to begin to sort of embrace and defend and perpetuates the institutions that allows this to happen. And so the division of labor is one of the great impetuses for the formation, or is the great impetus for the formation of society. Now as we noted, we already, people find it in their interest to specialize in making those goods at which they are the most efficient. And so just have a little example here. Two of my good friends, Groucho and Harpo, they're sort of the happy Marx brothers. There's another Marx brother, you may have heard of him, Carl, not quite as happy. But Groucho and Harpo, they were two people that had relative differences in their productive efficiencies. They could, let's suppose in this little primitive economy, they could produce mangoes or beef. That was basically it. And if we look at the first set of columns here we call production possibilities, what does that tell us? It tells us that Groucho could either specialize in mango production and produce 300 mangoes, or he could specialize in the same amount of time with the same amount of resources, etc. He could specialize and produce 600 pounds of beef. Harpo on the other hand, if he specialized and put all of his time and resources and energy in producing mangoes, he could produce 100 bushels of mangoes, or if he did the same thing and could produce nothing but beef, he could produce 400 pounds of beef. So on the basis of those production possibilities we can identify who is relatively more efficient at what. Now what's interesting, if we look at Groucho, Groucho it turns out is more proficient in the production of both goods. Proficient just means who can produce more of what? Who can produce more of what? Proficiency, a lot of economists would call that absolute advantage. So Groucho can produce 300 mangoes per week. Well how many can Harpo produce? 100. And so Groucho is better at mango production than Harpo. What about beef? Well Groucho can produce 600 pounds of beef if he specializes in beef production, where Harpo can only produce 400. So it turns out that Groucho has an absolute advantage in both goods. In both goods. Now, Adam Smith of course famously responded to the mercantilist by saying, well if two different parties have absolute advantages in two different goods, it's ridiculous to stop them from trading with one another. It's better if Groucho is better at mango production and Harpo is better at beef production. It's better for both of them to specialize in these things. They could trade and they're both better off. It seems almost obvious. But then they would say, aha, but wait. What if somebody like Groucho is more proficient at both goods? What then? Well it was David Ricardo, James Mill probably behind the scenes, but David Ricardo publishes The Law of Comparative Advantage. And he notes and explains that even in a case of both parties being more proficient, or one party being proficient at both goods, it is still beneficial. There is still a way that exchange benefits, specialization and exchange benefits both parties as they specialize according to efficiency, as they specialize according to what economists call the comparative advantage. Comparative advantage. And so now we ask the question, okay, who has a comparative advantage and what? Who is actually more efficient than what? Well, how do we know? Well, we already said that comparative advantage is determined by the opportunity cost of production. Who is a low cost opportunity cost producer of each good? So let's take a look at mangoes. If we look at mangoes, if Groucho, for instance, Groucho wants to produce mangoes, he wants to produce 300 mangoes, but he gives up the opportunity of producing 600 pounds of beef. And so for every bushel of mangoes he produces, it costs him two pounds of beef. Harper, on the other hand, if he specializes in producing mangoes, he can produce 100, but he gives up the opportunity of producing 400 pounds of beef. So every bushel of mangoes he produces, it costs him four pounds of beef. So who has a low opportunity of producing mangoes? Well, it's Groucho, right? Groucho, because two is less than four. I think even in outcomes-based education, two is still less than four. So that's where his efficiency lies. That's where his efficiency lies. Groucho is a more efficient mango producer. What about beef? What about beef? Well, you can work the logic through the same way only reversing the goods. And so if Groucho would produce 600 pounds of beef, he gives up the opportunity of producing 300 bushels of mangoes. So for every pound of beef he produces, it costs him one half of a mango or one half of a bushel of mangoes. On the other hand, if Harper specializes in beef production, he produced 400 pounds of beef. And to do that, he gives up an opportunity of producing 100 bushels of mangoes. And so his cost of producing... I'm sorry, I can't get that right now. He gives up the opportunity, if he produces a pound of beef, he gives up the opportunity of producing one fourth of a bushel of mangoes. And since one fourth is less than a half, then Harper is a low-cost producer of beef. That's where his efficiency lies. And so even in a case where Groucho is more proficient at both goods, both parties each have a comparative advantage still in one good over the other. And so they do have different efficiencies. Now what about... Okay, so how do we go from that fact to specialization benefiting and the benefits of comparative advantage and the benefits from specialization? Well, we can look at the case, say, before specialization and then a case after specialization. And we're going to first look at the production aspect of things. Before... If we look at a situation where we have both parties spending half their time in resources producing each good, we note that Groucho would produce 150 bushels of mangoes and 300 pounds of beef. Harper, on the other hand, would produce 50 bushels of mangoes and 200 pounds of beef. So if we total it up in terms of like a subtle two-person, not quite but almost society, the total production would be 200 bushels of mangoes and 500 pounds of beef. Now, however, if Harpo, shall we say, completely specializes, if Harpo completely specializes in his production, he produces only beef, he produces 400 pounds of beef, and he produces no mangoes. And then Groucho finds it in his interest to at least partially specialize, so he produces 225 bushels of mangoes and 150 pounds of beef. If they organize their production that way, note that together they produce more of each, right? Mango production goes up from 200 to 225. Beef production goes up from 500 pounds to 550 pounds, right? So there's a 25-bushel gain of mangoes, a 50-pound gain of beef. And so if we engage in production according to efficiency, specialization in the market division of labor allows both parties to produce more, and hence it will also allow them to consume more. Groucho and Harpo can work out an exchange ratio that's beneficial to them, and that would be a ratio of, say, one bushel of mangoes for three pounds of beef. And if they work out that ratio, it's mutually agreeable. Harpo could trade 180 pounds of beef to Groucho for 60 bushels of mangoes. And if they do that, we see consumption after specialization and trade increase for both parties. Groucho is able to consume 15 more mangoes and 30 more pounds of beef than he could have without specialization in exchange. Harpo is able to consume 10 more mangoes and 20 more pounds of beef than he would have been able to consume before specialization in exchange. So we have here a situation where, note, participation in the market division of labor, specialization according to efficiency, benefits both parties by not only allowing them to produce more, but also to consume more. This is not just an exercise in increased production. It's increased production for the sake of consumption. It allows people to actually increase their standard of living. They're able to have access to more consumer goods that they can use to satisfy their ends. And that is what we call economic development, economic progress. Also note that this increased productivity is not merely the result of specialization per se. As people specialize, there can be economies of scale that are gained, but it's more than just that. What would happen, for instance, if Groucho specialized in beef production and Harpo specialized in producing mangoes? In other words, what would happen if they both specialized in that good at which they are least efficient? That would not lead to economic progress. That would lead to economic retrogression. There would be a larger quantity of both mangoes and beef produced given the resources at hand. That would not be economizing. And so it's not merely specialization, the act of specialization, that gets us to increased productivity. There are some that argue for this, and there are some gains. One of Smith's reasons why the Division of Labor increases productivity over time, he said is because as people specialize, they get better at something. And that tends to be the case, but that's not the main reason why the Division of Labor actually increases production. The Division of Labor increases total productivity because it allows people to specialize in those goods at which they are most efficient. That raises a question. What is it that accounts for the various differences in relative costs of production for different people? And the answer is the variety that we find both in humans and nature. People are not the same. People are different. There are differences in the suitability of natural resources for production of certain things. You may not know that there is not, I don't think any, king crab production in the sandhills of Nebraska. For the very reason that there are no king crabs in the sandhills of Nebraska. They only have fresh water and they have rivers. They don't have salt water. They don't have oceans. They don't have gulfs. At the same time, king crab production is the number one industry, or one of the number one industries in Alaska. There are a lot of king crabs around Alaska. Not a tremendous amount of around the year grassland. And so the differences in the suitability of natural resources makes it more likely for certain people in certain areas to specialize in cattle ranching and other people to specialize in king crab production. A second reason that people will find themselves relatively more efficient or less efficient in different lines of production would be the differences given in capital stocks. Some people have, say, let's suppose that you inherit from your parents or your grandparents certain land in western Nebraska that's already fenced in with certain amount of capital goods, certain amount of pickups and cattle tanks and a certain amount of fencing and animal husbandry equipment. That, off the bat, makes you relatively more efficient if you know what you're doing in, say, cattle production as opposed to someone who inherits equipment that's suitable for crab harvesting. And so the capital endowments also will affect significantly who's most efficient in what line of production. Also, of course, the differences in the skill or desirability of labor. The skill or desirability of labor. If somebody's really good at something or they're the least bad at something, that will make them more likely to be efficient in that line of production. I think people still know who Michael Jordan is, I believe. He was a pretty good basketball player in his day, commonly referred to as the goat, which I don't think has anything to do with animals here, although I mentioned animal husbandry. He's the greatest of all time, which is a big debate about that now, but he was pretty good in his day. And yet, for a period of time, he opted out of basketball and tried some of their sport. Yeah, baseball. And then he came back to basketball. Now, why did he come back to basketball? A lot of people say, well, because he wasn't any good at it. Really? He wasn't any good at it. He was in the minor leagues. How many people here have been in the minor leagues? Not me. I one day thought I was going to be a shortstop for the Pittsburgh Pirates, and I didn't even make it through the high school team. It's just the way things were. That proved not to be my comparative advantage. It's not all clear now how exciting it would have been to be that shortstop for the Pittsburgh Pirates, but in any event, it didn't happen. Well, Michael Jordan actually got playing time in the majors, but so he wasn't horrible at it. He just was a whole lot better at basketball relative to his competition. And so he compared to me, he had a comparative advantage in basketball and baseball compared to me, but he definitely was way more efficient playing basketball because of his differences in the skill and his abilities. And so different people specialize in finding their interest to be basketball players, some baseball players, some doctors, lawyers and such, some cowboys, because they have a different desire ability and skill of labor. Some are better than others. And so all of these differences then contribute to people's relative efficiency, their comparative advantage. Now another thing to note is that this comparative advantage is not a fixed set in stone, so to speak. It's not eternal. In other words, you can change comparative advantages. If you have a comparative advantage, maybe in being an academic, but you really have this love of food and cooking, you could take a couple of cooking classes and find you so proficient that, well, now my comparative advantage lies in being a chef. It can happen. Or some people that started out as being a chef then found themselves to become more of a TV personality as they developed skills and they left their cooking show and that just became a regular talk show host. So these types of changes can happen all the time. And then of course, since people participate and producers participate in the Martin Division of Labor for the sake of selling products, what they find it efficient to produce in, what line of production they find it efficient to produce in, is also going to be determined in part by the demand for products. So somebody could be very, very proficient at, say, rocket science, but if nobody cares about good rocket science, you're not going to be able to specialize that and sustain yourself. And so relative demand for the product, for the output, is also going to have an impact on what people find it in their interest to specialize in. But in any event, people specialize according to relative efficiency. And this illustration, this example was an illustration of the Law of Association. The Law of Association simply means or simply states that each factor of production is efficient in some line of production. That's the best way to think about it, I think. Something I learned from Dr. Hermer. Each factor of production is efficient in some line of production. And this Law of Association is a development of a universalization of the Law of Comparative Advantage made the Law of Association developed by Mises. Mises develops and universalizes the Law of Comparative Advantage to the Law of Association. And he does this in a couple of ways. He notes first that this law applies not only to nations, right? It's not just, you know, the British producing wool and the Portuguese producing wine, but it applies to each person, right? Within the entire economic order, each person is relatively efficient at something. And so this Law of Association applies to every person. And also, and as I mentioned before, it applies not only to labor, but also to land and capital goods, right? It's this Law of Association in some sense facilitates the division of production, not just the division of labor. And so each factor can be utilized to efficiency and as each factor is utilized according to efficiency, people reap the most output for the resources utilized. And this allows us to produce the greatest amount of output given the scarce resources that we have. And one implication of this, one implication of this is that employment can be expanded indefinitely, right? Indefinitely. As long as we have not reached the perfect saturation point, as long as we haven't reached the point where there's no more land and no more capital goods to be utilized by labor, labor can always find a niche as long as land is relatively abundant, there is a place for laborers to find their path, their way in the market division of labor. And so only technical limitations could effectively limit the extent of the division of labor. If population, for instance, increased so much so that every inch of land was taken up by production, then with people left over, then there would be no basis, there would be no further benefits from specialization according to efficiency. But as long as we're not at that point, and we've never been at that point, as long as we're not at that point, as long as we have a market economy, people would be able to find a place to produce both benefit others and benefit themselves in the market division of labor. Now as the division of labor develops, produces itself certain social effects. So we can say there are social effects of the division of labor. These are effects that impact broader society. For instance, as people specialize in the production according to efficiency, initial differences that contributed to comparative advantages become even more pronounced. And so as people specialize, say in cattle ranching, they accumulate more capital goods that are suitable for cattle ranching that makes them even more efficient in that line of production compared to other things. Or as somebody finds that they have a talent in doing something and they start to specialize at that, they do indeed become more skillful. My dad, for 20 years of his working life, worked at a meatpacking plant. In the first 12 years he spent at a beef plant, and then that plant got sold to somebody else, and he transferred the same company to a pork plant. And of course when you transfer some place, you don't go right to the top of the totem pole in terms of desirable jobs, right? You start at the bottom. And one of the bottom jobs that he could start at was a tongue trimmer. A tongue trimmer, what is that? You trim tongues, right? And this is not plastic surgery, right? It's not people that come into the pork producing plant wanting to look like a dragon or a lizard so you trim their tongue in a certain way. No, a tongue trimmer is one who trims the spit glands off of the pork tongue that's been taken out of the pig. And they were basically, as my dad explained it, sort of four knife cuts he had to make on one side. You flip it over in four knife cuts and the spit glands go down into this chute that then allows the glands to be used for other things, probably by Hormel, but then the tongue gets put in the tongue box, right? Well, dad when he first started, he said that, you know, he wasn't great at it, he was okay, but he found that the production operation was on a chain, a timed chain, so that he was getting a pork tongue, one pork tongue every four and a half seconds. Every four and a half seconds, a pork tongue comes down the chute. So he is trying to feverishly take care of these pork tongue glands. And at first, during his working period, he would have a pork tongue backup. In other words, it would pile up. And so when it came time for break, he couldn't go to break with everybody else because he had to finish doing his work. But then over time, he got so good at it, he became so efficient, he just knew where to put the knife, he knew perhaps what kind of knife to use. He just came better at it, so much so that he never had tongue backup unless he wanted it. So he would get to the end of the shift and the whistle would blow for break and he'd go off to break it and the whistle would blow and everybody goes back except he could stay around to the break room for an extra minute or two, drink, finish his coffee. He would go back to the table and there would be, you know, a couple, a minute or two's worth of tongue sitting there waiting for him, but by the end of the shift, he'd have him cleaned out, right? So he becomes more proficient. So that's just a very micro example of how, yes indeed, as someone specializes, they can become more skillful in a particular piece of labor and makes them even more suitable for being a tongue trimmer, right? But after a period of time, it wasn't very desirable and so he's able to, you know, attain a much better task for himself. But in any event, that's part of the social effects that as people specialize in production, efficiency, the initial differences that contributed to the comparative advantages become even more pronounced. A specialization within the division of labor also alters a geography sometimes. As people of different regions recognize as the comparative advantage, they have as a result of the natural resource endowments and labor endowments. They begin investing in capital goods that are suitable for the tasks at which they are more efficient and then that just further perpetuates the differences. And the increase, the increased productivity resulting from the market division of labor is even to the point of, on the one hand, promoting these differences in society. But as we promote these differences in society in terms of the skill, the desirability of labor, the differences in the balance of capital goods, differences in natural resources and geographic regions, if we have institutions that allow for voluntary exchange, those differences are not necessarily an occasion for social conflict. They provide for their impetus for the formation of society, for the coming together right now, not over me, but over voluntary exchange in the promotion of society. And this increased productivity that results from the market division of labor is the key factor that allowed mankind to escape our Darwinian struggle for survival. That allowed mankind to not be sort of fighting tooth and nail for every little morsel of food or consumer goods. Each participant in the market division of labor both serves others and is served by others. The market economy does not promote atomistic individualism, but promotes community. It promotes people working together to achieve their ends. And that is why Mises says the greater productivity of work under the division of labor is a unifying influence. It leads men to regard each other as comrades in a joint struggle for survival rather than as competitors in a struggle for existence. It makes friends out of enemies, peace out of war, society out of individuals. I have a wonder too, by the way, this is again from Mises to Socialism in 1922. I wonder if Mises used that term comrade sort of proposively, right? The real comrades are the comrades that are voluntary comrades through voluntary exchange. Not force, not be a comrade or to the gulag. But as we all know, if you want to make an omelet, you've got to break a few eggs. So, the division of labor, it seems like is a great thing. Are there any limits to it? What keeps the division of labor? Are there any constraints? What holds it back? And there are some. Adam Smith's famous statement is probably the best statement in his entire book. The division of labor is limited by the extent of the market. The production of something for which there is a market for that something, right? So, let's suppose, you know, you have Groucho and Harpo, and Groucho specializes in mango production, Harpo specializes in beef production, and then we have Chico, other Marx's brother. And Chico comes and he wants to specialize in rocket science, because that's what he likes. That's his thing, that's his passion. But in this simple not a lot of demand for rocket science, right? There might be more of a demand for huts, for living space, right? But not for rocket science. So, if Chico says, I'm going to specialize in rocket science because that's what I want, he would get no income. And so, it wouldn't benefit him. So, he has to find something that other people want, something he could sell, that kind of thing. And so, Chico maybe can produce huts or butter or shoes or what have you. But to extend the division of labor, to extend the division of labor, all we have to do is bring into the market more traders. We just need to bring others into the market and that allows for more of the division of labor. And this then opens a door for our first sort of seed of a theory of economic expansion that increases. That allows for the division of labor to increase. And as the division of labor increases, production increases. And as production increases, people become more wealthy. As they become more wealthy, they are able to trade away goods that they are producing and in some sense increases their purchasing power and allows them to buy more of what other things that they want which opens a door for an expansion of the extent of the market for a further specialization according to efficiency. A further extension of the division of labor which increases productivity even more which increases incomes even more which increases demand and the extent of the market even more which allows the door to more division of labor and so on and so on and so on. And so, as people extend the market that opens a door to more division of labor. And we constrain the market that constricts the possibilities we have through the market division of labor. And as is implied in my most recent comments, we can only benefit from the division of labor if we can exchange what we can produce. If we can exchange what we produce. If James P. Snee, if Hormel can't sell any spam, if they're prohibited from selling spam by some crazed lunatic, then that part of the division of labor is going to break down. So we can only benefit from the division of labor if we can exchange what we produce. And so without the ability to trade we would all have to produce everything we want to consume ourselves. We're back to direct use production which is a lot less productive. And we can only exchange in an environment of private property. Hence in order to take advantage of all of the benefits of the division of labor, both social and economic, the society must embrace and defend private property. Now what that means is, of course, is that a society that wants to enjoy economic progress needs a market division of labor, but that also means that production for the market becomes more challenging because instead of producing for yourself, you're producing for other people and you don't know exactly. You can't read other people's minds. You don't know exactly what other people want. And so that requires people like entrepreneurs and entrepreneurship which you will will be hearing or have heard. Do we have the lecture on entrepreneurship? We just did, didn't we? No, that's tomorrow. That's before any other lectures. Sorry. You'll be hearing more about that coming soon to a lecture hall near you. And with that I will close the day.