Book Review: The New Division of Labor: How Computers Are Creating the Next Job Market

A mong the many famous maxims that have come down to us from the work of Adam Smith is: “The division of labor is determined by the extent of the market.” This statement captures an evolution frequently observed in the nature of businesses and jobs as economies and markets grow. In a small market, particularly in a preindustrial economy, goods were produced and sold in small shops. All stages of production were carried out by the same artisans, the most senior of whom may also have been the shop’s owner. The growth associated with industrialization brought production on a much larger scale. And with that growth in scale came processes that allowed production to be broken into distinct pieces performed by distinct workers. So one effect of industrialization was the shift in the distribution of work away from artisans who were skilled at and performed an array of related tasks, to workers who specialized in performing one, often relatively simple part of the production process. These changes originated with the introduction of technology that allowed large-scale production to take place. That is, there has long been an interdependency between the size of demand for goods (the extent of the market) and technology in determining the evolving nature of work. In The New Division of Labor, Frank Levy and Richard Murnane, economists at the Massachusetts Institute of Technology and Harvard University, respectively, direct their attention to the contemporary version of this interdependence. Their particular focus is on the ways in which computers have changed the workplace. Since the dawn of the computer age, many observers have predicted widespread replacement of machines for human work. Levy and Murnane assess the extent to which such predictions have come true and, more importantly, attempt to dig deeper into the relationship between information technology and human work. On the first score, it seems clear that some early fears about massive displacement of workers by computers were widely off the mark. Still, it also seems clear that the effect of technology on work has differed widely for workers of varying skill levels and occupations. It is this variation that claims the authors’ attention.