Let’s consider how a family would sustain itself if trapped on a deserted island. I call this “family economics,” as opposed to “Crusoe Economics” where an individual is trapped on a deserted island. I’ll do this to show the importance of the division of labor, from a miniscule “family economy,” to a large-scale industrial economy.
The point of this exercise is to demonstrate the importance of the division of labor and the hierarchy of skills, so to speak, that exist in industrialized, market economies. It’s not uncommon for libertarians and others who oppose the state to also oppose all hierarchy, authority, and sometimes as far as opposing all inequality. Some romanticize the idea of worker-owned economies where businesses are run democratically by the workers. They fail to understand the importance of the division of labor and inequality by merit throughout an economy.
Imagine a family of 4 was shipwrecked on a small island with no inhabitants, but a good amount of natural resources for its size. Let’s call the father (age 30), Murray. The mother (age 30), JoAnn. The son (age 12), Hans. The daughter (age 8), Ayn.
Upon shipwreck, the family realizes they won’t be saved immediately. They will have to sustain themselves for an unknown length of time, if they wish to survive and be rescued or escape the island. In an environment of scarcity such as on the island (so is the whole world, of course), it is necessary for individuals to use available means to achieve a desired end, namely survival of the family. The family’s goal of survival must be achieved by using the available means to achieve ends that are conducive to their ultimate goal of survival.
Time, labor, and land are all scarce resources. Misallocating time, labor, and land would be a death sentence for the family in this condition of ultra-scarcity. They must prioritize their needs and wants that will contribute to their ultimate goal. For example, instead of consuming time and resources to make a hairbrush, JoAnn’s time and labor as well as the available resources would be better allocated by making a water collection and filtration system.
This is where division of labor and inequality of skills or abilities is so valuable. While Murray and JoAnn may have the intelligence or know-how to design and create something like a water collection and filtration device, neither Hans nor Ayn do. For Hans and Ayn to be delegated the responsibility of designing and creating a water filtration system while Murray and JoAnn be delegated the responsibility of collecting kindling and firewood, for example, would be a misallocation of resources and contrary to the family’s ultimate goal. It is important that each family member provide the greatest utility based on their abilities. This may require for Murray or JoAnn to act as a manager of the family’s activities and production.
Why should Murray or JoAnn manage the family’s production rather than Hans or Ayn? Because, based on their skills, abilities, and merit, Murray or JoAnn would be better suited to manage the family’s production rather than Hans or Ayn. Thus, it is better for the family that those with greater skills be responsible for the things requiring greater skills, and it is better for the family that those with lesser skills be responsible for things requiring lesser skills.
So, while Murray and JoAnn work on the water supply, it is economical for Ayn to gather firewood. Gathering firewood requires little skills. Ayn, being 8 years old, is more productive gathering firewood than she would be trying to help with the water filtration system. While Hans, Murray, and JoAnn might be more efficient at collecting firewood than Ayn, they are far more productive by doing other things that require greater skill. Hans may be able to gather firewood more quickly than Ayn, but perhaps his unique tree-climbing abilities make him more productive to the family by climbing trees to gather coconuts or other things.
In this scenario, the family’s survival depends on the ability of the leader, whether Murray or JoAnn, to effectively divide the labor and organize the family’s production so as to meet their ultimate goal. If production were carried out by the family democratically, that is by voting on how labor should be divided and resources allocated, there is much greater opportunity for misallocations of labor and resources.
This is why diversity of intelligence and skills are so important to utilize. Some people are more capable than others at various activities and thus, are better suited to carry out those activities. Division of labor by meritocracy rather than democracy ends up being better for all as resources like labor are allocated more efficiently and rationally.