Ludwig von Mises was a defender of the concept of the division of labor. He rested his entire social philosophy on this concept. This included his doctrines of social peace, market processes, monetary calculation, and private property. He always returned to this theme: the division of labor.
This idea of the division of labor is central to the recent arguments over the development of software and robotics. The age-old fear is that software and software-controlled robots are a threat to mankind’s employment. This argument has been common ever since the early years of the industrial revolution.
Mises was adamant on this principle: specialization and greater wealth per capita. Let me quote from Human Action (Yale University Press, 1949). Human Action: The Scho... Best Price: $6.75 Buy New $15.36 (as of 05:45 EST - Details)
Experience teaches man that cooperative action is more efficient and productive than isolated action of self-sufficient individuals. The natural conditions determining man’s life and effort are such that the division of labor increases output per unit of labor expended (p. 157).The division of labor is the outcome of man’s conscious reaction to the multiplicity of natural conditions. On the other hand it is itself a factor bringing about differentiation. It assigns to the various geographic areas specific functions in the complex of the processes of production. It makes some areas urban, others rural; it locates the various branches of manufacturing, mining, and agriculture in different places. Still more important, however, is the fact that it intensifies the innate inequality of men. Exercise and practice of specific tasks adjust individuals better to the requirements of their performance; men develop some of their inborn faculties and stunt the development of others. Vocational types emerge, people become specialists.
The division of labor splits the various processes of production into minute tasks, many of which can be performed by mechanical devices. It is this fact that made the use of machinery possible and brought about the amazing improvements in technical methods of production. Mechanization is the fruit of the division of labor, its most beneficial achievement, not its motive and fountain spring. Power-driven specialized machinery could be employed only in a social environment under the division of labor. Every step forward on the road toward the use of more specialized, more refined, and more productive machines requires a further specialization of tasks (pp. 163-64).
The tremendous advantage of robotics is this: it allows extreme specialization. Yet at the same time, the tendency of new developments in programming is to allow people of relatively minimal skills in computer technology to take over the operations of robots. We see the development of 1.5 million smartphone apps that enable us to gain access to information that was available only to specialists a decade ago, let alone 50 years ago. The volume of information increases at an exponential rate, and yet the various apps enable us to keep up with those new sources of information that apply to our own lives, careers, and callings in life.
We are all becoming highly dependent upon this network of information. But the network is not centrally controlled. It is itself part of the processes that Mises described. The information available to individuals, which is amplified by the information made available by digital technologies, is extending our ability to extract wealth out of our environment. The greatest source of our wealth in the market order is the information possessed by other individuals. This information is being delivered to literally billions of people today because of the price competition associated with digital technology. We call this Moore’s law, but it has been operating since at least the 1890’s. The cost of information keeps falling. Our ability to access this information keeps increasing. The old economic law is true: when the price is reduced, more is demanded.
Human labor is by far the most versatile of capital investments. People can shift jobs, shift livelihoods, shift specializations in a relatively short period of time. This enables individuals to take advantage of new opportunities. These opportunities are multiplying more rapidly than at any time in human history. Individuals are in a position to take advantage of them. We are not machines. We are not robots. We are not computer programs. This is why we maintain a tremendous advantage over other forms of organized labor. We cannot work as long and as hard as a robot can, and we cannot work as mindlessly as a computer program can, but we can exercise creativity in ways that robots and computer programs cannot match.
Because of the reduced costs of social cooperation, which are a direct result of computerization and the falling cost of bandwidth, we are becoming more productive. The range of products and services that are available to us continues to expand. While some people worry that a robot is going to take over their job, we find individuals adjust, and they find new ways to serve each other by means of the market process.