Specialization

Specialization greatly promotes economic growth. This is such a widely accepted truth for economists that they tend to take it for granted without thinking too much of it. But if we stop and think for a while, specialization is definitely not a natural phenomenon. In order for specialization to happen, the economic system needs to come up with an ingenious way to coordinate the behavior of all the economic agents. In essence, specialization is an all-encompassing coordination and cooperation among all the economic agents in the economic system. It starts to appear really puzzling when we notice that there is no central planner giving commands to people instructing them what to do. The market system just works like an invisible hand, putting people to where they should be and generate an efficient outcome for the society.