There’s nothing magical about 40 hours

10 10 2016

“There is a connection between growth and jobs, but only because Wall Street has the system gamed to assure that all the gains from increased productivity go to managers and shareholders rather than to labour.
Thus the total number of jobs will decline and unemployment will increase over time if the economy is not growing at a rate at least equal to the increase in productivity. This problem is easily avoided if productivity gains instead translate into greater time for working people to devote to family, community, and other quality-of-life pursuits.”

David Korten from Agenda for a New Economy

If you are reading this you’re probably aware of the proliferation of articles being written about rapid technological advances and associated unemployment problems.

Most of these articles say pretty much the same thing. Technology is advancing so fast in every area of human endeavour, it is rapidly transforming our world. As a result computer programs and robots are set to take over many areas of work that are currently done by humans. This will put many people out of work and, depending on the particular writer’s view, will result in either huge employment problems or new opportunities.

Have just read an article on the subject that puts forward a commonly expressed idea – as follows;
“Two schools of economic thinking have long been engaged in a debate about the potential effects of automation on jobs. …Will new technology spawn mass unemployment, as the robots take jobs away from humans? Or will the jobs robots take over release or unveil – or even create – demand for new human jobs?”

And from another article;
“70-80% of jobs will disappear in the next 20 years. There will be a lot of new jobs, but it is not clear if there will be enough new jobs in such a short time.”

But there is another side to the argument that is usually not spoken about. Why don’t we let the new technology do as much of our work as it can, and welcome the fact that this frees us to spend our time doing things to make our lives more fulfilling and the world a better place to live? This doesn’t mean that someone couldn’t continue doing something that fulfils them when a new technology is invented to do it; it’s just that the need for a person to do that particular job for the sake of our survival is no longer necessary then. This seems to me to be the common sense approach to the issue; yet most economists and commentators disagree.

When people express concerns about new technology taking jobs, they are usually reassured by economists that the same concerns have been raised many times since the industrial revolution began, and that they have always proved to be unfounded. The argument goes that while many types of work have been lost to new technology, a sufficient number of new jobs have always arisen to take their place. An often used example is that in 1900 40% of US workers were employed in agriculture and that by the year 2000 that had fallen to just 2 percent. This has not resulted in the long-term unemployment of farm-workers, as myriads of new industries have arisen, resulting in more jobs and ever-increasing standards of living. In 200 years of technological advancement, we are told, there has never been a corresponding outbreak of technological unemployment.

But that argument doesn’t give the full picture; because in the last 140 years there has been a 50% reduction in work hours.(see graph below) If a standard job was still 65 hours a week with 4 days holidays a year as it was in the 1870s, we would in effect have to find twice as much work as we do now to keep everyone employed. Either that or there would be an unemployment rate of around 50%. But instead we have done the sensible thing and reduced our working hours by 50%.

There is nothing magical about 40 hours a week being what constitutes a normal job. Work hours have reduced in the past due to technological advances and there is no good reason why they shouldn’t reduce further as we progress into the next technological revolution. Machines haven’t taken jobs as such, but they have taken away massive amounts of work. That should be something to be welcomed – but our current economic thinking sees it as something to fear.



The Currency of Love

30 11 2015

Even from his hospital bed after he had a stroke, my father Erwin kept working on his projects for the good of humanity. A week before he died he came up with his final project. He called it ‘the currency of love’. No one ever found out exactly what he meant by it but, I think in this essay I am getting close.


There is a well known story about heaven and hell.

In hell  a group of people sit around a table set with a feast of exquisite food. Their problem is that all they have to eat with are spoons which have handles so long it is impossible to bring the food to their mouths. They are constantly frustrated and hungry.

The scene in heaven is almost identical to hell. People sit around the same table with the same long handled spoons. The difference is they use their spoons to feed each other across the table. The same situation as in hell, except here everyone is satisfied from the abundance in front of them.

This analogy of the spoons could also apply to our current world economic system with its seeming inability to respond to the hunger and poverty that exists in the midst of great abundance. In spite of the extraordinary productivity of our global economy, many people are not getting what they need for an adequate life. We have the means in our grasp to provide enough for everyone, but are blinded to this potential paradise by the shutters of limiting self interest, and the inertia that current economic thinking imposes on us.

We live in a world of extraordinary abundance. I am not just referring to the fruits of nature here, but also to the incredible ingenuity of the human race. Because of our continually developing technological ability, one person can now do the work that a century ago would have needed hundreds. This technological advancement has given us the power to produce surplus upon surplus with ease.

The problem of poverty in our world today is not because we can’t produce enough. There is currently more than enough to go around – even taking into account projected population increases. The know-how to give the world’s marginalised poor adequate food, education and healthcare is already here and rapidly increasing. The recently agreed upon United Nations Sustainable Development Goals are proof that this is common knowledge amongst those in the know. World leaders have now signed a commitment to end the worst of global poverty within 15 years. For me it is truly cause for celebration to be living at such a time as this.

In all the reporting of this historic event there are many voices of doubt whether the willpower to actually make it happen will be there – and for good reason. There have been many declarations made for human development goals in the past which were announced with great fanfare, but when it came to action the financial and political motivation were just not there.

That is the long spoon of hell.

There are people suffering from simple lack of food. At the same time there is enough food already here and certainly an abundance of knowledge how to grow and distribute even more. Yet inspite of the facts that show us that ending hunger is attainable,(see this video) putting this into practice has not happened. Other things are given greater priority – often things that seem trivial in comparison. A large part of the reason for our reluctance to act is the ‘everyone for themselves’ attitude our economic thinking engenders. Helping those in need is not classed as a viable economic activity. It is in fact considered a drain on economic resources and is thus usually only reluctantly done. Even if we know it is possible we avoid action hoping someone else will commit their resources to the job.

Our present economic system developed at a time when there was genuine scarcity and survival for many was a struggle, much as is still in many African and Asian countries. The early economists tried to find ways of dealing with this. So much so that economics is often defined as the science of how to best make use of scarce resources. Economists also made the assumption that human wants are unlimited, thus putting us on a path of perpetual contest with each other for the said scarce resources. Since these early days of modern economics the concept of the human being as a primarily self-interested actor in the play of life has become integral to our economic life. But what happens when advancing technology delivers us to a place where the scarcity side of the equation is less and less relevant?

I am not saying that self interest has no part to play in motivating economic activity. Rather I am saying that in a world of plenty, unmoderated self-interest is an impediment to realising the fruits of our abundance for us all.

Accumulating and holding onto as much as I can has some rationale when there are limited resources to go around and someone will therefore miss out, but it is counterproductive when there is an abundance and there is the degree of specialisation and interdependence that exists in today’s economy.

We live in an economic world of such complex interdependence it approaches the complexity of the human organism. We are a mass of cells in the global body – each one of us having a particular role to play. All these specialised parts are coordinated to work together for a common aim, and are dependent on all the others for their survival. It is now largely impossible for any individual to produce all their needs for living. We depend on each other to a degree not seen before. Yet as our combined productive ability increases and we are more and more dependent on the fruits of each other’s work, insecurity driven by economic thinking based on scarcity and self interest, compels us to compete with each other – to undercut the other person’s wages and job conditions. In the global economy whole industries move from country to country insearch of the cheapest labour and lowest level of regulation. We all know what happens in a human body when its cells start working against one another.

In a healthy human body resources are freely distributed to where they are needed. One cell doesn’t refuse to send resources to where they are needed because the other cell doesn’t have sufficient units of currency to exchange. Of course when there is scarcity, such as a limited food supply, the essential organs get fed at the expense of the rest of the body. But in a healthy body resources always go to where they are most needed. So when enough food is again available, it goes to those parts of the body that had sacrificed themselves to keep the essential organs going. If the food kept being restricted to those parts of the body when it was no longer in short supply, it would be considered to be an unhealthy body.

The same goes for our global economy. Why don’t the resources go rushing to those in the greatest need to end the worst of global poverty, not in fifteen years but in fifteen months. It would be possible if we operated from a paradigm of ‘enough’ rather than ‘never enough’ as economic thought presently encourages.  Our great technological abundance is calling us to evolve to a new level.

So we need to take more care of our less fortunate brothers and sisters who are sitting around the global table. Simply for the reason that the table is overloaded with produce and that our spoons are presently better able to reach their mouths than their own ones.

Unseen Abundance

3 05 2015

About 30 years ago some friends took me by boat to a remote island in Fiji. What stands out in my memory is the day one of the locals took us fishing. He waded out into shallow water and within about 30 seconds had a net full of bait fish. We then went out in his leaky wooden dinghy that had a concrete block tied to a piece of rope as an anchor. In half an hour he had caught enough fish to feed his extended family for the next few days. We went ashore and picked some breadfruit and paw-paws and he spent the rest of the day enjoying himself with his family and friends. There were things that he was desperate for such as sugar and I think to this day they wouldn’t have the internet – but still it was a very relaxed, easy life there.

It is valuable to learn whatever lessons we can from hunter gatherer cultures, but at the same not to over-glorify them. For example, that Fijian island had no doctor or hospital, a simple thing like fish hooks was in short supply and anybody with religious beliefs different to the norm would likely be marginalised or ostracised.

I think what we have in the world today has the potential to far surpass the ease of life on that Fijian island. With our highly productive technology and global communications systems we could, if we wanted, look after our much more complex survival needs in the same amount of time as the Fijian man. In saying this I am not suggesting the resource wasteful lifestyles of the affluent west represent a viable survival for the whole world population. What I am saying is that if we gave up our produce at any cost attitude and our belief that satisfying unending wants will make us happy, we might find that the abundance of time thus freed up could help us find the fulfilment we are longing for. Not only that it could also free up enough time and resources to devote our energies to things that really need doing. Things such as ending world hunger and poverty or cleaning up the environment.

I am bewildered when I hear economists telling us we have economic problems while being seemingly blind to the fact that our technological and organisational genius has created a world of such abundance that it renders the whole economic problem mindset obsolete. I am even more bewildered that we believe their assertions when the evidence in front of us tells us otherwise. The economist’s training has given them authority to convince us that if we don’t produce and produce and produce some more we are doomed. I am not blaming them – we have inherited an economic system that was developed in times when survival was a much more difficult and laborious undertaking than it is now.

The truth is that we have, with the grace of our organisational and technological ability, solved the age-old economic problem. If we wanted we could have more than enough for a comfortable life for every one in the world. Not a life of insane rushing around and rapid conversion of our precious resources into waste, but a world where we have an abundance of free time to pursue the things that really fulfil us.

Two of the main things preventing this economic utopia from being realised are; a misunderstanding of what really makes us happy, and the economic world view we have inherited from a time when there really was scarcity.

I think that to some extent we are faced with the choice of either having an economic utopia or having social and environmental devastation.

As far as solutions go; there are many. I like the simplicity of changing our attitude to unemployment; from a persistent problem to an evolutionary opportunity, from an economic indicator of something terribly wrong to a positive indicator that could revolutionise the world. Because unemployment in a world that is already producing a surplus is simply an opportunity for more free time for us all.

19 03 2015

In a nutshell what I am talking about is the insanity of treating unemployment as a production problem. The typical solution to unemployment is to find ways of producing more – thus creating more jobs. That solution no longer works. If anything in this crazy world we should be producing less. This more production solution to unemployment is also one of the main drivers of our belief in a perpetually growing economy. An excess of labour in a world that is already producing too much is not a problem but rather a great opportunity.


20 02 2015

“…And there are those jobs that are not only boring and unpleasant, but would make little difference to our existence if they were not there, except that someone is earning a living from them…”

Again and again we read it in the papers and hear it on the news; politicians, economists and journalists telling us about the vital need for jobs. This preoccupation with the creation of jobs as a solution to the unemployment problem is at the top of the agenda for pretty much all sides of politics and economic thought. We by and large take the more jobs viewpoint as self-evident truth. Which is understandable – in our world you need a job to earn a living so as to survive. If there is not enough work available for everyone then people suffer.

On the other hand, when I see this world where overproduction seems to be one of our problems – where shops overflow with merchandise, where you can have every little want catered for, where resources are being rapidly depleted and where the environmental results of all this production press for urgent attention, then I can’t help but see an enormous contradiction in being told there is a need to create even more work for us to do.

So why do we need this “more work”?

As I see it there are three main reasons why we work.

The first and most basic of these reasons is to produce the things we need for living. We need food, houses, transport, energy, hospitals, plus a whole host of other things, and work is required to make them possible.

Another reason for working is for personal fulfilment. Whether it is simply to be an active member of the wider community or whether someone is drawn to a particular vocation, most people have a need for some form of activity to occupy their lives with.

The third reason for working is we work to earn a living. Working to earn a living is a crucial part of our economic system. It ensures we all do a fair share of the labour required to produce the stuff we need for living. We need money to gain access to the things necessary for survival and mostly we get that money from a paid job. This inturn ensures that everyone contributes to the general wealth – and it goes on. I know it seems like I am just stating the bleeding obvious here, but I’m attempting to point to something of great import that is usually overlooked in discussions about work and unemployment.

In our world it is essential to have a paid job. When economists and politicians talk about the need to create work it is primarily this third reason for working they are referring to.

In the complex world we live in these three types of work are present in countless variations and combinations. They rarely exist separately. Someone may have a job, a farmer for example; their work not only needs to be done, but also gives them fulfilment and earns them a living – thus combining all three types of work in the one job. As we unfortunately know, there are many jobs that people are only doing to earn a wage but get no satisfaction from and would much rather be somewhere else. And there are those jobs that are not only boring and unpleasant, but would make little difference to our existence if they were not there, except that someone is earning a living from them. More and more in our world the focus is on the third reason for working – working to earn a living.

When looking at these three reasons for working it is important to see that the first two are of a different kind than the third. Working to produce the things we need and working for fulfilment arise directly as a consequence of the physical and mental world we live in. Because we are physical beings we need food and shelter etc and must work to produce them. Because we are psychological/spiritual beings we have a need for a fulfilling life and a need to be part of a wider community.

Working to earn a living on the other hand, is of a different nature. It is a system we have developed to help make our lives more predictable, efficient and fair. Like the rules of the road it only exists because people developed it as a way to deal with a particular situation. Essentially it is a means of fairly distributing the fruits of our combined labour – I do some work, make my contribution to the economy, for which I am given a certain amount of rights, in the form of money, to take what I need from the system. This ensures that everyone does their fair share of the work and no-one abuses the system. Yes it is possible to manipulate things (legally and illegally) so more of the wealth comes my way, but by and large, with a lot of tweaking, the system has served us well. Until now that is.

Something in the working to earn a living system has changed to such an extent that no amount of tweaking is able to keep it operating effectively. In fact trying to keep the system operating as it always has, is resulting in many destructive side effects, such as; overproduction, the marginalised unemployed and soul destroying work lives of large sections of the workforce. It is also preventing a potential worldwide economic utopia from occurring in our lifetimes. No doubt there are many other things that prevent us from having a world where everyone has enough for a fulfilling life, but this is one of the least understood and acknowledged reasons.

What has changed and is causing the system to malfunction is our rising productivity.

Here are some productivity statistics from the OECD website. Based on GDP per hour worked, Australia’s productivity went from 56.1 in 1970 to 111.3 in 2013. That equates to a doubling of productivity per working person over a period of 43 years. Most industrialised western countries show similar figures to this. For the former eastern European communist countries the increase is even faster. Poland for example went from 55.5 in 1993 to 126.8 in 2013 – more than double the productivity in 20 years. For some of the industrialised Asian countries the figures are astounding. South Korea went from 13.7 in 1970 to 130.3 in 2013 – a tenfold rise in productivity.


While these sorts of figures are not perfect measurements, they do illustrate some significant trends. You could say that in Australia for example we are now able to produce what we did in 1970 with half the labour we needed then. More likely, as working hours have changed little in the last forty years, we are producing around twice as much as we did back then. No wonder it is so difficult to find more jobs for us to do – we are already so overloaded with stuff.

We have just had a guest staying for a few days who brought with her; the latest iphone, an ipod and a laptop – all loaded with 100’s of movies, games, videos and various ways of connecting to the internet. Add to that working, socialising and the practicalities of life, and there really isn’t room to fit in more things. If anything we need more space to properly enjoy the things we already have.

From this perspective, when we look at our economic system’s need for more jobs, it is clear we don’t want the more jobs because we need to produce more stuff. We rather need the jobs to give people access (through wages earned) to things that would have been produced whether they were working in their newly created jobs or not. And politicians and economists talk about even more productivity increases happening – so the problem can only get worse.

A possible solution to this problem can be seen if we look at this growth in productivity from a radically different perspective.

At the moment, each time there is growth in productivity we are left with two choices; there are less hours of work required for the same amount of production and so someone looses their job, or alternatively we produce even more things to give the newly sidelined workers a means to an income. What we rarely consider is; are there better ways to distribute the fruits of our production, to the displaced workers when improved technology or better organisation result in the need for less labour? In that way we would not be continually chasing more jobs – but could fully welcome all of the gifts that increased productivity gives us – then workers would not be seen to be loosing jobs but rather being freed from unnecessary work.

To go down this path of thought is to enter some very dangerous territory. It means a radical rethink of two of the central tenets of our economic system – work and money. As already shown, working to earn a living is a way we have developed to ensure everyone partakes in both the creation and the consumption of the fruits of our labour. It is not a direct outcome of our needs as the other two types of work are, but a system we have created in response to particular circumstances. So if the circumstances change – such as they have with our increased productivity – we are not compelled to continue with a system that can’t seem to deal with the change. We could if we wanted for example, have a 1970 lifestyle and only work 20 hours a week. Or say we still wanted half of the new inventions that have come post 1970, then the work week would be an average of 30 hours – or an extra 10 weeks off per year.

Some economists who argue against these sorts of ideas, put forward what they call “the lump of labour fallacy” or “the luddite fallacy”. They argue that while there may be short term job losses due to new technologies, in the longer term new jobs are always created to take the lost job’s place. The mechanism whereby this happens is as follows. A new technology makes workers more productive – thus they earn higher wages. Those workers use their increased income to buy new products thus creating work for the ones who were recently displaced by a machine. The argument goes that you only have to look at employment levels since the begining of the industrial revolution to see there has been no outbreak of mass unemployment due to new technology.

This lump of labour argument conveniently ignores one of the most astounding developments of the industrial revolution. Between 1870 and 1970 the average working week in industrialised countries reduced from around 65 hours to 39 hours, which is a reduction of 40%. Now by far the majority of these reductions were made possible by labour saving machines. That is in effect a technological unemployment rate of 40%. Not only that but the total amount of years a person works in their lifetime has also decreased significantly. In the 1870’s about 75% of people over 65 were still working – by 1980 that had reduced to around 20% of over 65’s still in the labour force. The mistake that those who espouse the lump of labour fallacy make is they see unemployment as something bad that needs to be avoided at all costs. Whereas the bulk of the workers who have an extra 25 hours a week to enjoy the fruits of the new technologies know it as a good thing.

Yet inspite of the evidence and commonsense logic, something compels us to persist with our working to earn a living system. – Money. – The general notion is that if someone loses their job because a machine has been invented that will do it faster and better – we have to ‘find the money’ somewhere for them to have a living – which usually means taking it from somewhere else. So often there ends up being less hospitals, or schools, or help for the needy, in order to pay for the results of our increased productivity. As productivity increases we seem to be running faster and faster just to stay in the same spot. I like the solution to this problem proposed by Alan Watts in his essay ‘Wealth Versus Money’. He says that the wealth generated by work done by machines should go to the general community to solve this problem. That something like this doesn’t happen may be one of the reasons why we see more and more of the wealth in our world being held by fewer and fewer people – usually the owners of the technology.

The majority of this essay has been about the ‘working’ part of working to earn a living. The ‘living’ part – usually meaning money – is of a similar nature. Money, like working to earn a living, is a system we have developed over many years to help us deal with the complexities of producing and distributing the fruits of our labour. It does not possess the degree of reality that the goods and services we produce have. In our world though, money has been given a place of equal if not greater importance than the goods and services it represents. For example, look at the global trade in money which largely has as its aim making profits from non-productive money transactions. The amount of money involved in these non-productive transactions is currently hundreds of times greater than the value of trade in real goods and services. So large are these financial markets that a collapse in any of them has the power to bring down the whole world economy (see the recent GFC). So we put enormous amounts of resources into making sure that a handful of investment banks don’t go bankrupt. The derivatives market has grown so large that there is just not enough money in existence to bail out banks if there was a major collapse.

Another example is world hunger. There is currently more than enough food being produced to feed everyone in the world, but because we put such a high priority on making more money, the priority of feeding the hungry is put in second place – or even further down the list.

There is a growing interest at the margins of economic thought on “how money is created”. In short, over 90% of money comes into existence when banks make loans to individuals, organisations and governments. The thesis is that governments have the power ( and have made use of it in the past) to issue themselves no-interest or very low-interest loans to cover shortfalls and help ease the transition to a higher productivity world.

To go into this in more detail is beyond the scope of this essay. Suffice it to say we have the materials and knowledge to produce enough for us all with far less worry and stress than we do at present and one of the reasons we are not doing this is our belief in the need for more work.

Which is more real?

11 08 2014


What is real? The obsession with numbers on a computer screen that more often than not bear little or no resemblance to reality, or the miracle of the flesh and blood earth that is our home.


18 05 2013

…the economic problem is not-if we look into the future the permanent problem of the human race. Why, you may ask, is this so startling? It is startling because – if, instead of looking into the future, we look into the past – we find that the economic problem, the struggle for subsistence, always has been hitherto the primary, most pressing problem of the human race                                                                               John Maynard Keynes from Economic Possibilities for our Grandchildren

Open any basic economic textbook and one of the first things you will see is a definition of the economic problem. It goes something like this; human needs and wants are always much greater than our ability to satisfy them. Put another way – resources are limited but human wants are never ending, therefore we have to make decisions about what is the most intelligent way to use our resources to create the greatest good for the greatest number of people. All economic systems and theories are born out of attempts to solve this problem.

An important question arises when looking at the problem of wants and needs – because obviously the needs of a poor African villager are very different to those of an affluent Westerner. As basic needs such as food and shelter are satisfied, needs and desires still arise, but they become less and less essential. This is the critical distinction between the concept of needs versus that of wants. Many economic theories try to deal with this difference. For example, we tax trivial wants such as luxury cars and then use those taxes to support more essential needs such as health care and education. But is it economically or psychologically wise to try to satisfy wants that are more and more trivial?

Most economists when they talk about the economic problem state that human wants are insatiable and then quickly pass on to the problem of how to satisfy these wants, rather than questioning the whole premise. Will satisfying insatiable desires really make us happy – is it even possible to satisfy them and what are the social and environmental consequences of trying to do so?

We have developed a technology that gives us the ability to provide for the comfortable living needs of everybody on the planet. We know how to do this with a minimum of drudgery. The prevailing idea that it is desirable to go on trying to satisfy trivial wants past this point only strengthens the bonds of our insecurities and feeds our addictions.

So is there a point where enough needs have been satisfied and we can say the economic problem has been solved – now we can really start living? I believe in most western countries we have gone well past that point. So much so that we now have an advertising industry whose job is to convince us we have needs that we otherwise would not have had. As well as this there is the sense of meaninglessness that many in the affluent west feel in spite of their material riches.

We are living at the remarkable time when, if we chose, we could declare the economic problem solved. One of the biggest impediments to being aware of this great possibility, let alone doing anything about it, is that we continue to look at the situation through outdated, psychologically simplistic economic theory.

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