Suppose that you are a baby and that you are abducted by medical doctors.
At first they’re going to perform medical experiments on you, but you’re such a cute little tyke that they decide, instead, to raise you as one of their own.
They’re very diligent in training you in the ways of medical doctors, and by the time you are an adult you’re a medical doctor who can go toe to toe with the best in the profession.
You even win prizes for gladatorial combat with other physicians in the scalpel matches in the operating theatre of the Collosseum.
But you also have another skill: You’d make a really good secretary. The secretaries of the doctors who abducted you also took a shine to you as a child and trained you in the ways of secretaries as well. (Before they were put out of business by word processors.)
Eventually, you decide to strike out on your own and open your own practice.
You’re an entrepeneur!
You are also your only employee. But that’s okay, since as a doctor-secretary by training, you can both treat the patients and do the secretarial needs your business has. You do the secretarial work in the morning and see patients in the afternoon.
But you discover is that you have too many patients and not enough time. Your waiting room is filling up with countless patients who are workers from the nearby defense contractor that is working on a top-secret project that results in numerous splinters, splinter infections, and faintings from inhaling too many fumes from glue.
You’re at the breaking point. You simply can’t treat all the patients. Something has to change.
Then an accountant from the plant who is in to see you following a glue swooning gives you an idea. He points out that, as a doctor, you make $70 an hour, but secretaries make only $15 an hour. If you took the four hours you use for secretarial work in the morning and spent them doctoring, you’d make an additional $280 a day. If it requires one hour of secretarial work per hour of doctor work, you’d then need a full-time secretary, who you could hire for $120 a day. This would be a win-win-win-win situation:
- You would win because you would have an addition $160 in income per day ($280-$120)
- The secretary would win because now she would have a job giving her $120 a day (secretarial jobs being few and far between since the advent of word processors).
- The patients would benefit because now you’d have the time to treat them all.
- And the nation as a whole would benefit due to the very exciting but hush-hush project the workers are striving to accomplish.
What does this teach us?
That you should always listen to glue-swooned accountants?
That every doctor needs a secretary?
That flying saucers are real?
No. It teaches us that specialization can benefit everyone. Look at the difference between our society, where we have specialized labor, and the time when everyone had the same job (hunter-gatherer) and there was no specialization of labor and life was "nasty, brutish, and short." Which would you rather live in? The fact that we have specialized labor vastly increases social and economic efficiency, just as it increases your efficiency as a doctor, and makes life better for everyone.
The same principle applies on levels higher than that of the individual. It also applies to companies. If every bookstore had to oversee everything from the training of writers to the writing of books to the editing, layout, proofreading, printing, binding, and selling of books, they would be a much less efficient and smaller than they are, with only a handful of titles available. By specializing in one thing–selling the books–and leaving to others the creation and manufacture of them, bookstores are able to offer thousands of titles on every subject imaginable, benefitting everyone (except, of course, for readers of those books that should be burned).
The principle also applies to countries. Different countries specialize in different things, to the benefit of the whole world. Places like Hong Kong and Singapore and Vatican City could never grow all the food they need for their populations, and so they don’t. They import it and spend their time providing goods and services that the rest of the world needs (like those great Vatican City circuitboards), to the mutual advantage of both.
Hey Jimmy!
It’s great that you’re posting on things economic!
I think to summarize what you’ve just written: Each party should specialize in the production of which he has the comparative advantage in.
In the case you quoted, the fellow is better off specializing in treating the sick as the opportunity cost of him doing secretarial work’s just too high – while he’s doing the secretarial work, he’s forgoing consultation fees.
By committing his entire working hours to being a physician, he would not only earn a higher income, but also provide a job (the secretarial post), and more patients get to be served. And as he and his secretary get more efficient (they get more adept at their tasks, being specialists at it), the patients would benefit from faster and probably cheaper services.
As a result, resources would be maximized, the economic pie grows and parties involved would get a yummier and bigger slice of it!
Keep up the good work on the eclectic posts, Jimmy! Economics is indeed interesting, ain’t it?
Amare Et Severe,
Anne Louise
I too share the joy of comparative advantage. Do understand though that there can be problems. These problems become particularly acute when people no longer have the means or skills to provide for themselves.
An example. A waitress in Flint, MI, worked for a restaurant so that the owner could manage the business. The owner openned the business, because he could provide a meal more efficiently than the auto worker. The auto worker worked for GM, because GM had more efficient uses of their time than building cars. GM ships the factory off to Mexico. Everyone is layed off. The waitress becomes an exotic dance, because with her skill set there is a comparitive advantage.
Funny, that same thing happened in my town.
But as soon as the toothpick fighterplane was finished, all the workers lost their jobs and therefore their health insurance. Our doctor had to fire his secretary, who went back to her old job as Mother. She pulled her kids out of public school and began homeschooling again. Two of her sons grew up to be priests.
The doctor soon went back to school to become a welder, because there was a new factory in town building a something equally ridiculous out of steel.
I specialize in writing redundant software for an insurance company. I write the redundant programs really, really well too.
Toothpicks are an excellent idea. I’ll bring it up at the next R&D meeting.
Yet the great G.K. Chesterton said, quite accurately in my opinion, that “Specialization is for insects.”
Urban and suburban men today have managed to specialize to such a degree that they can no longer change their own oil, build a fire without using gasoline or starter logs, swing a decent hammer, or half a dozen other things all men knew how to do back in the day. Instead they make more money and pay someone else to do it. It might make more sense economically, but I don’t agree that it’s a good thing.
I’m with you, Jamie. I often wonder if we really are all that much better off.
While agreeing that specialization is necessary for efficiency of an organization, multi-skilled work is necessary for the FLEXIBILITY of an organization.
Case in point: My old company had a woman they could not fire because no one else knew her job well enough to take over. When she was ill, coworkers showed up at the hospital to bring her flowers – and get pointers. Management moved up the date of changing the mechanics of the operation, just so everyone had the same training.
Interesting thought, Jamie. My father made a point of teaching my brothers to cook, clean, iron, and sew – saying if they needed to rely on Mom or a “mommy replacement”, they were wusses! I wonder how many bachelors have those survival skills!
Ack – that should be “the multi-skilled worker”.
Super-specilization can be bad, as can being a jack-of-all-trades. However, a particular level of specilization in one skill, while maintaining lesser levels of other skills (survival skills of some sort) is a good balance.
So how does Catholic social doctrine factor into this? 😉
“This would be a win-win-win-win situation”
Except that the local social activists are now picketing the doctor because the secretary is head of household for a family of four (single income) and the $15/hr is not a “living wage” by local standards.
You have to differentiate between specialization as career and specialization as education model. As a career choice, specialization is good. Different specializations may be good at different times in your life, however.
Yet, as part of your education as a human, you probably should be able to do calculus, shoot a deer and turn it into a meal, speak multiple languages, and deliver babies. That’s because a) your brain needs stimulus to be a useful brain and b) you don’t know what you might have to do or think someday. That’s why things like Scouts and enrichment activities are good for both kids and adults.
I don’t plan to become a pilot, but if my pilot dies inflight or I want to write a story about a pilot, I might want to know how a plane’s controls work.
I don’t think that anyone will argue that *all* specialization is bad – any profession at all is a form of specialization on some level. And even hunter-gatherers were specialized to some degree (some people hunted, others gathered….)
The problem arises when specialization & efficiency are given disproportionate value. This sort of thing is (as many notable writers & theologians, both Catholic and non-Catholic, as well as a few popes have pointed out) to place economic/material/societal gain over the good of the individuals involved in production, and is potentially spiritually destructive. The obvious example is the assembly line: an individual makes several thousand of the same widget monotonously for eight hours a day.
One thinks of the words of Pius XI, directed against state Socialism, but which could with very few changes be applied to many of the ideas that lie behind industrial capitalism (just mentally change all the “social”s to “industrial”s):
“Indeed, possession of the greatest possible supply of things that serve the advantages of this life is considered of such great importance that the higher goods of man, liberty not excepted, must take a secondary place and even be sacrificed to the demands of the most efficient production of goods. This damage to human dignity, undergone in the “socialized” process of production, will be easily offset, they say, by the abundance of socially produced goods which will pour out in profusion to individuals to be used freely at their pleasure for comforts and cultural development. ” (Quadragesimo Anno 119)
My Dad used to always say that one should always have a profession and a skill. So if one doesn’t work out you can fall back on the other.
One thing I have noticed with many people who “specialize” is that they only know about the areas of their own skill. They have no interest or knowledge or appreciation for anything unrelated to their expertise. And it’s usually the arts which suffer.
I think the problem with postmodern education is that people specialize in one thing, and are clueless about everything else. We have computer technicians who have never read Shakespeare. Or accountants who have never heard an aria by Puccini. A friend I know works for a law firm. He made a comment about “crossing the Rubicon” to make a point and no one understood what he meant (and I mean the lawyers, not the secretaries!).
What happens with specialization is a sort of myopia. I don’t mean to say that one shouldn’t be a specialist, but to focus only on what one needs to know for one’s profession or line of work creates a vacuum in a cultural sense.
It may be good for an economy. But the soul of society will suffer for it.
Specialization’s one thing. Complete specialization’s an extreme, though not too bad a thing taken in the right context.
There is such a thing as nurturing ‘dynamic’ comparative advantages – constantly seeking possible new sources of comparative advantages. Innovation can change stakes almost immediately i.e. when a task that’s labor-intensive can be done more effectively and efficiently through automation could give the labor-rich country a run for its money.
The thing would be to perhaps specialize to a certain extent, in the production of a good or service we currently have a comparative advantage in. The maximization of resources would allow for research of more innovations to create even more competitive advantages (to overcome possible obsolescence) and increase the welfare level of the society. When society gains, people can afford to pursue other skills and other leisurely activities e.g. the arts, travel etc.
Economic analysis is usually done based on a set of rather constrained assumptions – for simplicity’s sake. However, there are always plenty of economic justifications for ‘deviations’ from the models, thus never fully robbing the powerful ideas of their ultimate value.
Anne Louise
And that’s why they call economics “The Dismal Science”
A fun read on this sort of thing is The Choice: A Fable of Free Trade and Protectionism by Russell Roberts. It’s written in a light style similar to “It’s A Wonderful Life.” The protagonist is brought in to two alternate futures of America. On future is a future in which specialization and free trade have been followed and the other in which America followed a path of protectionism.
The author is definitely in favor of free trade, so it is not an attempt at a dispassionate view. But it is clever, fun and makes some good points.
I disagree that specialization is not a suitable education model. I happen to be one of those people who was just born to do one thing, and if I had been allowed to use the time I had dedicated to the public school classrom to develop my skills I would have profited immensely. However, I think a more general approach is appropriate in alot of cases. It should depend on individual needs. We no longer apprentice our young people as was commonly done in the past. Mozart wrote his first symphony at age EIGHT. Does anyone care if he didn’t “get” algebra?
Truthfully, with the internet and the high quality of educational television (I’m talking Discovery Channel or History Channel type stuff, not PBS) institutionalized education is looking like a bit of a dinosaur.
But Mozart’s genius in music didn’t mean he was an idiot in other areas. To the contrary. I think the movie Amadeus misled people on this point.
Among other things, he was one of the long line of children who made up their own countries:
http://www.mozartproject.org/biography/bi_61_65.html
‘…he invented an imaginary land and named it the Kingdom of Back. “Why by this name, I can no longer recall,” his sister wrote much later. “This kingdom and its inhabitants were endowed with everything that could make good and happy children out of them.” Little Wolferl himself was the king of Back, and became so immersed in its administration that he persuaded Sebastian Winter, the family servant, to make a map of it and dictated to him the names of all the cities, villages and market towns.’
And he was probably a whiz at math. Math and music are closely intertwined.
I am not saying that Mozart was a kind of savant. The fact that he was preternaturally brilliant just makes a formal, structured education even less necessary. I’m saying, if the kid has a gift there is nothing inherently wrong with allowing them to develop it at the expense of some other activity. If a gifted and motivated child wants to play piano six hours a day at the expense of finshing his or her toothpick airplane project or self esteem workbook, I am in favor of letting them do so.
We all have to make decisions in life, and following one path often means abandoning another. That doesn’t mean that people must be helpless outside their chosen field. I happen to have a smattering of working knowledge in a number of practical areas(construction, home repairs, outdoor skills, first aid, and alot of other stuff) but I learned all this in pursuit of my own interests and not through any formal education. None of it was required.
I just think with the advent of the internet and home computers in general that a paradigm shift in “education” is long overdue and may, in fact, have already begun, signaled by the rapid growth of homeschooling.