Division of labor is an economic theory that has been in use for many centuries. As a result, there have been several definitions accorded to the term depending on the use of the theory.
However, a more acceptable version that has been relied on by many is that of Peter Groenewegen in the New Palgrave’s Dictionary of economics (1987, p. 901) which defines division of labor as the “division of a process or employment into parts, each of which is carried out by a separate person”. This is to mean that individuals will cooperate with or without their conscious to perform processes or employment that is divided.
The question that results is, why and how the separation of people in processes and employment concurs with the social and economic consequences? This question and many others are best answered using the evolution of the ideas generated from the theory of division of labor. This paper is therefore an in-depth analysis of the evolution of the division of labor theory starting from the ancient Greek economists such as Adam Smith, Karl Marx and William Petty, among others to the present.
The analysis will begin by examining the relationship between increasing returns and the division of labor as stipulated by Smith. This will be followed by the important insights by Karl Marx on the division of labor in the society and division of labor in manufacturing. The theories of other great economists on the division of labor theory will also be explored and finally comparing them to the modern theory of division of labor.
The history of Division of labor Theory
The evolutionary history of the theory of division of labor has been explained through various mechanisms. It was long ago used by the Sumerians to group their jobs and thereafter allocate them to the skilled people in the society.
However, according to Plato Socrates, the origin of the theory of division of labor is based on two main facts. The first one is the fact that human beings are endowed with different abilities (Bogers 2). The argument states that if at all human beings had equal strengths and abilities then the issue of division of labor would not have arisen since everyone can perform all tasks.
Secondly is the issue of the variation in the external conditions on the earth. This again leads to the creation of division of labor since had all the external production conditions been similar everywhere, then division of labor would have been of no use. After the realization of the theory of division of labor, several economists have tried to argue their points on this theory.
The Ancient Theories on Division of Labor
Adam Smith is one of the greatest economics known who lived from the year 1723 to 1790. He engaged in many works in the economics field where he had major contributions in the theory of the division of labor. Smith explored the various advantages of the division of labor. In one of his books titled The Wealth of Nations, Smith explained how the breakdown of a task into several operations made production easy (Dhamee 1).
He gave the example of a pin-factory, where he claimed that such a company’s production could increase by up to 240 times higher just because of the division of labor. The main reason for this is because the worker becomes acquainted to what they are doing hence becoming experts in that field. On the other hand, workers remain in their jobs for a long period hence saving time unlike when they have to switch tasks in the course of the day.
Smith continues to say that this was what led to the success of the Victorian factories in the 19th century. This was as a result of productive labor which is meant to fulfill two essential requirements which are creation of surplus that could be ploughed back into production and secondly lead to production of objects that are tangible. “The ideas of Smith were based on perfect liberty in order to assert the principle of organizing labor solely by a free market” (Bogers 4).
After his assertions, Smith identified the shortcomings of the theory of division of labor. He pointed out that it created boredom due to the monotony of performing a similar task for a long time. This in the long-rum would lead to dissatisfied and ignorant workers.
This was another of the ancient economics who lived between 1791 and 1871. Charles continued with Smith’s work in which he focused on simplifying and integrating the tasks. He argued that simplifying and integrating tasks had a great impact on the labor costs in that it minimized them greatly. The reason behind this is the low bargaining power of the worker since workers will require minimal time to get acquainted to each task.
Within his short life span of 65 years, Karl Marx made inevitable contributions in the field of economics. His, was criticism on the present theory of division of labor arguing that it led to the alienation of people. In his assertions, Marx claimed that there ought to be very little or no division of labor at all.
This would make workers have control over work thus being contended with it unlike when there is division of labor. Karl Marx thus wrote that “with this division of labor, the worker is depressed spiritually and physically to the condition of a machine” (Bogers 5). He further claims that alienation is great societal problem that could be easily generated through division of labor.
On the same theory, Marx describes labor to have value. He goes on to describe value as being a fraction of the total labor that is present in the society within a stipulated period of time for instance a year, and used in the production of a given product. Therefore to find the value of labor, the average labor available is divided by the number of units produced hence expressed in time of hours, days or eve months.
However, Marx’s greatest contribution in this theory is when he classifies the two types of division of labor as technical/ economic division and the social division. He stipulates social division of labor to be based on the different social classes and status of hierarchy that are present in the society. Technical division is usually as a result of the different skills that people have.
Sir William Petty is again one of the ancient economics who lived in the 1623 to 1687. As a matter of fact, he was the first writer to take note of the theory of division of labor where he made its significance to the Dutch shipyards. Petty made several contributions in political economy which eventually led to the differentiation of classical political economy as a science on its own.
Among other notions in economic science such as labor theory of value to econometrics he is the founder of the notion behind surplus and the division of labor. Petty claimed that the society could be equated to the human body which has several functions. In the society people will play different roles and functions all of which are of great importance to the societal functions.
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If there be 1000 men in a Territory, and if 100 of these can raise necessary food and raiment for the whole 1000, if 200 more make as much commodities, as other Nations will give either their commodities or money for, and if 400 more employed in the ornaments, pleasure, and magnificence of the whole; if there be 200 Governors, Divines, Lawyers, Physicians, Merchants and Retailers, making I all 900 the question is, Since there is food enough for this supernumerary 100 also, how they should come by it? (Gianni and Groenewegen 30).
Another great contributor to the division of labor theory is Fredrick Winslow Taylor who named his developments as ‘scientific management’. This theory of scientific management has been thoroughly developed and the final version of it is to be named after the innovator that is ‘Taylorism’. According to his theory, Taylor argued that the industrial process could be broken down into several unit tasks that are able to be well organized and timed. Despite having widespread application, it was of great use in Japan.
This theory generally entails working out the best and efficient way of organizing work such that the monetary allocation to the work equates the output generated. Taylor proposed that the tasks be distributed in accordance to knowledge, experience as well as skills of the worker. Therefore if the Taylor system is well applied in an organization, it will result into good labor returns.
The only shortcoming with Taylor’s theory on the division of labor is that human beings are treated like robots or animals having to work tirelessly and continuously. There is monotony in work and less chances for creativity and inventions.
Max Weber is often referred to as the father of bureaucracy due to his invention of the theory of bureaucracy. This theory was an opposition to the theory of the division of labor since it argues that occupational duties and workers can be freely interchanged such that there is no specific position for workers. The workers are therefore to move from one task position to another within the same organization.
The list of the ancient economists who made their contributions (whether small or big) to the theory of division of labor is endless with other being people such as David Hume, Henri-Louis, Durkheim and Henry Ford just to mention but a few.
The Modern Theory on Division of Labor
The modern theory of the division of labor has undergone several reforms from the ancient economics discussed above the most recent ones such as Romer and those to come in the future. It is arguable that not all the constituents of the ancient models have been incorporated in the modern theory since some of them have been left out and other modified.
Taking the example of Romer, who is a more recent economist to handle the theory of division of labor, he argues that Adam Smith had two ideas which conflicted. “In the first idea, Smith claims that competition leads to efficient resource allocation and in the second he notes that growth is an indigenous phenomenon” (Robert 76).
Both claims have been proved wrong after the developments of economics whereby growth is no longer viewed as an indigenous process. Other modern contributions concern the introduction of fixed costs in computation of profits, something that was not done before among many other developments.
Nevertheless, some of the ancient theories on the division of labor have still found their way into the modern society. A good example is the contribution of Emile Durkheim which is of great significance today.
In his book entitled The Division of Labor in Society of 1893, Durkheim majors on the effects that come with specialization (division of labor) and how they affect the society. For Durkheim, division of labor is infinite separation of occupations such that even the final product is independent. This is very evident in the modern society, take the example of a student who joins college and is asked to select a ‘major of specialty’.
Let us say, they select accounting, thus throughout the college years they will be specializing in accounting being prepared to be accountants. They graduate as accountants and get a job in an accounting firm where they perform accountancy services and duties. Their whole life revolves around accountancy. This is a perfect example to show that specialization or division of labor is inevitable and in practice in almost all areas of life.
In a nut shell, it can be said that the modern world is making great use of the theory of division of labor. It is mostly applicable in the management and organization functions of any business enterprises. Given the fact that societal hierarchy is inevitable, division of labor has been used to cater for such differences as well as others.
From the above discussion, it can be seen that the theory of division of labor has undergone various evolution from the ancient time to the present. The theory of division of labor has found its application and use in the present society by a great deal. As a matter of fact, the increased productivity in the current society can be attributed to the division of labor.
According to Robert, “a major shift in firm’s strategies and organizational structure driven in part by increased global competition and technological process” (Robert 184). He further continues to argue that, despite the many variables and processes involved emphasis should be put on specialization and division of labor.
On the other hand, division of labor has been found to have negative features since time immemorial. Some of these negative features include; boredom, demoralization and imposition of the discipline of labor among others. These negative features can be easily overcome by removing the direct producers from the market and the fact that repetitive performance of a task increases the efficiency of the operation.
Bogers, Marcel. Division of Labor. 2002. Web.
Dhamee, Yousuf. Adam Smith and the Division of Labor. 1995- July 24, 2011. <http://www.victorianweb.org/economics/division.html>
Gianni, Vaggi And Groenewegen, Peter. A concise history of economic thought: from Mercantilism to monetarism.-2003. Palgrave Macmillan.
Groenewegen, Peter. “Division of labor,” The New Palgrave: A Dictionary of Economics -1987. v. 1, pp. 901–07
Roberts, J. The Modern Firm. – 2004 Oxford University Press, New York, NY.