What Would Adam Smith Say?

When Adam Smith published The Wealth of Nations in 1776, it was in the midst of emerging industrial capitalism.  When he spoke about the division of labor, it was in the same context.  This meant that the market was small, businesses were small, and production took quite a long time when products were individually manufactured.  However, once labor began to become divided, and different people specialized in different stages of production, the economy began to expand; it became easier. This expanding economy was good for the market, and good for the individual workers because they could produce more in a shorter period of time, increasing the amount of money that could be made.

The division of labor was incredibly good for business and industry because it increased the number of goods that could be produced in the same amount of time.  It is worth mentioning that Smith was on the side of the emerging industrial capitalists.  This lent itself to being on the side of the worker, who realized higher standards of living, and to promoting the overall wealth of the nation, through the efficiency of production and the division of labor.

Because of this, we assume that Adam Smith was on the side of, or at least not in opposition to the worker.  That is, as labor becomes more specialized, and technological invention and innovation take hold, workers become more efficient and productive, which results in higher wages and a growing economy.

Is this still true today? Does the division of labor and technological innovation still promote the wealth of the nation? The division of labor, taken to its logical conclusion, produces mundane, mindless tasks, which require less and less skill and earn lower and lower wages. Increased specialization and innovation results in the displacement of workers and the phasing out of these jobs. As an advocate of the division of labor, it would seem now that Adam Smith is pitted against the best interests of the labor force.

However, it is important to take Smith in context.  It is possible that Smith may have said that we have gone too far – the division of labor has deskilled workers and technology has left them unemployed. Smith would have said that technology should replace these mundane tasks but not at the expense of workers’ livelihood.