in Capitalism THE SOURCE OF PROCESS INNOVATIONS IN CAPITALISM

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1 1The Evolution of Jobs in Capitalism 29 Competition forces firms to take part of the surplus and reinvest it into the firm. This reinvested surplus goes to attempts to find new products, to introduce profit-able product differentiation, to find new sources of cheap inputs into production, and to change the production process itself. Changes in the production process often called process innovations are continual in capitalism. Most of these changes are very small. But over time these continual small changes in the production process lead to profound changes in the way that production is carried out within the firm. Occasional major changes to take place in the production process within firms. The shift of Ford Motor Company to a automated assembly line was one such change. Such major changes are important, but their importance does not mean the continual small changes are unimportant. Studies have shown that the collective impact of the millions of very small innovations in production processes likely have had a more major impact on the US economy than have a few well-know innovations. Process innovations often lead to changes in jobs. Often, a process innovation is a change in a job that makes the firm more profitable. This chapter focuses on process innovations that involve changes in the nature of jobs offered to employees in the economy. THE SOURCE OF PROCESS INNOVATIONS IN CAPITALISM New process innovations do not fall out of the sky. Rather, they are the product of people with certain knowledge and skills. They are also the product of people who know they have to, eventually, get capitalists to buy the process innovations they peddle. 265

2 266 The Evolution of Jobs in Capitalism Technologies and jobs are designed by people who have particular goals in mind. The tools and equipment used to produce certain products are also selected by people who have many possible choices in how a product is produced. Nothing is inevitable about how a job designed or the technology used in a certain job. One major claim of this chapter is that jobs in capitalism have evolved in a way that have as much to do with management earning profits and gaining power over workers as it does with scientific and engineering knowledge. RISE OF SCIENCE Some time in the 19 th century scientific research became increasing important for the development of new process innovations in capitalism. Before this time most innovations were introduced as the result of trial-and-error experiments of curious amateurs or craftsmen trying new ideas on the job. By 1900 formally trained scientists working in research organizations with the goal of systematically finding new innovations acceptable to businesses appeared across the economy. Knowledge of chemistry and physics and newly developed procedures of engineering were applied to find new and better products, to introduce new product innovations, and to find the process innovations. The pace of technological advance in capitalism sped up quickly due to this change in the nature of the discovery of innovations. DIRECTION THAT SCIENTIFIC RESEARCH TAKES Scientific process does not occur in isolation. Those who direct much scientific research in the economy know that if they are to be successful they must, at the end of the day, convince business firms to buy their process innovations. Scientists and engineers through their training and everyday experience on the job come to internalize the notion that their work must end in products that will be of interest to business firms. That is, the state of scientific and engineering knowledge and the nature of the product itself are not enough to permit us to know exactly how work is performed in any economic system. Built into system is idea that process innovations and any associated job changes must be of interest to management. Others are rarely considered. For instance, innovations that lead to more interesting jobs but require higher wages are unlikely to be pursued as management is unlikely to be interested in such innovations.

3 The Evolution of Jobs in Capitalism 267 DEVELOPMENT OF THE DIVISION OF LABOR IN CAPITALISIM The division of labor describes how work tasks are performed within an economy. The division of labor is found in all economies. Capitalism, however, contributed to the spread of a special type of the division of labor that previously was found only occasionally: the manufacturing division of labor. SOCIAL DIVISION OF LABOR Rarely does a single individual produce all the goods and services that they consume. Rather, when people live in groups (within kinship groups, tribes, cities, or nations), an individual specializes in certain activities and relies on other people for the goods and services the individual herself does not produce. Specialization exists when some people within an economy perform some economic tasks while others in the economy perform other tasks. Specialization develops in parallel with exchange. If you make clothes and not food, you must have a way to get food from someone who makes it. It is possible that formal bilateral exchange occurs whereby you trade a shirt, say, for a big basket of corn. Sometimes, though, exchange takes a more collective form in kinship communities: all contribute to the group what they have produced. All that need something are able to take it from the collectively produced bundle of goods and services. Specialization often leads to the development of crafts, which are work activities that are recognized to require a relatively high level of skills in order to do these work activities well. Craftswomen or craftsmen also called artisans often get the social identity from their work: the baker or candlestick maker does not merely have a job they have an important function in society as they provide important goods and services to the community. An artisan has complete oversight in production and does most everything involved in the production of the good or service. Traditionally shoe production, blacksmithing, baking, and so on have been craft occupations. The rewards of a skilled craftsperson were many: they gained recognition from the community as is seen as a valuable member of society, they often earned a good standard of living compared to many others in society, and they gained the satisfaction that they were good at what they did for a living. The development of specialization so that people end up producing different items from one another and depend on exchange to survive has been called the social division of labor.

4 268 The Evolution of Jobs in Capitalism The social division of labor appears spontaneously where people live in kinship groups or in communities. The occupations of farmer, wood workers, blacksmiths, entertainers, and bakers and the specialization of some people in childcare appear in a community without anyone consciously planning for this to happen. Such spontaneous development of the social division of labor says nothing about who will fill the different occupations and other tasks within an economy. Very often social forces such as caste systems, patriarchal systems, and race-based systems determine who will fill the differ spots within a community that has developed a social division of labor. For instance, in kinship production tasks are typically divided by gender and by age. Men do different tasks (jobs) than women and the younger people in the community performed takes that differ from those done by the older folks. Some people hunt while other might raise food or gather fruit and nuts. Still others might bring up children while others build or repair shelters. Specialization in different tasks or jobs is seen in all economies. THE RISE OF FACTORIES AND MANAGEMENT IN CAPITALISM The social division of labor is found in all economies. As capitalism developed is started with the social division of labor but soon moved on to introduce a quite different way of production: the manufacturing division of labor. At the beginning of capitalism, capitalists relied on the labor processes that predated capitalism. The first workers within capitalism were artisans who produced just as they had before as independent bakers, blacksmiths, wheelwrights, cobblers, and spinners. The primary difference was that before these artisans were completely independent. Now these artisans worked for someone else. The capitalist might have purchased the raw materials and owned the output, but the artisan completely controlled how the labor was performed and the pace of work. The social division of labor still dominated production. Indeed, for the most part these artisans did not travel to a factory owned by the capitalist but continued to work where and how they before have. The capitalist was the one who traveled around to distribute raw materials and collect the finished product from the artisans. Over time capitalist took more control of production. They attempted to determine the number of hours that the artisans worked. Before, artisans worked as long and as hard as they desired. If they thought they had worked enough for the day they simply stopped workings. They also tended to work in a seasonal manner: perhaps working less in the spring while they planted food

5 The Evolution of Jobs in Capitalism 269 and perhaps working more during the cold winter when other economic activities were not possible. The early capitalists tried to halt this but found great difficulty as long as the work was performed at various sites away from the immediate oversight of the capitalist. Eventually, capitalist tried to gather together all his workers at a central location at a factory. A successful move into a factor permitted the capitalists to impose on workers a set number of hours per day and week. Now that workers were under the immediate oversight of the capitalist they found they now faced capitalist demands that they work at a more rapid pace of work they the artisans had before engaged in. The next step was that the capitalist shifted from paying workers by the piece to paying by the hour or day. Over time, artisans lost control over the pace and nature of work. This artisan control was replaced by capitalist control over who was done and how it was done. The capitalist undertook more management functions such as coordinating the flow of work and disciplining of workers. Capitalists moved the production process away from more traditional, and autonomous, forms of work such as putting out, craft labor, and subcontracting. In this way it found itself taking on more tasks beyond initial supervisory and sales tasks toward a more complex role involving coordination, planning, and recordkeeping. The capitalist took on activities that were once part of skilled, craft labor such as coordination of production. MANUFACTURING DIVISION OF LABOR The next step taken by the early capitalists was significant and represented a break with eons of traditional work organization. Capitalists broke down artisan production into a set if much more narrow jobs. This was the manufacturing division of labor. In the social division of labor the key unit of specialization is the occupation, in which an individual often oversees the production of something from beginning to end. A shoemaker who starts by cutting leather and ends with the final stitching would be a craft worker involved in the social division of labor. The manufacturing division of labor takes the next critical step: it breaks down occupations and crafts into a range of more narrowly defined, and less skilled, jobs. In this process the multi-skilled craftsperson is replaced by a set of people each of whom has a smaller range of skills. The person filling such a narrow job only personally participates in a small part of the production activities needed to produce some good or service.

6 270 The Evolution of Jobs in Capitalism Often this process is referred to as deskilling. Workers who formally had held jobs that required a high level of skill now found they were forced to take jobs that required far less skill. Over time all workers lost these higher skills as jobs requiring them disappeared and workers therefore never learned them. The manufacturing division of labor can be seen in an auto factory. In an auto factory the production of cars involves hundreds of different people, each contributing only a small part to the construction of a car. In the manufacturing division of labor the production of a product is broken down into different very specialized jobs. Production in this setting must involve a group effort: no single individual can produce the product by herself. One implication of the manufacturing division of labor is that an individual must be employed within a factory in order to be productive. An autoworker that specializes in the installation of the windshield is unlikely to be able to start up production himself. Without a job in an auto factory the autoworker s skills are worthless. The manufacturing division of labor appeared widely only after the appearance of capitalism and wage labor. Further, the manufacturing division of labor does not appear spontaneously. The decisions of crafts people did no lay behind the development of the manufacturing division of labor; employers often forced this division of labor onto their craft employees because it served employers interests of earning higher profit. The manufacturing division of labor most typically appears in one circumstance: when the labor of workers is controlled by others. Workers often fought (and continue to fight) the expansion of the manufacturing division of labor with it threatened to appear. Workers generally prefer to do a range of tasks. They generally do not desire to specialize in a very narrow task that they do over and over again. A natural tendency to avoid boring and tedious low skilled work is present in most people. Why did capitalists introduce the manufacturing division of labor? One particular reason has often been cited, although research shows that it appeared to have played only a small role in the introduction of the manufacturing division of labor. In some cases the manufacturing division of labor could have lead to increased productivity. The argument made by some is that when workers specialized in a very narrow range of tasks such as which followed the expansion of the manufacturing division of labor they might have become supremely proficient in these tasks. This high proficiency might have exceeded the proficiency of a skilled worker who did a wider range of tasks. It was also

7 The Evolution of Jobs in Capitalism 271 argued that when workers specialized in a very narrow set of tasks, and as a result became intimately familiar with these tasks, they might be more likely to discover some technique, machine, or tool that would increase the productivity of workers still further. Little evidence exists, however, that the manufacturing division of labor led to increased productivity. Most workers who specialized in a very narrow range of tasks did not appear to become more in these tasks than the skilled workers they replaced. Further, no evidence exists that workers who performed the same narrow tasks hour after hour and day after day discovered better ways to perform these tasks. Rather, it appears that many workers became quite bored with their jobs because it involved the performance of the same few tasks repeatedly. This boredom did not promote a keen focus on the task and a seeking of new and better ways to do the job but, rather, promoted the mindless and thoughtless performance of the tasks workers were assigned. No evidence exists that employers introduced the manufacturing division of labor to promote productivity. However, evidence does exist that employers introduced this division of labor for two other reasons. First, by shifting work into a factory and then breaking down artisan production, the capitalist greatly enhanced his control over the production process and placed himself in a dominant position. Rather than having to deal with independent artisans, the capitalist was able to employ a number of less skilled workers who were much more dependent on the capitalist for their survival. This permitted the capitalist to manage the pace of work and the rate of pay so that he now was the primary receiver of the surplus. That is, the rise of factory production using the manufacturing division of labor apparently had more to do with capitalists gaining control over all the surplus than any phantom efficiency gains. Second, the manufacturing division of labor reduced labor costs for the employer. The detailed division of labor within a factory was aimed not to increase job skills but to reduce the level of skills required to produce a product. This permitted firms to hire the minimum level of skill necessary to produce a product and, so, to reduce the wages that they paid to workers. Made possible the replacement of skill artisans (who might be somewhat resistant) with lower paid (and more pliant) unskilled workers. Sometimes these workers were women and children. The goal is the reduction of labor costs through the reduction in skill required for production of a product. This can be

8 272 The Evolution of Jobs in Capitalism seen with a hypothetical comparison of labor costs before and after the introduction of the manufacturing division of labor. This process was not pushed very far in small manufacturing plants. But when large factories appeared management was often very interested in pursuing cost reductions (and greater control over workers and the pace of labor). CONTINUED EVOLUTION OF JOBS IN THE US ECONOMY The evolution of jobs in capitalist did not stop with the introduction of the manufacturing division of labor. The details of how jobs have evolved in the US over the past, say, 100 years are not quite appropriate for this introductory text. Yet is should be kept in mind that the evolution of jobs in capitalism does not occur because of random discoveries of new technology. The technology that is introduced is often the product of intentional search by research and development outfits that presume that they only technologies worth pursuing are those that are of interest to capitalists. It should also be kept in mind that the evolution of jobs in the US is pushed by a system in which those who introduce changes in the production process and jobs only rarely do these jobs themselves. The sorts of changes in work and jobs that are introduced are likely to be quite different from what would be the case if those who did the work also did the designing of jobs.

9 The Evolution of Jobs in Capitalism 273 Ford factory, first moving assembly line, 1913, Highland Avenue, Detroit, MI, Courtesy of the Frances Loeb Library, Graduate School of Design, Harvard University. This photo is in the public domain.

10 274 The Evolution of Jobs in Capitalism