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.
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“…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.
I want to stress that these proposals are not being presented to be accurate examples – the idea is rather to illustrate trends that are happening in the world. Some economists who argue against these sorts of ideas, put forward what they call “the lump of labour falacy”. They argue that you cannot just divide up many jobs into equal smaller sized jobs. There are costs and efficiencies, they say, that are lost when one job is divided between several different people. Granted this may be true, but there are also many unused efficiencies on the other side of the ledger that exist because of our compulsion to be creating as much work as possible. If we were free to not only stop creating unnecessary work, but also free to dispense with some of the work for work’s sake that is already being done, those lost efficiencies could easily be accounted for.
Yet 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. I like the solution to this 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.
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.
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Tags: alternative economics, economic utopia, paradigm shift, shorter work week, unemployment, unemployment solution, work income connection, work-life balance
Categories : economics, economy
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.
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…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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Tags: alternative economics, economic problem, paradigm shift
Categories : economics
It’s been a while since writing here. Am in the process of editing and putting the posts in this blog into a little downloadable booklet that will put the whole argument into a more complete form. Hopefully that will be available here in the near future..
Meanwhile here is an edited and expanded version of the post Why Unemployment is Good?
WHY “UNEMPLOYMENT IS GOOD”?
“Unemployment in a society that is already producing enough is simply a potential for lower working hours. That’s why it is good. It points to the fact we have solved the age-old economic problem of survival”
Mostly we are told that unemployment is an evil to be avoided at all costs. That our best efforts should be directed to making sure there is enough work available for all. When there is an economic downturn, such as in the recent global financial crisis, work dries up, unemployment rises and people suffer. The usual approach to solving this scarcity of work problem is economic stimulus – that is finding ways to get the economy moving. The idea being, more demand for things results in more production which means more work and a corresponding lowering of unemployment. I seriously question this way of looking at the problem. As the title of this blog suggests, I want to turn the whole idea upside down.
When I say “unemployment is good,” I’ve often found a need to qualify the statement. I don’t mean the suffering of those put out of work is good, neither do I mean that lazing around doing nothing or living an unfulfilled life is good. I am talking about unemployment as an economic indicator. Usually unemployment is seen as a sign of something wrong. in the economy. What I am saying is that in a world of plenty like ours it is actually a sign of an opportunity so great that it could transform the world.
Just say there is an economic downturn – production goes down, there is a shortage of work and people lose jobs. At this point I would ask; is there still enough being produced to support us all? Is food still being produced, are schools and hospitals still operating, are electricity and other utilities still available? The answer to this question in a country like Australia at least, is an obvious yes. The enormous productive capacity of our civilization means that even when less people are involved in production (i.e. unemployment) we can still produce plenty. In fact it’s not hard to argue that much of our production is for the creation of things that are unnecessary or even destructive. We could significantly reduce the amount of stuff we produce and still have enough, except for one problem. Unemployment. We are caught in a double bind. Reducing production increases unemployment, even if the reduced production is desirable.
But turn the whole thing on its head and an incredible opportunity becomes apparent.
Unemployment in a society that is already producing enough is simply a potential for lower working hours. That’s why it is good. It points to the fact we have solved the age-old economic problem of survival. As machines do more and more of our work there is obviously less and less work for us to do. We are being freed from work not put out of work.
Each time there is a technological advance it frees up some labour, (or as we mostly say, it puts people out of work). In the past that excess labour has been used to do things we didn’t have time to do before – to improve our standard of living. This process has been occurring more or less continually since the Industrial Revolution began. It is a process of being able to do more and more with less and less human labour. Gradually over time it has gotten us to the point where material survival is easily taken care of.
Obviously in the early days of our technological development there were plenty of things that needed to be done and so we thrived on the extra labour and productivity that machines gave us. But now after much progress most of the essential things have been taken care of and it is increasingly difficult to find meaningful things for our excess workers to do. At this stage the option of reducing our work hours rather than producing more comes into its own. But we seem to have lost sight of the fact that reducing working hours is just another way of raising living standards. To my mind this is one of the great economic frontiers.
By simply absorbing the underlying unemployed of 5-10% into the workforce, we could not only reduce our working hours by about the same 5-10%, but end the problem of unemployment once and for all. By giving up the almost obsessive need to create work for employment’s sake, we could stop wasteful and unnecessary production and reduce working hours even more. Some people have estimated that it would be possible to work less than half the hours we do now and still have a similar lifestyle. Really though; the associated lowering of stress, the freeing up of our creative spirits, the ability to direct our attention to things in the world that desperately need doing would not make it a similar lifestyle at all – it would as Robert Anton Wilson says; “make the Renaissance look like a high school science fair or a Greenwich Village art show“.
Many people writing on this subject speak about the four day working week, others about the four hour day. My point is that as long as we are driven to create work for employment’s sake rather than work for meeting our needs for living, then none of it will happen.
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Tags: alternative economics, economic utopia, shorter work week, unemployment
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I love this extract from Robert Anton Wilson’s essay The Rich Economy
I don’t think there is, or ever again can be, a cure for unemployment. I propose that unemployment is not a disease, but the natural, healthy functioning of an advanced technological society.
The inevitable direction of any technology, and of any rational species such as Homo sap., is toward what Buckminster Fuller calls ephemeralization, or doing-more-with-less. For instance, a modern computer does more (handles more bits of information) with less hardware than the proto-computers of the late ’40’s and ’50’s. One worker with a modern teletype machine does more in an hour than a thousand medieval monks painstakingly copying scrolls for a century. …
Unemployment is not a disease; so it has no “cure.” …
Unemployment is directly caused by this technological capacity to do more-with-less. Thousands of monks were technologically unemployed by Gutenberg. Thousands of blacksmiths were technologically unemployed by Ford’s Model T. Each device that does-more-with-less makes human labor that much less necessary.
Aristotle said that slavery could only be abolished when machines were built that could operate themselves. Working for wages, the modern equivalent of slavery — very accurately called “wage slavery” by social critics — is in the process of being abolished by just such self-programming machines. In fact, Norbert Wiener, one of the creators of cybernetics, foresaw this as early as 1947 and warned that we would have massive unemployment once the computer revolution really got moving.
It is arguable, and I for one would argue, that the only reason Wiener’s prediction has not totally been realized yet — although we do have ever-increasing unemployment — is that big unions, the corporations, and government have all tacitly agreed to slow down the pace of cybernation, to drag their feet and run the economy with the brakes on. This is because they all, still, regard unemployment as a “disease” and cannot imagine a “cure” for the nearly total unemployment that full cybernation will create.
Suppose, for a moment, we challenge this Calvinistic mind-set. Let us regard wage-work — as most people do, in fact, regard it — as a curse, a drag, a nuisance, a barrier that stands between us and what we really want to do. In that case, your job is the disease, and unemployment is the cure.
“But without working for wages we’ll all starve to death!?! Won’t we?”
Not at all. Many farseeing social thinkers have suggested intelligent and plausible plans for adapting to a society of rising unemployment. Here are some examples.
1. The National Dividend. This was invented by engineer C. H. Douglas and has been revived with some modifications by poet Ezra Pound and designer Buckminster Fuller. The basic idea (although Douglas, Pound, and Fuller differ on the details) is that every citizen should be declared a shareholder in the nation, and should receive dividends on the Gross National Product for the year. …
2. The Guaranteed Annual Income. This has been urged by economist Robert Theobald and others. The government would simply establish an income level above the poverty line and guarantee that no citizen would receive less; if your wages fall below that level, or you have no wages, the government makes up the difference. …
3. The Negative Income Tax. This was first devised by Nobel economist Milton Friedman and is a less radical variation on the above ideas. The Negative Income Tax would establish a minimum income for every citizen; anyone whose income fell below that level would receive the amount necessary to bring them up to that standard. …
What I am proposing, in brief, is that the Work Ethic (find a Master to employ you for wages, or live in squalid poverty) is obsolete. Delivered from the role of things and robots, people will learn to become fully developed persons, in the sense of the Human Potential movement. They will not seek work out of economic necessity, but out of psychological necessity—as an outlet for their creative potential.
As Bucky Fuller says, the first thought of people, once they are delivered from wage slavery, will be, “What was it that I was so interested in as a youth, before I was told I had to earn a living?”
The answer to that question, coming from millions and then billions of persons liberated from mechanical toil, will make the Renaissance look like a high school science fair or a Greenwich Village art show.
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Tags: alternative economics, economic utopia, paradigm shift, shorter work week, unemployment
Categories : economics
In current economic thinking unemployment is usually considered to be a production problem. That is when there is not enough production going on to make use of all the available labour you end up with some people left out of the whole economic cycle. The usual response to this is to try to create more work to absorb this excess labour. This is why we are compelled to continuously increase our production so as to keep ahead of the growing pool of unemployed.
But looked at from a broader perspective unemployment is not a problem of production but rather one of distribution.
Even if output goes down a little, as it has over the last year – putting more people out of work, our enormously productive technology still goes on churning out more than enough goods for us all. So we are not looking to find work for the unemployed because we need their labour to ensure we can produce enough. We are trying to find work for them so they can earn an income to gain access to the things that would be produced whether they were working or not. Wouldn’t it be simpler to just give it to them directly rather than go through this complicated process that results in so many negative side effects? (the marginalised unemployed, environmental problems of overproduction, the lack of fulfilment in trying to consume all this stuff, resources not being used where they are really needed – ie in ending hunger and poverty in the world for a start)
When I say – wouldn’t it be simpler to just give it to them directly – I’m not advocating having one section of the community sitting idly by while the rest of us work to support them. What I’m suggesting is that if we are already producing enough, we share the “less work” around equally and all work that much less while still having the same living standard as before. Paradoxically that would be an increase in living standard because the same living standard on less work is an increase in living standard.
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Tags: alternative economics, less work, paradigm shift, unemployment, work-life balance
Categories : economics, economy