Adam Smith, the Division of Labor, and the Machine Problem

Here are the chalkboard notes (from last semester).

Recall,  that out of the enclosure movement comes the institution of private property, which leads to production for exchange, which eventually leads to development of a labor market. Adam Smith was analyzing a handicraft, petty commodity production system, which he saw as a "natural" system of perfect liberty:

• Natural rights doctrine – against divine rights 
• Against monopolies - such as those established by the crown, like the East India Co.
• Envisioned a highly competitive system of production and exchange that would make it so that no one individual could amass much economic power. 

Through their mutual self-interest society as a whole would benefit. Division of Labor - > productivity -> increase in the wealth of nations.

1. Increased dexterity 
2. Time saved by not moving between stations 
3. Specialization would lead to innovation in technology to increase productivity. 

Can you think of examples of division of labor in production? The assembly line is a classic, but modern example (the assembly line did not exist in Smith's pin factory example). This video shows the production process of the old Model T Ford. Take note of how many workers there are relative to the machines.
This one documents the much later Dodge production process (with audio!). Are there any differences between the ratio of workers to machines between this one and the first video?
Contradictions in Smith: This passage from the Wealth of Nations captures some misgivings Smith had about the division of labor and its effect on the welfare of the individual

In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of people, comes to be confined to a few very simple operations, frequently to one or two. But the understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible to become for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging,...... 

This is why Smith advocated for free public education. This is something to think about when you read about schemes to privatize public education in America.

Marx: Whereas Smith was writing on the dawn of capitalism (really he was looking back to the end of the age of handicraft production; thought mercantilism was antithetical to this ideal – Jeffersonian ideal), Marx lived during the rise of the industrial revolution and witnessed the excesses of laissez faire. Saw the system as both alienating and exploitative. In a system in which workers must work for wages in order to purchase the goods and services necessary to stay alive, he thought the capital accumulation process was a major source of unemployment, poverty and what he called the immiseration of the proletariat.

How can capital accumulation which raises productivity and leads to an increase in the wealth of a nation be bad for the worker? With fewer workers necessary to carry out production, labor becomes "redundant." Is this true today? Well, take a look at this last video of automobile production and compare this to the previous two? What is the obvious trend here?