Automation Produces Liberation

Gary North - February 19, 2014

Automation is the means of the liberation of mankind: first, liberation from poverty; second, liberation from drudgery.

The first point was made by Adam Smith in his most famous passage in the Wealth of Nations (1776): the section on the pin makers. This is how the book begins.

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

The effects of the division of labour, in the general business of society, will be more easily understood, by considering in what manner it operates in some particular manufactures. . . . .

To take an example, therefore, from a very trifling manufacture; but one in which the division of labour has been very often taken notice of, the trade of the pin-maker; a workman not educated to this business (which the division of labour has rendered a distinct trade), nor acquainted with the use of the machinery employed in it (to the invention of which the same division of labour has probably given occasion), could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part are likewise peculiar trades. One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on, is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them. I have seen a small manufactory of this kind where ten men only were employed, and where some of them consequently performed two or three distinct operations. But though they were very poor, and therefore but indifferently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds of pins in a day. There are in a pound upwards of four thousand pins of a middling size. Those ten persons, therefore, could make among them upwards of forty-eight thousand pins in a day. Each person, therefore, making a tenth part of forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day; that is, certainly, not the two hundred and fortieth, perhaps not the four thousand eight hundredth part of what they are at present capable of performing, in consequence of a proper division and combination of their different operations.

This raised a crucial issue: drudgery. In reaction, Alexis de Tocqueville wrote this. This is in Democracy in America, Book II (1840), Chapter XX.

It is acknowledged that when a workman is engaged every day upon the same details, the whole commodity is produced with greater ease, speed, and economy. It is likewise acknowledged that the cost of production of manufactured goods is diminished by the extent of the establishment in which they are made and by the amount of capital employed or of credit. These truths had long been imperfectly discerned, but in our time they have been demonstrated. They have been already applied to many very important kinds of manufactures, and the humblest will gradually be governed by them. I know of nothing in politics that deserves to fix the attention of the legislator more closely than these two new axioms of the science of manufactures.

When a workman is unceasingly and exclusively engaged in the fabrication of one thing, he ultimately does his work with singular dexterity; but at the same time he loses the general faculty of applying his mind to the direction of the work. He every day becomes more adroit and less industrious; so that it may be said of him that in proportion as the workman improves, the man is degraded. What can be expected of a man who has spent twenty years of his life in making heads for pins? And to what can that mighty human intelligence which has so often stirred the world be applied in him except it be to investigate the best method of making pins' heads? When a workman has spent a considerable portion of his existence in this manner, his thoughts are forever set upon the object of his daily toil; his body has contracted certain fixed habits, which it can never shake off; in a word, he no longer belongs to himself, but to the calling that he has chosen.

IIt is in vain tha laws and manners have been at pains to level all the barriers round such a man and to open to him on every side a thousand different paths to fortune; a theory of manufactures more powerful than customs and laws binds him to a craft, and frequently to a spot, which he cannot leave; it assigns to him a certain place in society, beyond which he cannot go; in the midst of universal movement it has rendered him stationary.

In proportion as the principle of the division of labor is more extensively applied, the workman becomes more weak, more narrow-minded, and more dependent. The art advances, the artisan recedes. On the other hand, in proportion as it becomes more manifest that the productions of manufactures are by so much the cheaper and better as the manufacture is larger and the amount of capital employed more considerable, wealthy and educated men come forward to embark in manufactures, which were heretofore abandoned to poor or ignorant handicraftsmen. The magnitude of the efforts required and the importance of the results to be obtained attract them. Thus at the very time at which the science of manufactures lowers the class of workmen, it raises the class of masters.

While the workman concentrates his faculties more and more upon the study of a single detail, the master surveys an extensive whole, and the mind of the latter is enlarged in proportion as that of the former is narrowed. In a short time the one will require nothing but physical strength without intelligence; the other stands in need of science, and almost of genius, to ensure success. This man resembles more and more the administrator of a vast empire; that man, a brute.

What Tocqueville did not see was right in front of him: machines were replacing men in repetitive tasks. The machines are better equipped to do these tasks. They are highly specialized tools of production. In contrast, human beings are versatile. They can do so many things. But they are not good at mindless repetitive tasks. This is because they have minds. Minds cannot be programmed. They do not stay in approved paths for long. They go off the rails.

This is called creativity. It can also be called proclivity to accidents.

Tocqueville saw men in factories as appendages to machines. In the first 150 years of industrial capitalism, this was true in some factories. This view of production was incarnated in the time and motion studies of Frederick Taylor in the early twentieth century. He wanted to make men more like machines. Why? To increase their productivity. He wanted to liberate them economically. But his solution was to make them more like machines.

But, step by step, as more tasks were made repetitive, more capital was invested to increase the precision of machines. As they became more reliable, and as more tasks were mechanized, men escaped from Tocqueville's dilemma and Taylor's bodily procedures. They were left freer to make decisions.

The production system of Japan, which has worker groups, is one response. They try to find ways to increase output. Alcoa's program to reduce accidents is another. This takes creativity. Men must know the limits of the robots, and they must know the limits of men who run the robots. The interaction is risky. Men on the factory floor come up with solutions. Management implements them.

The issue is two-fold: (1) human creativity; (2) capital formation. The free market encourages both. To the extent that machines and software free up men from repetitive tasks, they are a blessing.

This will make it tougher on people with limited creativity. They must learn to be good users of tools. This is always a challenge. There are complaints. But there are rewards, financial and psychological, for creative people who think outside the box -- a popular expression for thought outside of automated processes and traditional practices.

The free market rewards those who come up with customer-satisfying goods and services. It does so by enabling customers to express their desires by means of a rewards system: profit and loss.

Machines are not the enemies of creativity. They are the product of creativity, plus capital investment. They liberate men from the drudgery of repetitive processes.

There are people who prefer drudgery in limited amounts. They are in the groove. They do not say they are in a rut. They do not like added the responsibility of decision-making. They do not like creativity. They do not want to be entrepreneurs. They prefer mostly repetitive tasks. For centuries, they have resisted the introduction of machinery. The machines did these tasks cheaper and better. But the rest of us should not blame machinery for liberating men from drudgery.

Automation creates dislocations for people whose main contribution to the economy had been their ability to do repetitive tasks cheaply. But customers prefer greater predictability. They are a demanding bunch. And when it comes to customers, let me cite Pogo: "we have met the enemy, and he is us."