Division of Labor

Division of Labor

BIBLIOGRAPHY

The phrase division of labor can justifiably be used to indicate any form of work specialization, such as the division of labor between men and women; and yet, ever since Adam Smith’s The Wealth of Nations (1776), it has come to refer to the division of tasks within an industrial process. Smith saw the division of labor within the industrial process as enormously efficient and illustrated his argument by the now hallowed example of the pin factory. A competent pinmaker, we are told, could not make more than twenty pins a day, whereas, upon dividing the tasks into eighteen operations, such as drawing, cutting, grinding, and so on, ten men can make over 48,000 pins in a day. On an average, therefore, each individual’s productivity is increased 240-fold. The example is especially interesting because the productivity increase involves no change in technique—it is purely a case of applying existing knowledge more efficiently. The only limit to such productivity lies in the ability to sell the additional output, hence Smith also tells us “That the division of labour is limited by the extent of the market” (1776).

We are emphatically told in chapter 1, Book I, of the Wealth of Nations that the division of labor is the most important reason for greater production and is the primary force leading to prosperity:

The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity and judgement with which it is anywhere directed, or applied, seems to have been the effects of the division of labour. (p. 13)

It is the great multiplication of the production of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people. (p. 22)

Three reasons are given why a concentration of effort upon a single task increases efficiency. First, the skill of individual workers is much improved by specialization; secondly, workers save time and effort involved in having to switch from one operation to another; and finally, the division of labor facilitates the invention of machinery. The three reasons are most applicable only in manufacturing and Smith notes that agriculture is not suited to the division of labor, with the implication that one is not to expect much growth in that sector.

The rhetorical force of Adam Smith’s presentation has to be separated from its economic analysis. All individuals have identical capacities in Smith’s presentation and he ignored the traditional view of the division of labor as permitting individuals to perform those tasks that were most suitable to them. Dugald Stewart, Smith’s successor at Edinburgh, criticized each of Smith’s three reasons. Stewart grants that a workman gains in dexterity by concentrating on one task, but the efficiency gains thus obtained he considers to be quite limited (Stewart 1855, vol. 8, p. 315). Secondly, while it was perfectly true that a worker saves time by not having to change jobs, such gains are of small magnitude. If, then, the division of labor is to explain the productivity of labor, it must be by its influence upon the invention of machinery (p. 319).

Stewart now made two very significant innovations. First, his analysis of production focused on breaking production processes down into a series of simple tasks, as simple tasks are the ones that are most easily mechanically duplicated; gains in time and dexterity followed as a corollary of this attempt at simplification. Secondly, the entrepreneur and not the worker is put at the center of the stage. Stewart doubted that workers themselves would engage in the invention of labor-saving machinery, as Smith had conjectured they would, because the effect of such improvements indeed might even lead to his being unemployed. It is the capitalist who is driven by the lure of profits to continually improve his machinery. E. G. Wakefield later elaborated upon this far-reaching criticism by insisting that every successful division of labor must be accompanied by a plan for its subsequent combination. Coordination was prior to, and critical for, the successful division of labor. Smith’s one-sided emphasis Wakefield found to be “not only very deficient but also full of error” (Smith [1776] 1840, p. 33).

Later generations have made the division of labor the paramount principle underlying profitable international trade. The international division of labor is a feature that Smith himself laid little stress upon and the argument about its centrality is based on a misinterpretation. The phrase division of labor can be used for any activity where there is some element of specialization. When used in the context of international trade, to suggest that trade between two countries is beneficial in allowing two countries to specialize, what is being referred to is, however, not at all the same phenomenon that occurs in the pin factory. The gains here typically arise from the different endowments of the two countries, not from the subdivision of tasks within a unified process.

From the scholarly point of view it must be regretted that Smith (1) neglected the fairly extensive British tradition—Petty, Maxwell, and Harris, to name a few—of viewing the division of labor as a factor in productivity, and (2) failed to acknowledge his debt to the Encyclopedie (see Kindleberger 1976, p. 1). Not only does the example of pinmaking appear to have been taken from the French Encyclopedie, the three advantages of the division of labor are also distinctly stated there as well. (This point is distinctly noted by Edwin Cannan, editor of the fifth edition of the Wealth of Nations, and subsequently by Roy Campbell and Andrew Skinner, editors of the 1976 edition.) When Adam Smith and Adam Ferguson fell out in the 1760s and 1770s, Smith appears to have accused Ferguson of plagiarism—to which charge Ferguson justifiably replied that he had only dipped into the same French source as Smith (Hamowy 1968).

Charles Babbage (1791–1871) and, independently, the Italian economist Melchiorre Gioja (1767–1829) elaborated on Stewart’s insight that work could be matched to individual abilities: “The master manufacturer, by dividing the work to be performed into different processes each requiring different degrees of skill and force, can purchase exactly that precise quantity necessary for each process” (Babbage 1832, pp. 137–138). (Babbage also claims that needlemaking is more illustrative of the division of labor than pinmaking.) Andrew Ure considered the same issue through the employer’s eyes and noted how important subdivision is to the social control of industry. The function of science is to mechanize every “difficult” process so as to reduce the bargaining power of skilled workers (Ure 1835, p. 19). Wherever a process requires particular dexterity and steadiness of hand, it should be withdrawn as soon as possible from the “cunning” workman, who is prone to many kinds of irregularities, and entrusted to a specific mechanism, so self-regulating that a child could supervise it. Babbage, Gioja, and Ure foreshadow the twentieth century views of F. W. Taylor and Henry Ford, who wanted to replace worker initiative with rules and assembly lines. With Ford and Taylor, and their associated production philosophies Taylorism and Fordism, the view of the worker as robot was virtually complete. It appeared that efficiency requires a dehumanized work environment. Yet labor disputes and poor production quality, quite apparent to all by the 1980s, suggest to many that traditional Taylorism and Fordism are at an end. The latest step has been to globalize the division of labor by shipping out unskilled work to low-wage countries, a process that has the added advantage of removing the alienated worker from view.

Ensconced within the Wealth of Nations, however, was a potent message about alienation. After having extolled the division of labor in Book I, in Book V Smith emphasized the way in which the division of labor turned human beings into mechanical morons: “The man whose whole life is spent in performing a few simple operations … has no occasion to exert his understanding, or to exercise his invention.… He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become” (p. 781). This acquired stupidity makes the ordinary worker an indifferent family man and a poor citizen. Because of this considerable danger to civil society, Smith went against his usual principles and urged the state to become involved in providing primary education. The suggestion that primary education would suffice to save the worker from an alienated, almost disembodied, existence drew Karl Marx’s acid remark that Smith had sought to cure the major ill of industrialism with a “homeopathic dose.” It is rumored that Smith was indebted to Rousseau for the “alienating insight,” but, be that as it may, Smith is properly considered parent of the major stem of modern labor relations and stepfather to the opposition. The dominance of Taylorism as the ideology of work in the 1930s caused a reaction that is exemplified by Elton Mayo’s insistence that human relations in the workplace are crucial to maintaining productivity.

The casual treatment of the worker’s welfare in the American workplace is to be contrasted with the considerable care taken in the molding of engineers. William Wickendon wrote that educational leaders of the 1920s saw the college as being like a factory and urged that colleges must take raw material and “turn out a product which is saleable,” with the significant implication that “the type of curriculum is in the last analysis not set by the college but by the employer of the college graduate” (as quoted in Noble 1984, p. 46). The most effective spokesman for engineering education, William Wickenden emphasized teamwork, rather than individualism. The new “engineer for industry” was urged to be a good subordinate. One notes that these are the very complex of attitudes that America had to “relearn” from Japan in the 1970s and 1980s!

The social approach to technology looks at Fordism as the primary source of misleading insights. In turn, Fordism arose from glorifying the productivity of the pin factory. In order for large capital expenditures to take place, both corporation and state need to be socially stable. Yet such social stability is difficult to arrange under modern conditions, unless one pays attention to the worker’s welfare. The full message of the division of labor is a complex one and far too much has been lost by focusing upon the making of pins.

In addition, the effect of the division of labor was to fix attention on one simple operation, whereas the improvement of machinery required knowledge of a great variety of operations. The “popular” view of technological progress sees it as occurring outside the control or guidance of the worker, who has the challenge of adjusting himself to the technology at hand. And yet, one has to remember that perhaps as much as 40 percent of the technological improvements that occurred in the textile industry during the Industrial Revolution have no assigned source. These were all improvements that occurred as workers made small, “invisible” improvements whose aggregate effect was quite noticeable. Of course, there are no rules for obtaining such invisible changes, but we can be sure they will happen if we possess a literate, inquisitive, and enterprising labor force. The creation and sustenance of such a labor force is a social process and it makes the successful implementation of any technology policy the result of investment in building up the requisite social foundations. The modern history of labor use has scarcely proceeded along these lines, however (see Rashid 1997 for a historical review).

The appropriateness of the Fordist model has also been called into question by new alternatives to mass production, such as the Just In Time (JIT) production (also called “flexible specialization”) adopted in Japan. The smallness of readily available markets in Japan meant that firms needed to adapt their production strategies. Instead of mass-producing at low costs, they now had to produce relatively small quantities of high quality goods at affordable prices. This was a considerable challenge, requiring product innovation as well as cost minimization.

JIT manufacturing also required further changes in the philosophy of production, best exemplified by the automobile industry. Automobiles are discrete products—as opposed to dimensional products, which are sold by volume or weight. Resetting machinery for discrete products takes time; to reduce the costs associated with machine resetting, workers needed to have several skills. Because quality control became essential to every step of the production process, and because even research and development needed to be discussed factory-wide, unskilled workers with minimal initiative or independence, so appropriate to Fordism, became a liability. While JIT manufacturing requires intelligent, cooperative employees, there is, of course—just as in any other system—nothing to prevent these employees from being overworked.

SEE ALSO Change, Technological; Productivity; Smith, Adam; Taylorism

BIBLIOGRAPHY

Babbage, Charles. 1832. On the Economy of Machinery and Manufactures. London: C. Knight.

Cooper, Arnold, and Timothy Folta. 1999. Entrepreneurship and High Technology Clusters. In The Blackwell Handbook of Entrepreneurship, eds. Donald L. Sexton and Hans Landström, 348–367. Oxford: Blackwell.

Easterlin, Richard A. 1981. Why Isn’t the Whole World Developed? Journal of Economic History 41 (1): 1–19.

Fransman, Martin. 1986. The Shaping of Technical Change. In Technology, Innovation, and Change, ed. Brian Elliot, 7–16. Edinburgh: University of Edinburgh.

Freeman, Christopher, John Clark, and Luc Soete. 1982. Unemployment and Technical Innovation: A Study of Long Waves and Economic Development. London: Frances Pinter.

Hamowy, Ronald. 1968. Adam Smith, Adam Ferguson, and the Division of Labour. Economica 35 (139): 249–259.

Kindleberger, Charles P. 1976. The Historical Background. Adam Smith and the Industrial Revolution. In The Market and the State: Essays in Honor of Adam Smith, eds. Thomas Wilson and Andrew S. Skinner, 1–25. Oxford: Clarendon.

Mayo, Elton. 1933. The Human Problems of an Industrial Civilization. New York: Macmillan.

Noble, David F. 1984. Forces of Production: A Social History of Industrial Automation. New York: Knopf.

Rashid, Salim. 1997. The Myth of Adam Smith. Cheltenham, U.K.: Edward Elgar.

Rosenberg, Nathan. 1970. Economic Development and the Transfer of Technology: Some Historical Perspectives. Technology and Culture 11 (4): 550–575.

Smith, Adam. [1776] 1840. An Inquiry into the Nature and Causes of the Wealth of Nations, ed. E. G. Wakefield. London: Charles Knight.

Smith, Adam. [1776] 1976. An Introduction to the Nature and Causes of the Wealth of Nations, eds. Roy H. Campbell and Andrew S. Skinner. Oxford: Clarendon Press.

Stewart, Dugald. 1855. Lectures on Political Economy. Vol. 8–9 of the Collected Works of Dugald Stewart, ed. Sir William Hamilton. Edinburgh: T. Constable, 1854–1860.

Ure, Andrew. 1835. The Philosophy of Manufactures; or, An Exposition of the Scientific, Moral, and Commercial Economy of the Factory System of Great Britain. London: C. Knight.

Salim Rashid