Effects of Division of Labour, Demands for Economic Security

QUESTION 1:

The two types of demands for economic security are limited and absolute security. The limited type of security can be achieved for all. On the other hand, absolute security is not achievable in a free society. Hayek (2007) says that absolute security is not up for offer except under some circumstances. One of these is the case of judges. They are given total independence. He says that the first type of security is against severe privacy in physical terms. The second type accommodates a certain standard life. Further, on, he says that if a society has self actualized; that is, it has acquired the first type of security, it should be able to guarantee to all. However, the freedom of the general public should not be jeopardized.

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In light of the security matters, the author also wishes the country to provide for individuals especially on the common hazards of life. For main goals of policy to be attained, the author also says that enough security against stern privation and causes that can be avoided (both efforts that are misdirected and disappointments that follow) be reduced. Working towards this should bear fruits instead of bringing down individual freedom. This means that outside market security is paramount. In addition, competition should not be tampered with. However, he states that for freedom to be preserved, there is need for some kind of security. The reason behind this is that some people can put up with the risk which comes about because of freedom, however, it should be noted that they can put up with the risk as long as it is sizeable. Limited security in this case draws a line where it affects and where it does not. For instance, the labor market is totally independent of limited security. This type of security provides for safety, health care, as well as minimum wages. On the side of absolute security, selected few individuals are protected.

He offers a punch line that freedom does come with a price; this means that people should be willing to give up material possessions to have preservation of liberty.

Job security is not a guarantee; this according to the author. Anyone who has a job becomes dependent of the state to earn wages. This kind of security is harmful to the state. For a secure state, everyone should be able to take care of themselves. In addition to that, absolute security is a disadvantage to a class of people. One class will enjoy the benefits while another class will suffer. The ones who access absolute security are doing so at the expense of those who cannot be able to afford it.

QUESTION 2

Adam says that there are effects of division of labor. However, they cannot be understood if ousted from their context. The context here is the general business found within the society. We have to consider here how it operates and in specific manufactures. For instance, there are those manufactures that supply small wants. The total number of workers is equally small. Those who have been posted in different branches but carrying out the same task can be collected under the same roof and placed under the watchful eye of one supervisor. If we consider another type of manufacture that deals with supply of great wants, we will find that the various branches do employ great numbers of workers and it would be impossible to bring them under the same roof.

For the big manufactures, the work, therefore, translates to further division into a greater number of potions. On the other hand, the divisions in the small manufactures are not complex.

He goes on to say that, the effects are quite similar, though. Labor cannot be subdivided so much. In addition, it cannot be reduced into simple operations. Division of labor thus can be related to the proportionate increase. This is in terms of the productive powers of labor. In countries where industrialization is at its best, the separation of various types of trades is so clear and so is their employment.

If there is increase in the weight of work, then division of labor comes calling. Let us say that the same number of people who used to carry out the task have the same skills to accomplish the new wave of work, (Smith, n,d). There will be three possible circumstances. First, there will be increased use of hands and mind of the same worker. There will also saving of time which is more often than not lost when moving from one task to another. Lastly, a vast number of machines will be invented which will facilitate and enhance labor. This will make one worker be able to handle work that would otherwise have been handled by many people. Therefore, this means that if production is on a large scale, there will be increased specialization. More people will be employed so that the increased rate of production can run smoothly. Point to note, however, is that this large scale production does call for an equally large market. It would be of no need to produce for multitudes when only a few need the product or service. If the market is smaller, however, there are ways it can be made bigger. The manufactures have to just find out what the consumer wants. Alternatively, they could create the demand itself.

The improved skills of a worker will mean that there will be an increase in the amount of work he/she will be able to accomplish. In addition, the division of labor reduces the business of a worker to a specified operation, and by concentrating on this particular operation alone, it increases the dexterity of the worker.

These explanations simply show that division of labor and market size dynamism is limitless. The details, if delved into, will result in other implications. For instance, the time saved from moving from one set of work to another is of advantage.

QUESTION 3

Neoliberalism is by definition a theory that embraces practices of political economy which propose that the well being of humans can be at best, improved by making individual business freedoms and skills liberal. However, this should be done within an institutionalized framework, which is characterized by markets that are free, private property rights that are strong as well as free trade. The state has a role here; it has to create and secure an institutional framework that accommodates such practices, (Harvey, 2005). For example, money integrity and quality should be guaranteed by the state. In addition to that, the state must come up with structures and functions concerning the military, defence force, the police department, and laws. These functions will be fundamental to securing the rights of private property and also being able to guarantee markets that are functioning properly. If there is no market then the state has to create it by any means necessary. However, any interventions to the market spearheaded by the government should be done so with utmost moderation. This is because the state cannot possibly have substantial information to control the prices in the market. Moreover, there are interest groups that are powerful and they are capable of distorting the interventions of the state, which in one way or another, will be of benefit to the groups.

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Neoliberalism embraces the rule of market as a policy. Private enterprises need to be liberated from any bonds that the government imposes upon them. This does not give attention to any consequences; for instance, the social damage this liberation may have. The state should therefore be open to international trade. This also calls for no control of prices. Freedom should be manifested in three levels; free movement of capital, smooth flow of goods, and services. Another policy is the slicing the expenditure of the public in favor of social services; for example, the schools and the healthcare sector.

There is also another policy on deregulation and privatization. Deregulation calls for reduction of the government’s regulation of anything that could reduce profits. This includes environmental protection and job safety. Privatization also calls for the government to sell enterprises, goods, and services that are owned by the state private investors.

References

Hayek, F. A. (2007). The road to serfdom; text and documents. The definitive edition. The University of Chicago Press.

Harvey, D. (2005). A brief history of neoliberalism. Oxford University Press. Great Clarendon Street.

Smith, A. (n.d). Wealth of nations. Prometheus Books, Buffalo, New York.