and the men have been classified in over thirty specialties and twenty rates of pay, from 16 cents to 50 cents an hour. The 50-cent man is restricted to using the knife on the most delicate parts of the hide (floorman) or to using the axe in splitting the backbone (splitter); and, wherever a less skilled man can be slipped in at 18 cents, 18 cents, 20 cents, 21 cents, 22 cents, 24 cents, 25 cents, and so on, a place is made for him, and an occupation mapped out. In working on the hide alone there are nine positions, at eight different rates of pay. A 20-cent man pulls off the tail, a 22-cent. man pounds off another part where the hide separates readily, and the knife of the 40-cent man cuts a different texture and has a different "feel" from that of the 50-cent man. Skill has become specialized to fit the anatomy. In this way, in a gang of 230 men, killing 105 cattle an hour, there are but 11 men paid 50 cents an hour, 3 men paid 45 cents, while the number getting 20 cents and over is 86, and the number getting under 20 cents is 144. ... Skill specialized to fit the anatomy. division of labor grew with the in dustry. The division of labor grew with the industry, following the intro- How the duction of the refrigerator car and the marketing of dressed beef, in the decade of the seventies. Before the market was widened by these revolutionizing changes, the killing gangs were small, since only the local demands were supplied. But, when the number of cattle to be killed each day increased to a thousand or more, an increasing gang or crew of men was put together; and the best men were kept at the most exacting work. point of greatest is economy discovered. At what point the greatest economy is reached was discovered by How the experiment and by comparison of one house with another. Each firm has accurate knowledge of the labor force and the output of every other house, and in this way improvement becomes general and each superintendent is keyed up. Taking a crew of 230 butchers, helpers, and laborers, handling 1,050 cattle a day under the union regulations of output, the time required for each bullock is equivalent to 131 minutes for one man, from the pen to the cooler, the hide cellar, and all the other departments to which the animal is distributed. But this is made up of 6.4 minutes for the 50-cent man, 1 minutes for the 45-cent man, and so on; and the average wage per hour for the gang would not exceed 21 cents, making the entire labor cost about 46 cents per bullock. Questions on the foregoing Readings 1. Define production. 2. Why does Boehm-Bawerk say that man's rôle in production is modest? 3. What is the relation of production to man's power to move things? 4. Illustrate man's direction of natural forces with reference to the firing of a gun. 5. Upon what does the effectiveness of production depend? 6. Of what, according to Adam Smith, is the division of labor a consequence? 7. Does the division of labor exist among the lower animals? Explain. 8. What does Adam Smith mean by saying that we gain most of the things of which we stand in need, by addressing ourselves to the self-interest of other people? 9. What, according to the economist, is the relation of the division of labor to civilization? 10. Name some peoples who do not cultivate the soil. 11. Who, according to Dr. Starr, was the first agriculturist? Why? 12. What was probably the first and simplest tool used in primitive agriculture? 13. Describe the process of threshing grain, as practiced among the Pueblo Indians of southwestern United States. 14. What is the approximate age of the highly effective methods of modern production? 15. Describe briefly the nature of boot and shoe manufacture in Massachusetts during the home stage of manufacture. 16. What stage followed the home stage? 17. Where was the first textile mill in Massachusetts established? 18. Who was Samuel Slater? 19. Describe the work of Slater in the United States. 20. What was England's attitude toward the exportation of machines during the early part of the nineteenth century? 21. Along what two lines has the division of labor progressed? 22. What is meant by the "butcher ristocracy "? 23. Why is there a small proportion of skilled workmen in a butchers' gang? 24. Explain the statement that in the packing industry skill has been specialized to fit the anatomy of the animal. 25. How do packing firms discover the point at which their labor force can be utilized with greatest economy? CHAPTER VIII EXCHANGING THE PRODUCTS OF INDUSTRY 43. Relation of division of labor to the market1 creases the productivity of the The result of the complex division of labor is that the output The division of the group or community is greatly increased. If one man working of labor inalone were to perform all of the operations of butchering a bullock, the process might take him all day. But, as we have seen in the last chapter, butchering in a Chicago packing plant is carried on by a number of specialists who, by means of dividing up their labor minutely, are enabled to butcher an average of more than four bullocks per day per man. It is clear that the division of labor increases the amount of product per man, yet it should be remembered that it is not economical to turn out this increased product unless there are purchasers for it. In other words, there must be an adequate market before the complex division of labor is practicable. In the following selection, Adam Smith explains the statement that the division of labor is limited by the extent of the market: As it is the power of exchanging that gives occasion to the division of labor, so the extent of this division must always be limited by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, for want of the power to exchange all that surplus part of the produce of his own labor, (which is over and above his own consumption), for such parts of the produce of other men's labor as he has occasion for. There are some sorts of industry, even of the lowest kind, which can be carried on nowhere but in a great town. A porter, for example, can find employment and subsistence in no other place. A village 1 From Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. London, 1776. Book 1, Chapter III. group, but is limited by the extent of the market, as Adam Smith points out. Some in dustries can town or Relation of portation to commerce. Character of the market in the inland parts of the country. is by much too narrow a sphere for him; even an ordinary market As by means of water-carriage a more extensive market is opened to every sort of industry than what land-carriage alone can afford it, so it is upon the sea-coast, and along the banks of navigable rivers, that industry of every kind naturally begins to subdivide and improve itself, and it is frequently not till a long time after that those improvements extend themselves to the inland parts of the country. A broad-wheeled wagon, attended by two men, and drawn by eight horses, in about six weeks' time carries and brings back between London and Edinburgh near four ton weight of goods. In about the same time a ship navigated by four or eight men, and sailing between the ports of London and Leith, frequently carries and brings back two hundred ton weight of goods. Were there no other communication between [London and Edinburgh], therefore, but by land-carriage, as no goods could be transported from the one to the other, except such whose price was very considerable in proportion to their weight, they could carry on only a small part of that commerce which at present subsists between them. . . . Since such, therefore, are the advantages of water-carriage, it is natural that the first improvements of art and industry should be made where this conveniency opens the whole world for a market to the produce of every sort of labor, and that they should always be much later in extending themselves into the inland parts of the country. The inland parts of the country can for a long time have no other market for the greater part of their goods, than the country which lies round about them. . . . The extent of their market, therefore, must for a long time be in proportion to the riches and populousness of that country, and consequently their improvement must always be posterior to the improvement of that country. In our North American colonies the plantations have constantly followed either the sea-coast or the banks of the navigable rivers, and have scarce anywhere extended themselves to any considerable distance from both... 1 Until the coming of the railroad, the Amer ican market was a rela 44. Beginnings in American railway development 1 It follows from the above selection that an extensive market for commodities is dependent primarily upon transportation. At the time that Adam Smith was studying the relation of the market to the division of labor, transportation by means of the railroad was unknown, and water transportation was not effective in reaching tively the interior parts of this country. As a result, the American market narrow one. for commodities was relatively a narrow one. It was not until after the first quarter of the nineteenth century that the American railway gave promise of greatly extending this market. The first important railway in the United States was the Baltimore and Ohio, which opened to traffic in 1830. This epoch-making event is described by Mr. Reizenstein in the following passage: Baltimore and Ohio traffic in 1830. Upon the twenty-second of May, 1830, the first division of the The Baltimore and Ohio Railroad thirteen and three-quarters miles long, from Baltimore to Ellicott's Mills was opened for the trans- opens to portation of passengers. The cars needed for general traffic, however, were not ready until early in June, but after that time the travel on the road was constant. By the first of October, 1830, the receipts were $20,012.36, although the road had only a single track and was able to transport merchandise or produce during a few months only. The freight offered for transportation was about ten times the amount which the company was able to handle. 1 From Milton Reizenstein, The Economic History of the Baltimore and Ohio Railroad, 1827-1853. Johns Hopkins University Studies, Vol. xv, Baltimore, 1897; pp. 24-29. |