Smith, Marshall and Young on division of labour and economic growth

The aim of this paper is to reconstruct the theory of division of labour andeconomic growth proposed by Adam Smith and developed by AlfredMarshall and Allyn Young. In their approach division of labour is the mainengine of growth and plays a central role in capital accumulation andtechnological progress. We suggest that, according to their theory: 1)economic growth is endogenous; 2) it has the nature of a cumulative, pathdependentprocess; and 3) it can be described as a disequilibrium process,supported by competitive forces. We argue that these aspects make thecontributions of Smith, Marshall and Young still insightful for thedevelopment of growth theory, even in the light of the modern approachof endogenous growth theory.