Thursday, December 3, 2015

Work, Pt 3

Some Thoughts about Work, Part 3

Lazy hands make a man poor,
but diligent hands bring wealth.
Proverbs 10:4 (NIV)

In parts one and two of this essay I stated a platitude:

The “moral law of labor” (revised): Every person who is able ought to work.

I broke off part two while making clarifying comments about the moral law of labor.
(1) The law of labor is not the only moral value.  It must be balanced against other goods.
(2) Some labor aims at producing necessities, but other labor procures non-necessary goods.
(3) There is no bright line distinction between necessary and non-necessary labor.  Between clear examples of necessities (e.g. food and clothing) and non-necessities (science-fiction novels), there are lots of goods in the vague middle (sailing ships and banks).  Goods in the middle group might have been unneeded at one stage of history but required to maintain the overall productivity of a later time.

Now, a few more points before we come to the main question.
(4) We don’t need a clean distinction between necessities and non-necessary goods to make an important observation.  People who engage in the production of non-necessary goods depend on the labor of people who produce necessities.   Imagine an artist working hard on a new symphony, poem, painting, or play.  While she works on her art, other people must supply her daily necessities.  The result of the artist’s labor may greatly enrich life for many people.  She may, if markets allow, trade her artistic production for other goods.  Nevertheless, her work is only possible because other people’s labor is so productive that it meets her needs as well as theirs. 
(5) History and civilization stem from non-necessary labor.  Artists, musicians, priests, rulers, soldiers, explorers, and scientists—like philosophers, none of these jobs bake any bread.  They produce no food, transportation, shelter, or clothing.  Yet without the work done by such people, civilization would not exist, our material conditions would never change, and the economy would be what it was fifty thousand years ago, a universal struggle for survival against chance and starvation. 
(6) Therefore: in economic terms, history and civilization have been made possible by the excess productivity of human labor.  Those who work to make the daily necessities supply their own needs and the needs of artists and their kind, the civilization makers.

            The excess productivity of labor can be used in a variety of ways.  In ancient Egypt, the pharaohs decided to devote millions of man-hours of labor to construct pyramids.  In a very real sense, pyramids were physical instantiations of the excess productive capacity of Egypt’s agricultural economy.  In economic terms, we could say that some of the excess production of Egypt was “saved” and turned into “capital.”  That capital was then used to build temples and pyramids, and to support armies and a priestly class.  Egypt was hardly unique, economically speaking.  Ruling classes in civilizations around the world directed “capital”—in every case made possible by the excess production of those who labor to make necessities—to be used to create palaces, cities, roads, statues, prisons, libraries, navies, opera houses, and so on: in short, all the paraphernalia of civilization. 
Occasionally, sometimes by accident, capital was used in a way that increased productivity.  We can call this investment.  Suppose a ruler commands that human capital be used to build not a statue to his own glory but a road connecting parts of his territory.  A road, by making transportation speedier and safer, probably increases productivity in that country.  Absent natural or human caused disasters, a ruling class that consistently invested capital (saved labor) toward increasing productivity would, in a few generations, rule over a very wealthy state.  Unfortunately, rulers all around the world have burned up most capital rather than investing it; they do this primarily through war.
Modern capitalist economics depends on the reciprocal relationship between labor and capital.  Excess labor becomes capital, and capital increases the productivity of labor.  Only in the last three or four centuries have the ruling classes realized that capital can be invested.  They now know that resources invested in education and infrastructure (to take two excellent examples) will make a country wealthier, whereas capital spent on jewelry and colossal statues won’t.  I am not condemning resources spent on cathedrals or science fiction novels or the like; I’m only pointing out that they aren’t investments, in the sense that they don’t increase productivity.  Leaders in capitalist countries have recognized the dynamic of labor and capital and have tried to encourage it through government policies of many sorts.
I am not going to say anything about the various policies governments have devised to encourage saving and investing.  Whether those policies were wise or not, the long-term trend is clear.  Over time, the pace of investment and the overall increase in productivity has risen dramatically.  The total production of goods and services in the world is increasing exponentially.  The industrial revolution leads to the information revolution, which leads to driverless cars.
What next?
            Economists, futurists, and science fiction writers have long speculated about where economic change will take us.  Perhaps we will see the end of extreme poverty.  Perhaps we will use up crucial resources and pollute the earth.  Maybe the “population bomb” will consign billions to starvation.  The possibilities are infinite.  Nevertheless, I think we know enough about capital and labor to introduce a new thought: the moral law of labor may be false.
            Invested capital makes labor more productive. More and more, the production of goods relies on capital, not labor.  And there is apparently no necessary limit to productivity.  At one time, a farmer could feed his family and one other family.  Today, a handful of farmers can feed thousands.  There is no reason that in some tomorrow a small number of protein technicians could feed everybody.
            The “moral law of labor” says that everybody should work.  But there have always been a few people who are able to work but don’t.  Historically we have labeled them as “dilettantes,” “lazy,” “parasites,” and so on.  In current economic theory we call them “free riders.”  Notice the tone of moral disapproval.
            Some of the non-workers are independently wealthy.  They inherit so much capital that they need not work.  In popular myth, such “wastrels” fritter away their capital and come to a bad end.  In reality, plenty of independently wealthy people show enough wisdom to trust their financial advisors and live, either modestly or extravagantly, on the profits of their investments.  Given the productivity of capital, I predict that the number of wealthy non-workers will grow.
            Some of the non-workers live at the bottom of the socio-economic ladder in social welfare states.  In any country that has a sufficiently generous system of social welfare, there will be some people who choose not to work.  Given the choice between very low wage jobs and welfare, they take welfare.  These are the “free-riders.”  Economists worry that too many of them will create a drag on economic growth.  Perhaps they will.  But in the long run, the productive power of capital will increase the overall carrying capacity of national economies, to the point where the free-rider problem disappears.  I predict that in the long run the policy question will not be how to get those at the bottom to work; rather, the question will be how to get sufficient money into their hands so that they can buy things.  A capitalist economy needs consumers.
            I suggest the truth is this: people do not have to work to get the “daily necessities.”  Capital is far more productive than humanity ever guessed until recently.  As capital becomes responsible for producing a greater and greater share of the things we really need, more and more human jobs are devoted to creating non-necessary goods.  We become educators and novelists.  We invent new computer games.  We write blogs.  A tiny fraction of those blogs become commercial successes; most of them earn no money.
            In the future, that is what people will do.  They will “work,” if they choose to, at an ever-increasing palette of non-necessary jobs.  Only a minority will have the privilege of laboring at jobs that produce necessities.  Mostly, that group will consist of computer specialists, who tell the robots what people want to buy for Christmas.


  1. Perhaps you are right, that unemployment will constantly grow (counting those who aren't looking for work). It seems to be doing that in America right now.

    But I have two caveats:

    1. You pointed out that we come to depend on things we once couldn't imagine. The economy you imagine will depend on electricity and technology and cheap transportation, making necessary occupations that didn't exist a generation before. I don't see why you still call those occupations non-necessary.

    2. There is the problem of demoralization. Portland, Oregon, might be an example -- the place where young people go to retire. Here is a city with an astonishingly large population of young adults either unemployed or significantly under-employed, living off surpluses generated by others. Other people, young and old, have noticed. Some take it as funny, others as utopian -- but still others with resentment. "Why should I have to work harder", they think to themselves, "to subsidize young people who refuse to work much?" If the hard workers cannot cut the retired young people off from their subsidies, the workers are likely to decide they should be able to slack off and get some of the benefits of leisure for themselves. They, too, will cut back on their labor, and productivity will stagnate or decline.

    The choice to let others carry me along is rational as long as there are plenty of others still working hard. Since no individual choice to retire early is likely to tip the balance into an economy that can't provide everyone's needs, every individual choice to retire early is, on average, rational. The demoralization of labor thus could lead to a tragedy of the commons where each person slacks off counting on others to cover the cost.

  2. People don't have to work harder so young people can retire. Well, maybe they do now, but over time capital will produce enough goods that young dilettantes can spend their time perfecting the latest kind of popular music or graphic novels, and it won't matter that 98% of them earn no money by such work.

    I will address other objections in part 4.