Division of labour

In the era of industrialisation, specialisation was the driver. It’s improvement of productivity was unsurpassed. The author of my textbook, Alain Anderton, uses the well known example of the worker who could make 20 pins a day if he did all the stages in pin-making himself, whereas the same person can make 4,800 pins when he and nine others divide the work. This is virtuous when production needs to grow and labour and capital are scarce – it is then essential to increase labour productivity and the rate of capital utilisation. But what if labour is not scarce?

What I am asking is, if we keep to the doughnut1, is labour scarce then? I mean, when we adapt our living standard in the West to the limits set by the ecological ceiling, while at the same time allowing the income distribution to become more equal in the world – would we need the same amount of labour or more, or less? If things progress as normal, a decline in production would mean a decline in employment. Would an increase in unemployment change our perspective on the division of labour?

I would think, the most limited resource is leading in how much can be produced with the resources available. Therefore, if we want to improve efficiency in these days, it makes more sense to focus on efficient use of resources provided by the planet, instead of efficient use of labour resources through the division of labour.2 Also, I would say, specialisation and labour productivity are defining factors for the quantity of production, but not so much for the quality.

How can you use this in the classroom?

I would suggest to go back to the underlying question of the division of labour: making efficient use of resources, not only of labour, but also of capital by improving the rate of capital utilisation. But now there is a new kid on the block – our ecological system – that puts a ceiling to what we can produce. So, the question does not so much regard labour and capital, but efficient use of the resources provided by our ecological system, while at the same time protecting the system from detrimental factors. Could that imply that sometimes labour is preferred over capital – like robots -, since labour’s energy needs are different from capital, or not?

To explore the use of resources with your students you can take any product relevant to a student: sneakers, shirts, mobile phones, …, and trace it back through its supply chain3 to make an assessment of resources used. Feel free to add the division of labour as a perspective in the assessment. Of course it is nice if somebody already did some of the work, so I rounded up some online resources you could use:

  1. I am referring to the doughnut model of economist Kate Raworth, as described in her book Doughnut Economics.
  2. I think inclusion through labour, allowing everyone to take part – is going to be more of a challenge than efficient use of labour.
  3. Supply chains in itself are enabled through the division of labour. The more steps in a supply chain, the more labour is divided.