Welcoming the 7 billionth neighbor



Welcoming the 7 billionth neighbor

Steven Horwitz | Nov 01, 2011

Steve Horwitz was cited in Berin Szoka’s Salon piece on the world’s 7 billionth person.

Smith’s less appreciated insight is that “the division of labour is limited by the extent of the market.” More people means more buyers, too. “Smith’s point, as economist Steven Horwitz explains, “was that the degree of specialization that one would see in a given market depended upon how much demand there was for the specialized product. Thus, small towns rarely have ethnic restaurants beyond the very popular Chinese and Italian, nor do they have radio stations that specialize in very narrow musical formats…. Larger, wealthier communities can support this degree of specialization because there is sufficient demand, deriving from a larger population and a larger degree of wealth being produced.”

' '