We have already discussed land, labor, and capital as separate factors in production, but we have yet to speak of these factors combined in a cooperative effort to get the best results from all. This is the problem of industrial organization. In this chapter we shall consider the particular phase of industrial organization which is known as division of labor. The next chapter will be devoted to the broader problem of the manner of grouping together all of the factors in production.

69. Labor Specialization

From the point of view of organizing the workers for their work we may distinguish three stages in the movement towards specialization of effort. In the first stage the workers were independent of each other. Each family produced practically all of the things it needed. Each man was a farmer, and a blacksmith, and a carpenter, and a shoemaker. He did all of these things and more, but perhaps he did none of them well. This was the price he paid for his economic independence. We may designate this stage as that of union of labor,1 since there were various kinds of labor performed by one laborer.

In the second stage it was found that there were a few or many tasks that could not be performed satisfactorily by the individual worker. In order to get them done he was obliged to surrender some of his economic independence, and to secure the assistance of fellow workers. For example, a barn was to be built and heavy timbers were to be used in its construction. One man could not lift the timbers; and so the neighbors were called in and five men easily did in one day what one man could not have done in a month. We shall designate this stage on the road to division of labor as labor in common. Another example of labor in common is the old-fashioned husking bee, where the neighbors got together to help first one neighbor and then another. Here the demand for the cooperation did not come, as in the barn building, from a lack of physical strength to do a piece of work independently, but rather through a lack of moral strength sufficient to keep each worker working at his best at his individual task. The next stage in labor specialization was the division of labor.

1 This term has no reference to labor unions. The latter are organizations of employees formed primarily for the purpose of advancing the interests of their members, as opposed to the interests of the employers.