Tag Archives: Technological unemployment

Would Keynes’ Grandchildren Please Stand Up?

“I wish I would have drunk more champagne,” – final words of John Maynard Keynes.

Former priest, Nelson Bolles once remarked he had been with many people at the end of their life, but never heard anyone say “I wish I had done more work.” This sentiment is familiar – yet our lives remain organised around work as if the opposite were true.

Keynes final words reflect a similar belief.

In his famous essay written in 1930, Keynes predicted that technological progress would gradually free humanity from the need to work long hours. The economic problem — the struggle for subsistence — would, he believed, come to an end. The real challenge would then begin: how to live well with the time that abundance made possible.

Today, that prediction is usually treated as a failure. The fifteen-hour week has not arrived. The rhythm of working life — mornings, commutes, deadlines — still structures our days.

But this judgement depends on how we measure the outcome.

Keynes was not wrong

Over the past century, productivity has increased dramatically. At the same time, life expectancy has risen, without a corresponding increase in total lifetime work. The additional years of life have largely appeared as time outside of work — IE. retirement.

In this sense, the reduction in work that Keynes predicted has occurred. It has simply taken a different form to what he expected: not a steady shortening of the working week, but an expansion of life beyond it.

The lifetime picture, however, is not the same as the lived one. For those in the central decades of working life — with careers, mortgages, raising families — the daily reality has changed much less. Lifetime work statistics point in one direction; the lived experience of work life points in another. That gap raises significant questions.

Why work still dominates

If less work is possible, why does it not show up in everyday life?

The answer lies in how access to life’s needs is organised.

Food, shelter, education, care — are not simply available. They are accessed through income. And income, for most people, comes from work. As a result, the amount of work people do is not determined primarily by what is technically required to meet human needs, but by the need to earn in order to access them.

Housing provides the clearest example. In countries such as Australia, securing a place to live increasingly requires decades of financial commitment. For younger generations in particular, this often means working longer — not to live better, but simply to gain access to something basic. In effect, this becomes a transfer of income across generations, reinforcing the central role of work.

The same pattern appears elsewhere. Education is extended and often debt-funded. Childcare is purchased in order to make paid work possible. Even as productivity reduces the labour required to produce what we need, the structure of access keeps work central to everyday life.

When more efficiency creates more work

This raises a deeper question: if we can meet our needs with less effort, why do we continue to devote so much time to work?

Part of the answer lies in how those needs are defined.

In areas such as housing, the cost and complexity of meeting basic needs have increased over time, shaped by regulation, professionalisation, and rising standards. Many of these changes bring real benefits. But they also appreciably raise the amount of work required to access those benefits.

This is not purely a technical necessity. It shows up clearly in the choices people make when alternatives exist — some people who move to countries such as Thailand, where traditional building methods and lighter regulation remain viable, often find they can live comfortably on a fraction of the income. The same basic need, met with far less work. What varies is not what people need, but what the system requires in order to provide it.”

There is a deep irony here. When the cost of meeting basic needs rises, the result is often counted as economic success — more work is created, more income flows, output increases. Yet this also represents a greater claim on people’s time. What appears as growth may, in part, be the absorption of potential leisure into additional work. We count it as progress because it generates more money. But more money circulating is not the same as more human wellbeing. This is one of the places where the confusion between money and real wealth is most visible — and most costly.

Work in the wrong places

The pattern becomes clearer when we step back further — from individual lives to the global economy as a whole.

People in poorer countries work significantly more hours than those in richer ones. Part of this reflects lower wages. But it also reflects how the global economy directs labour.

Production flows toward where money is, not where need is greatest. As a result, large amounts of human effort are devoted to goods and services with marginal benefit, while more basic needs remain unmet elsewhere.

At the same time, globalisation links these systems together. Workers in richer countries are increasingly connected to those in poorer ones through shared production and competition. This creates pressure that limits how far reductions in work can occur in one place without being reflected elsewhere.

The result is not simply inequality, but misalignment. The problem is not that too little work is being done, but that the work being done is not directed toward what is most needed.

Money and the organisation of life

At a deeper level, all of this reflects the role of money — and a confusion about what it is.

Money is not the food, the house, or the time itself. It is a system of claims on those things. But once access to life is organised through those claims, the need to earn and maintain them comes to shape how life is lived.

As Alan Watts observed, there is a tendency to mistake the measurement for the thing measured. When that happens, the system begins to organise itself around the maintenance of the measurement rather than around what the measurement was meant to serve.

In modern economies, this can be seen directly in how work is sustained. We work not only to produce what is needed, but to maintain the flow of income, employment, and financial claims that structure access to life itself. The monetary necessity of work has come to be experienced as if it were a material necessity — as if the work itself were what stood between us and survival, rather than the way access to survival is organised. Because we do not make that distinction, we cannot easily see the less-work option, even when our productive capacity has already made it possible.

Conclusion

Keynes’ prediction has not simply failed. The reduction in work he anticipated has largely occurred. But it has not taken the form he expected.

The capacity to work less exists. Yet the way we organise access to resources, define our needs, and direct human effort continues to keep work at the centre of life.

The question is no longer whether we can work less.

It is why, having gained that capacity, we do not.

There’s nothing magical about 40 hours

“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.

work-hours-graph

The Currency of Love

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. This is the same situation as in hell, except here everyone is satisfied from an abundance of food and community.

This analogy of the spoons could well apply to our current world economic system with its seeming inability to respond to the hunger and poverty that exists in the midst of extreme abundance. In spite of the remarkable 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 limiting shutters of 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 constantly 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, shelter, 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 (from 2015). 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 here already and certainly an abundance of knowledge how to grow and distribute even more. Yet in spite 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 or counter-productive 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 still is in some 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 make best 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. In fact if you open any economics textbook the first chapter will usually be a discussion on what they call the economic problem; the conflict between scarce resources and unlimited wants. Since the 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. Each one of those 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 never 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 in-search 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

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.

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.

THE “MORE WORK” FALLACY

“…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 fulfillment 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 fulfillment 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 and so there is no great increase in unemployment. 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 more things, thus creating work for the ones who were recently displaced by that new technology. The argument goes that you only have to look at employment levels since the beginning 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 (see graph) This is a reduction of 40% off the average working week.

work-hours-graphNow by far the majority of these reductions were made possible by labour saving machines. But say if instead of reducing working hours, we would have maintained a 65 hour work week, there would not be enough work for everyone and there would now be a technological unemployment rate of 40%. Technological unemployment and shorter working hours have a direct relationship – they are both outcomes of the same thing.

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 in spite 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 field called Modern Monetary Theory that points out  that governments can never be short of their own currency as they are the issuers of it. They have the power to issue themselves as much money as is needed to make use of the productive resources of the country. This could help in the transition to a higher productivity, lower working hour 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

Here is an edited and expanded version of the post 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 on its head.

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. What I am talking about is 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 radically 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.

…we seem to have lost sight of the fact that reducing working hours is just another way of raising living standards

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

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

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 AS A POSITIVE ECONOMIC INDICATOR

Over the years whenever I’ve said “unemployment is good,” I’ve found I often need to qualify the statement. I don’t mean the suffering of those put out of work is good, or I don’t 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 with our economy. What I am saying is that it is a sign of a great opportunity that has the potential to transform our world for the better.

Most of the posts on this blog look at this issue from various perspectives. For me writing about it helps to develop my understanding of the question. I’m beginning to see that there is something here staring us in the face with it’s obviousness yet we remain oblivious. As the saying goes we have eyes but do not see.

-unemployment is good

This essay that this blog is named after was written in the early 1990’s and published in a small journal I used to edit called Economics for the Global Good (EGG)


When God kicked Adam out of the garden of Eden, He put the curse of work on him. Up until that time whenever Adam needed any food, shelter or entertainment it was always there for the taking. But from then on he was told he would have to work for his keep. According to the good book, God’s words to Adam were as follows;
…cursed is the ground because of you, in toil you shall eat of it all the days of your life.
For good measure he threw in a few by the sweat of your brows, and that was it for poor old Adam.
Whether you believe the story of Adam and Eve is factual, allegorical or just not true is not important here. The fact is that the ‘curse of Adam’ has become part of our cultural heritage. Throughout history this curse has been taken up by the various churches and governments. You’ve got to work they would tell us, You probably won’t enjoy it, but that’s the way things are. And to a certain extent they were right. In pre-industrial times survival was a labour intensive activity.

In the late 20th century this philosophy of work is still with us. Sometimes  known as the Protestant work ethic it is alive and well, living inside the brains of most westerners. If you’re from the west and you’re not working hard it’s almost something to feel embarrassed or guilty about.
But does this curse of Adam have any relevance to our time at all? Or has its day passed. In the past people had to labour and toil simply so they could eat. But that was before the machine age. These days (in the west at least) most of that labouring and toiling has been taken over by machines. Which leaves us free to devote ourselves to whatever takes our fancy. We could be virtually back at the Garden of Eden where the only duty was to enjoy the fruits of the earth. But something has gone wrong For some reason we are not taking full advantage of the extraordinary benefits the age of technology is offering us.

The signs of this reluctance to utilise our technological mastery can be seen all around us. Of these one of the most disturbing is third world poverty and hunger. To be sure hunger and poverty have always been with us. But the difference now is that we have the medical and agricultural know how to completely eradicate them. Meanwhile around 25,000 people die every day as a direct result of not having enough food.

The evidence suggests that inspite of the proliference of labour saving machines many people are finding survival more and more difficult.

To better understand the phenomenon of this outdated curse of Adam it helps to look back and compare our present situation with that of our recent ancestors.
One hundred and fifty years ago in most western countries the poorest half of society had a lifestyle very similar to that of the poorest half of many third world countries today. Getting food was the main occupation of the day. The men would work about 60 hours a week under very tough conditions. Between them the women and children put in at least the same again. All this work got them a simple dwelling and just enough food to get by on. When there was an extra expense such as buying a new pair of shoes or seeing a doctor, someone had to eat less. This someone was usually the mother or the children as their health was considered less important than that of the father who needed the energy for his work. Because there were no mod-cons such as washing machines and vacuum cleaners women worked extremely hard looking after the home and the children. From the age of about ten to the time of her death most of a women’s waking  hours were taken up by this work. In those days many children died in their first few years of life. If you had an average sized family of eight children you could reasonably expect that two of them would die while still young. For those who survived childhood the average life expectancy was around fifty years.

Now all this could easily be a description of life in a poor African country today. But no, that was us in the newly industrialised west. Since then there has been a dramatic change in lifestyles.

These days the pursuit of food occupies a very small part of our time. We certainly never have to worry about going hungry. We now have televisions, telephones, cars, computers, well equipped kitchens and bathrooms and a vastly improved health care that has lifted our life expectancy to eighty years. And we only work about thirty- seven hours a week to get all this.

But that is only part of the picture, because a large portion of those thirty-seven hours we work is taken up in the production of the enormous amounts of excess and waste that we have become so notorious for. Much of our time is now devoted to the creation of an endless flow of excess packaging, excess weaponry and even excess food and buildings. Further time is spent trying to deal with the resultant mess. Just imagine if we stopped producing all that surplus stuff in the first place. We would then be working shorter hours and would be able to compare our situation with that of our struggling forefathers even more favourably.

As far back as the 1930’s Bertrand Russell, in his essay In Praise of Idleness, was of the opinion that it would be possible to get by quite comfortably on a four hour working day. And our productive ability has increased by many times since then. JM Keynes the economist and Einstein – among others – have also looked at this problem and come up with similar conclusions. The question they asked was how much work would we need to do if we got organised, eliminated waste and made full use of our technology. Depending on what sort of assumptions were made, most studies have concluded that we could quite easily maintain a high living standard and only need to work a few days a week.

Now could that be true? Are we really doing twice the amount of work than is needed to support our living standards? And if is this is so why do we constantly hear that one of the biggest problems in our society today is that there is not enough work?

We do have a problem with work. You can’t help hearing about it. Every day on the television, on the radio and in the newspapers, politicians and economists tell us. There’s mass unemployment! People are suffering! Times are tough! There is a desperate search going on for solutions to this great problem of our time.

But why should there be any problem at all? We are blessed with an incredible technology which makes it possible to produce enough for everyone with ease. It isn’t hard to put up an argument that we are producing far too much. Yet people are suffering and times are tough.

It has already been shown that the fact we can afford to spend so much of our time producing waste and excess is really a hidden sign of how far we have advanced. Well it’s exactly the same thing with unemployment.

Unemployment is a sign of our unrealised potential. It simply means we are not making full use of the available work force. Wouldn’t we all be better off if the whole labour-force was being used?

To illustrate this; say there is a big pile of rock that has to be carried to the top of a hill. There are a hundred people available to do this work. Unemployment is like saying we will only use ninety-five of these people for the job. The other five are not allowed to help. They must remain idle. Not only that but they are penalised for their enforced idleness. Under a system like this everyone suffers. Wouldn’t the job be much easier to do if there were five extra people to help? With five additional pairs of hands, the rock would be at the top of the hill much faster’ no-one would be redundant and everyone’s work load would be less.

But this is exactly what happens in our society. Ninety-five percent of the work force do all of the work while the other five percent (through no choice of their own) don’t contribute at all. Isn’t it logical that if the unused five percent (the unemployed) were to help with the work it would all get done that much faster. Then there would be no unemployment, everybody could work less and we’d still be producing just as much as we do now, which is more than enough for everyone.

But what about money? We are told that if there is not enough of it around then we can’t afford to make use of our excess labour. We are told that if we were to share the workload more equally then everybody would earn less and thus have a lower living standard. Money, – those bits of paper and metal with numbers written on them – has become of such importance that the matter of whether or not we are producing enough is now a secondary issue. Surely one of the main reasons we work is to get whatever needs to be done, completed as quickly and enjoyably as possible. And surely one of the main reasons we have money is to make it easier to distribute the fruits of that labour amongst one another. The real question should be not whether there is enough money but whether there is enough stuff being produced. And it’s obvious there’s enough stuff. Our current technological and organisational abilities mean we can now produce an abundance with ease.

Economists can write volumes giving all sorts of complicated reasons for unemployment, but isn’t the reality that it is an illogical and absurd concept? We have been persuaded to believe in it as a necessary evil. Woe is us, we tell each other, there’s not enough work.

But how on earth can there be such a thing as not enough work? There is only as much work as needs to be done. Either we are producing enough to satisfy all our requirements, in which case we don’t need to do any more work, or, we aren’t producing enough, in which case we do need to do more. The common wisdom is that if we increase the amount of work that has to be done, then we’re better off. To my way of thinking, as long as all the work that needs to be done, is getting done, then the less work the better.

Unemployment in a society that is already producing enough is simply a potential for lower working hours. To illustrate this I’d like to go back to the example of the 95 people carting rocks up a hill. Just say in order to complete the job each one of those 95 people has to carry rocks for 37 hours. In that case the total number of hours worked would be 3515. (95 x 37 = 3515) but if they subsequently got their 5 idle companions to help then that 3515 hours of work could be divided between 100 workers instead of 95. (3515 – 100 = 35.15) each worker would then only have to lug rocks for 35.1 hours – a saving of about 2 hours.

These figures show that in Australia for example where the unemployment rate is around 5%, there is scope for a reduction of about 2 hours from the average working week. But for some reason we always seem to be looking for ways to increase the amount of work that is done. We are told about the need for increased exports, increased retail sales and economic activity – and about impending disaster if there is ever any decrease. My argument is the exact opposite to that. It’s about reducing economic activity – about less work. Once a certain level of comfort and ease has been achieved in our lives then there should be no need to produce any more. From that point on we ought to be freed from having to work.

This statement, freed from having to work, doesn’t mean that people have to stop working or that they can’t produce more stuff if that’s what they want to do. It’s not a pretext for lazing around and vegetating. It rather means that survival no longer be the main purpose for working. Once all the work that needs to be done has been completed, people ought to be able to spend their time doing whatever pleases and fulfils them; whether it be rock climbing, stamp collecting or brain surgery. And the less work we could get by on, the more possibility there would be for people to devote themselves to the things they enjoy. This is not to say that that work which needs to be done can’t also be fulfilling. Many of us could think of nothing better than to be a farmer, a doctor or a teacher. Even a job like collecting the garbage could be rewarding if you didn’t have to do it all the time.

But that’s not all if we were to reduce the amount of stuff that we produce and at the same time equally share round the work load, we could go a long way to solving the environmental crisis. Because our current level of production is not sustainable – our environment is being destroyed in the pursuit of production at any cost. Making major  cuts to production would help solve that urgent problem.

Our present situation reminds me of the golden age of Greece – a civilisation that gave us so many great ideas in philosophy, politics, sport, science and art. But there was a downside to the civilisation;- slavery. The reason that all those philosophers and artists had time to excel as they did was because of the vast army of slaves that looked after them. At that time about 50% of the population were slaves. People have struggled with the question – was the enslavement of fellow human beings worth the great intellectual advances that were attained? In many ways we live in a parallel situation today, only we have solved the slavery problem – because the machines are our slaves. So one could say that we are now at the very threshold of a new golden age, we just haven’t realised that we’re there yet.

As things stand all this talk about increased leisure is just a dream. As long as our present attitude to work persists, we will continue along this path of over-production till our planet bursts at the seams – all the time worrying that we need to produce even more. In order to realise the economic utopia that has all but arrived, we need to understand that less work is desirable – that unemployment is good.