• Seth Barnett

Smith's Division of Labor: A Shift of Perspective

In the famous economic text Wealth of Nation’s, Adam Smith shows that growth is central to the increasing division of labor and the specializations within those labor forces. So, if a laborer learns their job and does not switch throughout the day, Smith theorizes that productivity goes up. Smith also pointed out the flaws in this approach in that the workforce would more easily become dissatisfied with what they were doing. This is where he insists that the government become involved in helping people seek out and obtain needed and wanted education and would help the labor force evolve and lead new labor forces.

Labor also helps explain the value in use versus value in exchange debate, or what Smith referred to as the diamond-water paradox. He found that the more labor needed for an item, the higher value in exchange no matter its value in use. (In this example, diamonds require more skilled labor to locate, harvest, and ready for market.)

There are many factors that limit the division of labor, but the most obvious issue was one of Smith’s solutions. Education is no longer a means of helping some dissatisfied workers. It is more readily available today than ever. This has caused a shift in the division of labor as those that may have been qualified factory workers two decades ago, now have more specialized education, yet the factories still need labor. Two outcomes have come of this reality. One is fewer workers in the factories causing increased costs. The other is a shift in our understanding of what education means. Factory workers now may be educated but not as educated as someone who could advance further in the labor force. This has effectively devalued education so that the understanding of education as a means of satisfying dissatisfied workers may no longer have the same effect as what Smith had pointed out.


©2020 Seth Barnett Writing