The Spaniard looked up at the magnificent scene in front of him and gasped in amazement. The year was 1436 and he was in Venice to see how the Italian city state armed its warships. Back home, this was a laborious process taking days, but here before his very eyes the Venetians were arming ship after ship in less than an hour a go. But how exactly did they do it?
Back in Spain, ships had to be tied up at the dock as hordes of workers loaded the vessel with fresh munitions and supplies. In Venice, by contrast, each ship was towed down a canal, and the different specialist weapon producers lowered their products onto its deck as it passed by. Mouth gaping, the Spanish tourist recorded the process in his diary. He had just witnessed the apotheosis of the division of labor: one of the world’s first production lines.
The idea is simply this: we can produce far more, far better, by dividing up the work and specializing in what each of us is good at. Division of labor has been practiced for millennia. It was already well established in Greek times; it was in place in factories around the country in Adam Smith’s day, but it took until the early 20th century for it to meet its culmination in the shape of Henry Ford and his Model-T car.
Division of labor is what helped drive the first Industrial Revolution, enabling countries around the world to improve their productivity and wealth dramatically. It is the production method behind almost every manufactured object you care to think of.
Dividing up labor makes sense, whether on a small or large scale. For instance, take a region that is particularly suited for farming wheat, having the right soil density and rainfall levels, but that frequently has to let parts of its land lie fallow since its inhabitants cannot cut enough of the wheat at harvest time. Residents of the neighboring region are expert at making blades for swords and tools, but its land is pretty barren and its inhabitants often have to go hungry.
The powerful logic of division of labor says that the two regions should specialize in what they are good at and import what they struggle to produce. The inhabitants of each would then have sufficient food and as many blades as they need either to harvest the wheat or to protect themselves.
The complexity of manufacture Take a regular lead pencil. Its creation involves a multiplicity of different steps: chopping the wood, mining and shaping the graphite, adding the labeling, the lacquer and the eraser. It took countless hands to manufacture one single pencil, as Leonard Read, founder of the Foundation for Economic Education, wrote in his inspiring short work I, Pencil (1958): “Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn’t it? Especially when it is realized that there are about one and one-half billion of my kind produced in the USA each year.”
Not until the era of Adam Smith was division of labor summed up in a simple theory. The famous example Smith used in The Wealth of Nations was that of a pin factory in 18th-century Britain, where small pins were manufactured by hand. The average man on the street could scarcely make a pin a day, he said, but in a pin factory the work was divided among a number of specialists:
One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations … the important business of making a pin is, in this manner, divided into about eighteen distinct operations.
According to Smith, one factory of 10 men could produce 48,000 pins a day by dividing up the labor—a stupendous 400,000 percent increase in productivity. Working in this way the team produces considerably more than the sum of their parts.
This is, of course, the prototype for the kind of factory created by Henry Ford a century ago. He devised a moving production line whereby the car being constructed would pass on a conveyor belt in front of different teams of workers, each of which would add a new—standardized—part to it. The result was that he could produce a car for a fraction of the price, and in a fraction of the time, that it took his competitors.
“Where the whole man is involved there is no work. Work begins with the division of labour.”
Marshall McLuhan, Canadian media theorist
Sticking to one’s strengths However, division of labor does not stop there. Consider a company where the managing director is far better than his employees at administration, management, accounting, marketing and cleaning the building. He would be far better served delegating all but one of these tasks to his employees, and taking for himself the most profitable one.
In a similar vein, it makes no sense for a car manufacturer to make every single part of its vehicles, from the leather on the seats to the engine to the sound system. It is better off leaving some, or all, of these specialist processes to other companies, buying the products off them and simply assembling them.
Smith took the idea one step further: he suggested labor should be divided up not only between different individuals suited to certain tasks, but also between different cities and countries.
The dangers of division There are, however, problems inherent with dividing up labor. The first is that, as anyone made redundant will testify, it can be extraordinarily difficult to find work when you specialize in a craft that is no longer in demand. Hundreds of thousands of car workers, coal miners, steel workers and so on have, in recent decades, found themselves consigned to long-term unemployment after the factories, plants and mines they worked in shut down. Second, a factory can become entirely dependent on one person, or a small group of people, which can allow them to wield disproportionate power over the entire process—going out on strike, for instance, should they have a grievance.
Third, it can be dangerously morale-sapping for an individual to be forced to specialize only in one specific trade or expertise. Having to carry out a single repetitive job each day leads to what Smith called a “mental mutilation” in workers, degrading their minds and alienating them from others. It was an analysis with which Karl Marx heartily agreed. In fact, it forms part of the basis for his Communist Manifesto, which forecast that workers would become so disenchanted that they would eventually rise up against employers who imposed such conditions on them.
Nevertheless, the alienation engendered by the division of labor has to be set against the phenomenal gains it generates. The division of labor has informed the growth and development of modern economies to such an extent that it remains one of the most important and powerful pieces of economic logic.
the condensed idea
Concentrate on your specialties
| timeline | |
|---|---|
| 360 BC | Plato cites specialism in his Republic |
| 1430 | The arsenal of Venice—standardized parts and assembly-line techniques |
| 1776 | Adam Smith explains how division of labor works, by describing the process in a pin factory |
| 1913 | Henry Ford and the assembly line—automation of car manufacture |