Robert and Edward Skidelsky, emeritus professor of political economy at the University of Warwick and lecturer on moral and political philosophy at the University of Exeter respectively, have penned what FT Alphaville feels is a must read essay on the impact of abundance and post-scarcity dynamics on price stability and the nature of labour, and work itself.
Our emphasis throughout, however.
On how technological progress makes possible a day when people don’t have to work at all:
Imagine a world in which most people worked only 15 hours a week. They would be paid as much as, or even more than, they now are, because the fruits of their labor would be distributed more evenly across society. Leisure would occupy far more of their waking hours than work. It was exactly this prospect that John Maynard Keynes conjured up in a little essay published in 1930 called “Economic Possibilities for Our Grandchildren.” Its thesis was simple. As technological progress made possible an increase in the output of goods per hour worked, people would have to work less and less to satisfy their needs, until in the end they would have to work hardly at all. Then, Keynes wrote, “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.” He thought this condition might be reached in about 100 years—that is, by 2030.
On the dawn of a Star Trek-style generation, which sees humanity dedicate itself to a much nobler purpose than just making money, and where appetite is finally satiated:
Making money cannot be an end in itself—at least for anyone not suffering from acute mental disorder. To say that my purpose in life is to make more and more money is like saying that my aim in eating is to get fatter and fatter. And what is true of individuals is also true of societies. Making money cannot be the permanent business of humanity, for the simple reason that there is nothing to do with money except spend it. And we cannot just go on spending. There will come a point when we will be satiated or disgusted or both. Or will we?
On how abundance changes motivation:
Keynes thought that the motivational basis of capitalism was “an intense appeal to the money-making and money-loving instincts of individuals.” He thought that with the coming of plenty, this motivational drive would lose its social approbation; that is, that capitalism would abolish itself when its work was done.
But on how we refuse to adjust from a scarcity mindset despite growing evidence of abundance:
But so accustomed have we become to regarding scarcity as the norm that few of us think about what motives and principles of conduct would, or should, prevail in a world of plenty.
On why fear and illusion of scarcity prevails:
Why, despite the surprising accuracy of his growth forecasts, are most of us, almost 100 years on, still working about as hard as we were when he wrote his futuristic essay? The answer is that a free-market economy both gives employers the power to dictate hours and terms of work and inflames our innate tendency toward competitive, status-driven consumption. Keynes was well aware of the evils of capitalism but assumed that they would wither away once their work of wealth creation was done. He did not foresee that they might become permanently entrenched, obscuring the very ideal they were initially intended to serve.
The irony, however, is that now that we have at last achieved abundance, the habits bred into us by capitalism have left us incapable of enjoying it properly. The Devil, it seems, has claimed his reward. Can we evade this fate? Perhaps, but only if we can retrieve from centuries of neglect and distortion the idea of a good life, a life sufficient unto itself. Here we must draw on the rich storehouse of premodern wisdom, Occidental and Oriental.
On what labour becomes:
Let us state firmly that we are not in favor of idleness. What we wish to see more of is leisure, a category that, properly understood, is so far from coinciding with idleness that it approaches its polar opposite. Leisure, in the true, now almost forgotten sense of the word, is activity without extrinsic end, “purposiveness without purpose,” as Kant put it. The sculptor engrossed in cutting marble, the teacher intent on imparting a difficult idea, the musician struggling with a score, a scientist exploring the mysteries of space and time—such people have no other aim than to do well what they are doing. They may receive an income for their efforts, but that income is not what motivates them. They are engaged in leisure, not toil.
On the response to critics, and why this is different to communism:
“That is all very splendid,” our critic might retort, “but it is hardly likely that a reduction of externally motivated activity will lead to an increase of leisure, in your high-flown sense of the term. Slackers like us need the stimulus of money to move us to anything. Without it, our natural laziness comes to the fore, leading not to the good life but to boredom, neurosis, and the bottle. Read a few Russian novels and you will see what I mean.”
Such an objection can be met only with a declaration of faith. A universal reduction of work has never been attempted, so we do not know for sure what its consequences would be. But we cannot think them as dire as our critic suggests, or of the central project of modern civilization, to improve the well-being of the people, as empty and vain. If the ultimate end of industry is idleness, if we labor and create merely so that our descendants can snuggle down to an eternity of daytime television, then all progress is, as Orwell put it, “a frantic struggle towards an objective which [we] hope and pray will never be reached.”
We are in the paradoxical situation of goading ourselves to ever new feats of enterprise, not because we think them worthwhile, but because any activity, however pointless, is better than none. We must believe in the possibility of genuine leisure—otherwise our state is desperate indeed.
On pockets of scarcity and moves towards efficiency:
If scarcity is always with us, then efficiency, the optimal use of scarce resources, and economics, the science that teaches us efficiency, will always be necessary. Yet in any common-sensical view of the matter, scarcity waxes and wanes. We know that famines are periods of extreme scarcity, and that good harvests produce relative plenty. Thomas Malthus understood that when population grows faster than food supplies, scarcity grows; and in the reverse case, it declines. Moreover, scarcity, as most people understand it, has diminished greatly in most societies over the last 200 years. People in rich and even medium-rich countries no longer starve to death. All this implies that the social importance of efficiency has declined, and with it the utility of economics.
On overcoming scarcity:
The beginning of sanity in this matter is to think of scarcity in relation to needs, not wants. And this is how we do normally think of it. The man with three houses is not thought to be in dire straits, however urgent his desire for a fourth. “He has enough,” we say, meaning “enough to meet his needs.” Flagrant manifestations of insatiability—such as an uncontrollable desire to collect cats or dollhouses—are widely viewed as pathological, not normal. We are all, in principle, capable of limiting our wants to our needs; the problem is that a competitive, monetized economy puts us under continual pressure to want more and more. The “scarcity” discerned by economists is increasingly an artifact of this pressure. Considered in relation to our vital needs, our state is one not of scarcity but rather of extreme abundance.
Over time, such a shift is bound to affect our attitude toward economics. To maximize the efficient use of our time will become less and less important; and therefore “scientific” economics, as it has developed since Robbins, will be demoted from its position as the queen of the social sciences. It can bring us to the threshold of plenty, but must then retire from its oversight of our lives. This is what Keynes had in mind when he looked forward to the day when economists would become as useful as dentists. He always chose his words carefully: It was as dentists, not doctors, that humanity would come to need economists; at the margins of life, not as a continuous, much less controlling, presence.
So is this what’s really driving the financial crisis? We increasingly think yes.
More to the point, account for abundance of goods/end of scarcity when interpreting economic data points, and you’ll find that this one theory has the capacity to explain almost every development we’ve seen since the dotcom bubble burst and how these seemingly independent developments link together.
In fact, we’d dare to say the idea constitutes a grand unified theory for the entire financial crisis.
Beyond scarcity – FT Alphaville