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. This seems to me to be the common sense approach to the issue; yet most economists and commentators disagree.

The usual argument is as follows.

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 by the year 2000 that had fallen to just 2 percent. This has not resulted in 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, there would now be a massive shortage of work and an unemployment rate of around 50%. We would also have much less time to enjoy the benefits that technology has brought us, as we would be working most of the time.

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.

work-hours-graph

Advertisements




THE “MORE WORK” FALLACY

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.

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.





WHY “UNEMPLOYMENT IS GOOD” revisited

28 02 2013

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.





– Unemployment is not a disease; so it has no cure

2 09 2009

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.





–Unemployment Is A Distribution Problem Not A Production Problem

4 08 2009

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.





-UNEMPLOYMENT IS GOOD #2

12 07 2009

In the United States steel industry between 1982 and the year 2002 production rose from 77 million tons a year to 120 million tons. At the same time the number of workers employed in the industry went from 289,000 down to 74,000.

This is not an isolated occurrence. Similar statistics can be found in most industries in all industrialised countries. The reason is not complicated – better machines and greater efficiency means an increasing ability to produce more with less labour.

Surely this is a good thing. The only question is what do we do with it. How do we best realise the great gift our technology is offering us. For example, if the  statistics for steel were more or less representational of productivity increases in all industries, that would mean we could sustain 1982 living standards on a 10 hour work week. I know it’s not as simple as that: there are many post 1982 developments that we would not want to do without and some industries have not had the productivity increases that steel production has (though some have had more). I’m just using this example to indicate the scale of what is happening.

We are not even coming close to taking full advantage of the possibilities that technology opens up. While our great productivity has resulted in large increases in living standards, it has also helped to cause two of our biggest problems. On the one hand we generate unemployment, turning the machine freed workers into the out of work. On the other hand we desperately start producing more and more stuff to create work for the unemployed to do. We have created the twin problem of unemployment and a global and personal smothering in excess stuff, when we could just be having more and more free time.

And please, not free time to drink more beer and watch more television. But free time to give our lives more meaning and transform the world.

PS. I am intending to set up a new page on this blog listing various statistics on productivity growth





-ECONOMIC GROWTH – GOING NOWHERE FASTER

4 07 2009

As I understand it generating work so as to avoid unemployment is one of the main reasons given for the desirability of economic growth as well as for the almost pathological fear of any reduction in growth. Whether the production that constitutes that growth (or negative growth) is really needed or is even destructive seems to be given secondary importance.

I believe one of the things that keeps us in this absurd situation is that working for a living has become our means to survival even if the things that that work produces contribute nothing or are destructive to our well-being/survival. It seems that we have the technological and organisational knowhow to have a more than adequate lifestyle on much less work than we are doing now. I think one of the main reasons this does not happen is that we have elevated an abstract concept (working to earn a living) to equal if not greater importance than the actuality of working to produce the real needs for living. Once we have produced what is needed for our level of lifestyle then it is patently absurd to go on working (and producing) simply to get the means to access the things that had already been produced.

There have been various solutions put forward to solve this problem. For example, some people advocate the guaranteed minimum income as a way separating the work/income connection. While I am not against this, I believe a lot can be achieved by staying with the problem for longer. Once the absurdity of what we are doing would be seen more widely, then enormous amounts of creative energy to find solutions would be released. By absurdity I mean that we are running faster and faster to stay in the same spot or even go backwards when we could just let the machines do the running for us.








%d bloggers like this: