Professions and urbanisation

The division of labour is specialisation. In its ideal form, it is achieved when someone can fill a specific area of - in Durkheimian terms - societal work. And he can do this if the income from the provision of this part of the work is at least sufficient to maintain his existence, or, to put it in Marxian terms, to reproduce it in society. Where population density is sufficiently high, the spread of the division of labour is almost a matter of course. The reduction of distribution costs increases the number of market participants, and this increase allows more and more participants to devote their entire lives to a single specialisation of labour. Smith took this development so much for granted that he dealt only with the cases that were repugnant to him. He believed that the so-called professions do not earn an annuity income because of some professional competence, but because they live in cities where they may have many clients. Looking critically at Smith's argument, we have to conclude that at the level of the phenomenon Smith is right, that the professions tend to live in cities. However, this is not necessarily because, as Smith believed, professionals are ruthless (immoral, if you like) in the way they exploit their monopoly of competence. An explanation can be found even assuming benevolence. The professions require a high level of training, so that their representatives are few in number in the population, but their services are in demand by many. Thus, professionals play a central role. The need to meet the needs of their clients to the greatest extent possible, therefore, leads professionals to locate themselves in central places, i.e. in cities, in order to reduce the deadweight. What is true of the professions is also true of the occupations: the development of the division of labour is a symptom of urbanisation.

Excerpt from Károly Halmos: A Hitel ökonómiájának morálja és a társadalomtörténet morálökonómiája [The Moral Economy of Hitel and the moral economy of social history]. In: Jólét és erény: Tanulmányok Széchenyi István Hitel című művéről. Hites Sándor (ed.) (Hagyományfrissítés 2.) Budapest, Reciti, 2014. 133–146.