Chapter 2: Of the Principle Which Gives Occasion to the Division of Labour
The Wealth of Nations by Adam Smith
Smith begins the chapter with the argument that, “The division of labour arises from a propensity in human nature to exchanged” (p.14). Therefore, DOL is a natural evolution of man from their desire to trade, barter, and exchange goods and services according to Smith. By stepping back from the pages and remembering that DOL is the breakdown of a person’s labor into very specific, repetitive roles; it becomes readily apparent that there is a flaw in the “naturalness” of DOL let alone Capitalism as argued by dozens of thinkers, economist, and historians including Joyce Appleby (see: The Relentless Revolution). To perceive a resource as a “resource”, a service as a “service”, or a good as a “good” with modern implications and definitions applied, insinuates a higher expectation and role than originally given in the early twinklings of mankind. Even up to the point where a simple trade was made between two individuals or tribes represents a more complicated picture, but nowhere near the principle that goods and services ought to be divided up for more efficient and effective mass production of goods. Those are terms that neither Smith nor Marx can properly apply toward primitive societies as they did. Nonetheless, as the chapter continues Adam’s does provide marvelous insight about the vast differences between animals and human-beings.
Paraphrasing his next part of the argument, Adam’s points out that only humans have the propensity to truly exchange; animals lack the nature of such an agreement/contract (p.14). “When an animal wants to obtain something either of a man or of another animal, it has no other means of persuasion but to gain favour of those whose services it requires” (p.15). Following from this line of thought, man can also gain favors, but such an action is not favorable at all times because he both lacks the time and is in need of cooperation and assistance of “great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons” (p.15). To simplify, while an animal may live in packs and has some need of assistance from its own kind, it does not need it to the level of a human-being, but more importantly it is incapable of making vast alliances due to its nature. People, however, are capable of making vast alliances and are greatly in need of more stable cooperation amongst other peoples if they want to survive or, at least, live a longer life. In this same manner, Adam’s argues, “it is in vain for him to expect it from their benevolence only” (p.15). Man is capable of using another ability besides gaining favor or using force to get what they need or want.
Man is more likely to prevail by gaining another’s self-interest or “if he can interest their self-love in his favour” (p.15). This is where the principle of bargaining comes into play as it represents this principles of giving someone something in return for something else. This course of action fulfills a mutual self-interest for both parties. Animals are incapable of truly bargaining their way through a matter. To note, there is modern research to suggest that Chimpanzees bargain food for sex, grooming, and the like but it is limited and lacks any notion of real trade that takes place amongst humans (Georgia State University. "Researchers Shed Light On Trading Behavior In Animals -- And Humans." ScienceDaily. 22 June 2009). I add that to remind the reader of two distinct points: 1) Beware of the desire to humanize animals to an unbelievable extent for a researchers own self-interests and 2) Economics is hardly detached from the natural or social sciences (e.g. phycology, philosophy, biology, theology, sociology). Universities modern approach of breaking down the liberal arts into categories and splitting the natural and the social from another can be rather shameful toward the realities of society. I am not advocating that the natural sciences of man justifies their actions (e.g. murder) or anything insane, but we cannot afford to not study the whole picture. All of the sciences are connected and interdependent. Interconnection ranges from the attempts to connect evolution with economics to a much larger debate of creation vs evolution. Moving on, animals must either gain another animals favor (e.g. submission or simulate a form of “bargaining”) or use force. Then comes one of many famous lines from the Wealth of Nations:
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely (p.15).
Charity is the hope for the beggar as it can sustain him or her, but “it neither does nor can provide him with them as he has occasion for them” (p.15). Altogether beside the beggar’s reliance on the goodness of man’s heart to provide, man uses a means by which fulfills his self-interests while also fulfilling another’s self-interests for their own and the cycle continues. These cycles are fulfilled through treaties, bartering, or purchase (p.15).
By purchase Smith means money. Although he does not address it directly at this point, it cannot go without saying that money is the best form of exchange as it can “purchase” goods and services in a peaceful manner that provides a fair exchange for most people. It is the origins of money in Chapter IV (four) that becomes a staple topic for Smith and, I might add, for most economic historians. A must read is Neil Fergusons’, The Ascent of Money. Equally important, it cannot go without saying that money itself is an unnatural event to some extent that takes place in humanity. Granted, man is greedy and seeing resources that are deemed “better” would naturally lead to competition over that resource, however, monetizing an economic system remains an abnormal reaction that is worth studying further. As one professor of mine put it, “the monetary system is rather barbaric if you truly think about it” and I have given it plenty of thought. Indeed, on the surface it does turn strange when we base goods and services off of a fabricated of a physical resource or good, but then again it has also created a stabilizing force as well. It leaves much to be researched.
By page sixteen, Smith continues to make the mistake of associating primitive societies (any society up to the seventh century for that matter would be farfetched) with modern socioeconomic capitalistic tendencies by using the principles of treaties, bartering, and purchases throughout history as a derived principle of the Divisions of Labour (DOL) (p.16). Without considering the particulars of his flawed argument further, it is worth recognizing that Smith makes a great observation of how one person’s toils encourages another to labor so that they too can benefit through trade, status, and other advantages that profits work over idleness as it “encourages every man to apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business” (p.16).
On the top of page seventeen, Smith understood that it was not nature that made man most dissimilar, but their “habit, custom, and education” (p.17). He ties this is in as being the positive effects of DOL rather than the cause for DOL (p.16-17). It is important to split this argument into two parts by first addressing the issue of nurture versus nature.
Without a doubt, how one is nurtured—the cultivation and fostering of boys and girls, men and women—is vitally important in the betterment of an individual. People are not born unequal in the sense that one person is “naturally” superior over another in every respect. That is to say there is no natural hierarchy which makes one a king and another a slave. These devices are formulated through mankind and encouraged through the nurturing process. However, it would be ignorant to ignore the natural differences, beyond men and women, people may be born with and have genetically (something Smith could never have known without modern science). Some people are born with disabilities while others are simply born with good genetics such as being a faster runner, swimmer, etc. Regardless though of natural disabilities or abilities, these differences do not justify a belief in the natural superiority of one human over another. Equality must take precedent. That is the moral purpose of equality. One could even argue that the belief in such a natural superiority is the antithesis of a free market ideology. Divisions of Labor (DOL) do not care if you are born of kings and queens as long as you have the resources—physical, mental, or financial—to endure. Dealing with humanity though leaves open the reality that people formulate divisions. The question must then be if such divisions are based off of the attitudes of “natural superiority” such as the atrocities against African-Americans or the Jews in Nazi Germany to give extreme examples or if these are divisions created by circumstances and cultivations. Not everyone can be rich nor will everyone be poor. These divisions are sometimes unfortunately linked to a racist past that has since passed but still living with the consequences. One must acknowledged this reality, but there are indeed no easy answers. Ultimately the habits, customs, and education of individuals will benefit more overtime unless such an individual is burdened by some disability. But the question then remains, are these desires to nurture due to the effect of DOL?
At the end of the first paragraph going from pages sixteen to seventeen are the following:
But without the disposition to truck, barter, and exchange, every man must have procured to himself every necessary and conveniency of life which he wanted. All must have had the same duties to perform, and the same work to do, and there could have been no such differences of employment as could alone give occasion to any great difference of talents (p.17)
Smith is consistent in his argument that the Divisions of Labor (DOL) are of natural consequence and of the natural evolution of man and man’s progress. Unequivocally, Smith was wrong on this point. The historical context of human progress and development is far more complicated and interconnected than a mere DOL. Does the principle of DOL as argued by Adam’s impact a society's psychology? Yes, Capitalism redefines culture as does Marxism and every other ‘ISM.