The Economic Growth And Cycle Caused By The Evolution Of The Division Network Of Labor

This paper explains the economic growth and economic cycle as the macro phenomenon of the labor division network's dynamic evolution,which is a dynamic evolution process driven by the micro economic individuals' trial and error actions and these actions' interaction under uncertainty.This dynamic evolution methodology treats the evolution of the labor division network and the economic development as a social selection progress,which is a market process based on the mechanism as following: the economic individuals' make amounts of trial an error,these actions compete with each other and which stimulates the organizational changing and institutional arrangement innovation and production mode updating(which also compete with each other),then all of these process causing the variation of the labor division network's size and inner structure.This dynamic evolutive analytical perspective can avoid the limitations of reductionism and it provides a micro foundation for the macro analysis.The vertical division of labor expands the economic activities carrying out in order at the different time to the activities executing in different place at the same time,which makes the operations more refined and streamlined and which also makes the mass production can came out simultaneously,which relaxes the restrictions put on production by the production cycles and individual's work time and geographical space,which also leads to the intergenerational division of labor,and expands the scope of human economic activity and improves productivity.The horizontal division of labor implements the specialized production of the different products on the same division level,which increased the goods diversity and improved the degree of specialization and the increasing returns of scale.The knowledge division of labor improves the efficiency of knowledge creation,transfer and utilization,which is the base of technological innovation and uncertainty reducing.It can increase the efficiency of exchange and information transfer that the specialization of the trial and error on the innovation of organization and institution and the selection of productive mode,which would improve the coordination efficiency within the division networkof labor.The individual's trial and error actions and its' choices of specialization cause the expansion of the labor division network and complicating the network's structure,which increasing the economic dependence between individuals.The constraints of geospatial on production drives the industrial agglomeration of the division department intensive using of land,which perform as urbanization.The difficulties of coordinating the specialized sections in thedivision network of labor is increasing accompany with the evolution of the labor division network.Monetary institution,the price mechanism based on the monetary system and specialization of information industry can improve the efficiency of the interactions among the specialized departments in the division network,which can reduce the risk of coordination failure within the division network.The structural of the labor division network consist of the financial chain,production chain,and which also determined by the connectivity of the division network and its communication efficiency.Since the economic activities is time-consuming,the activities' adjustment is cost,the collective action of decentralized individuals' choice is difficulty,and there are exchange and information costs,the structure of the division network is rigid.The structural rigid could accumulate the distortions within the economic system,which increasing the risk of coordination failures of the partial or the global network.Since government can affect the efficiency of exchange and information transfer directly,its action is important to economic development.When the government action is interfered the information transfer mechanism within the labor division network and disturbed the structural adjustment of which,it will increasing the risk of economic fluctuations and impeding the evolution of the division network.When the government action improved the efficiency of exchange and information and reduced the rigid of the network structure and encouraged the individual's trial and error,it will promote the evolution of the division network,and improve the economic development.