The Evolution Of Transaction Costs, System And Division Of Labor

The division of labor is a basic phenomenon of economy and also an important symbol between human beings and animals. Division of labor in human society is not only more complex in its character but also in its evolution process from simple to complicated. It is the one of proposition with few doubt and dispute form economists. The level of division of labor can measure the level of productivity and the economy development degree of a nation or a region. Its evolvement means the development of economy. Therefore,the lag and stagnation of a country can attribute to underdevelopment of division of labor. so, what are the factors which impede the evolvement of the division of labor?The division of labor makes people can concentrate on one or several production. However, people's demand are various. so the basic contradiction of division of labor is caused by the oneness of production and the deverity of demand. As a result, the society needs a mechanism to harmonize the division of labor. There are two kinds of harmonize mechanism:plan and trade. Transaction is the most universal harmonize mechanism but have its cost. Various governance mechanisms are needed because the information asymmetry and transaction monopoly as well as individual opportunism trendency caused by division of labor. Implement the mechanism have its cost which is called transaction cost.When transaction cost exists, individual should weight the profit from division of labor and transaction cost before making decision. Therefore, transaction cost influences the level of division of labor. However, on other hand, the division of labor also affect the trade.The evolvement of division of labor induce the emergence of transaction method with higher efficiency. So, division of labor and transaction could stimulate each other. Individual innovate action caused the enhancement of the level of division of labor and the appearance of new transaction governance mechanism. and then propel the development of both division of labor and trade. By this way, transaction cost is endogenetic in the course of evolvment of division of labor. But individual...