Adam Smith and Karl Marx: The Division of Labor

Adam Smith and Karl Marx, despite the radical difference of their opinions on capitalism, were two of the greatest economic analysts of their eras. In general, Smith (1974) takes the position that the division of labor that occurred concomitantly with the Industrial Revolution has the effect of increasing wealth for a society as a whole and expanding the opportunities for meaningful employment for workers. Marx (2002), on the other hand, argues that the evolution of modern industry and the division of labor subjects workers to oppressive, dehumanizing working conditions while concentrating wealth in the hands of a few. This brief analysis will assess each argument. While Marx (2002) makes a valid point regarding the impact of capitalism and industrialism on workers, it is Smith's (1974) discussion of the division of labor that is most convincing.

Smith (1974, p. 109) opens his discussion by stating that "the greatest improvements in the productive powers of laborà seem to have been the effects of the division of labor." In the great manufacturing centers that were developed during the early years of the Industrial Revolution, Smith (1974, p. 109) saw opportunities for employment of "so great a number of workmen that it is impossible to collect them all into the same workhouse." Industrialization, said Smith (1974, p. 112), fostered a "great increase of the quantity of work which, in consequence of the division of

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. Further, Smith (1974) believed that the power of exchanging or bartering that gives rise to the division of labor creates a situation in which the extent of this division is limited by the extent of the market. As markets themselves become more complex, it becomes virtually impossible for one individual to fully supply himself and his family with all of the goods and services that are needed. Consequently, workers specialize and become adept at producing specific goods or services that are valued by others and from which an income or livelihood can be gained. This is as true of the capitalist landowner as it is of the factory worker or the cottager. Certainly, Smith (1974) did not fail to recognize that the division of labor invariably resulted in significant differences in income or in control of capital. However, he saw this difference as an inevitable consequence not solely of the division of labor, but of the economic realities of private property and the control thereof. Karl Marx (2002, p. 12) appears to agree with Smith (1974) that the "starting point of modern Industry isà the revolution in the instruments of labor and this revolution attains its most highly developed form in the organized system of machiner
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Approximate Word count = 1635
Approximate Pages = 7 (250 words per page)