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Smith and Marx – division of labour

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Benefits of the division of labour

Adam Smith and Karl Marx on the division of labour

  1. Adam Smith on the benefits of the division of labour

Book1 Chapter 1 Paragraph 10 of Smith, A. (1776) An inquiry into the nature and causes of the wealth of nations:

It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people. Every workman has a great quantity of his own work to dispose of beyond what he himself has occasion for; and every other workman being exactly in the same situation, he is enabled to exchange a great quantity of his own goods for a great quantity, or, what comes to the same thing, for the price of a great quantity of theirs. He supplies them abundantly with what they have occasion for, and they accommodate him as amply with what he has occasion for, and a general plenty diffuses itself through all the different ranks of the society.

  1. Karl Marx on one of the consequences of workers supplying work in advance of being paid

Vol.1 Chapter 6, Footnote 14 of Marx K (1867) Capital:

One example. In London there are two sorts of bakers, the “full priced,” who sell bread at its full value, and the “undersellers,” who sell it under its value. The latter class comprises more than three-fourths of the total number of bakers. (p. xxxii in the Report of H. S. Tremenheere, commissioner to examine into “the grievances complained of by the journeymen bakers,” &c., Lond. 1862.) The undersellers, almost without exception, sell bread adulterated with alum, soap, pearl ashes, chalk, Derbyshire stone-dust, and such like agreeable nourishing and wholesome ingredients. (See the above cited Blue book, as also the report of “the committee of 1855 on the adulteration of bread,” and Dr. Hassall’s “Adulterations Detected,” 2nd Ed. Lond. 1861.) Sir John Gordon stated before the committee of 1855, that “in consequence of these adulterations, the poor man, who lives on two pounds of bread a day, does not now get one fourth part of nourishing matter, let alone the deleterious effects on his health.” Tremenheere states (l.c., p. xlviii), as the reason, why a very large part of the working-class, although well aware of this adulteration, nevertheless accept the alum, stone-dust, &c., as part of their purchase: that it is for them “a matter of necessity to take from their baker or from the chandler’s shop, such bread as they choose to supply.” As they are not paid their wages before the end of the week, they in their turn are unable “to pay for the bread consumed by their families, during the week, before the end of the week,” and Tremenheere adds on the evidence of witnesses, “it is notorious that bread composed of those mixtures, is made expressly for sale in this manner.” In many English and still more Scotch agricultural districts, wages are paid fortnightly and even monthly; with such long intervals between the payments, the agricultural labourer is obliged to buy on credit…. He must pay higher prices, and is in fact tied to the shop which gives him credit. Thus at Horningham in Wilts, for example, where the wages are monthly, the same flour that he could buy elsewhere at ls 10d per stone, costs him 2s 4d per stone. (“Sixth Report” on “Public Health” by “The Medical Officer of the Privy Council, &c., 1864,” p.264.) “The block printers of Paisley and Kilmarnock enforced, by a strike, fortnightly, instead of monthly payment of wages.” (“Reports of the Inspectors of Factories for 31st Oct., 1853,” p. 34.) As a further pretty result of the credit given by the workmen to the capitalist, we may refer to the method current in many English coal mines, where the labourer is not paid till the end of the month, and in the meantime, receives sums on account from the capitalist, often in goods for which the miner is obliged to pay more than the market price (Truck-system). “It is a common practice with the coal masters to pay once a month, and advance cash to their workmen at the end of each intermediate week. The cash is given in the shop” (i.e., the Tommy shop which belongs to the master); “the men take it on one side and lay it out on the other.” (“Children’s Employment Commission, III. Report,” Lond. 1864, p. 38, n. 192.)

Note also Smith’s negative comments on factory work in point 3 of the commentary here.

Commentary added 14 October 2014

4 responses

  • David Harold Chester says:

    Marx has not explained the division of labour in the true sense. The above selection from his book is about “adultaration” of bread and also about the long time between the expenditure of labour and its payment and the adverse effects of this. Neither of these two things has much to do with the division of labour which as Smith rightly explains is one of the direct results of our needing to specialize and to be more efficient in the production of goods and services. I suggest Marx’s selection be omitted from this comment.

  • David Harold Chester says:

    A point not yet made is that with the division the associated improved efficiency comes with an increase in the competitive forces to produce the particular sub-products. Each speciality brings with it a degree of pressure on the specialist to produce more cheeply that was less present when the combined process was handled by a smaller number of less efficient companies. It allows the cost of production to be lowered and hopefully this can be passed to the consumer, furthing progress in the system by the resulting cheeper produce and greater degrees of employment needed.

    It also introduces the need for improved communication between the suppliers and the various component assemblers of the production team. This means that they should all be situated in close proximity so that the partly made goods can pass quickly between them. This effect causes the industrial towns to develop intensive districts associated with a particular end product. In turn this makes for a higher degree of value to be generated by the local community in the economic ground-rent of the underlying sites of land. It can lead to monopolization of these sites and eventually to social barriers for entrepreneurs who wish to start up similar competitive lines of the same product manufactrure in a slightly different region.

    Thus the arguements associated with the division of labour can result in a whole list of implications all of great relevance to the structure of our macroeconomic social system.

  • mallory says:

    I don’t care!!!!!!

  • Julian Wells says:

    I think David Harold Chester’s first comment is missing the point; the passage from Smith alleges that the division of labour has the beneficial result “that universal opulence … extends itself to the lowest ranks of the people”.

    Marx illustrates how “general plenty diffuses itself through all the different ranks of the society”.

    Maybe the goods and service mentioned are produced more efficiently (although Smith’s discussion does not touch on that), but his fanciful claims about prosperity are thoroughly exploded by Marx.

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