Tag Archives: 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 “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 IS GOOD #2

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.

-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.

– WHY “UNEMPLOYMENT IS GOOD”?

“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.”

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 the recent global financial crisis, then work dries up, unemployment rises and people suffer. The usual approach to solving this problem is economic stimulus – that is; finding ways to get the economy moving. More demand for things results in more production which means more work and a 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.

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 small 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). Generally that excess labour has been used to do things that 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. 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.

Some 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.

-CHANGE OF HEART

I’m interested in paradigm shift. That is in seeing with new eyes, or simply being aware of how much our world is shaped by the cultural stories and beliefs we share. Often these world views are so ingrained we are unaware that we hold them. Some paradigms work well, others not so well. Some are just downright destructive.

Many of the paradigms that are contained in our world economic outlook are seriously questionable. Here are a few of them;

There is not enough to go around (scarcity) so we must compete for what there is. Most economic texbooks state this as the basic premise of economics. The industrial and technological revolutions have made this scarcity a thing of the past, yet we still persist in acting as if there is not enough.

Increasing production is good, decreasing production is bad. A corollary of this is that recession is bad. At the present time we constantly hear that world consumption and production have gone down, therefore we are in recession (which is bad) and we need to get out of it as fast as possible. Looking at this paradigm through new eyes, it is obvious that we are producing enough to satisfy our needs. If there is a possibility to cut  back on production and still meet our needs this is cause for celebration not hand wringing.

 The phrase ‘the bottom line’ is an accounting derived expression meaning the basic underlying truth or determining factor. In our world there is a paradigm that the bottom line (availability of money) is the bottom line, rather than being things like truth and goodness, or even from an economic perspective, that we have a technologically created abundance which enables everybody to be materially well looked after.

 There is the paradigm of consumerism that advertising so persavisely promotes. You won’t be happy unless you have more things. Brian Swimme goes into this in more detail in a very good essay titled ‘How do our kids get so caught up in consumerism’.

 One of the most powerful and least recognized economic paradigms is; money is a reality, rather than it is an abstract concept we have invented, as a tool to help us distribute the fruits of our labour. It is not a hard and fast reality, so if it has shortcomings it can be reinvented or even dispensed with to suit our needs. What often happens is that we have to detrimentally adjust our lives and the well-being of our world to fit in with the structure of money. I am reminded of the saying; ‘Only when the last tree has died and the last river been poisoned and the last fish been caught will we realise we cannot eat money’. Alan Watts’ essay Wealth Versus Money looks at this subject in a refreshing way.

 And of course what the title of this blog refers to. Unemployment is bad, versus unemployment is good. “Unemployment is good” does not mean that the suffering of individuals put out of work is good, but rather that if we can reduce the total amount of work needed to supply our living needs, then surely that is a good thing. This could release enormous amounts of time to do things that could contribute to a flowering of our civilisation – things such as the ending of poverty and hunger in the world.

-WOULD KEYNES GRANDCHILDREN PLEASE STAND UP!

“I wish I would have drunk more champagne”
last words of JM Keynes

Nelson Bolles, former priest and author of what colour is your parachute, once said that while he has been with many people at the moment of their death he has yet to hear one person say, “I wish I would have done more work.” Keynes’ parting words reflect a similar sentiment – in the final analysis  quality of life is far more important than facts figures and how much money one has accumulated – though even on his deathbed Keynes manages to say it with his usual dry wit.

If one reads his essay Economic possibilities for our Grandchildren, it is very clear that this was not just some last minute death-bed revelation on Keynes’ part, but that he was well aware of this philosophy in the prime of his life.

Many’s the time during research and readings in the field of alternative economics that I have come across references to this essay. “Remarkable”, I’ve always thought, “here is one of the best known and influential mainsteam economists of all time putting ideas that we in the field of  “new economics” take for granted – things that would make Your average mainstream economist (if there is such a thing) blanche with horror.

Take this often quoted extract for example;

The love of money as a possession -as distinguished from the love of money as a means to the enjoyments and realities of life -will be recognised for what it is, a somewhat disgusting morbidity, one of those semicriminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.

The essay, as its title suggests looks at where economics will be 100 years into the future. As it was written in 1930 we are looking somewhere around the year 2030.

For a person as deeply involved in their vocation as Keynes was in economics, looking that far into the future can be a liberating experience. It allows them to dispense with the day to day cares of their discipline and take a broader viewpoint and, like Keynes has in this essay come to some remarkable conclusions.
The basic gist of the work is that due to the massive accumulation of capital and the rapid advancement of technology, somewhere in the not too distant future the economic problem will be finally solved.

…the economic problem is not-if we look into the future-the permanent problem of the human race.

Why, you may ask, is this so startling? It is startling because-if, instead of looking into the future, we look into the past-we find that the economic problem, the struggle for subsistence, always has been hitherto the primary, most pressing problem of the human race-not only of the human race, but of the whole of the biological kingdom from the beginnings of life in its most primitive forms.

Thus we have been expressly evolved by nature-with all our impulses and deepest instincts-for the purpose of solving the economic problem. If the economic problem is solved, mankind will be deprived of its traditional purpose.

With the economic problem out of the way, Keynes says that humanity will come face to face with its major challenge.

Thus for the first time since his creation man will be faced with his real, his permanent problem-how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.

Keynes discusses this post economic problem in some detail. Most people he says, cherish the idea of dispensing with work and taking up lives of leisure. But Keynes believes that if it this actually did happen, they would find the reality is not as they expected. People must have something to occupy themselves with – to direct their energies towards. At the moment, he says, work fulfils this function. But when the economic problem is no more … it will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.

One way of solving this problem is to share around the ever reducing amount of work. Keynes suggests  a 15 hour working week – three hours work a day being more than enough to satisfy …the old Adam in most of us!

Keynes feels that the process towards this economic utopia would be a gradual one. That … there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed but he warns that until this time arrives we must put up with our economic system and its corrupt practices of avarice, usury and the love of money, for only they, he says can lead us out of the tunnel of economic necessity into daylight.

This essay was written in 1930 it is now almost eighty years later – approaching the end of his 100 year time frame – and as far as grandchildren go, if Keynes has any they would have been born by now. So how does his vision stack up. Are we well on the path to economic abundance for all, or are there circumstances that he could not have foretold, and do we put his essay into the same category as some of those ‘visionary’ Victorian inventions such as the mechanical hat tipper.

I believe he had a realistic vision as since this time there has been an accelerating development of technology and labour saving machines. But I think that he underestimated how strongly the economic system that he helped construct would bind us to outmoded concepts of economic scarcity thus preventing us from living this vision.

What is perhaps most valuable in this essay is that Keynes makes the distinction between two different types of work. There is work that is done to allow for our physical survival and there is work that is done simply for the sake of having a fulfilling life. He makes the very important point that economics really only need concern itself with the first type ( work for survival). So as technology advances, work for survival becomes less and less important and thus economics becomes less and less important. Then fulfilment in life rather than accumulation of money takes its rightful place as the bottom line.