Technology and Employment Practices in Developing Countries

Hubert Schmitz

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781351127103
• Topic: Economics
• Subtopic: Business General
• Index: Economics

Originally published in 1985, this book analyses the extent and way in which technological change determines the utilisation of labour in less developed economies. The book compares firms which are technologically very advanced with firms which use less sophisticated machinery and equipment, and analyses how technology shapes their demand for labour. It is concerned with the impact of technological change on the utilisation of labour in terms of number of jobs, recruitment, training, skill requirements, labour turnover, wages and internal mobility; it also investigates the impact on the utilisation of external labour in the form of subcontracting of small producers and employment of outworkers.

Part One

TECHNOLOGICAL CHANGE AND LABOUR UTILISATION IN MANUFACTURING INDUSTRY: A REVIEW OF THE LITERATURE

Chapter 1

THE LABOUR PROCESS IN THE HISTORY OF ECONOMIC THOUGHT

The objective in this first part of the study is to review the main propositions put forward in the literature on how technology shapes the demand for labour. This is done in two stages: first we examine how the subject has been treated in the history of economic thought (this chapter); we then assess the views which have been expressed specifically in relation to developing countries (chapter 2). Throughout, the emphasis is on the impact which technological change has on skill requirements and on wages.

CLASSICAL POLITICAL ECONOMY

The labour process as the combination of the material instruments of production and the social organisation of labour is a classical theme for economists. To those who venture into the ‘real world’ to run industrial enterprises it is a daily concern. This has probably never been clearer than at present. The current crisis with its intensified competition shows relentlessly that lasting success in industry depends on rapid technical change and an efficient organisation of labour.¹

Those economists who remain in academia are inescapably reminded by Adam Smith in the first chapter of his great work that the wealth of nations is based on advances in the labour process. The progress begins with the division of labour, the main advantages of which were first spelt out by Smith (1776) as follows:

This great increase of the quantity of work which, in consequence of the division of labour, the same number of people are capable of performing, is owing to three different circumstances: first to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and lastly, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many. (p. 112)

Smith occupied himself primarily with the advances made in labour productivity. It was Charles Babbage in his work On the Economy of Machinery and Manufacture (1832) who expounded the advantages which employers gained in the utilisation of labour, particularly in the training and remuneration of workers:

Of the time required for learning. It will readily be admitted that the portion of time occupied in the acquisition of any art will depend on the difficulty of its execution; and that the greater the number of distinct processes, the longer will be the time which the apprentice must employ in acquiring it. Five or seven years have been adopted, in a great many trades, as the time considered requisite for a lad to acquire a sufficient knowledge of his art, and to repay by his labour, during the latter portion of his time, the expense incurred by his master at its commencement. If, however, instead of learning all the different processes … his attention be confined to one operation, a very small portion of his time will be consumed unprofitably at the commencement, and the whole of the rest of it will be beneficial to his master. (p.132)

Apart from shortening the time of training, the division of labour enables the employer to hire cheaper workers. Babbage pinpointed

that the master manufacturer, by dividing the work to be executed into different processes, each requiring different degrees of skill and force, can purchase exactly that precise quantity of both which is necessary for each process: whereas, if the whole work were executed by one workman, that person must possess sufficient skill to perform the most difficult, and sufficient strength to execute the most laborious, of the operations into which the art is divided. (pp. 137–8)

This is what later writers, for example Marshall and Braverman, called the Babbage principle: labour power capable of performing a certain process may be bought more cheaply as dissociated elements than as capacity integrated in a single worker.

Andrew Ure saw clearly that the division of labour was only the beginning. In his Philosophy of Manufactures (1835) he hails the breakthrough which the application of machinery brings to the politics of production. By

decomposing a process into its constituents, and embodying each part in an automatic machine, a person of common care and capacity may be entrusted with any of the said elementary parts after a short probation, and may be transferred from one to another, on any emergency, at the discretion of the master. Such translations are utterly at variance with the old practice of the division of labour, which fixed one man to shaping the head of a pin, and another to sharpening its point … (p.22)

Ure was particularly fascinated by the potential of machinery ‘in training human beings to renounce their desultory habits of work and to identify themselves with the unvarying regularity of the complex automaton’ (p.15). The prospect of reducing the contribution of labour to one of merely minding the machines made him plead for science to be brought more systematically into the factory. ‘The principle of the factory system then is to substitute mechanical science for hand skill …’ (p.20). This was central to Ure not just in order to reduce the necessary training time, but also to enhance the employer’s control of the work process:

By the infirmity of human nature it happens that, the more skilful the workman, the more self-willed and intractable he is apt to become … The grand object therefore of the modern manufacturer is, through the union of capital and science, to reduce the task of his work-people to the exercise of vigilance and dexterity …. (pp.20–1, emphasis added)

Karl Marx (1867) could not have agreed more, except that he looked at the same question from the point of view of labour:

The implementation of labour, in the form of machinery, necessitates the substitution of natural forces for human force, and the conscious application of science, instead of rule of thumb. In manufacture, the organisation of the social labour process is purely subjective; it is a combination of detail labourers; in its machinery system, modern industry has a productive organism that is purely objective, in which the labourer becomes a mere appendage to an already existing material condition of production, (p. 364)

This relationship between technology and labour was most vividly depicted by Charles Chaplin in the film ‘Modern Times’. It shows how the labour process is designed around the performance of the machine and how the worker has to perform in accordance with its needs rather than vice versa. Marx (1933) calls it the real subordination of labour to capital. This is distinguished from the merely formal subordination of labour, where labour works for capital but where the labour process itself is still under the control of the worker. The clearest example of the latter is the outworker or small subcontractor. In the first volume of Capital, Marx analyses the stages of the development towards real subordination from simple cooperation (chapter 13) through manufacture (chapter 14) to machinofacture (chapter 15). The introduction of machinery is a culmination of this development because it allows capital to break the limits within which it can effect a real command over the labour process.

It is within this context of the subordination of labour to capital that Marx analyses what is of central concern to us: the relationship between technological change and labour requirements. Under machinofacture, capital can design and organise the labour process without reference to the traditional skills and craft. With the division of labour in manufacture the skill requirements are already reduced, but each worker still has some degree of control over content and intensity of work. In machinofacture, the porosity and room for judgment is further reduced. ‘There the movements of the instrument of labour proceed from him, here it is the movements of the machine that he must follow’ (1867, p.398) The skill implications are drawn out by Marx as follows:

Along with the tool, the skill of the workman in handling it passes over to the machine. The capabilities of the tool are emancipated from the restraints that are inseparable from human labour-power … in the place of the hierarchy of specialised workmen that characterises manufacture, there [is], in the automatic factory, a tendency to equalise and reduce to one and the same level every kind of work that has to be done by the machine minders …

So far as division of labour reappears in the factory, it is primarily a distribution of the workmen among the specialised machines … The essential division is into workmen who are actually employed on the machines … and into mere attendants of these workmen. Among the attendants are reckoned more or less all ‘feeders’ who supply the machines with the material to be worked. In addition to these two principal classes, there is a numerically unimportant class of persons, whose occupation it is to look after the whole of the machinery and repair it from time to time; such as engineers, mechanics, joiners, etc. This is a superior class of workmen, some of them scientifically educated, others brought up to a trade …(p. 396)

In as far as machinery dispenses with skills and muscular power, it becomes a means of drawing on a wider range of workers, putting downward pressure on the levels of remuneration. This is one relationship between technological advance and wages drawn out by Marx. A second is more indirect: technical change results in the displacement of workers, constantly replenishing the reserve army of labour with the effect of holding wages down.

Without doubt Marx provides a powerful framework within which to understand technological change and the resulting utilisation of labour. This must be recognised even though the homogenisation of labour into a mass of de-skilled low-paid workers has never been as pervasive and sweeping as his analysis implies. De-skilling is a tendency which constantly reasserts itself, but it is accompanied by the creation of new skills. Technological innovations provide capital with the means of reasserting control in the workplace, but at the same time give some groups of workers increased leverage to fight for better pay and conditions of work. These are issues to which we will return later.

Even though Marx laid the foundation for an analysis of the labour process, the subject virtually disappeared from the agenda of economic theorists, both in the Marxist and neo-classical line of thought. Let us first deal with the latter. Alfred Marshall, one of its founding fathers, still displayed wide knowledge of technology and the organisation of labour, and devoted considerable attention to the labour process, as much in his Principles of Economics (1920) as elsewhere. His followers, however, increasingly abandoned the subject and indeed the modern standard text books of neo-classical economics largely ignore it.

The problem is not just one of inadequate attention, but an inherent difficulty in dealing with the labour process. To start with, technical change is awkward ground for neo-classical economics, because of its central concern with the production function, an essentially static concept.² The production function relates inputs used to output obtained at a given technological level, that is, technology is an exogenous variable. The very same problem extends to the neo-classical explanation of labour demand because it is an application of production function theory: the hiring and payment of workers is seen as determined by marginal productivity. Thus the two poles of our investigation, namely technical change and labour utilisation, never meet. Moreover, the political dimension of production, namely control, entirely escapes the neo-classical framework.

TAYLORISM AND MANAGEMENT STUDIES

This charge cannot be levied against another branch of ‘bourgeois’ economics: management studies. The scientific management movement was initiated by F. W. Taylor in his works Shop Management (1903) and Principles of Scientific Management (1911). His main concern was not so much the development of a new technology but the elaboration of new management methods and the reorganisation of work at any technological level. He starts from a critique of conventional management; its main problem, he believes, is that most of the specific expertise about how best to perform a job and how quickly it can be done resides in the worker. In his view this is the obstacle to increasing efficiency and greater prosperity for both employer and employee. He therefore suggests that ‘managers assume … the burden of gathering together all the traditional knowledge which in t...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Tables
• Acknowledgements
• Introduction
• Part One Technological Change and Labour Utilisation in Manufacturing Industry: A Review of the Literature
• 1. The Labour Process in the History of Economic Thought
• 2. Technology Related Patterns of Labour Utilisation in Developing Countries
• Part Two Technology and Labour in Brazilian Industry
• 3. The Approach
• 4. The Cotton Spinning and Weaving Industry
• 5. The Chemical Fibre Industry
• 6. The Clothing Industry
• 7. The Hammock Industry
• 8. The Spinning and Weaving Industry Continued
• Part Three Towards an Understanding of Industrial Labour Processes in Developing Countries
• 9. Classifying Technologies
• 10. Putting Out – Past or Present?
• 11. Skills and Control
• 12. Labour Turnover, Wages and Reliability
• 13. Some Policy Implications
• 14. The Future with Micro-electronics
• Annex
• Bibliography