One of the founding fathers of modern economics. His most famous work was the Wealth of Nations (1776) - a study of the progress of nations where people act according to their own self-interest - which improves the public good. Smith’s discussion of the advantages of division of labour remains a potent idea.
A sociological term to describe the estrangement many workers feel from their work, which may reduce their motivation and productivity. It is sometimes argued that alienation is a result of the division of labour because workers are not involved with the satisfaction of producing a finished product, and do not feel part of a team.
Division of labour
The specialization of labour in specific tasks, intended to increase productivity.
Measure of value
A function of money where it can be used to judge the value of a good or service.
Medium of exchange
Money is any asset that is widely acceptable as a medium of exchange when buying goods and services in markets. It facilitates transactions between buyer and seller.
Method of deferred payment
A function of money that allows a system of making payments at a later date.
Money is defined best by what money does. Money – in its various forms – fulfils various key functions including a medium of exchange, a unit of account, a store of value and a standard of deferred payment.
A method of production where a business or area focuses on the production of a limited scope of products or services to gain greater productive efficiency.
Standard of deferred payment
A function of money - the accepted way, in a given market, to settle a debt.
Store of value
A function of money in that it can be used to save and be exchanged at a later time.
Unit of account
A function of money, a nominal unit of measure or currency used to value/cost products, assets (e.g. houses), debts, incomes and spending.