Economics: the caring profession

In response to my piece on the mismeasurement of productivity, I was asked by a slightly incredulous reader “Does this mean that the quality of peoples working lives is a fundamental value in economics?”

The answer, which may surprise both non-economists and those who get their economics from the business pages is “Yes!”

The basic assumption of (mainstream/neoclassical) economics is that the cost of labour is the disutility associated with it. The more unpleasant the work, the greater its economic cost.
The idea that gains produced by people working harder are ‘free’ to the economy is, in economic terms, a fallacy (unless people enjoy working harder). A lot of self-proclaimed economic rationalists don’t realise this, but this just shows they are neither rational nor good economists.