Thursday, November 11, 2010

Toil, the Foundation of Life

Robert King writes on Adam Smith’s alleged “Unwarranted assumptions” in Virtue Quest (‘exploring ways to grow in virtue and overcome vice’) (HERE):

Smith makes a number of assertions at the beginning of his work, assertions that have been taken for granted by pretty much all economists since. The first of them is that labor is the source of wealth.
Now, there is no denying that labor is one of the sources of wealth; but Smith treats it as if it is the sole and entire source of wealth

Robert King does not identify the other definitions of ‘wealth’ that Smith is supposed to have missed and therefore he makes his own assumption about the “meaning” of “wealth".

For Smith, wealth was the annual output of “necessaries, [subsistence goods], conveniences [additional goods that are perceived to add small and great comforts to life], and amusements [relatively flippant possessions according to taste and income] of life” (WN I.v.1. 47).

These rich ideas were in contrast to the common (c.17th century) meaning of wealth being gold, silver, precious stones, and, later, paper currencies, which were a means of exchange in monetary societies, but which had no intrinsic value in themselves and for Smith they were not wealth as he understood it – and far from their being treated by Smith as ‘mere assertions’; their evolution and history are thoroughly explained in his opening chapters (he was ‘always willing to run some hazard of being tedious in order to be sure that I am perspicuous (WN I.iv.18: 46)

Robert King reverses Smith’s order in stating: “The first of them is that labor is the source of wealth.

In a first reading through of Wealth Of Nations it is easy to miss Smith’s distinctive historical perspective, which dominated his thinking. He said that labour was the “first” and “original source” of all wealth in the ‘original state of things’, which in primitive societies, that ‘first age of man (scavenging, hunting and fishing)’ was clearly true; what humans did to subsist upon was achieved solely by their own labour, not by gold, etc. Without their labour (or somebody’s else’s), they starved to death. Toil was the foundation of life.

Indeed, I am sure that King (who appears to be religious) knows that in the Biblical story of the Garden of Eden, Adam and Eve were put there ‘to work it and take care of it” (Genesis 2). Abundant fruit has to be picked, berries have to be collected, game has to be chased, all had to be carried, cleaned and prepared. What they collected, in Smith’s terms, constituted their ‘wealth’.

King asserts that

The abundance or scantiness of this supply [of goods], too, seems to depend” on the productivity of the laborers. While it is true that there is no wealth without labor, it is equally true that labor must have some thing to labor upon to generate a valuable product. Wealth, or value, is not disconnected from the real stuff of the world; it is not created ex nihilo.”

This seems to imply, at least to me, that the King believes that sources of food in nature are wealth and that before a valley is ever occupied or visited by humans that ‘wealth’ was present through the eons before humans arrived, even though no human knew anything about what they had never seen. Even in the short life span of humanity (400,000 years out of millions) King considers all unknown and unused resources to be ‘wealth’ presumably in some metaphysical and meaningless sense (it took 40,000 years for humans to reach what we know as Australia; it took Homo Erectus a million years to reach China. The real wealth of these territories only had meaning in the context of humanity’s labour in making it so.

Wealth, or value, is not disconnected from the real stuff of the world; it is not created ex nihilo", declares King. In the beginning the “real stuff” had utility only when labour was applied to it; after tens of thousands of years that “real stuff” developed “exchange value”, but only when “exchange” was joined to its utility by human beings in societies.

Food in those days did not turn up ready caught and cooked, with humans only having to open their mouths to be fed. Somebody had to labour to transform the “stuff” into edible and nutritious food.

King writes, as a prelude to declaring himself a “a homebody”, who wants “something more than ‘one simple operation to fill up the ‘employment of my life’. I have no desire to be ‘reduced’ to such mechanical production (quoting Smith):

First, the improvement of the dexterity of the workman necessarily increases the quantity of work he can perform; and the division of labour, by reducing every man’s business to some one simple operation, and by making this operation the sole employment of his life, necessarily increases very much the dexterity of the workman’ (Wealth Of Nations, I.i).

Most of his readers may not notice that King has switched to a modern society, compared to when the ancestors of 18th-century labourers in Britain were in the forest, living off their labour alone.

The division of labour in the 18th century was not a life-choice, compared to the life-choices now available to King and his family. Here, note that Smith did not invent and nor was he the first to make a note of the division of labour (Plato noted it millennia ago). Smith was a moral philosopher who observed the world he lived in and analysed it consequences. The productivity of labour reached new levels with mechanization and the re-organisation of work. Those labourers, man and boys, no doubt woud have preferred “something more than ‘one simple operation to fill up the ‘employment of” their lives. They had no real choice but to work in the pin factories. (King does not have to, because even pin-making is now mechanised and a few banks of machines make all the pins that the US needs.)

But even in 1776, Smith describes a little further along in his opening chapter (WN I.i.11: 22-24), how the common day-labourer’s woollen coat was made in a long and complex supply-chain from home and abroad, involving scores of people, each contributing their bit to the final product. Expand Smith’s example across the whole of his 18th-century society (and Robert King’s) and see how the international division of labour produces the mass multitude of products and services now regularly consumed by billions of people (including Robert King’s) to provide their living standards.

That is what Adam Smith was writing about. We haven’t all turned into ‘pin-makers’ or single-tasked automatons.

I would conjecture that an audit of all the things owned and consumed by Robert King may surprise him out of his complacent dismissal of Smith’s “assertions” about the impact of the recognition of the historic role of labour and, from a few thousand years ago, the continuing impact that the nascent division of labour in modern societies.

He might well ask just how many individuals, most of them in their millions unknown to him, who, through the division of labour, contributed to the computer he writes upon and Internet that distributes his “labor of love”, so that we who are his readers may share his thoughts and judge them.



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