Consumption is one side of people’s economic activity. Labour is the other. In consumption, we take from the world; in labour, we give. Like consumption—and like all human activities—labour should be analysed in terms of the good.
When economists think about the good of labour, they rarely have much to say. Basically, their “economic man” is looking for the highest paid job he can find. High pay is better than low, and unemployment is bad (although perhaps sometimes necessary for the sake of macroeconomic stability). But there is much more to labour than pay, or than paid work. Take, as a prominent example, the labour of so-called non-working mothers, or stay-at-home fathers.
It is standard economic practice not to assign any value to this unpaid labour. That is obviously wrong, as any thoughtful economist will admit. The good of this labour is manifold. Children, society and the mothers themselves all benefit.
There also are goods associated with mothers working for pay, and perhaps evils associated with some mothers working as mothers. But whatever the final judgement about working mothers—whether for individuals or for social policy—the argument should be about the various goods of all the people involved. The wages, which are supposed to guide “economic woman,” should play only a minor role.
The analysis of the good in labour is made more difficult by the inevitable mixed feelings of labourers. Labour is always laborious—it always has an element of grim toil. Even the most dedicated worker at the most interesting job sometimes gets frustrated. Even the happiest mother has her rough days. This labour discontent seems to be a permanent part of the human condition, despite claims to the contrary by some management theorists.
Also part of the human condition is the labourer’s poor moral judgement. A hit man may think a murder, which is done well serves the good, but the judge will put more emphasis on other goods, most notably the lives that were so efficiently terminated. For Breakingviews readers, it can be asked whether a hedge fund manager’s multi-million dollar pay package is good, either for society or for the manager’s own character.
Economists should accept the dislike and look though the self-deception. If they saw the good of labour clearly, at least two important conventional economic assumptions would be reversed. First, as suggested, paid employment would no longer be considered a good-in-itself. There are many valuable unpaid labours and many paid labours of limited value. Indeed, economists should ask if some people would be better off virtuously “unemployed” than pointlessly employed.
Second, economists should realize that labours of production are, overall, less valuable than labours of love and care. Love contributes more to the human good than consumption does, especially than frivolous consumption. Of course, not everyone can work at caring. Some people have to labour at producing stuff (roughly speaking the goods, as compared to services, of standard economic terminology). But the typical economist’s emphasis on labour productivity—a concept, which only makes sense for the production of stuff—is misplaced.
Industrial economies have a particular problem with labour productivity: There is too much of it. That is a total reversal from the old days, which lasted from the beginning of the human race to around 1750. For all that time, 70-95% of the adult male population worked primarily at providing the most basic stuff. Their labour was often not productive enough to keep bread on the table. The women did their part at home, but universal consumption satiety remained a distant dream.
Labour-saving technology has changed all that. If modern techniques and traditional working hours were used only to keep up the consumption lifestyles of 1700, the unemployment rate would currently be about 80%. A mere 5% of our population produces far more food than 70% of theirs did. As for non-food, an hour’s relatively undemanding work in a modern factory produces more than what hundreds of hours of often hazardous and almost always hard toil did in a pre-industrial home or workshop. By now, rich countries are mostly super-sated with stuff. All of this stuff is produced by less than a quarter of the adult population, working for less than half of the days of their lives.
That leaves a lot of potential time on the hands of the labouring population. Human ingenuity has filled the gap in many ways: longer schooling, shorter working weeks, more years of retirement, looser definitions of disability and, most significantly, the creation of many new types of labour.
Whether the time has been taken up well is another matter. Certainly, some of this new labour is very good—for example, in the production of new types of beneficial stuff or in some of the newly developed skilled caring professions. Much, however, is close to pointless.
For example, while some financial labour supports the productive economy, there is little objective good in many of the labours of trading and speculation. In the modern welfare state, incessant record-keeping and detailed regulations create “make-work” labour. Is the labour of innovation and advertising really good when it only stokes excessive desires for stuff? Is there perhaps a spiritual emptiness in the time-killing but labour-intensive leisure industries? In short, much of the labour that has been found for displaced productive workers is almost pointless, even if it is well paid. The pointlessness contributes to what sociologists call “alienation”—a purposelessness that poisons much modern labour, including many highly skilled tasks.
As far as labour is concerned, the great challenge for economists is not to get more women into the paid workforce or even to keep the unemployment rate down. It is to find ways to make more modern labour better serve the good.