3.1 Division of labour

Adam Smith identified the division of labour as a principal source of increasing productivity. When production is divided into specialised tasks, workers improve their dexterity, avoid the time lost switching between tasks, and develop machinery that reduces labour. Exchange allows each person to specialise while obtaining the products of other people's specialised work. The resulting increase in output is central to Smith's account of the material benefits of commercial society.

The greatest improvements in the productive powers of labour, and the greater part of the skill, dexterity, and judgment, with which it is anywhere directed, or applied, seem to have been the effects of the division of labour.

Smith also warned that the same process could damage the people performing the work. A person whose life is spent carrying out a few simple operations has little opportunity to exercise broader intellectual capacities and may lose the ability to exercise judgement or invention.

The man whose whole life is spent in performing a few simple operations, of which the effects, too, are perhaps always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention, in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become.

Smith argued that government action, including support for education, was necessary to prevent this degradation among the great body of the population.

This creates a conflict that cannot be reduced to income. Division of labour may increase total production and make goods more abundant while leaving workers with repetitive work, little autonomy, and limited opportunity to develop their abilities. Workers may object to these conditions even when their material standard of living has improved.

In a democracy, those workers are also citizens. A majority may use political power to regulate working hours, safety, employment conditions, education, or the organisation of production. Such measures may protect human development and workplace autonomy, but they also restrict how owners organise their property and production. The productive benefits of the market can therefore come into conflict with the majority's judgement about what constitutes an acceptable working life.

The conflict within Objectivism

This problem creates a particularly deep conflict within Objectivism. Followers of Ayn Rand are among the strongest defenders of free markets, but Objectivist ethics does not treat the accumulation of goods as the end of human life. It places rational self-interest, individual happiness, purposeful productive achievement, and the full use of one's mind at the centre of human flourishing. Rand described productive work as the central purpose of a rational life and warned against uncritically repeating a routine or settling into work that requires less than the full use of one's mind.

Ayn Rand, “Productiveness”, The Ayn Rand Lexicon.

The modern division of labour leaves vast numbers of people doing precisely the repetitive, narrowly constrained work that Smith and Rand both regarded as destructive of human potential. That work may take place through formally voluntary employment contracts and contribute efficiently to production, yet still leave workers with little autonomy, creativity, intellectual development, or meaning in much of their waking life. The market's success in producing material abundance does not by itself establish that it enables the people doing the work to flourish.

Pointing to the worker's formal freedom to accept or reject a job does not resolve this conflict when rejecting such work may mean losing access to food, clothing, and shelter. Objectivists who defend the market while ignoring the enormous prevalence of work that suppresses the exercise of reason fail to confront the market by the standard of human life and happiness that their own philosophy establishes.