Adam Smith and the Costs of the Division of Labor

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Alex Aragona for AdamSmithWorks

July 3, 2020

One shouldn’t be satisfied with any discussion of the division of labor that leaves consideration of the costs off the table. 
Adam Smith’s observations on the division of labor are among his most well-known, even for those who haven’t read much of his work. However, too often focus is placed solely on the benefits Smith outlined, leaving the incorrect impression that Smith was just a division-of-labor cheerleader, and that his observations on the subject are useful only insofar as they explain productivity and economic growth. Disproportionate focus on the benefits perpetuates an incomplete understanding of the nature of the division of labor and disregards an important dimension of Smith’s thought. It also discourages thought on the nature of the work perpetuating the growing wealth of our nations, and a broader discussion about human happiness, character, and wellbeing. 

One shouldn’t be satisfied with any discussion of the division of labor that leaves consideration of the costs off the table. This is especially true if even people unfamiliar with Smith’s work seem to be able to present a well-rounded picture of the division of labor. 

For example, business professionals and managers recognize both the positives and negatives of narrow and repetitive work. On benefits, as one of my old Human Resources textbooks [1] notes:
If workers perform tasks as efficiently as possible, not only does the organization benefit from lower costs and greater output per worker, but workers should be less fatigued. This point of view has for years formed the basis of classical industrial engineering, which looks for the simplest way to structure work to maximize efficiency. Typically, applying industrial engineering to a job reduces the complexity of the work, making it so simple that almost anyone can be trained quickly and easily to perform the job. Such jobs tend to be highly specialized and repetitive. [Emphasis mine]

Smith didn’t travel into the future to read my business school textbooks, hoping to bring nuggets of capitalist wisdom back home to 18th century Scotland. And the exposure most business professionals have to Smith’s name and work (beyond a mention or brief discussion in Economics 101) is limited, at best. Yet, the text quoted above could plausibly be the start of a chapter that came from a book called something like The Wealth of Nations for Business Managers.

In any case, business professionals ultimately understand that the simpler and more streamlined a job or task becomes, the more efficient it is, and the more gains to overall output there are. Simple job design also decreases training costs and the level of knowledge, skill, and creativity required for a position, allowing firms to easily rotate people in and out of these positions as necessary. In other words, as a business, you can look at someone doing a very simple and repetitive job as less of an inquisitive, independent human being, and more like a replaceable component in a larger machine of efficiency.

Whether slamming down a hammer in an 18th century workhouse, or typing on keys in a modern workplace, constant repetition and a relatively narrow occupational existence may be great for productivity and output, but over the course of time it may also lead to less happiness, character development, and overall well being. Can it be that the more valuable our body and brains become as inputs to a production process, the less valuable they become to ourselves? Division of labor is a good thing.  But is it possible, as the old saying goes, to have too much of a good thing?

The HR professionals I cited earlier seem to think so. As they continue their own section on specialization, they note:
Despite the logical benefits of industrial engineering, a focus on efficiency alone can create jobs that are so simple and repetitive that workers get bored. Workers performing these jobs may feel that their work is meaningless. [Emphasis mine]

The lecture I remember accompanying this section of the textbook didn’t relate all of this back to Adam Smith, or get so far as discussing Marx’s thoughts on alienation and labor. However, the lecture did go on to say that workers who feel their work is narrow, repetitive, and meaningless start to feel restless and trapped by repetition. Put another way, workers begin to feel they are meaningless and leading a narrow existence, which takes a huge toll on their mental health and well being over time. Workers who feel meaningless are unhappy, and their sentiments for their job start to spill over into their private life and character. They have a higher tendency for burnout, depression, and perhaps something even worse.

Unsurprisingly, business courses (especially ones that discuss humans as resources) tend to relate human costs back to business costs — unhappy employees create unhappy bottom lines. The attempt to avoid negative business outcomes inspires many different management and human resource theories, including ideas that (ironically) call for what seems to be a sort of un-division of labor in the quest for “job enrichment” and widening an occupation to give it more meaning, like “having each employee perform several tasks to complete a particular stage of the process, rather than dividing up the tasks among the employees.”

The pendulum swings the other way?

The tension that exists between the operations and human resources departments is best left to the business world. However, we do well to consider the tensions among the division of labor, capitalism, and human well-being and character.

If you say this kind of critique of the division of labor is too much of a stretch, then we’ll also have to charge Adam Smith with the same crime. In The Wealth of Nations he describes the effects of repetitive tasks on the human spirit and character more broadly. Smith fears what you can become if you live a narrow existence based around an occupation:
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 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. [Book 5, Chapter 1]

If we think there’s something to be said for this passage and find it interesting that even business professionals ultimately concerned with productivity and output seem to step in line (probably unintentionally) with Smith’s notes of caution, then anyone who wants to study Smith and his work should feel there is good cause to stop and seriously consider the human costs — or rather, the costs to our humanity and character — involved with building up the wealth of our nations. 

Modern industrial capitalism has made us all wealthier and materially better off, and just as Adam Smith observed and described its enormous potential, much of the credit for that can be traced back to productivity the division of labor unleashes. Thanks to specialization, millions of us in the West are able to work hard at a specific skill (or set of skills), and focus our energies on more or less repeating routines and processes to generate a living.

Rightfully, some will point out that’s not all there is to it — we still have free time to take our mind off work. This is true. In wealthy societies, most of us divide our time between our own mix of labor and leisure. Yet, it seems after a tiring day of work we can also fall into the trap of using our leisure time as simple respite from our work — respite just as narrow and repetitive as our labor (binging Netflix and idle scrolling through social media immediately come to mind).

The wealthiest of capitalist futures may look like one of increasing specialization of labor and skills combined with an increasing number of entertainment avenues where we get our leisure fix. But does repetitive labor and the escape from it through easy access to increasingly repetitive and idle leisure come at the cost of broadening our interests and concerns, improvements to our overall character, and a well-rounded, wide set of experiences? Is the wealthiest of capitalist futures also one of people who have less time and inclination for a broader sense of social concern and sympathy, and less desire to pursue more challenging forms of inquiry and creativity? Put bluntly, should we be happy with continually narrowing vocational expertise and avocational escapes at the cost of becoming more “stupid and ignorant” in other areas?

Adam Smith understood the causes of wealth and economic progress, but also their negative effects. His cautions about the division of labor serve as a springboard into additional lines of questioning and discussion about the nature of work under conditions of continual economic development and increasing wealth. His work should also prompt us to consider our natural tendencies for inquiry, creativity, sympathy, and the search for a broader meaning and existence — human features and sentiments that need cultivating in areas beyond our jobs.

Businesses seriously consider these costs and have managerial tricks and theories up their sleeve to ensure the well being of their workers doesn’t negatively impact their bottom line. It shouldn’t be a stretch for those who study Smith to make a conscious effort to form a well rounded approach in their thinking about the division of labor and specialization in a capitalist economy while asking how modern lives are affected by the nature of work, and at what cost.

[1]  Steen, Sandra, Raymond Noe, John Hollenbeck, Barry Gerhart, and Patrick Wright. Human Resource Management. 2nd ed. Toronto: McGraw-Hill Ryerson, 2009.

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