Tag Archives: Adam Smith

The Division of Labor

Posted on by

Adam Smith’s Inquiry Into the Nature and Causes of the Wealth of Nations was published in 1776, and gives his descriptions of the things that are responsible for helping to build a nations’ wealth at the beginning of the Industrial Revolution. The first chapter speaks about the Division of Labor, which Smith states has been the cause of the greatest improvement in the increased productivity of labor. He gives the example of the pin-makers and their ability to increase productivity and output with a division of labor.  Each step in making a pin was performed by a different worker, allowing for a more efficient process and resulting in the creation of many more pins. If there was no division of labor and each man worked independently, they would not be able to produce the same number of pins. Therefore with the introduction of the division, no matter in what arena, there is a proportionable increase in the productive powers of labor. When a man is only responsible for completing one step in a process, his dexterity improves and he can increase the quantity of work he can perform, while saving time in the process. Each individual worker becomes an expert in their particular task, resulting in more work being completed more efficiently.

With an increase in technology and the development of new machines in the Industrial Revolution came the idea of the division of labor. The workers new ability to concentrate on specific tasks led them to become more skilled in that task. This specialization allowed for increased efficiency, a growth in output and increase in trade, leading to greater economic independence for the nation.

 

One Child Policy

Posted on by

Adam Smith claims that human growth will inevitably push the limits of agricultural growth, as humans reproduce at exponential rate and plant life does not. The limits of our agrarian capabilities are somewhat unknown, however, there is current awareness that if the human population does outgrow the available resource pool, the result would be wide spread starvation and death.

            The People’s Republic of China imparted the “One-Child Policy”, or the banning of Chinese families to produce more than one child without extra taxation, in 1979. The One Child Policy prevented an estimated 200 million births, and has greatly alleviated the overstretching of China’s industrial and agricultural resources necessary to accommodate its citizens. Over population and scarcity of resources is usually a byproduct of a society that is undergoing a rapid process of industrialization and urbanization, while simultaneously failing to expand its resource pool—the exponentially increasing population density despite the absence of adequate resources for maintenance. In contrast, less refined hunter-gatherer societies do not run into these issues, as naturally their populations do not grow exponentially in density because they lack the original resources and they must be mobile.

One Child Policy

Posted on by

Adam Smith claims that human growth will inevitably push the limits of agricultural growth, as humans reproduce at exponential rate and plant life does not. The limits of our agrarian capabilities are somewhat unknown, however, there is current awareness that if the human population does outgrow the available resource pool, the result would be wide spread starvation and death.

             The People’s Republic of China imparted the “One-Child Policy”, or the banning of Chinese families to produce more than one child without extra taxation, in 1979. The One Child Policy prevented an estimated 200 million births, and has greatly alleviated the overstretching of China’s industrial and agricultural resources necessary to accommodate its citizens. Over population and scarcity of resources is usually a byproduct of a society that is undergoing a rapid process of industrialization and urbanization, while simultaneously failing to expand its resource pool—the exponentially increasing population density despite the absence of adequate resources for maintenance. In contrast, less refined hunter-gatherer societies do not run into these issues, as naturally their populations do not grow exponentially in density because they lack the original resources and they must be mobile.

 

The Wealth of Nations and the Division of Labor

Posted on by

Adam Smith writes about the division of labor and its essential role in industry and innovation. He uses the example of a pin-maker with little experience, who may by himself manufacture only one pin in a day. There are as many as eighteen distinct steps that go into making a single pin; these are tasks that if all executed by one man take much longer to master and much longer to carry out. If these eighteen tasks are delegated to different pairs of hands however, each pair carrying out only two or three of these eighteen steps, the production of pins will skyrocket. This is also true for any industry. Even the simplest products take many steps and many different processes to manufacture. These individual tasks require varying levels of skill. When labor is divided among many different laborers there is less time wasted sauntering from task to task. A worker may concentrate on one task throughout the work day without switching his attention to another distinct task and having to adapt to that task after performing the previous one.

While it is natural for a person to saunter between tasks and to initially perform at a lower rate when starting a new task, it is also natural to innovate to improve efficiency. Smith uses the example of the boy responsible for opening and shutting alternately the communication between the boiler and the cylinder on the first fire engines. The boy naturally preferred to spend time with his friends over being constantly employed on the fire engine, so he invented a device to replace his job on the engine: he “observed that, by tying a string from the handle of the valve which opened this communication, to another part of the machine, the valve would open and shut without his assistance” thereby allowing him to “divert himself with his play-fellows.” Smith notes that the operators of machines are not the only drivers of innovation; the makers of machines and observers are also major drivers of innovation and improvements in efficiency. There are those whose only occupation is to observe and create improvements to existing machines and processes.

The division of labor in individual industries is an important device for efficiency, but specialization is also essential for innovation and efficiency. Smith points out all the different processes and industries that go into making something as simple as a wool coat: ship-builders, sail-makers, and rope-makers were needed to facilitate the ability to transport goods from place to place; tool-makers made the shears that were used to get the wool from the sheep and the shepherd raised that sheep. There are countless other professions and specialties that go into the seemingly simple process of making a wool coat. This is true for any other manufactured good as well.

The Wealth of Nations and Essay on Population

Posted on by

Chapter 1 of Smith’s famous text argued that specialization is key to economic growth. He explained how making each man a master of his particular trade makes production faster and leads to further innovation; a cycle of rapid growth then ensues. This growth spreads more wealth over more people, narrowing the gap between princes and peasants. Malthus, in his First Essay on Population, debunked Godwin’s argument that a more egalitarian society and economics will end poverty. Malthus mainly argued that population inevitably reaches an equilibrium with subsistence because population naturally tends to increase but subsistence is definite.

These two philosophers’ arguments are more closely related than they seem at face value. Malthus argued that population is limited by what the earth has to offer. Smith proposed a way to make production much more efficient–specialization. Increased specialization, makes production of materials, all of which are either directly or indirectly from the earth, more efficient. Therefore the more efficient production becomes, the more people the rather can support. The only true limitation on the human population is technology, which is forever developing at an increasing rate. Thus population capacity can never be accurately predicted. The factors which we see at limitations to the population capacity now are mainly space, food, water, and clean air. However, what if science brings up the ability to turn all waste from resources into new resources? Then space would become the final limitation. What if we then develop a way to live at higher elevations or beneath the sea? Questions like these seem unreasonable at the present day, but who could have predicted that nuclear energy would possible one thousand years ago?

Discussion on Capitalism

Posted on by

Marx: We are gathered here today to discuss our current economic, political, and social situation.

Smith: Politics? Social situation? I’m only here to talk about economics….

Marx: Well Smith when you improve the lives of citizens, and arrange politics so that it will benefit the people, economics will also improve.

Smith: Marx I’d have to disagree. You must first improve the economy in order to improve the lives of citizens.

Marx: But Smith the history of all societies has always been a struggle between classes: the struggle between the oppressed and the oppressor! It’s more complicated than simply economics.

Simon: Do you not see the interconnection between the oppressed and the oppressor, and how they are both to blame?

Marx: No! I blame the bourgeois for all the struggles of the proletariat!

Simon: But do you not see that it is the competition which is at fault? Competition makes everyone each other’s enemies.

Marx: Are you defending the bourgeois?

Simon: It’s not that I am defending them, but I am saying that all are hurt by the division of labor. You seem to believe that all bourgeois are successful. It is very easy for one to fall from their position as bourgeois into the proletariat class. Only the people who create the cheapest and highest of quality will succeed. Not only does this create suffering for that person, but it also wastes resources. All the machines in their factory will go to waste because of the high specification. Most importantly competition takes away humanity by creating a population who are hostile to each other.

Smith: How does it make everyone each others’ enemy? Working together, especially with division of labor creates higher efficiency because you aren’t switching from one task to another, and leads to further innovation.

Simon: They are enemies because in order to succeed in a capitalist economy one must destroy another person. It leads to people deriving satisfaction from others misery.

Marx: Smith you also have to think about the effects of overproduction when division of labor leads to too much efficiency.

Smith: I do not believe that there is such a thing as being excessively productive….That’s simply counterintuitive.

Marx: But when you produce too much it will lead to a surplus.

Smith: Yes a surplus that may be used to benefit the workers! They will be able to trade or increase technology with these surpluses.

Marx: Overproduction is an epidemic!

Simon: When you produce more than can be consumed you will end up with underconsumption which will lead to lower wages for the workers, and a lower quality of life.

Smith: How does this happen simply from dividing labor, and making everything more efficient?

Marx: You must see that when you take away specialization you make it so any citizen can accomplish all jobs. Now not only do you have a surplus of goods, but also a surplus of workers. Since jobs are so simplified, many people are capable of doing them, and there are no longer specialized jobs. This leads to a giant surplus of workers which allows employers to keep lowering wages. As Simon believes that competition leads to a lack of humanity, I believe that the division of labor takes away human qualities by making laborers nothing more than an extension of the machine.

Smith: But people have always worked, why now would they be so affected by their jobs?

Marx: All of the proletariat’s energy is focused on finding work, and working enough hours to be able to feed his family. This takes away his ability to maintain family values, to the point that he must send his children to work.

Simon: But do you see how the division of labor can be harmful to both classes?

Marx: The only way the bourgeois are harmed is in the revolution by the proletariat. I am organizing today who is with me?

Smith: I’m no activist. Publishing literature is enough for me.

Simon: Me too, Marx is too much of a rebel for my liking. I’m more for writing about my ideas, not taking action, but I wish you luck.

Locked Out

Posted on by

[Karl Marx sits in the hallway of his dorm room.  Claud de Rouvroy, who goes by “Simon”, trips over Marx’s outstretched feet.]

 

K: [quickly pulls his feet back] Ooh, sorry, man!

S: [getting up] Don’t worry about it… er, what are you doing?

K: I’m locked out of my room… Adam’s MIA. Have you seen him?

S: [dropping his bag and sitting down] Nah, not since Econ this morning. I’m kind of glad, though… it got a little intense today.

K: Ha, yeah, he was getting really defensive in the class discussion.  Tonight will probably be a little awkward.

S: Well yeah, the Industrial Revolution and communism/capitalism conversations always rile people up… we were totally right, though.

K: [excitedly] Oh, I know! What was he even saying?

S: I don’t know… division of labor… laissez-faire…

K: That industry was toxic, though. He agreed with that.

S: [shaking his head] No no, he disagreed.  He thought the industrial boom was great for society. He kept talking about all the jobs and merchandise it created.

K: Well yeah, but at the expense of the workers.  The free market in the UK led to the Industrial revolution, which led to a huge gap between the rich and poor.

S: I think what Adam was trying to say was that when labor got competitive, wages went down, because everyone wanted whatever job they could ge-

K: Right, which is bad for the working class.  Low wages mean more members of a family are forced to work.  They devote so much of their time to work that hardly pays off- literally, because wages still drop.  And then on top of that, they were expendable. Anyone could learn to do their job, and they could be replaced immediately.  How does that help the working class?

S: Well it doesn’t, but he did mention afterward that on the other hand, when employers got competitive, wages went up.  Like a fluctuating cycle.  I think Adam was sort of saying that it could benefit the eco-

K: [scoffs] How?

S: [he takes a moment to see if Karl is going to continue] -…benefit the economy by stabilizing it.  The whole “division of labor” idea.  Everyone gets really good at one thing, does it really well, and production increases exponentially.  This creates a booming economy, and benefits all the citizens. [He pauses, frowning.] That’s where I really disagree, though.  What good is having a booming economy if the workers can never enjoy it?  Society doesn’t really improve if the rich, business-owning class is the only one that reaps the benefits.

K: Right, and that’s when Adam agreed that the working, proletariat citizens would realize they were being oppressed and revolt against the powerful bourgeoisie.  That would lead to a proletarian-controlled society that would then develop into a truly just Communist society, where everyone puts in equal work and receives equal resources.

S: Er… no. That’s when Adam started his spiel on how the proletariat individual doesn’t matter as much as the country as a whole.  If the country is being moved along by the progressive inventions of the working class, then it is a success.

K: [glaring] That’s what you think?

S: No! You asked what Adam thought! I’m agreeing with you.  The success of a nation can’t just be defined by its levels of production… especially if high production results in low quality of life for the vast majority of its citizens.

K: [throwing his hands up in frustration] Adam doesn’t get it!

S: [he nods, inspired by Karl’s enthusiasm] How can he understand the poor? He doesn’t even get financial aid! What does he know about hard work?

K: [He pauses, furrowing his brow] Simon, isn’t your dad an investment banker?

[Both boys are silent for a moment. No eye contact is made. Just as Simon is about to speak, a portly woman hastily rounds the corner.]

DPS Agent: [out of breath] I got a call for a lockout.

 

 

St. Simon and Smith vie for the job

Posted on by

The year is 2012, and St. Simon and Adam Smith appear in the corporate headquarters of a multi-national corporation known for its sleek computers and cell phones. Both are interviewing for the position of Chief Executive Officer. The two men acknowledge each other and sit in a terse silence while waiting to be called in to their interviews. Smith turns on CNN to lessen the tension.

St. Simon: Ha! Look at that. The employees in our China plant are revolting again. Good going on that one, Smith!

Smith: Not my problem, Simon. Capitalist systems aren’t responsible for the conditions within factories – all they ensure is one damn fine profit. Go cry to the HR department.

St. Simon: Typical Smith. Hey, you still doing that erroneous thing where you equate the accumulation of capital ensures the happiness of society?

Smith: The job of the workforce is to supply goods to the great masses of people who want them! Capitalism simply delivers the product that everyone wants in an efficient way. A capitalist society fosters the unity and cooperation of its citizens in the work force.

Simon: Pft! Capitalism divides industrialists who are driven by competition and creates separate classes of laborers and owners. It encourages egoism and degrades happiness to the triumph of one man over another.

Smith: You are mistaken. Capitalism allows wealth to trickle down to the workers, who in turn can purchase whatever they may have occasion for, cycling money back into the economy.

St. Simon: Right! That stuff didn’t work under Reagan and it won’t work here. Your stance degrades all matters of the human experience to the what a man’s got in the bank. The division of labor neglects to acknowledge the inherent worth of man, and instead reduces his role in society to that of a cog in a machine. The practice is dehumanizing and makes men a mere means to an end – the end being the accumulation of wealth in the pockets of the few at the expense of the masses. And on top of this, the industrialist becomes a worshiper of capital, a slave to material goods.

Smith: You’ve always been a bleeding heart. Without capitalism, the only thing that can be sure to be distributed equally is unhappiness and squalor. Our assembly lines increase the dexterity of the workers. By dividing labor we ensure the cooperation of laborers and increase morale. Our increased production bolsters lets more people buy our overpriced products, putting money into their economies and into my bank account. And hey, at least our workers people have jobs! If we pulled production out of China, there would be nothing for them. We’re doing a public service.

St. Simon: The division of labor eliminates the need for specialization or expertise. Any idiot can perform the job of one of our factory workers, and this makes him a slave to his employer, for he knows he can be replaced at any moment. And the division alienates the laborer from the product he is creating! You think any of the guys down on the assembly line have ever actually been able to afford what they spend all day producing? That’s the biggest hole in your logic Smith: though you speak of social unity, and the harmonization of supply and demand, the divide between the laborers and the factory owners creates a social disorder that negates any potential good that could come of the system of capitalism.

Smith: Hang on… why the hell are you even here, anyway?

Simon: I plan on nabbing the CEO position and driving this place into the ground.

Smith: Good luck with that. Hey, I heard that guy Marx from accounting has a crush on you. 

Marx’s First Day On the Job

Posted on by

Karl Marx arrives for his first day of work in a factory, only to find that Adam Smith happens to own the factory.

Marx: You’re kidding me, right?

Smith: Sorry?

Marx: I’m taking on this factory job to, you know, unite with the proletariat and stuff, and I get landed with Adam Smith as my boss. This is just too perfect.

Smith: Um…

Marx: Well, I spend every flipping day inciting workers to unite against the bourgeoisie, and actually see that they are part of one big, sad, oppressed class. And now here I am, standing across from the man that basically let the whole bourgeoisie class feel guiltless about stripping the proletariat of their humanity.

Smith: Oh, so you think I’m the reason the bourgeoisie doesn’t feel guilty about the so-called oppression of the proletariat? Actually, wasn’t it you who said that the class situation of the bourgeoisie makes them think the way they do about the world? If you really believed your own theory, you would believe it was impossible for me to have influenced their attitudes towards capitalism.

Marx: You know who I am, then? You’ve read my stuff? Aren’t we proletarians just one big, nameless commodity to you? Come on, admit it.

Smith: I would hardly call you a proletarian.

Marx: Whatever. Let’s tour the factory. Oh, do you see this assembly line? Know what it does?

Smith: Sure. Every worker’s job is reduced to a simple, small task, to the extent that their skills increase tenfold at that one, single task. Not to mention, they aren’t wasting time switching between jobs. The assembly line increases efficiency.

Marx: And you think that’s a good thing?

Smith: Certainly. Just look around the world. The most efficient industries produce the best products and generate the most revenue. Simply put, the quality of their citizens’ lives are just better.

Marx: Come on now, which citizens’ lives are you referring to? Our society only ever looks through the lens of the bourgeoisie. If we were to look through the eyes of the proletariat, we would see that the oversimplification of labor drives wages down, which in turn forces more members of each family to enter the work force. And then, what do you know, the larger work force creates more competition for jobs, which in turn further lowers wages. So tell me, who has this high quality of life to which you are referring?

Smith: Um, the country does. The country is improving and moving along. I never said anything about the quality of life of the proletariat. Anyway, wouldn’t you agree that before the division of labor, everyone was saddled with more work? In unindustrialized countries, people many different types of work, whereas here, one only needs to do one type.

Marx: Well, at least in those countries, everyone is still connected to the product of their work. No bourgeoisie is exploiting them, either; they don’t have to undersell their labor to anyone.

Smith: So you’re proposing that we go back to caveman times?

Marx: No, I’m proposing that the proletariat take control the means of production, rather than continuing to suffer under the bourgeoisie.

Smith: You make it sound so easy. Don’t you see that everyone is selfish? They’re not going to give themselves up to the cause, or let any property be “public property” like you imagine. Selfishness, by contrast, is what makes capitalism work; it’s what causes entrepreneurs to rush into good industries, and drop out when they have negative profit margins. Selfishness creates that balance between supply and demand.

Marx: Haven’t you read St. Simon? At least he thinks of how the people will suffer before balance is achieved. Anyway, I’ve got to go. I’m finally here among the proletariat, and they still haven’t achieved class-consciousness. I’ve got work to do.

Smith: Sure thing. And I’m going to go increase the efficiency of my factory. After all, I’m after profit.

Marx: Sounds amoral, man, but you’ll be powerless one day.

 

Smith: Good luck with that.

 

 

Marx and Smith

Posted on by

Sam Wittmer

 

Two men sit at the bar, each contemplating his respective drink.  Across from the two, in a booth on the other side of the dark room, a group of factory workers sits down.  It is the end of their day; the workers are tired men, wearing rags and clearly exhausted, but nonetheless making jokes and laughing.

Karl Marx:  This is truly a sad sight.  I know the pain that those ironworkers and smelters must be feeling.

Adam Smith: Why do you say that?  Surely they have jobs and are able to provide for their families.

M:  Ah, but you must see that these men are a broken people.  They are the proletariat of London.  They face constant exploitation from the bourgeoisie, who care for nothing but producing more and more.  The modern Bourgeois, forged in the wreckage of feudal society, now oppress these wage-laborers and treat their personal worth as simply an exchange value.

S:  Well, that is very strange of you to believe.  I think of it as somewhat of a—how do I put this? —Oh, I know—an invisible hand! This new division of labor that we now see greatly stabilizes the economy and increases production and advances technology.  With each one of those factory workers creating a single part of a product, they are able to produce faster, greater quantity and greater quality of products.  Thus, we must allow as much production as the markets will allow.

M:  But this division of labor has made the workingman expendable, and his masters view him as having a low exchange value.  The reason for this is that division of labor creates workers who are easily replaced by others, therefore the factory owners may pay their workers only enough to keep them alive—in this way they survive only to produce more for the bourgeois owners, and have no humanity.

S:  Let me continue on the invisible hand controlling the markets in relation to this previous statement.  Those workers will not work if they are not being given fair compensation.  This is also how the economy works—people will not buy a product if it is not a fair price.  Producers must be fair in their trade, for the market will not allow it to be otherwise.

M:  The people in fact do not have a choice of how they live.  Their sole property is their own physical labor, and this they sell to the bourgeoisie and become commodities.  The proletariat will overthrow these chains of capitalism because conditions will simply be too terrible to bear.  The proletarian revolution will bring about a Communist society where all property is held by the state with centralized production.  All will earn the same.

S:  If all people are to make the same and also have no personal property, then for what will they work?  Innovation will come to a standstill, as incentive is no longer present.  Furthermore, why do you think that these people will be able to get along?  No one will be in charge if they are all equal.

M:  They will in fact all be the proletariat and have an abundance of goods.  When there is no want of food and shelter, there will be no strife.  History is the history of class warfare—the tale of one group oppressing another.  This revolution will effectively eliminate the need for class struggle because there will be no classes.  As for order, it will be a democracy controlled by the people.

Plato: (lurking in a dark corner of the bar) But lead to tyranny, Democracy must!

S:  Who was that?

M:  I do not know but I believe it is our cue to leave.

S:  Indeed.  Well I believe I will see you again next Friday, Karl?

M: Ah, of course Adam, I do enjoy our conversations.

They exit.