So, I started looking at incomes because Americans have been working as hard as ever, but they haven't been getting paid more for it. This, despite rising productivity. There was a wonderful set of series, D722-727, giving the incomes of full time employees from 1900 to 1970. I was fascinated. It was better than Ripley's believe it or not. Did you know that real income had risen four-fold from 1900-1960? Naturally, I had to learn more about these wonderful numbers, and here again, the Census came through. At the bottom of the table was a footnote and the name Lebergott.
I've been wading through Manpower In Economic Growth for a bit now. Lebergott actually tried to get some idea of what Americans were earning back in the late 18th and through the 19th century, but it's all pretty sketchy. Slaves, for example, weren't paid, and a lot of people were paid in kind. If you were a farmhand, you might wind up with some bushels of wheat, and you had to sell or barter to get them ground, buy clothing, pay your rent, and buy other stuff. In other words, you were part time farmhand, part time wholesaler and job lotter.
Anyone who can write "The results are unequivocally confusing." is someone who takes the data seriously. Too many people look at the raw data and don't get confused properly. One thing he pointed out was the Adam Smith didn't understand America all that well. Smith went on at length about the importance of specialization. If you've read any economics, you know the parable of the pinmakers, where breaking this task into a series of specialized subtasks could produce marvelous productivity gains.
Well, America, especially in the early 19th century was full of generalists. Even your farm hand might have to do a stint wholesaling, and the typical American career might include terms as a shop keeper, a farm, a rail splitter, a teamster, and so on. He gave one example of a mason putting down his trowel, spending some time working in a drug store, and then setting himself up as a doctor. America didn't have Europe's castes and guilds. You could be anything you wanted, as long as you kept the customer satisfied.
On page 121 Lebergott goes so far as:
"We actually speculate that a dominant, significant force making for great productivity advance was the very absence of division of labor."Wow! So much for Adam Smith.
"What, after all is characteristic of the effective division of labor? It is that there is one preferable way and, finally, the approved and only right way."Specialization works in highly mature industries, but when circumstances change, and they were quite different in the new world as opposed to the old, someone has to figure out a new "best way" of doing things. In Europe, the work would have been done by specialists, but in America it was done by amateurs. Some would botch the job. Most would just muddle along.
"But a significant group took an entirely different approach to the work - because of a difference in perspective, laziness or sheer genius. It was these who made major technological discoveries, who made substantial departures in the organization of work and enterprise."Not only did America listen to the "aggressive deviant", but America was full of people from all over Europe. In England, there was the English way. In Germany, there was the German way. In America, there was no one American way, so many ways would be tried, and the best ways chosen.
I always like an economist who looks at the data, and looks beyond the dogma. Adam Smith was not wrong as a rule. Much of his work was insightful, as when he notes that on occasion an invisible hand might lead individual profit seeking to benefit the common good. (Smith never represented this as a rule, only as a possibility). Adam Smith was writing early in the American experiment. The real disruption was only beginning. I'm inclined to believe that he would have found much to appreciate in Lebergott's analysis.
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