Monday, February 19, 2007

The Division of Labour Has a Long Lineage, as have Markets

A Blog, ‘Associated Content: the people’s media company’, publishes today a book review by Brian McElroy, “Adam Smith in Karl Polanyi's The Great Transformation”. I contains nothing controversial with the approach of ‘Lost legacy’, though Karl Polanyi might have choked over it while eating his morning cornflakes.

Brian McElvoy opens with a paragraph that sums up the differences between Polanyi and Smith:

In Karl Polanyi's The Great Transformation, a treatise on the economic and social consequences of the Industrial Revolution, he often invokes Adam Smith as the founder of an intellectual movement that inappropriately relegated primitive economics to prehistory by assuming that man has a natural propensity to barter, truck and exchange one thing for another. Polanyi clearly differentiates himself from this movement, largely based on one of the basic premises of the market economy; he states that "the division of labor, a phenomenon as old as society, springs from differences inherent in the facts of sex, geography, and individual endowment; and the alleged propensity of man to barter, truck and exchange is almost entirely apocryphal" (Polanyi 45).”

From this page on (we are only at page 45), Polanyi and readers familiar with the works of Adam Smith go their separate ways. It’s some years since I last read Polanyi’s books and I remember spotting his errors in his ‘marxian’ version of the world and history, and the tendency he had to assume that Smith wrote about market relations in pre-history (and, indeed, in the ages of shepherding, farming and commerce) as if ‘truck, barter, and exchange’ on its separate, diffuse and social-evolutionary appearance within existing modes of production, meant that they dominated these ‘old’ orders and replaced them.

I have a couple of papers by Morris Silver (New York University) on these subjects, one of which is a studied and through rebuttal of Karl Polanyi’s narrow views of exchange relations in the Ancient world, using screeds of data from Greek times and earlier to show the extent and depth of what Polanyi calls peripheral, that I have not seen answered (it is among my papers in France, so I cannot give you references).

Brian McElroy does not address the substance of Polanyi’s critique, except in so far as it refers to what Smith wrote, and for this I was receptive. Polanyi came at Smith with the prejudices of a person who had taken on board the market economy, as described by Chicago, aligned it with a few quotations from Smith, and then proceeded to attack his perceptions of Smith’s political economy, as if Chicago Smith was Adam Smith inside guise of the neoclassical paradigm. Given that the neoclassical paradigm does not even describe existing economic relationships, I remain confident that Smith emerged unscathed from Polanyi's polemics against Chicago.

“As illustrated, Polanyi and Smith hold plainly different ideas on the causal factor behind the division of labor. Polanyi finds that Smith's ideas which gave rise to the notion of 'homo economicus' were more prophetic than descriptive; he states that "while up to Adam Smith's time [the propensity to barter, truck and exchange] had hardly shown up on a considerable scale in the life of any observed community, and had remained, at best, a subordinate feature of economic life, a hundred years later an industrial system was in full swing over the major part of the planet" (46).”

Polanyi’s version of the division of labour is almost laughable.

Consider the simple everyday facts of life in ancient times: city states had ports; ports have ships; ships have crews; crews eat food; other people produce the food; ships carry cargo; other people produce the cargo; other people eat food; families shelter in houses; people build house; people use tools; other people make tools; tools and cargo are transported; other people transport goods, using carriages (built by others) and animals tended by others; who visit temples, built by others and managed by priests; others guard the cities; they eat food; other produce the food; and ….

There is also the extensive monetisation present in all the economies of the ancient world, and that, is the crowning evidence for the existence of the widespread division of labour: for what conceivable purpose would money exist if there was no division of labour? And before money there was barter and the same applies: 'truck, barter, and exchange' causes barter and, eventually, money, and both, eventually cause the commercial age that Smith identified, and the commercial age, in its second manfestation after the recovery of Europe from the Fall of Rome, led to the capitalist phenomenon from the mid-19th century.

How far must I go on to demonstrate the ubiquitous nature of the division of labour from ancient times, long before Plato wrote about it, never mind Petty and his watchmaker, or Diderot in his Encyclopedia, and, of course, Smith visiting the pin factory in Wealth of Nations, all of which was before the ‘industrial system’ a ‘hundred years later’.

The absence of a division of labour (which may have been preceded by the divisions associated with the sexes) describes a primitive pre-human existence (the ‘brutes’ in 18th century lore), combining absolute equality (a totem of orgasmic Marxism), with absolute poverty (another totem consequence of the socialist states of the 20th century, plus North Korea in the 21st).

Google Professor Morris Silver and follow up with his impressive scholarship on these matters.

Thanks to Brian McElvoy for reminding me of Karl Polanyi’s unsound analysis of history, and his mistakes about Adam Smith.

Read Brian McElory’s post at:


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