My main preoccupation for several years has been the question “why is it possible to earn money for no other reason other than already having more than you need in the first place?” I’m not satisfied with the standard stories, and that is what motivated the Ruminathans. But lately, I have been thinking about another element of the way we’ve organized our economic relations: the division of labor.
Adam Smith’s Wealth of Nations opens with his famous description of a nail factory. Its workers are collectively more productive when they split up the steps than they would be if each worker took a nail through the whole process, from beginning to end. By specializing in just one step, a worker can become enormously productive at it, and if the collective work of specialists is well-organized, a factory of ten specialists produces many more nails than ten generalists working individually.
As at the nail factor, so in society. Collectively, so the story goes, we are much more productive and much better at meeting our individual needs if we specialize rather than trying to live autarkically. Of course, at the nail factory, it is somebody’s specialized skill to design and manage the overall production process. While that may work at the scale of nail mass production, no single person can coordinate the specialized contributions of teeming billions. Luckily, just a few basic rules can generate self-organization in complex systems, as long those basic rules are allowed to operate uninhibited. Although some individuals may not be able to meet their needs perfectly under those rules, the emergent self-organizing system meets individual needs better than the two alternatives: everyone living autarkically, or the central organization of the workflow of billions of specialists. The all-important rule is simply that each person should maximize their “utility” where utility is the aggregation of an individual’s preferences. And, according to some, this rule just happens to coincide with our natural inclinations.
In fact, even if those aren’t our inclinations and we set others’ utility above our own, according to this view, we should still follow the basic rule, even though it appears selfish. Two reasons: a) applying the rule is what allows self-organization to work, and b) we’re usually pretty clueless about others’ utility anyway, and we should let people just work things out for themselves. The latter will ring true for any couple who has ever tried to agree on what movie to watch when both partners try to put the other’s wishes above their own.
That’s the summary of the argument for free markets. Even shorter: We’re more productive when we specialize, but then we need to coordinate, and the best way to coordinate is to follow a few simple rules that allow self-organization to emerge in a complex system.
Put in terms of first great question of ethics (“What do we owe each other?”): We owe each other to specialize ever deeper, getting more and more productive so that we can meet everyone’s needs better, collectively. But by specializing, we throw ourselves at each other’s mercy: Giving up the ability to meet our needs on our own is a big risk. To manage that risk we also owe it to each other to put systems in place to ensure that everyone holds up their part of the bargain and that, amidst all this specializing, we don’t leave big gaps in the supply chain.
That is society’s Grand Bargain. We don’t individually find food, water, and shelter. We break down delivery of goods into ever longer and more ramified supply chains, let prices fluctuate freely in order to signal what stuff we need more of and what we need less of, and hope for the best.
We don’t just outsource our provisioning of water, food, and shelter. To focus on that one little sliver of the Great Supply Chain we actually get good at, we need to clear our schedule: We send our children to childcare and education specialists, pay cleaning specialists (trash collectors at least, if not housekeepers), and let restaurants and consumer goods companies take on food preparation. Rather than make music and tell stories ourselves, we pay specialists to do so for us. After all, by specializing they get much better at making music and movies than we ever could.
So much for the division of labor and the first great question of ethics. I’m not satisfied with this story, but that’s a larger topic worthy of many a Ruminathan. In the meantime, what has caught my conscious attention in the last few months is the second great question of ethics: “What is the good life?” Does focusing on one thing and doing it extremely well constitute a life well-lived? I know how I have chosen to live my life, and in the “About the Author” sidebar you can see that I have resisted specialization. But did I choose well?
A future Ruminathan will explore that question. One thing is for sure: I won’t settle quickly for a flabby “do whatever works for you”-type answer. That is the last refuge after trying like hell to find the good, the beautiful, and the true.
The Ruminathans 
I think I could argue that capitalism and the division of labor actually enhanced our freedom to pursue self-determined goals in life. Yes, there is probably a specialization of the wagework for most of us. But at the same time, the productivity of the capitalist economies have led to a reduced workload for individuals which after all gives us more time playing music, telling stories etc. To put it in other words: A hundred years ago, ordinary people couldn’t even think about these kind of things because they were too busy working for the basic needs in life.
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This is indeed the argument I would have made myself a few years ago, and while I still believe it has some merit, there are several things that have made me quite skeptical. In no particular order:
At the highest level: I have come to view the base case against which “progress” should be measured as the hunter-gatherer socioeconomic organization, and certainly not the state of affairs of 100, 200, or 300 years ago in Western Europe / USA. Economic welfare immediately after the industrial revolution may well have been at a true nadir in the history of human affairs. Things may have improved (for some) over the past 100-300 years, but off of a foul base. In this I have been heavily influenced by Jared Diamond’s “The World Until Yesterday.”
In line with the previous point: unquestionably, some people enjoy more leisure time now in developed nations, but on a global scale, that may not be true. I think a good case can be made that we have outsourced drudgery to other parts of the world. It’s not a pleasant thought, but it may well be that if I can take a few hours of week to think philosophical thoughts and write them down in a blog it is because someone is working 16-hour days in an Indonesian mine. Just because I recognize my share of globalism’s spoils as leisure instead of in my bank account does not make me any less a member of the global 1%.
There is in my mind a clear qualitative difference between passive consumption and active production of things like music, stories, and other creative endeavors. What looks like more time for music, etc. may actually be an increase in time devoted to passive consumption, but at the expense of active production, and I would characterize this transformation as a loss. Music may in fact not be the best example – it’s simply one that I am most interested in – but today we buy objects of everyday use and delight in their superior quality, whereas previously, yes, we may have spent some of our time making them but would have also delighted in their manufacture, even if the outcome was quite humble. Now we have to go out of our way to reinsert creative hobbies into our schedules; we may have got this benefit “for free” previously. Similarly for exercise, for which we now have to seek out opportunities, and we may have previously got it “for free” through everyday “necessary” activities. And there is fairly decent evidence that the necessary activities did not become backbreakingly onerous until after serious division of labor (and markets for agricultural products) began.
Something that has always puzzled me is how ethnographers like Elias Lönnrot (The Kalevala) or The Brothers Grimm could find it fruitful to go into small subsistence communities to collect orally transmitted folk tales (or songs, etc.) if the people in those communities did not have time to learn them by heart and tell them to each other in the first place.
And to be clear: I am not saying that we should go back to being subsistence farmers or hunter-gatherers if for no other reason that I don’t believe that’s a viable path for all 8 billion of us. But as we consider direction and meaning we should take stock of where we’re headed and what we might be losing; there may be other ways to organize the activities of 8 billion that are optimal for a different set of goals than just maximizing total output.
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To begin with, I base my arguments on the idea that individual economic success and wealth in general does give people more freedom to choose for self-determined goals.
Judging the division of labor, the times that we are comparing really matter. Hunter-gatherers may have had more personal freedom in their lives, but it only lasts so long as they didn’t die starving or by the occasional tiger (or warfare with neighbors). It seems more appropriate to compare to the medieval times and early modern age because the idea of the division of labor really took off during the industrial revolution (even though the idea is much older). I am unaware of the Diamond Book you mentioned, but I doubt a few hundred years ago there was much opportunity to escape the estate you were born into. It is at least interesting that you mention the Brothers Grimm, because I’d say they were what we’d call “elites” today (as descendants from a cleric family they were for sure part of the global 1%).
I agree that we (the western world) outsource drudgery to other parts of the world with the result that many of us enjoy more self-reliance and leisure time. Still, I think there is evidence of reduced worldwide poverty over the time in question (see for example https://www.youtube.com/watch?app=desktop&v=5JiYcV_mg6A). And according to my premise above, wealth comes with more leisure time and self-reliance. But since we are living in the midst of this ongoing development, I concede that the final judgement if capitalism and the division of labor benefits people on the global stage (and the long-term) is still pending.
Then there is the argument that we use our leisure time not for our own good. I am myself a big critic of social pressure to follow all the popular trends of music, TV series and consummation in general. But this remains still a personal decision. Further, I doubt that even a majority engages in more consumption compared to self-produced ‘happiness’. But even if most of us follow the big trends, it is at least possible to choose otherwise and I think many actually do so.
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Just a couple of points on the paragraph “Judging the division of labor… part of the global 1%”:
I don’t wish to make hunter-gatherer existence to be a baseline because it was idyllic, but because it is the “base” both from a historical perspective and in terms of the longest-running mode of social organization (in a sense having the “best proven track record”). As far as we know, tribal warfare is a problem in H-G societies, but for instance famine seems to be more of an agricultural society problem. In this I’m following the evidence assembled in the already mentioned Diamond book, and in “Against the Grain” by James C. Scott and “Affluence without Abundance” by James Suzman.
But even taking medieval / early modern times as a baseline: Apparently, it was not easy to get the Industrial Revolution started at first because it was difficult to induce people in rural areas to work on producing commodities (specializing in producing a commodity for a market) even through higher wages! This would indicate that people must have been meeting their everyday needs just fine without needing to trade, and if anything, wanted more leisure. This is discussed in David Landes’s “Wealth and Poverty of Nations.” The central role played in the Industrial Revolution by the enclosure of the commons in England, which took away the ability of villagers to be diversified across both crafts and food production, is discussed in “The Great Transformation” by Karl Polanyi. So I’m not sure that the popular image of medieval farmers working incessantly just to stay alive is accurate.
My point about ethnographers like the Brothers Grimm clearly did not come across correctly: obviously they were part of the 1% at the time. But my point is that they collected the cultural wealth of the non-1%ers of the time. Clearly whoever the Grimms and Lönnrot were visiting had time to enjoy and orally transmit rich cultural traditions.
Note also how the video linked started the investigation of poverty at 1800, well after the specialization trend was underway, and not at all a good baseline for comparison.
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Yesterday I had a meeting with my reader circle, debating about the book ‘how rich it is okay to be’ (Christian Neuhäuser: Wie reich darf man sein). The discussion culminated in the question if all people could possibly become rich or if the divide in poor vs. rich is inherent in our system. That seems to be one of the basic questions of your post. Unfortunately, we couldn’t find a satisfying answer…
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