2016/06/26 Knowledge Forum
Thread: Adam Smith “The Wealth of Nations”
Book 1 Chapter 10 “Of Wages and Profit in the Different Employments of Labour and Stock”
Part 1 “Inequalities arising from the Nature of the Employments themselves”
In Part 1 of this chapter, Smith discusses various kinds of employment, and offers observations which I find recognizable 240 years later.
In our time of 2016, it seems to me that the need for what Smith calls “common labor” is decreasing in developed countries, and that as robotic systems become more and more capable, the need for common labor will decrease until it exists only as recreation enjoyed for its own sake, and not as a way of earning an income.
Smith seems to have recognized the importance of invention in advancing the state of art of various “manufactures” as he calls them, but I do not get the impression his countrymen were faced with the pace of change of technology which is expected in the current time.
He notes the wage earning potential of education and experience leading to designation of a worker as “skilled labour”. At Smith's time, apparently apprenticeship existed at a cruder state than seems to be the case today. It is my impression that apprenticeship does not exist at all in the United States, except that certain Labor Unions provide for a gradual increase of skill through a combination of class room instruction and on-the-job training with experienced workers.
Part 1 of this chapter considers the importance of trust in setting wages, and spends some time considering various kinds of risks.
Part 1 closes with discussion of the situation of workers who are unable to secure full time employment for an entire year, and embark upon a variety of part time activities in order to supplement their incomes. This circumstance seems to be similar to the increase of part time employment in the United States of 2016, and to the rise of new kinds of activities made possible by the development of the Internet, and universal availability of powerful computing devices packaged as telephones with wireless connectivity.
It seems to me that the growth of Internet mediated short term employment is not different from the kind of on call labor that exists around the world as day laborers are selected by employers from those who present themselves as available at gathering places.
A key difference exists between group mediated employment in on call situations, and individual employment. Examples of group mediated employment in on call situations abound in the economy of 2016. Taxi drivers are provided vehicles and administrative support, and in return the drivers stand ready to provide transportation to travelers whose arrival is unplanned and effectively random.
Restaurants, retail establishments, banks and a myriad other businesses provide secure income flows and suitable working environment to workers who stand ready to assist unscheduled customers.
Group mediated employment operates on a longer time scale in many businesses. I am thinking here of projects that take weeks or months or even years to complete. Smith mentions a number of activities in his time that sound similar, in the context of describing employment that varies in duration and availability, but Smith's discussion here revolves around wages, which are higher when work is infrequent, because the workers must sustain themselves between gigs.
Smith closes Part 1 with discussion of what he calls “stock” in the context of rental of rooms in a house in London as a way of adding to family income. This reminds me of the growth of an Internet mediated business that is growing in favor in 2016, involving rental of homes or rooms to visitors, as an alternative to rental of hotel or motel rooms.
Where I hope to end up over the course of these weekly ruminations is with a conclusion that the economy of the planet Earth of 2016 can support a class of distant communities with digital communications reflecting the greater variety of capability of the larger population, while at the same time providing a large and ready market for digital communications from the smaller populations, who may yet offer insights or achievements not occurring elsewhere.
(th)