by Madawc Williams
Adam Smith is commonly described as the prophet of modem capitalism. But the industrial revolution had begun at least a decade before the publication The Wealth of Nations. It was an economic take-off inherent in the visions of Roger Bacon and the schemes of Francis Bacon (Lord Verulam). The direction of change was clearly understood by William Petty in the 17th century. Petty’s essays on the growth of London accurately foresees that Britain could become a largely urban society. He realised that Britain as a whole could get by with manufacturing, with agriculture relegated to a secondary role. So plenty of people had an inkling of what was coming.
Smith’s contribution was to fail to see that the new economic forces were undermining the orderly hierarchies of 18th century Britain. Other people did see, and were justifiably appalled. Only a very few were radical enough to see this break-down as an exciting prospect, and Smith was not one of them. For all his analytical cleverness, he simply failed to understand what was happening.
Smith had begun his analysis of the division of labour with the making of pins. This task had been broken down into some eighteen separate semi-skilled tasks, with a consequent boosting of production. The whole of society was beginning to be reorganised on this radical new pattern, a pattern that would largely wipe out the independent craftsman or artisan. But for Smith, it was nothing very new:
“In a tribe of hunters or shepherds a particular person makes bows and arrows, for example, with more readiness and dexterity than any other. He frequently exchanges them for cattle or for venison with his companions; and he finds at last that he can in this manner get more cattle and venison than if he himself went to the field to catch them. From a regard to his own interests, the ref ore, the making of bows and arrows grows to be his chief business, and he becomes a sort of armourer.”
But this is quite different from the ‘division of labour’ in the pin factory. One individual specialising in bows and arrows is not at all the same thing as ten to eighteen men sharing out the separate stages in the production of a pin. The first process is likely to produce a large class of independent craftsmen. The second requires a mass of dependent labourers confined to mind-numbing tasks like making one tenth of a pin.
Most human societies have had some degree of job separation. The first and most basic was the division into ‘men’s work’ and ‘women’s work’. Smith’s writings indirectly helped to create a society in which all such sexual divisions were progressively eroded, though this was far from his intention. Before Smith, the division was a universal fact of human life, even though particular tasks might be ‘women’s work’ in one society and ‘men’s work’ in another. A few tasks might also be shared between the sexes, but mostly there was a separation.
There is no contradiction between this fact and the equally solid fact that men and women were more or less equal in some societies and very unequal in others. It is also true that some societies allowed a few individuals to take on a social role that contradicted their biological sex. The two sexes might be separate but equal or separate and very unequal, and gender-benders might or might not be accepted. But a separation of tasks was always maintained.
As well as this, even a small tribe would generally support some specialists – arrow makers, herbalists, singers, pot-makers, shamen. The bigger the society, the greater the number of specialist jobs that could exist. A village could support · only one blacksmith. A town might have several, with one concentrating on horseshoes, another on mending pots and pans and a third on ornamental metal-work. In a city things might go much further, with coppersmiths, silversmiths, goldsmiths and even pin-makers.
All of this, note, is at the level of family businesses, the middle-class ideal, the system that almost everyone very much approved of in the 18th century. In· Europe, the various trades had for centuries been regulated by guilds. And guilds regarded individual enterprise as the ideal. Guild regulations prevented any one guild member from underbidding the rest, ensuring the long run prosperity of the whole group. Also membership was limited and restricted, so that there would always be enough work for each guild member. All of this job security vanished, when ‘pointless’ and ‘unproductive’ guild regulations were done away with. In the long run, the traditional middle class itself was changed out of all recognition by the very market forces it had unleashed.
If Smith had desired the abolition of small private property and argued for the superior merits of a society divided between wage labourers and capitalists, you could have called him a man of truly prophetic vision. Personally I see the change as an improvement, albeit one that was carried through at enormous human cost and quite appalling destructiveness. But then, I am one of those people who have been created by the forces that Adam Smith, Sir William Petty, Lord Verulam and Karl Marx helped to unleash.
I am not nostalgic for a world in which my ancestors were exploited and kept down. Whether you regard me as middle class or working class, I am definitely someone who makes a living selling my labour-power to capitalist employers. And also someone who does quite nicely by it. I do not see the change as a disaster – quite apart from the future prospect of a move to socialism, which I still have some hopes of seeing in my own lifetime. But I am sure that Adam Smith would have been appalled even by early Victorian capitalism, let alone what came afterwards.
(The only other possibility is that he was a visionary subversive genius who deliberately lied in order to persuade 18th century society to swallow his poison pills. But this is unlikely in the extreme. Let us proceed on the assumption that Adam Smith fooled himself along with everyone else, when he confused two very different processes under the label of ‘the division of labour’.)
I said earlier that- William Petty was the first modem writer to take note of the matter. He did this in a description of the workings of a Dutch shipyard. The deed preceded the idea: people with a particular . task to perform had discovered new methods that were only later observed and justified by writers on political economy. And even in the ancient world of Greece and Rome, something similar happened and was duly recorded. Thus Xenophon, writing in the fourth century B.C. says in his Cyropaedia:
“Just as the various trades are most highly developed in large cities, in the same way food at the palace is prepared in afar superior manner. In small towns the same man makes couches, doors, ploughs and tables, and often he even builds houses, and still he is thankful if only he can find enough work to support himself And it is impossible for a man of many trades to do all of them well. In large cities, however; because many make demands on each trade, one alone is enough to support a man, and often less than one: for instance one man makes shoes for men, another for women, there are places even where one man earns a living just by mending shoes, another by cutting them out, another just by sewing the uppers to get her, while there is another who performs none of these operations but assembles the parts, Of necessity, he who pursues a very specialised task will do it best.” (Cited in The Ancient Economy by M. I. Finley).
Like Smith, Xenophon slides from the specialisation of task to the fragmentation of work, without realising that there has been a qualitative change. When two shoemakers in one small town decide to make shoes separately for the two sexes, they get at least as much out of it as their customers do. They avoid competition by splitting one market into two, with each having a monopoly of their own half. Thus the work of one does not interfere with the work of the other. Either may raise prices, or lower them, without influencing the other cobbler’s trade. Each remains independent.
At a personal level, they may be close neighbours, distant neighbours, barely on speaking terms, bitter enemies, close friends or even lovers (this is Classical Greece we are considering, remember.) The main point is that the separation of their tasks mean that they are not constrained to have any particular social relationship with each other. They are both citizens of the same community, but beyond that it is up to them.
Now consider the shoe makers who have separated the tasks of cutting out shoes, sewing the uppers and assembling the parts. Each of them is now in very large measure dependent on the other two. If the first of them is a workaholic, he may cut out a vast number of shoe soles, hoping thereby to become very prosperous. But most of these will lie about useless add unsalable if the fellow who sews the uppers is inclined to take it easy, and the man who assembles the whole is not inclined to hurry him. Both of them may find that they can get by very nicely as things are, while still having the leisure to listen to the local philosopher sounding forth in the city square, or to play dice, or to do whatever else they may feel like doing. The cutter-out may get very angry about his ‘lost soles’. But there is little that he can do if the other two are not under his control.
Besides, even if the workaholic could persuade the others to speed up, this would merely flood the market and create a glut This would be very nice for their fellow-citizens, who would get cheaper shoes. But the cobblers themselves would find that they were working much harder for rather less money. They might also feel that making just part of a shoe was far less satisfying-than making the whole commodity. Either they would slow down a bit, or else they would each go back to individual cobbling.’
Xenophon’ s description assumes a society in which there is little trade in manufactured goods. A small town would get its doors, ploughs and tables from one craftsman, not from any neighbouring town. The team of shoe-makers are presumably just supplying their own city, not trying to export them and destroy the livelihood of worse and more expensive shoemakers in other parts of the world. According to Finley, “there were exceptional protective measures for domestic agriculture … I know of no comparable law protecting a manufacture.” (Ibid.) Some shoes may have been produced for export, but probably as luxury goods, and definitely not destroying local manufacture. The high cost of transport made a difference, as did numerous local taxes and tariffs. So if one group of cobblers tried to fragment and de-skill the trade, they would get nowhere.
That was part of the Greek way of life – numerous self-sufficient cities. It was a way of life that successfully preserved itself over a number of centuries, and was more or less what most town-dwellers wanted. Something similar emerged in mediaeval Europe, except that the Guilds may have been a progressive force helping to develop skills, raise standards and enforce fare dealing. Certainly Finley argues in the same book that the classical world had nothing as sophisticated as a Guild, and suffered from the lack of such institutions.
What was happening in Smith’s time was the fragmentation and combination of labour, with none of the social controls that the Guilds had enforced. Tasks that had been skilled trades were turned into a series of unskilled or semi-skilled tasks, usually for the benefit of a single owner who controlled everyone else’s work. The key to the process is a free market, in which any rich man can organise poor men as labourers performing a series of tasks according to the rich man’s will, and then freely sell the products no matter who he may put out of business.
A guild of pin-makers, if such a thing had ever existed, would require that each master pin-maker work separately, with one or two apprentices who could expect to become master pin-makers in turn. Each could have the satisfaction of producing whole pins, by the mastery of a whole series of tasks. Such a guild would be very unlikely to choose to de-skill its own trade, confining its membership to the more or less mindless task of producing a mere tenth of a pin.
Such a system would always be the choice of the producers. But people tend to buy the cheapest goods, given a choice, regardless of how they are produced. No one approves of fragmented de-skilled work as such, but everyone enjoys saving money by buying cheap goods. Only a
very few will hold out for moral reasons. Given free trade, work is bound to be transformed and fragmented. The system that Smith so admires, the fragmentation and combination of labour, arises when power shifts to new forms of production. If we accept the figures Smith gives us, then pins produced by individual craftsmen would cost fully one hundred and twenty times as much as those produced by a collective of ten or more semi-skilled labourers. Even if the difference were much more modest than that, people would still opt for the cheaper product.
Smith confuses the specialisation of work with the fragmentation of work, calling both the ‘division of labour’. If the manufacture of pins is split off from other tasks, it can still be an individual trade. It could even go further – separate manufacturers for large pins, small pins, fancy pins etc. But when pin-making is fragmented into eighteen separate small tasks, individual production is undermined. Most people in the 18th century were against the undermining of craft skills. Most of them were appalled by the creation of a mass of dependent labourers. But such feelings counted for little: the process was the natural outcome of a system in which the main thing that counts is the price of a product Free exchange of goods leads to the combination of labourers and the undermining of the centuries-old system of guilds and small production.
And who benefits from this change? According to Smith:
“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 … He supplies them abundantly with what they have occasion for, and a general plenty diffuses itself through all the different ranks of society.” (Ibid, Li)
Note the qualification ‘in a well-governed society’. The economic theory as such say nothing about who will get the extra wealth. But it should be obvious that a rich man with plentiful reserves will be in a much stronger bargaining position than a poor and landless man who must work to eat. Until the rise of the trade unions, most of the new wealth went to factory owners, with considerable ‘trickle-down’ to a rising and very opulent middle class. The ordinary workers may well have lost ground, become poorer than their parents had been.
Workers in a skilled trade have a common interest in securing a decent living for themselves. They have a common interest in refusing to sell their goods below a price that will secure them the sort of living that they feel entitled to. But capitalists employing a mass of semi-skilled or unskilled workers can undercut them. And when there is a pool of unemployed, they can pay their own workers as little as they can get away with, which is often a wage only just above starvation level.
Consider what was happening when Smith wrote. The Industrial Revolution in Britain was preceded by an Agricultural Revolution, which increased the overall wealth of agriculture, but also concentrated it into fewer and fewer hands. Enclosure destroyed a traditional system that had ensured some sort of living for a large peasantry. The ‘yeomanry’, the independent small farmers, were gradually squeezed out. It was a long and complex process, which had begun in Tudor times or even before then. And it has not so far happened in some relatively isolated mountain districts. But the 18th century was a time of particularly large and drastic changes. Oliver Goldsmith, born just seven years after Smith, described the process very clearly in his famous poem The Deserted Village:
“Ill fares the land, to hast’ning ills a prey
Where wealth accumulates, and men decay;
Princes and lords may flourish, or may fade;
A breath can make them, as a breath h~ made;
But a bold peasantry, their country’s pride,
When once destroy’d, can never be supplied.”
This is no poetic whimsy, but a perfectly clear and accurate vision of what was happening, at a time when the whole process might still have been halted. Wealth was accumulating, the rich were getting richer. But the small farmers, the peasantry, were being destroyed as a class. Whether you see the transformation of peasants into factory workers as decline or as progress, the dry statistics of modem scholars confirm Goldsmith’s assertion. He had a better understanding than Smith of what was happening and where it might lead.
According to Smith,” … the yeomanry of England are rendered as secure, as independent, and as respectable as law can make them.” (The Wealth of Nations, III. iv. 20.) He uses formalities and abstractions to avoid seeing what was actually happening. The formal legal rights of yeomen or peasants were indeed quite good. But formal legal rights did not protect them from being squeezed off the land.
“Human kind / Cannot bear very much reality” said T. S. Eliot, a bank-clerk who took a discontentedly right-wing view of an England that had been many times reshaped by Adam Smith’s economics. Part of the secret of Smith’s success was his talent for not seeing a reality that he did not want to know about, and that the 18th century upper classes did not want to be told about And he has gone on fooling people ever since. T. S. Eliot was inclined to blame the Jews, failing to see that capitalist economics would have done pretty much the same things to society even if there hadn’t been any Jews in Europe. (It has done exactly the same thing in places like Japan, where Jews were never of the least importance.)
If market forces are allowed to decide matters, peasant farming is bound to be replaced by capitalist farming. Small farms may possibly raise more food per acre, at least if they use modem methods. But the extra labour is naturally reflected in the price, and it is price that gives large-scale capitalist farming its general advantage. Small scale farming provides an increasingly thin living, and the fluctuations of a free market will break them in a bad year. The process continues down to the present day. Despite the Common Agricultural Policy, French farmers now make up a’ mere 6% of the population, many of them old and with no child who wants to succeed them.
Peasants arc for the most part conservative. Living in a world of constant change, they have no liking for additional changes or for political radicalism. Only when everything starts breaking down will they consider a new order. Given minimal competence by the rulers, they will be all in favour of keeping things very much as they are. The casual way that they were being abolished horrified Goldsmith. He correctly foresaw that almost anything might happen when this class was destroyed.
Deprived of the chance to be peasants, the population gradually drifted into the cities, to be drawn into industrial production, mindless semi-skilled tasks under the direction of factory owners. Ludicrously, their former work on the land came to be classed as ‘unskilled’ by statisticians, so that this change seemed like a sort of step up. But agricultural labour involves dozens of skilled tasks, most of which you have to grow up with to perform well. In the short run, the process was very definitely a step down.
As for the long run – that is another matter. Robert Owen was probably the first man to see advantages in the actual process of fragmentation and combination. He began as a factory owner, one of a class that was mainly motivated by self-love and self-interest, and hardly ever by benevolence. Most of them acted from a desire to become rich enough to get well away from the social changes that they were causing. The long-term aim was to set up as landed gentry, and if possible marry into the aristocracy. But Owen saw things differently. For no obvious reason, he had a benevolent desire to build a better world. At New Lanark he showed how a well-run factory could be the basis for a whole new way of life. This, properly speaking, was the beginning of both socialism and communism. It was quite different from other forms of early radicalism, which desired a return to small individual property.
Karl Marx should properly be seen as someone who tried to justify Owen’s vision by a modified version of Adam Smith’s economic schema Marx could see, quite as clearly as Goldsmith, that the old order was undermining itself. But for Marx, this was a welcome process, leading to a new social order based on working class power. This was an excellent new insight for the time, and the recent collapse of Leninism does not discredit the hard core of Marx’s analysis. To diagnose the disease is not the same as being able to cure it.
The amazing thing is not that Leninism has now collapsed. The amazing thing is that Lenin could have founded a system that lasted as long as it did. He had no experience of government, business or public administration, or anything indeed except left-wing factional politics among Russian exiles. Yet he invented a system that was unlike anything that had ever existed before, and that came close to taking over the whole world. Such a venture would not have been possible unless Marxist theory had given him deep insights into the world, allowed him to see patterns where conventional politicians saw only disorder and chaos, the disruption of a ‘natural order’ that would in due course be re-established.
The decline of the USSR began when the useful aspects of Leninist politics were successfully copied by other societies, political parties and individuals. (Such as the ordinary electrician who has now become President of Poland, an unthinkable event in the pre-Leninist world). But the decline and fall of Leninism after the death of Stalin is a matter for another article. Let it simply be noted that the further they moved away. from Lenin’s original vision, the worse things got
Unlike Owen or Marx, Smith had no vision of the sort of society that should result from the unleashing of market forces. There is no indication that he even realised that there was a problem. His constant if unstated assumption is that market forces could tum the world of production upside down, without any effect on the orderly hierarchies of 18th century Europe. Life was to prove him wrong: when one part of the world was shaken up and changed out of all recognition, everything began to change, and has gone on changing ever since.
My next article will look at Adam Smith’s notion of productive and unproductive labour. A notion that underlies the crazy excesses of Thatcherite privatisation.
This article appeared in May 1993, in Issue 35 of Labour and Trade Union Review, now Labour Affairs. You can find more from the era at https://labouraffairsmagazine.com/very-old-issues-images/ and https://labouraffairsmagazine.com/very-old-issues-images/m-articles-by-topic/.