Division of Labor and Free Markets - Essay Example

Division of labor and free markets Adam Smith argued that in free market, there are many sellers and buyers and there no one cares about their personal staffs. All they care in the free market is about the prices, sales, and the goods that have been sold. Moreover, the important things in the free market is the different types of free market philosophy which include the concept of unrestricted free market philosophy, and the competitive free market philosophy. The Philosophy of the unrestricted free market means that the market of the goods does not need permissions of importations from other parties even from the ministry of the commerce. In addition, the philosophy of the unrestricted free markets does not deal with the language of the fixed price because the price of the goods on it changes in part. The unrestricted free market decides the prices of the goods in order to create a fair price for both the customer and the seller (Smith 23). The Rules that the unrestricted free markets follow is the right to control property, transfer property one by one voluntarily, refrain from using force, and the right to establish contracts. The unrestricted free markets nowadays are popular in that they exist in every place. Good examples of the unrestricted free market are the oil free market, and the black market. For instance, concerning the oil free market, it is referred to as unrestricted free market because the oil has variable values that changes from period to another depending on the events that happens every day in the political or economic world so it is not restricted with the policy of the free market. The idea of invisible hand is applicable to the man’s natural behavior towards self-interest. Therefore, by allowing every person freedom to generate and exchange services and goods as they want, and opening all markets to fair competition, the business will thrive. In turn, this will bring universal populace since every effort from the people would be appreciated. Smith argued that in order to bring about prosperity, people needed to work hard and enlightened because this act of enlightened self-interest was common to majority of individuals. In addition, Smith needed people to have the potential to think about long-term business since it would curb customer exploitation (Smith 32). The focus of Adam Smith ideas rested on economic growth. According to Smith, economic growth is entrenched in division of labor. The idea of division of labor relates to specialization of labor particularly downsizing large jobs into many tiny units. When there is division of labor, each laborer or worker becomes an expert in one area of production, which in turn increases the workers efficiency. Division of labor benefits the society since the fact that workers do not need to switch or change tasks during working hours saves money and time. However, Smith warned against forcing or coercing people to perform repetitious and mundane work because it led to dissatisfied work and ignorance among workers. In a response to this, Smith urged governments to offer education to employees so that they could acquire necessary skills and expertise in specific works. Education was significant because it could curb the deleterious influences of industry life. Division of labor meant giving each employee a specific work that marches or suits them. Adam Smith asserted that having employees perform specialized works led to increased productivity this is because it is easy to allocate tasks in accordance with worker’s specific skills. For example, an employee who is skilled in dealing with numbers performs better on inventory control than a worker who is not (Smith 78). In addition, division of labor leads to technical efficiency because it decreases transition time between work and tasks. Division of labor increases dexterity in the workplace because it decreases every man’s business to simple management. Adam Smith argued that the roles or functions of government is limited to provision of universal education, defense of the country, punishment of crime, enforcement of legal rights and public works such as roads and bridges. The government would intervene when individual acted on their short-term priorities, and would enforce policies against fraud, robbery and other crimes that might cause moral decadence in society (Smith 99). Adam smith warned against bigger bureaucratic governments since they could enforce authoritarian regimes. In addition, the government had to produce a solid currency to drive the economy. It was not good for governments to engage in wasteful expenditures such as wars instead they had to adhere to the free market philosophies by permitting free trade via removal trade tariffs, and keeping taxes low. Smith saw taxes and tariffs making life costly for individuals while oppressing industry and trade. It should create laws that are equitable and fair, whether they are based on universal laws or bound within the context of a given country. These principles should establish what should be regarded as "fair share" of the assets that belong to the public, while principles of restorative or retributive justice ought to shape the response to acts that are against a society's regulations of "fair play." The government is required to come up with fair rules and ensure that citizens adhere on those rules. Most citizens usually frame justice in fairness terms and invoke fairness and justice principles to explain their dissatisfaction or satisfaction with their government. These institutions should treat them fairly and carry its operations in accordance to fair and just rules expressed through various justice principles (Smith 114-120). The government of the people for the people should act as an essential mechanism to realize important values. It should offer citizens with particular benefits and services. It also aims to promote vital values that are good and suitable for every individual. This role of the government as the insurer of central democratic values is what forms national political institutions. The link between Smith and Marx extend beyond the anticipations of the Marxian theories of value and surplus value. A keen analysis reveals that Smith talked more about the motives and behavior of the capitalists and property owners as well as the exploitative origin their income. From this, it was very easy to notice the long-run effects of capital accumulation on wages, profits and the lot of the working class which were distinctly radical and ‘Marxian’ in character (Smith 84). Most of the views put across by these two great philosophers are somehow too detailed and need attention to differentiate them fully. It is good to note that through their contributions, this has made it easy for the community because it acts as a gateway of understanding. With the help of more modern intellects to further our society, knowledge would lead to development of society around happiness (Scott 56). Marx argued on exploitation and alienation. They viewed capitalism as way of creating inequality between two main classes that is; owners of production the bourgeois class and the working class known as the proletarians who provided labor to the ruling class. The labor product in this case was alien from the producers themselves (Mandel and Marx 69-72). According Marx, the workers who were the producers were exposed to many challenges one to deal with the fluctuation and competition of the market prices. This made them believe that the working class were mistreated and deprived their share by the ruling class who gained more profit. With the introduction of new technological materials to assist in capitalist states, the ruling class depended on labor from the proletarians in Marx view this exploitation of the masses that made up a larger percentage. The introduction of capitalist system opened trade to global world with the employment of huge masses of people to work in industries. However capitalist still remains exploitation of the workers by the ruling class the wealth produced by the workers is of benefit to the ruling class. Working in industries has exposed workers to poor working conditions. With the increase in market competition, the workers who are viewed as commodities are turned to work under strict rules. This has had an adverse effect to human beings who in turn are subjected to harmful chemicals in the industries, which may lead to contraction of diseases (Scott 71-75). It is impossible to prevent some circumstances in capitalist. The overgrowing use of machines enhances high productivity of goods, which creates employment opportunities for workers to work in those industries. It will however be difficult to avoid the use of child labor to work within these industries. Huge gap of social inequalities has also continued to widen further. The exploitation of the workers has constantly resulted into wars and crises, which has been difficult to prevent (Scott 81-82). The division between the owners of production and the workers meant there is likelihood of war eruption, which in this case is inevitable as a result, impairing the development of a capitalist economy. With huge concentration on capital, whereby small retail units had to pave way for the enlargement of wide markets agriculturalists had to suffer. It should however be noted that this system of capitalist makes it very difficult to control the economic crises. Works Cited Mandel, Ernest and Marx, Karl. Capital: A Critique of Political Economy. New York: Penguin, 1993. Print. Scott, Arnold. Marx's Radical Critique of Capitalist Society: A Reconstruction and Critical Evaluation. Oxford: Oxford Univ. Press, 2009. Print. Smith, Adam. The Wealth of Nations. New York: Simon & Brown, 2003. Print. Read More