In Praise of Idleness
http://www.solstice.us/russell/idleness.html
Having read this, I feel the need to expound further on what I said below on work, etc. Suppose (to borrow Bertrand Russell's example) the following: a number of people are employed for eight hours each day in making pins, and for this, they receive a living wage. The cost of pins has been driven down to the point that you could not sell more pins by lowering their price further; the current rate of pin production is just equal to the ideal rate of pin purchase. Now suppose someone clever invents a mechanism by which pins can be produced twice as efficiently. Makers of pins can produce double the original rate of pins per hour of work. With this efficiency, you can do any one of the following things:
- Create unemployment and profit. That is, fire half of the workers; keep the other half working for eight hours each day at the same wage, making the ideal number of pins. The company pockets the money that would have gone to pay the fired workers. In this model, you are paying your workers for time.
- Create unemployment and wealth. That is, fire half the workers, and keep the other half working for eight hours each day, but pay the remaining workers twice as much as before. In this model, you are paying your workers directly for each pin they produce (assuming each worker is equally efficient).
- Create poverty and profit. That is, keep all of your workers, but cut their hours in half, and retain the hourly wage you used before. The company pockets the money that would have gone to employ the workers for the other four hours each day, and pays the workers for time. The workers all have to find second part-time jobs to cover the shortfall, and if they can't find such jobs, they no longer make enough to live on.
- Create surplus. That is, keep everyone working for eight hours a day at the original wage, and make twice as many pins. Since pins are already meeting demand (as stipulated above), this creates waste until and unless someone comes up with a very demanding new application for pins.
- Create leisure. That is, cut everyone's hours in half, but double their hourly wage at the same time, so they make the same amount of money in half the time. Alternately, turn half of the work days into fully paid holidays, or pension off half the workers at full wages, allowing them to retire while the other half works eight hours each day for the original hourly wage.
- Some combination of the options: you could certainly divide the application of the new efficiency in several ways. For instance, you could pension some workers, award more paid vacation days, cut some hours, lay some workers off, and create a small stockpile of extra pins (just in case your factory should explode and you cannot produce any pins until the repairs are finished.)
It seems to me obvious that the ideal application of this efficiency is to create leisure. There is some benefit to some people in option two (where half the workers are fired and half have their wages doubled), but I suspect that being laid off is a greater harm than having your salary doubled is a benefit. It probably is also worse for the economy. Two workers at a living wage buy two sets of The Things Needed To Live. One worker at double that buys one set of The Things Needed To Live and one share of luxuries, probably saves some surplus; meanwhile, the fired worker must rely on charity or public support. Inasmuch as the company can't be expected to go along with any move that doesn't benefit it, there are the combination options - create the pin stockpile. Offer the pension at a somewhat lower rate of pay than the full workday. Pay for the vacation days, but at half or three-quarters rate. But create leisure.
Having read this, I feel the need to expound further on what I said below on work, etc. Suppose (to borrow Bertrand Russell's example) the following: a number of people are employed for eight hours each day in making pins, and for this, they receive a living wage. The cost of pins has been driven down to the point that you could not sell more pins by lowering their price further; the current rate of pin production is just equal to the ideal rate of pin purchase. Now suppose someone clever invents a mechanism by which pins can be produced twice as efficiently. Makers of pins can produce double the original rate of pins per hour of work. With this efficiency, you can do any one of the following things:
- Create unemployment and profit. That is, fire half of the workers; keep the other half working for eight hours each day at the same wage, making the ideal number of pins. The company pockets the money that would have gone to pay the fired workers. In this model, you are paying your workers for time.
- Create unemployment and wealth. That is, fire half the workers, and keep the other half working for eight hours each day, but pay the remaining workers twice as much as before. In this model, you are paying your workers directly for each pin they produce (assuming each worker is equally efficient).
- Create poverty and profit. That is, keep all of your workers, but cut their hours in half, and retain the hourly wage you used before. The company pockets the money that would have gone to employ the workers for the other four hours each day, and pays the workers for time. The workers all have to find second part-time jobs to cover the shortfall, and if they can't find such jobs, they no longer make enough to live on.
- Create surplus. That is, keep everyone working for eight hours a day at the original wage, and make twice as many pins. Since pins are already meeting demand (as stipulated above), this creates waste until and unless someone comes up with a very demanding new application for pins.
- Create leisure. That is, cut everyone's hours in half, but double their hourly wage at the same time, so they make the same amount of money in half the time. Alternately, turn half of the work days into fully paid holidays, or pension off half the workers at full wages, allowing them to retire while the other half works eight hours each day for the original hourly wage.
- Some combination of the options: you could certainly divide the application of the new efficiency in several ways. For instance, you could pension some workers, award more paid vacation days, cut some hours, lay some workers off, and create a small stockpile of extra pins (just in case your factory should explode and you cannot produce any pins until the repairs are finished.)
It seems to me obvious that the ideal application of this efficiency is to create leisure. There is some benefit to some people in option two (where half the workers are fired and half have their wages doubled), but I suspect that being laid off is a greater harm than having your salary doubled is a benefit. It probably is also worse for the economy. Two workers at a living wage buy two sets of The Things Needed To Live. One worker at double that buys one set of The Things Needed To Live and one share of luxuries, probably saves some surplus; meanwhile, the fired worker must rely on charity or public support. Inasmuch as the company can't be expected to go along with any move that doesn't benefit it, there are the combination options - create the pin stockpile. Offer the pension at a somewhat lower rate of pay than the full workday. Pay for the vacation days, but at half or three-quarters rate. But create leisure.