Thursday 16 June 2016

Is there any industry that we cannot specialize

We usually talk about how specialization improves productivity and generates additional economic growth; however, there is a question in my mind that if there exists some fields that we cannot apply specialization. Specialization does not work very well when the work can have many different states. If we apply specialization, we need many people to specialize in only one state and only one state will actually be dealt with once we observe the state. This is a waste of resources. To deal with this situation, we can have two solutions. The first solution is to forget about specialization and allow people to work in all states. The second solution is to let a computer do it for us. The advantage of a computer is that it can be programed to specialize in all states with specialized algorithm. Trading is a classic example that people need to handle many different states; and computers are doing relatively better job than us human beings.

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