Week of March 8, 2020

I’ve taken the liberty of adopting a new format after the week off—largely out of vexation at someone who should be writing with more wisdom.

Economic Possibilities for Ourselves

by Robert Skidelsky | Project Syndicate | 20 December 2019

Skidelsky’s schematic outline of the techno-optimist and catastrophist views of robot-led automation is largely ahistorical fluff, but he raises an important question: why don’t people accept the consequences of labor-saving innovation and work less? Even his so-called “precariat” of the underemployed exceeds the traditional subsistence income and could afford either a reduction in labor-hours or a diminution in wages without risking starvation. Inflation is not the answer; consumer goods, by and large, have become more, not less affordable over time. Televisions, for example, have seen prices decline in absolute terms, while books, music, and cinema are all but free. Where appliances and products have become more expensive, they have seen enormous qualitative improvements. Consumption unimaginable in Keynes’s time is possible for a pittance, but the leisurely society he predicted for his grandchildren seems remote even for our own. Each wave of automata encourages more labor with better tools.

My suggestion would be a combination of shifting baselines and the concomitant of cheaper goods and differential rates of productivity increase—the Baumol effect, whereby slow-growth services see bloated prices as a result of fecundity in other sectors. Since health care and higher education, which defy technological and organizational innovation, are less prone to efficiency improvement than, say, manufacturing, the opportunity cost of labor in those occupations rises. So too, therefore, should their prices, as is reflected in empirical fact and popular discourse. Given that these once-fantastical services are now treated as necessities, what passes for subsistence income today—the socially-accepted minimum level of consumption—has risen almost in lock-step. Historical precedent suggests that this may strongly affect labor supply. During the eighteenth century, English and Dutch laborers forged a pre-industrial “industrious revolution” in response to the sudden availability of foreign goods, working longer hours to generate extra income for luxury purchases. These commodities were eventually incorporated into the matrix of basic living requirements (for what is an Englishman without tea and sugar?), such that domestic manufacturers profited enormously from offering cheaper mimicry.

Bertrand Russell himself wondered at this apparently bizarre tendency, ascribing it to a mistaken concept of “duty” inculcated by an oppressive leisure class. His analysis, however, betrays an Aristotelian ignorance of the worldly philosophy; his suggestion that a doubling of productivity in a pin factory would leave demand unchanged, for example, conflates movement of the demand curve with movement along it. Nevertheless, Skidelsky vaguely agrees that the prevalence of full-time labor is the result of mass delusion, willful or otherwise. Rather than focus on the panacea of “upskilling” (which, I’ll grant, is idiotic), we should reconsider how our lives should be made meaningful without the constant impetus of the daily grind. It’s one thing for a professor, whose occupation overlaps with accepted cultural ideals, to advocate such a bifurcation, but quite another to suggest that the truck driver whose primary means of social interaction is morning coffee with his colleagues be taught the value of Wittgenstein and the stage circuit.

Lord Keynes foresaw this complication, as Skidelsky is undoubtedly aware, in the same essay alluded to above:

Yet I think with dread of the readjustment of the habits and instincts.... To use the language of to-day-must we not expect a general “nervous breakdown”? We already have a little experience of what I mean—a nervous breakdown of the sort which is already common enough in England and the United States amongst the wives of the well-to-do classes, unfortunate women, many of them, who have been deprived by their wealth of their traditional tasks and occupations—who cannot find it sufficiently amusing, when deprived of the spur of economic necessity, to cook and clean and mend, yet are quite unable to find anything more amusing…

We have shown little aptitude for grand cultural proficiency, and a near-universal preference for routinized tasks that keep indolence at bay. If the possibility of total aimlessness was tangible in Depression-era America, it is omnipresent today—so we point in terror at the mechanical job-thieves as they threaten the manifestation of Russell’s four-hour ideal. Riches are little object; see the countless interviews with bankers who, after triumphantly exiting the game, yearn for nothing but the guff and clamor of the trading floor. Michael Milken, banned from employment in the financial industry, regularly offered pro bono consulting to friends and colleagues.

We will work until we cannot, though we already can not.