As I said, these are bright students. They have identified what could be a “conundrum”. And Jeff's point I think is the base of a misunderstanding.‘As you also point out, this problem should be further sharpened if in fact, as Smith predicts, the "progress of the division of labor" means that the work performed by most workers, "the great body of the people, " becomes increasingly narrow, specialized, simple, and mindless (WN pp. 781-782).
Smith makes two distinct statements on the effects of the division of labour, those in Book V, so to speak, are aimed at a different audience for a different purpose to Book I. It is a common misreading not to bear the two separate audiences in mind, as I state regularly on Lost Legacy.
In Book V, Smith’s concern is with the general and socially deplorable ignorance of the common people, induced by scarce educational provision for their education as children. This is a serious social problem, not recognized by the upper orders (major landholders and place holders in society, who people the legislature and their influencers).
Smith had in mind the different traditions in Scotland (where he lived) and England (the larger partner in the Union that since 1707, made up the United Kingdom of Great Britain, ). In Scotland, Protestant Church pressure since the 16th century had promoted ‘little schools’ in each parish, funded by local taxes, charities, and negligible fees from parents, to provide elementary schooling in ‘reading, writing, and account’ (arithmetic) from age 6 years for as long as parents permitted attendance (mainly boys). In England such provision was sparse and grossly inadequate (after all, there were 60, 000 parishes, ).
Smith’s suggestion called for such ‘little schools’ to be set up generally in Britain to tackle the appalling ignorance (WN p 785-6), which dulled further the children of the poor when sent to work by parents (‘with little time for education’ and parents with ‘scarce able to afford the maintain’ ‘to earn their subsistence’ (WN p 784-5).
He bolstered his case with dire warnings of the consequences of not educating the poor in order to frighten the decision-makers to pay-for the necessary remedy. This can be see in WN p 788 in graphic terms relating to likely work in modern trades, subjected to the intensity of the division of labour in simplifying tasks. Ignorance plus simplicity in their working lives made for political instability; education plus necessary simplicity created a barrier to the influence of ‘the interested complaints of faction and sedition’ (WN p 788).
Moreover, on a broader point, relevant to the gist of Daniel Albornoz and David Kanter’s questions, is that the importance of the division of labor in WN is not confined to ‘pinheading’. Smith goes on to describe the complexity involved in the day labourers ‘common woolen coat’, which is the real import of WN. Supply chains were complex, even in the 18th century. As their complexity grew, so would the demand for labour, both locally and nationally, and worldwide.
But significantly, a day labourer’s wage had to cover both necessary subsistence – the biological requirements – and, increasingly since the 17th century, his purchase of the necessary ‘conveniences of life’ (which in total was the ‘annual output' of society and the cause of its growing employment, and growing, albeit, minimal requirements for higher (marginally), but ‘normal’ living standards as represented in the real wages of common labourers, and other trades people.
I think Jeff, plus Ricardo and the Marxists, narrowed their focus too much on biological subsistence, which favours pessimistic ‘immiseration’ and drifts away from Smith’s historical approach of taking into account the much wider range of ‘necessaries and conveniences of life’, which was a key difference of Europeans compared to the lives of African and Indian hunter-gatherers (the First Age of Man), when compared to common labourers in commercial society (the Fourth Age of Man; see Adam Smith Lectures in Jurisprudence, [1762-3] 1978, Liberty Find). See also how Smith documents to rising annual output of ’necessaries and conveniences of life’ for ordinary people in WN from Julius Caesar’s visit to Britain 50 BC, through to ‘the restoration of Charles II’ in 1660 and then to mid-18th century in WN, p 344.
He states this clearly:‘The money price of labour is necessarily regulated by two circumstances; the demand for labour, and the price of the necessaries and convenience of life’ (WN p 103).
The changing components of ‘subsistence’ must be borne in mind when working abstractly with models that denude themselves of realism, as Ricardo was apt and proud to do – he certainly cleared the way for the pessimism of Marx, whose own models lead to ‘immiseration’ conclusions, which are contrary to the rising real incomes of labourers, in skilled, supervisory and new technology occupations - what some Marxists call the ‘aristocracy of labour’ - itself a product of ever more complex divisions of labour among supply chains, supplying rising populations, benefitting from deepening productivity.
Professor Mike Munger has shown how one or two companies today (in place of thousands in the 18th century) employ automated pin-making batteries of computer-driven machines to supply all UK pin output (and a couple of others in the US), which is a far cry from ever-greater immiseration of pin–making by chronically stupid, even ‘brain-dead’, labourers.
This can be integrated into Smithian concepts of ‘increasing-returns’ optimism, freed from Ricardo’s negative pessimism (see A. Young, Economic Journal, 1928).
One last thought on Jeff’s condition on Smith’s vision: “as long as the market is allowed to operate unhindered”.
Part of the theoretical problem is that modern economists (and Ricardo, etc., ) ignore Smith’s historical approach to political economy, and judge his statements absent any context of what was actually happening around him.
No markets in the real world of 18th-century Britain were “allowed to operate unhindered”. It was the absence of “unhindered” operation in markets, including that for labour that, IMHO, characterizes the source of much of the uncertainty, described as a “conundrum” by Daniel Albornoz and David Kanter, and not addressed by Jeff.
Labour was far – very far – from being free in any meaning of the word. To the one-sided Combination Acts applying to labour but not to employers, were added the settlement of wages by local Magistrates, backed by jails, transportation, and public whipping of ring leaders of ‘riotous labour’, not forgetting the Settlement Acts, the Statute of Apprentices, the Trade Guilds, chartered monopolies, patent laws, the Poor Laws, and the oppressive religious environment (leading to migration to the colonies).