Home > Economics - General > Work and beyond (crosspost from Crooked Timber)

Work and beyond (crosspost from Crooked Timber)

February 10th, 2014

A little while ago, Ross Douthat tweeted a link to this Aeon article of mine, reflecting on Keynes ‘Economic Possibilities for our Grandchildren’, which gave rise to some interesting discussion (Memo to self: Find out about Storify). Now he’s addressed the topic in the New York Times, linking directly to Keynes essay. There’s some interesting food for thought here. Unfortunately, it’s mixed up with some silly stuff reflecting his job as the NY Times token Republican, in which capacity he has to do some damage control over the exposure of the latest Repub lie saying that Obamacare will cost 2.5 million jobs. As Douthat delicately puts it “this is not exactly right”. But, although his heart clearly isn’t it, he tries to construct a narrative in which the Repubs might be right for the wrong reasons, or, in an even less-felicitous defence, mean-spirited and inaccurate but justified by the success of Reaganism thirty years ago.

More interesting though, is Douthat’s discussion comparing idealised hopes for a post-work society with the reality in which well-educated professionals are working longer hours than ever, while many at the bottom end of the income distribution, particularly poorer men have withdrawn from the formal labour force altogether (presumably, relying on disability benefits or scraping a living in the informal economy). One possible solution to this problem, is simply to give the poor more money, for example, in the form of a basic income, and not worry about whether they choose to work. Douthat isn’t too happy about this idea, saying

Both “rugged individualist” right-wingers and more communitarian conservatives tend to see work as essential to dignity, mobility and social equality, and see its decline as something to be fiercely resisted. The question is whether tomorrow’s liberals will be our allies in that fight.

But this position elides a bunch of crucial issues.

First, while work may be necessary to “dignity, mobility and social equality” in a market society, it certainly isn’t sufficient. For unionised US workers in the mid-20th century, earning middle-class incomes in relatively secure jobs and expecting better for their children, work was, arguably both necessary and sufficient to achieve a fair measure of these things. But an at-will employee, juggling two or three tenuous jobs that pay $7.25 an hour, and looking at a steady decline in real income, is scarcely getting much in the way of dignity, let alone mobility or social equality.

Equally importantly, market work isn’t the only kind of work people can do, and certainly not the most valuable. Most obviously, there’s the raising of children. The US the developed countries that does not provide any kind of paid parental leave, and even the legislative provision for unpaid leave (12 weeks a year for mothers in firms with more than 50 employees, nothing for fathers) is incredibly stingy. The idea that the ‘rugged individualists’ who block any improvements to these conditions actually care about the dignity of the working class is simply laughable.

I don’t need to tell Douthat any of this. It’s all in his book Grand New Party with Reihan Salam, notably including a proposal for a full year of paid parental leave. The book received cautiously respectful reviews from many in the centre and centre-left, but fell entirely flat with its intended audience in the Republican Party.

I’ll have a bit more to say about the kind of technological determinism that seeks to explain labour market polarisation as arising from computers and the Internet a bit later. For the moment, I’ll repeat the conclusion of my Aeon essay that a response to technological change that will preserve the link between work, dignity and equality will require both a reduction in total hours of work and an expansion in the range of social contributions regarded as work, beyond those that generate a market return

Finally, coming back to the argument about Obamacare. Whatever your views on work and incentives, it’s ludicrous to regard as beneficial a system that ties people to their current jobs through the fear of losing health insurance. The result is not just that people work longer hours than they would choose to do at the wages on offer: they are stuck with their current employer until they can find a new job offering comparable health benefits, something that is getting increasingly difficult to do.

The employer-based health insurance system was (like Obamacare in many ways) a kludge adopted[^1] because it was better than nothing, and because a sensible single-payer system couldn’t get through Congress. But it’s been broken for years, and can’t be sustained indefinitely.

Again, Douthat is clearly aware of all this, but can’t say so in his current position. I’m still expecting him to jump ship before too long, and I hope he doesn’t go through too many more exercises like this in the process.

[^1]: I’m drawing, from memory, on David Moss, When All Else Fails who explains why national health insurance never made it into the New Deal.

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  1. February 10th, 2014 at 21:14 | #1

    There is some work that should not be done. An example would be working in coal mines. At the same time I appreciate that unemployment is not the best outcome for these people. As it happens, the last I heard, my neighbour has not yet got another job. I will offer however practical help and support I can.

    (I fully appreciate, we may be next on the Government’s hit list.)

    Now that climate science has pushed the boundaries of modelling of multi-variable and dynamic system science, shouldn’t the government use similarly constituted economic models to evaluate and perhaps forestall the economic fallout from its decisions?

  2. paul walter
    February 10th, 2014 at 23:42 | #2

    Dignity seems to be the last thing the De Maistrean right wants for the masses, even the middle classes.

    Talking with Americans, you soon discover they are utterly frazzled, after years of being
    “an at-will employee, juggling two or three tenuous jobs at $7.25 an hour”.

    Not morons either, but highly trained and intellligent people.

    Wmmbb describes what has happened over the last twenty years, culminating in the 2007 ALP and Greens election platforms, but that sort of thing has been wiped from the memory of the public by the Murdoch, Abbott, Cameron types, latter -day Habsburgs whose limited imaginations cannot see beyond a new feudalism as the exclusive way to run a society.

  3. February 11th, 2014 at 01:02 | #3

    There has been an adjustment over time. Someone from 1980 would not believe the number of fast food outlets, coffee shops and restaurants we have now. They would not have dreamed that someone would pay for a personal trainer. They would struggle to comprehend just how cheap consumer goods have become.

    We need to adjust to a future without too much inequality, and where there is incentive to work. And by work I mean do something that someone else values enough to part with money for.

    The trouble with the right is that they prefer inequality, as it means paying less money to the people whose labour is making them rich. And sadly it seems too many people believe their lies.

  4. February 11th, 2014 at 05:57 | #4

    NEW RULE: Before there is any more pretend take down of Reformocons, those who on left who want to pretend to outthink their betters must first deal with GI/CYB.

    Guaranteed Income / Choose Your Boss:

    http://www.morganwarstler.com/post/44789487956/guaranteed-income-choose-your-boss-the-market-based

    I have Konczal ON RECORD supporting it.

    Hell, I now have Freddie Deboer ON RECORD supporting it.

    And I birthed the damn thing at BigGovernment/Breitbart.com 4 years ago. Where it generated hundreds of comments running almost entirely in favor it.

    —–

    There’s REALLY only one real problem in the modern American economy: Wages as a safety net is the road to hell.

    Look, should COMMIT to reducing inequality? Yes. Should we ensure each person has their basic nut covered? Yes.

    But once I, a raving free market loving technologist, COMMIT to delivering those imporvements to what we have now, the debate only comes down to:

    Will people be made to “work”

    And the answer is yes. But let’s define work correctly. Work = SOMEONE ELSE will pay THEIR OWN MONEY for something you do.

    That’s it.

    I’d set the bar VERY LOW at only $40 per week, the equivalent of $1 per hour, and you the worker don’t have to work 40 hours, just get paid $40. Sing, dance, paint, write, build, garden, work from home, talk on the phone, chat online, cook, teach yoga, train dogs, pick up dog shit, fix up homes, mow lawns, whatever the hell you LIKE THE MOST, but chosen from a vast set of job offers that CONFORM TO REALITY.

    Workers don’t have to take the job that pays the most. I honestly hope they don’t, but I know some will, but they will make the choice as freely as any of us makes a choice about the work we choose to do.

    Let me explain the logic of CONFORM TO REALITY. Its a big assertion.

    1. We have decided everyone must work. (conservative demand)
    2. Anyone who says “i’d like to work!” get their nut covered. (liberal demand)

    Thus the market reality is we have > 30MILLION who starting tomorrow are available to be hired:

    1. as long as the work you hire them for is NEAR them (I’d say a couple miles at most).
    2. you fund the account to pay them
    3. you describe the tasks (via check boxes just like selling on Ebay) they will be required to do
    4. You give feedback and have feedback given on you as an employer

    Meet these requirements and you benefit from REALITY: You are going to get things done for you today, that yesterday you could not afford to have done for you.

    This means in POOR AREAS the Guaranteed Income + the wage paid will BUY 30%+ MORE STUFF FOR THE POOR than GI alone.

    This is WHY liberals can’t touch my refromocon plan!

    Because the poor want MORE CONSUMPTION.

    And before a thing can be consumed it must be produced.

    And when 30M are put to work PRODUCING THINGS, since they live amongst the poor, they are going to tend to be making things FOR EACH OTHER.

    This gives us Purchasing Power Parity (PPP) in poor areas. GI is the same, but cost of goods and services goes down.

    Look, Sumner, and Reihan support this. Pegobry does. if you ask him Interfluidity is going to take it over status quo too.

    There’s no downside to my plan, other than that people have to work. And again, working increases consumption amongst the poor on the supply side.

    You don’t want to just increase demand, we also need to increase supply.

    Anyway John, I think you need to just say out loud, GI/CYB is best possible compromise between liberal and conservative morality (Haidt) – it can win OWS crowd, Congressional Black Caucus and Tea Party support. Wall Street will hate it. DC will hate it. Fortune 1000 shareholders will hate it.

    but you John, you’d take it in a second and you should tell everyone else that’s true.

  5. Ikonoclast
    February 11th, 2014 at 08:17 | #5

    What is of concern to me is that the final crisis of capitalism is converging with the final crisis of ecological collapse. Marx was correct in predicting that capitalism would burn up every other value. We now see that all human values and all natural values are being burnt up in the engine of capitalism.

    The question now becomes “Socialism or Barbarism?” (Asher Horowitz.)

    “In general, though, it is clear that socialism becomes what he (Marx) calls a “real possibility” only when capitalism is manifestly incapable of developing the productive forces beyond a certain point, at a point where society is increasingly and more frequently faced with crises and collapse. At certain points in history people are faced with a dilemma and a choice. Either they radically change their social system and social relations or they have to live with a serious regression behind what they have already achieved.”

    “As capitalism matures it is marked by an increasing lack of correspondence between the forces and the relations of production. The relations of production increasingly fetter the further development of the productive forces. Eventually this contradiction becomes so grave that the necessity of a collective decision emerges. The choice becomes one between socialism or barbarism.”

    “For Marx’s is actually not a theory of historical inevitability. The only thing that is inevitable in it is the eventual self-destruction of capitalism. This is not at all difficult to accept. It is even trivial as a prediction. Nothing lasts forever. Should we believe that a thousand years from now capitalism, Disneyworld, Hollywood, Republicans and Democrats will still be kicking around? The real question is what will replace it? It is not necessarily going to be something higher or better.”

    “We could end up with a streamlined 1984 scenario in which a narrow elite of technocrats manages a class of service workers, an infinitely expanding “defense” budget and a growing population of the partially employed, “underemployed”, unemployed and unemployable. The vast number of “misfits” of such a hypothetical future age of automation would not even really resemble Marx’s notion of a “reserve army of the unemployed”. They would form a shattered underclass of drones, leading a powerless existence without meaning and even without responsibility. Maybe this 80% of the population could spend most of its time watching television and lobotomized on dope. Would it be excessive to call this barabarism?”

    But surely, the “age” of that last paragraph has arrived all but the last descriptive sentence before the rhetorical question. It describes the US right now. What is left out of Horowitz’s analysis, in this essay at least, is the probability, nay indeed now almost the certainty that environmental collapse, leading to economic collapse and then on to social and civilizational collapse is exactly the barbarism we are headed towards.

    The moment in history when we abrogated all our responsibilities and annulled all our chances, was the victory and administration of Reagan. All serious attempts to move towards ecological sustainability were torn down and we embarked on a last orgy of “endless”growth and material consumption which has now lasted about 40 years. We have destroyed virtually all our natural capital (the oceans are now virtually destroyed as is our climate) and overshot carrying capacity. The descent into barbarism is beginning right now, country by country. The increasing unrest in the Middle East and North Africa, in the Ukraine, Bosnia & Heregovina and Argentine is now related to peak production. Peak production and post peak production problems are a big part of the unrest in these areas. Every other consideration, every other analysis of world events is spurious if it ignores this over-arching reality.

  6. Hermit
    February 11th, 2014 at 08:23 | #6

    How can you pay a Sydney mortgage on casual work? Even some 40 hours a week minimum wage workers must be struggling with a 50 km commute to a night shift job. Their lives are consumed by work and travel to work with few happy times to make it all worthwhile. Perhaps they live in the vain hope it will get better. If the future resembles Cuba with a large part of the week spent tending backyard vegies then that offers little joy. Lack of cash will mean dilapidated houses and cars and very little dining out or recreational travel. At least in Cuba there are no rich people to resent with even doctors on subsistence salaries.

  7. February 11th, 2014 at 08:30 | #7

    @Hermit

    Yes, this is what GI/CYB solves for.

  8. Ikonoclast
    February 11th, 2014 at 08:51 | #8

    @Hermit

    Within 10 to 15 years, the bottom 80% of the USA will look like Cuba is today.

  9. Hermit
    February 11th, 2014 at 08:54 | #9

    @Morgan Warstler
    What does that mean?

  10. February 11th, 2014 at 09:11 | #10

    John! Approve my comments!

  11. February 11th, 2014 at 11:44 | #11

    Hermit, you asked how someone could pay a mortage on casual work. The trick is to spend only half of one’s income and invest the rest in the Australian stock market, either directly or to avoid fuss, bother, and mistakes into an index share fund. If casual work means an average of 20 hours work a week at $20 an hour as one drifts from opportunity to opportunity this will leave a person with a generous $200 a week to spend. That’s more than enough to pay for food and cheap share accommodation or possibly a nice sleeping bag. But after 10 year of living this lifestyle is when the real fun begins. Assuming average performance from the stock market you’ll be living like a king with over $19,000 a year to spend. You can either live it up and spend over $365 a week, or you can invest that extra money and meet your goal of Sydney home ownership even sooner. Even if one continues to have a prolifigate spendthrift lifestyles where you spend half your income, after less than 25 years you’ll have enough money buy outright a median priced Sydney house. But that’s not what I’d recommend. Either rent a Sydney house and let the owners pay off the mortage or declare yourself to be a consultant, create a company and use your investment income to fake business income and use that to get a mortage from the bank. Congratulatons! You now have a Sydney mortage and the means to pay it off.

    Now most people seem temperamentally unsuited to doing what it takes to own a Sydney home on 20 hours casual work a week. Too many people in this world want to have a full time job, relationships, cars, and electricity as soon as they leave high school or university and simply aren’t willing to put in 20+ years of living at the margin of society without in order to join that society. I guess these people just don’t believe in the Australian dream. If you want some tips on how to get by on $10,000 a year perhaps you could send Gina Rinehart an email.

  12. February 11th, 2014 at 12:41 | #12

    Actually, Ikonoclast, I doubt if the bottom 80% of Americans will have anything like as good health care or education (for instance) as Cuba.

  13. February 11th, 2014 at 13:26 | #13

    OT, but in the wake of the car manufacturing closures, Professor Quiggin might like to comment on the following thought.

    The Australian dollar is high because of the mining boom. Australian manufacturing is vanishing largely because of the high dollar. Can’t you therefore build a case for a bigger transfer of wealth from mining to manufacturing during mining booms, so that we still have a manufacturing industry when the mining boom ends?

  14. rog
    February 11th, 2014 at 16:01 | #14

    Also a tad OT is this excellent piece by JQ in the current New Matilda

  15. paul walter
    February 11th, 2014 at 21:15 | #15

    @Ikonoclast Perceptive that.

    I wonder if oligarchy will not succeed in dragging the lot down eventually, though, before the chance of a salvage.

    The reaction of the big end, when confronted with an issue maybe by scientists, or to do with humanity, has become increasingly irrational.

    The mad frenzy of Austerity is an example and seems more to with a gut hunger for power and a need to control than born of anything to do with economics (particularly use-value). And the spillover has come in the manifestations of climate denialism, wars that lead nowhere, uber surveillance, consent manufacture techniques and so forth.

    Truly, I wonder often if we are just witnessing a hi tech form of feudalism at this stage of financialised capitalism.

  16. Ron E Joggles
    February 12th, 2014 at 06:24 | #16

    Quoting Prof Q: “to explain labour market polarisation as arising from computers and the Internet” – it goes back rather further.

    Starting high school in 1964, our teachers told us that mechanisation would change the way we worked – we’d be relieved of tedious and unrewarding manual work, which would be replaced with worthy jobs in conservation, cultural activities and sport. The first part of this equation was true, but we haven’t had the inclination to devote resources to the second – we simply don’t need everyone to work, and it’s way cheaper to pay them enough for minimal subsistence, than it is to employ them in “worthy” activities – and our response to the social consequences is punitive and vindictive.

    Progressive sentiment peaked here in the Whitlam era, and we’ve been steadily sinking into a selfish complacency characterised by shallow materialism and a thorough detachment from environmental reality – in wealthy countries we live in urban/suburban bubbles and give scarcely a thought to the catastrophies suffered elsewhere.

    Ikonoclast @5 will seem too apocalyptic to some, but I think he’s right.

  17. Ron E Joggles
    February 12th, 2014 at 06:34 | #17

    Quoting Ronald Brak: “how someone could pay a mortage on casual work” – commercial lenders are now so constrained, by their own policies and, apparently, legislation, that they will not lend at all to casual workers – not even with a steady record of sufficient disposable income to finance repayments on a modest loan – not even a few grand to replace a worn out old bomb so the poor old bastards can continue commuting to the 20 hours a week they subsist on.

  18. February 12th, 2014 at 10:54 | #18

    @Ron E Joggles

    And while we are on casual workers, I note they are exceptionally popular at universities. When it comes to delivering a lecture, a casual can be paid the rate to deliver an existing lecture, or the rate to create a new one.

    While its generally assumed that anything you create while working for the uni is owned by the uni, I’m inclined to think that if the uni only pays you to deliver an existing lecture, then any materials that you produce for that lecture are yours, not the universities.

    The tenured staff don’t seem to understand this reasoning.

  19. may
    February 12th, 2014 at 11:59 | #19

    the were two referendums in west oz on the subject of extended shop hours.
    in both the people of west oz rejected extended hours.
    the conservative (barnett) govt extended shopping hours anyway.
    big rent,big boxes are now competing with the local family owned deli,to the deli’s detriment.
    when all the delis are gone the only grocery outlets can be kilometers away.
    the cost of labour for the high rent,big box outlets increase but the amount of groceries,notwithstanding the small extra picked up from extinct delis,remains the same.
    same amount of people,same grocery spend but no productivity/profit boost.

    workers work longer to produce the same as they did when the hours were not extended.

    the profit margin lessens.

    so we now have the cry that it is the fault of the workers and their pay must be reduced.

    is that about it?

  20. paul walter
    February 12th, 2014 at 12:12 | #20

    It is about Big Money quashing the little guy, May.

  21. February 12th, 2014 at 14:52 | #21

    Australia could increase its taxation level to around that of Gemany and, all else equal (ceteris parrotbus), give every Australian about $10,000 a year from birth as a guaranteed income. However, that probably won’t happen and I’ve heard anecdotally that some politicians are opposed to any tax increases at all. So what are some small steps that could be taken towards a guaranteed income that would be difficult to remove by those who want the lower class to live life to the full by savouring the thrill of living on the edge of destitution? Well one thing that could be done is to give every Australian a “Life Income Fund” and some source of money, perhaps funds from mining leases, could be paid into it. (Revenue from gambling might be a good source.) The Australian share market has an average return of about 9% but we don’t want to expose people’s Life Income Funds to volability, so I suggest the Australian government create an index share market fund and put all the Life Income Funds into it and then give a steady return to people of say 7%. This 7% figures is just an estimate, I haven’t done any complex calculations, and whatever the figure is it may need to be revised if there is a long term change in share market returns and it may need to be lower at the beginning to cover market falls, but once the government has enough funds to cover a 60+% fall in the share market the return on the Life Income Funds could be bumped up closer to the average share market return.

    How would these Life Income Funds work? Well, people would get the return on their investment as income, 7% or whatever the return is, but they wouldn’t be able to reduce the principle below a level where it wouldn’t provide enough income to keep them out of poverty if they had no other income. And if there isn’t enough return on their funds to make welfare payments unecessary then the income they get from their fund would reduce benefits.

    So this way a small system could be set up that might only have a little effect at first, but it would be all ready to be expanded in the future.

  22. Ikonoclast
    February 12th, 2014 at 17:31 | #22

    I had to laugh at a pithy quote I read recently.

    “It’s easier to imagine the end of the world than the end of capitalism.”

  23. jungney
    February 12th, 2014 at 18:17 | #23

    Shorten the working week to achieve full employment. The more insecure and unrewarding work becomes then the greater the likelihood of this outcome but only if we insist on it. Use the taxation system to spread national economic outcomes around, build a social secuity system worthy of the name, introduce a COLA and allow people to only work for a nominated period, a decade or so, in full time work. Tell those who want the work ‘opportunities’ of the past, ie, lifelong f/t employment, that they are being selfish and must share the respect, dignity and other benefits of work with others. Oh yes, and shoot all the flying pigs you see!

  24. February 12th, 2014 at 18:29 | #24

    may :
    the were two referendums in west oz on the subject of extended shop hours.
    in both the people of west oz rejected extended hours.

    I always thought a better idea would have been to tell the retailers they could have 60 hours per week, and they were free to choose the hours.

  25. Tim Macknay
    February 12th, 2014 at 19:16 | #25

    the were two referendums in west oz on the subject of extended shop hours.
    in both the people of west oz rejected extended hours.

    When was the first plebiscite? I can only recall one, in 2005.

  26. sunshine
    February 12th, 2014 at 19:45 | #26

    I like Ike(s apocalyptic vision ) too Mr Joggles (also your comment) ,and Jungney s hope .

    After WWII industry was supposed to eventually provide certain basics for all -then we could relax and enjoy more leisure time (Jetsons style !). It didnt happen ,we couldnt slow down. Too much is not enough .Now most people work too much and the rest not at all ,half the world is dying from over consumption and the other half from under consumption .

    It is possible to have dignity without paid work -possible but not easy given the messages all around us. I find most people like to work at something or other -people are naturally industrious. However society is not currently set up very well to facilitate people getting together to spend time in creative production outside paid work (work is usually boring and not creative anyway). Not having a boss to solve the ‘what should I do today ? ‘ question for you can be challenging but should be ultimately rewarding .

    I think the Howard govt valued the unpaid work done by retired people at about equal to 20% of GDP -child minding for grandchildren was a big factor, (then they proceeded to continue to describe older people as a dangerous drag on the rest of us anyway).

    I like growth in medical technology but apart from that I wish we would realise we have the basics of life covered ,share the work around ,and get on with a bit of that promised (productive or not) leisure time.

  27. February 13th, 2014 at 11:18 | #27

    @sunshine

    The problem is not “too much is not enough”, it is that we are a competitive species, and are not driven by absolute possessions, but rather by the desire to have more than others – i.e. to have a higher status.

    If it were not for this characteristic, we would be happy to share the industrial production more equally.

    The whinging of the right is mainly a complaint that they could be even more important if the hoi polloi were worse off.

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