"In the 1960s and 1970s, jobs on the General Motors assembly line were very narrowly defined; a worker would perform the same set of tasks—for example, screwing in several bolts—every 60 seconds for eight to ten hours per day. Workers were not expected or encouraged to do anything beyond this single task. Responsibility for the design and improvement of the assembly system was vested firmly in the hands of supervisors and manufacturing engineers, while vehicle quality was the responsibility of the quality department, which inspected vehicles as they came off the assembly line. GM’s managers were notorious for believing that blue collar workers had little—if anything—to contribute to the improvement of the production process ..."
The quotation is from Susan Helper and Rebecca Henderson in "Management Practices, Relational
Contracts, and the Decline of General Motors," which appears in the most recent issue of the Journal of Economic Perspectives. (Like all JEP articles back to the first issue in 1987, it is freely available on-line courtesy of the American Economic Association.) Of course, back in the 1960s in particular General Motors was an enormously successful and profitable firm, and so the extreme division of labor seemed to be working fine from the company's point of view.
Both the notion that the division of labor can lead to enormous gains in output, and the concern that an extreme division of labor can be bad for workers, are themes in Adam Smith's The Wealth of Nations. (Here, I'll refer to the ever-useful version available online at the Library of Economics and Liberty.) Smith's well-known story of the division of labor in a pin factory comes almost immediately in Book I: indeed, the first chapter of Book I is entitled "The Division of Labor." Smith discusses how the manufacturing of pins can be broken up into 18 separate tasks, and how after such a division of labor, small operations of 10 or more people (some doing multiple tasks) could then produce 48,000 pins per day. Smith hypothesizes that one person working alone, not knowing much about the specifics of pin manufacture, might be able to make only 20 pins per day--maybe only one.
But in a lesser-known passages back in Book V of Smith's The Wealth of Nations discusses the perils of too great a division of labor. Smith writes:
"In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently to one or two. But the understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects 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. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging, and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expence of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it."You'll occasionally hear someone say that "Adam Smith never really considered the downside of the division of labor," which is clearly incorrect. Indeed, Smith goes on to make this argument one basis for his argument for government support of public education for everyone.
For GM, the extreme division of labor ended up not working well. Helper and Henderson quote an autoworker named Joel Smith about what it was like working at GM back in those days. Smith said:
In the old days, we fought for job security in various ways: “Slow down, don’t work so fast.” “Don’t show that guy next door how to do your job—management will get one of you to do both of your jobs.” “Every now and then, throw a monkey wrench into the whole thing so the equipment breaks down—the repair people will have to come in and we’ll be able to sit around and drink coffee. They may even have to hire another guy and that’ll put me further up on the seniority list.
Management would respond in kind: “Kick ass and take names. The dumb bastards don’t know what they’re doing.” . . . Management was looking for employees who they could bully into doing the job the way they wanted it done. The message was simply: “If you don’t do it my way I’ll fire you and put somebody in who will. There are ten more guys at the door looking for your job.”In contrast, Toyota plants were built on division of labor, too, but the treatment of workers was quite different. Helper and Henderson explain:
Jobs on Toyota’s production line were even more precisely specified: for example, standardized work instructions specified which hand should be used to pick up each bolt. However, Toyota’s employees had a much broader range of responsibilities. Each worker was extensively cross-trained and was expected to be able to handle six to eight different jobs on the line. They were also responsible for both the quality of the vehicle and for the continual improvement of the production process itself. Each worker was expected to identify quality problems as they occurred, to pull the “andon” cord that was located at each assembly station to summon help to solve them in real time, and if necessary to pull the andon cord again to stop the entire production line. Workers were also expected to play an active role in teams that had responsibility for “continuous improvement” or for identifying improvements to the process that might increase the speed or efficiency of the line. As part of this process, workers were trained in statistical process control and in experimental design.A similar difference applied in how GM and Toyota dealt with suppliers. GM told suppliers what to make with a detailed blueprint, and then more-or-less told the suppliers to shut up and make it. Toyota and the Japanese firms fostered long-term relationships with suppliers where they collected more data and used it to encourage innovation, while still bargaining hard on price. Helper and Henderson make a persuasive case that a primary reason why GM saw its US market share fall from 50% in the 1960s and 1970s to less than 20% in recent years, and needed to be rescued from bankruptcy with a government bailout in 2009, is in large part because of GM's inability to change its culture and build productive relationships between its workers and suppliers.
Maybe the division of labor isn't the enemy: instead, maybe it's particular managers who have little or no respect for what the actual workers can know or contribute. Of course, that problem isn't particular to capitalism. Managers of factories in government-owned firms or planned economies were quite susceptible to it as well. Indeed, one might argue that modern firms which outsource tasks to foreign producers for nothing more than a cheap pair of hands have often ended up discovering the potential downsides of such a relationship. As the sociologist Emile Durkheim argued in his 1893 book, The Division of Labor, a division of labor in a modern society (especially when backed by support for education and training as supported by Adam Smith) can be a way of both strengthening social ties and offering freedom and opportunity for individuals.
