In part one, I imagined a scenario where one hundred people, selected at random, are stranded on a desert island. They have no hope of escape, but they can survive indefinitely thanks to the resources available to them. In fact, only forty need to work to satisfy the needs of the whole population. So how would this group divide the work between themselves?
Let us begin by defining a few likely characteristics of our island population. To begin with, let us be realistic about what a random sample of people would be like. Every individual would be different. People would differ in their attitudes, in their capabilities, in their generosity and so forth. There may, arguably, be different degrees of need. Some people may need a higher calorie intake, others may require special medical care, such as treatment for diabetes or asthma. Some people will be more naturally inclined to give, others will be more selfish. Some will be assertive, some passive. Some will arrive on the island with skills that are more immediately useful than others. For example, perhaps there are some with a good working knowledge of how to build and maintain shelter. Others will possess fewer skills or skills that are less relevant to the circumstances. A croupier or jockey will offer little if there is no gambling tables or horses. Dividing the work between this population is not a simple case of taking a task, dividing it by 100, and giving everybody an equal share of it. Even if it was possible to segment work that perfectly, it would be less efficient to give all the islanders an equal share of a job that could be performed by one person with the most relevant talents.
Soon after their arrival, the individuals most capable of building shelter and getting food may set about the task, without waiting to be asked. Whether they are doing it for the community as a whole, or just for themselves, they will likely employ themselves in essential work. This will be motivated by their own desire to survive, if nothing else. Others, with less relevant skills, will be in more of a quandary. Do they emulate their peers, even if it means they do an inferior job? Do they work as individuals, only providing for themselves, and hence suffer from being relatively impoverished as they fashion an inferior habitation and struggle to feed themselves? Or do they seek to embrace community, and form relationships with the strongest providers? Whatever relations are formed will depend heavily on the ethical values and worldviews of the people on the island. A strong provider who also has a strong sense of moral obligation may decide to build shelter for others, as well as himself. Individualists who can support their own needs may choose to limit their interaction with the rest of the group, and retain the fruits of their labours for themselves. Those who cannot provide for themselves so easily, will need to adopt one of three basic postures towards the strongest providers: seeking charity (or taking what they need), seeking education or offering an exchange. Charity, or theft, may be a viable strategy if the strongest providers are happy to carry the extra burden, are willing to tolerate the implications for an uneven distribution of work, or calculate that the effort involved in preventing theft is greater than the effort needed to replace what was stolen. Education, in the form of learning new skills, would permit weaker providers to become stronger providers. This has the merit that it should reduce the burden on the strongest providers. However, it has disadvantages too. If the strongest providers educate their peers, they create an extra burden on themselves whilst they do so, and if successful they ultimately reduce their status and bargaining power within the community. From the perspective of the weaker providers, improved skills may make them more independent, but they will still need to go to the effort of learning those skills, and they may feel they will never be as adept as the stronger providers. In our world today, charity, theft and education are important factors in determining how we are organized, but it is the principle of exchange that dominates.
Trade is a basis for ordering society. It permits specialization and flexibility. The principles of trade are simple and personal enough that humans adopt it readily, even when they are forbidden to do it. Because only forty of the inhabitants need to be engaged in necessary work, the islanders could engage in a relatively large amount of work which is performed not out of need, but in order to satisfy other desires. For example, as garments become threadbare, they may be replaced by new clothing that is decorative, as well as functional. Perhaps somebody on the island makes jewellery, whilst another tells stories and sings songs for the amusement of onlookers. Base desires may also be satisfied through trade. One or more inhabitants may engage in the world’s oldest profession, especially if there is a mismatch between the genders and ages in the island’s population. A poor mix of potential sexual partners may make prostitution very lucrative.
Criminal activity, if completely unchecked, may become a serious threat to the well-being of the islanders. If relatively large numbers thrive by taking what they want, and relatively small numbers bear the burden of providing not just for themselves but for the thieves as well, it will not only demotivate the providers but potentially encourage more inhabitants to prosper at the expense of others. Theft is, at base, a zero-sum game. What the thief wins, the victim loses, leaving the sum unchanged and only changing the distribution. However, a zero-sum game may be very profitable to the winners of the game. Why go to a lot of effort to collect your own mangoes, when it is easier to take them from somebody else? If there is no reprisal, the thief is better off by not contributing and just taking. However, a zero-sum game is ultimately unproductive. If all one hundred inhabitants stopped producing, and tried to survive through stealing, they would all die. If a society is to be sustained, either everybody has to meet their own needs, or some people have to make a surplus that will support themselves and provide for others.
As the island is far from ordinary society, it is far from any established legal system. Even so, the islanders are likely to adopt their own laws and customs to govern behaviour. This may initially be inspired by the morality of the cultures they came from, but shorn of that influence, it could evolve in unpredictable ways. Laws are an expression of government. The islanders cannot have them without some mechanism to intervene in each other’s affairs. Whether it be effected by mob rule, by a form of voting, by a dictatorship, or by some hybrid of the familiar forms of government, laws can only be enforced if there is a kind of government to enforce them. Government greatly changes the potential for organization amongst the community. The aspirations for laws could be limited. It may be that they only serve to regulate trade and enshrine the idea of ownership and property, in order to encourage people to provide for themselves and discourage anyone wanting to help themselves to their neighbour’s possessions. Laws can also go a lot further. They may become an expression of moral will. For example, prostitution may be banned. To reduce dissent and enforce community, rituals and beliefs may become a matter of law. In modern secular societies, it is possible to forget that laws, through the ages, have often been used to enforce religious practices and points of view. The principle of law, and of government, also offers an alternative way for some individuals to provide for their own needs. Instead of picking mangoes themselves, a legislator, governor, despot or judge may have their needs provided for in exchange for the role they perform. This may be an attractive option to anyone who lacks the skills to provide for themselves, and is not keen on relying on charity or theft to maintain themselves. The option may not just be attractive, it may be very enriching. The ruler may be the richest person on the island, although in productive terms, they only arrange and orchestrate what others do, and provide nothing themselves. To someone of an individualist frame of mind, such a government may represent the most terrifying form of criminal behaviour: the creation of a legal system whose very purpose is to enrich some at the expense of others. That such a system can be enforced is not proof that it is moral. There is little difference between the basis of payment and reward given to a fascist blackshirt or to a Mafia goon. In the imagined island, only forty people need to work to satisfy everyone’s needs. That means even the simplest democratic check to ensure ‘fairness’ in government – the requirement for votes won by a majority – could be compatible with the effective enslavement of the producers for the benefit of all others. If the other sixty inhabitants were unified, it would not even matter if the forty workers were allowed to vote.
I described this island as a thought experiment, in the hope of casting some light upon how we do organize ourselves in the world today. If the experiment was repeated many times, I believe it would turn out very differently depending on the specifics of who was on the island. The complete separation of the island allows us to keep things simple, but as John Donne noted, no man is an island. Our world is full of individuals and groups, sometimes acting together, sometimes acting against each other, often indifferent but unpredictable in when their efforts will reinforce or negate each other’s. Individuals interact with small groups, small groups interact with large groups, and ultimately every single person has some immeasurable impact on the whole word. Each person’s actions is like a butterfly’s wings; a single act or beat might precipitate a chain of cause and effect that leads to a storm on the other side of the world. The difficulty is being able to take a major outcome in the world and trace it back to its causal roots. Historians may look at the influences and upbringing of the key individuals that make decisions and shape events, but they usually, and wisely, take their research no further. In the island thought experiment, and in any history of any event, we see examples of the various options for how people can act, react, and hence organize themselves as people. The basis for how this world is organized is just an extrapolation from the same simple themes as prevalent on the hypothetical island: whether people are more or less productive, whether they are more or less selfless or selfish, whether they prefer to play a zero-sum game or want to add value to the world, whether they seek to impose on others, keep to themselves, or find a compromise within their community.
During part one, I noted that the economist J.M. Keynes had predicted increasing wealth and increasing leisure. Put simply, both would be the result of economic models that are non-zero-sum in nature. The world makes more wealth than required to satisfy immediate needs, the surplus is reinvested in making even more wealth, this makes it even easier for output to outstrip demand, an even larger surplus is generated, leading to even more reinvestment, and we have a virtuous circle. Keynes’ prediction of increasing wealth have been borne out, but not his prediction of increasing leisure. In fact, measures that show people are working are usually treated as a sign of political success and good government. Keynes predicted that we will be working 15 hours a week by 2030. For that to come true, governments will need to start regarding our traditional conception of ‘full’ employment as a failure.
Can we explain how Keynes was right, and that the economic wheels are turning to make the world wealthier, whilst he was also wrong, and not releasing us for more leisure? To give a complete answer is beyond my abilities in this post, but I think the clues can be drawn from the behaviour of the inhabitants of our imagined island, and from the analogues in the world around us. Perhaps Keynes made the understandable error of assuming that changes in the total of wealth would also lead to changes in the distribution of wealth. Many people considered to be ‘poor’ by modern standards are incontestably rich by historical standards. One sign of this is that life expectancy keeps improving. However, perception of wealth need not be aligned to the reality of wealth. If televisions were a rarity when Keynes wrote in the 1930’s, that does not mean people think themselves wealthy because they have one now. Telephones are far more ubiquitous now than they were in the 30’s, but people may not consider themselves rich because they have a mobile phone today. If people perceive themselves to be poor, they may continue to work hard even if they are a lot richer than their great-grandparents were. Changes in perception may be one cause of why people do not work shorter hours, but I think there is another more crucial reason: we need to work in order to maintain the basis for how our society is organized.
Is there evidence that the great wealth of the human race produces is being used to keep us busy, because we cannot find an alternative way to keep our society running? I believe so. More importantly, it does not have to be a conscious decision. Imagine the world was like our hypothetical island. If you only need 40% of the world to work in order to satisfy everyone’s needs, how do you keep that proportion motivated, and avoid demotivating the remainder? If 60% of the world decided to go on permanent holiday, and just took what they needed, there would be the risk that many of the other 40% would stop working too. We definitely produce more than we ever have before. Because of advances in science and technology, each single person can make more than they would have a hundred years ago. Machines mean that the output per person is more than it was. This was the basis for Henry Ford’s revolution in car manufacture, but it applies much more broadly than that. So why are we still so busy? The key is in finding customary forms of human behaviour that are universal and which sustain human needs. Exchange is universal. John Lennon asked if we could imagine a world without possessions. I do not think we can. We give, we take, we aim to get what we need, and what we want by giving others what they want or need. If that leads to over-production, we do not care, so long as we each get what we want.
One reason why we would all need to keep on working despite increasing wealth is that we use the world’s wealth to attempt things that were never tried before. An obvious example would be sending people to the moon, creating gigantic particle colliders and other expensive scientific projects that lack any obvious benefits to normal mankind. Whatever advances are made in applied science as a result of the investment, it is doubtful that you need to spend on those specific projects in order to get those advances. Great scientific leaps forward happen for all sorts of reasons, sometimes as a consequence of huge state-backed projects, often not. We are not just changing technology, but also trying to change the nature of our society through wealth. Throughout history, people at the margins of society have suffered. If you could not work, you went without. The human race, on a global level, seems set on ending that. Whilst that noble program keeps productive people busy, it also risks higher and higher numbers of people wanting to classify themselves as needing support, instead of giving support. For the good of our current basis of organization, this has to be reigned in. Both providing for people’s needs and reigning in criminality leads to a need for government intervention. This means employing people to do the work of government, whether it be in providing services that cannot be effectively provided any other way (roads, a system of welfare benefits) or applying and enforcing the will of the government (the legal system, the police). In the UK, income tax is still a ‘temporary’ tax that has to be renewed by Parliament each year. With roughly 40% of the nation’s income now taken for UK government spending, there is no sign that it will come to an end any time soon. When David Lloyd George was Chancellor of the Exchequer, he introduced the ‘people’s budget’ to pay for all the welfare reforms the Liberals had introduced, including meals for schoolchildren, pensions for the old, labour exchanges and national insurance to provide for healthcare and unemployment benefits. It caused a political crisis because of the extent to which it taxed wealthier citizens, and a constitutional crisis when the Lords, the second chamber in the UK Parliament, tried to block it. In the people’s budget, the very richest were expected to pay 11.25% of their income in taxes. As you can see, the business of being in government is now a lot bigger than it was when David Lloyd George was pushing his radical reforms.
Not only is government engaged in eliminating poverty, it is increasingly involved in eliminating all forms of suffering in a constant quest for perfection. Some government missions are of debatable worth. There are understandable disputes about how much we need to fight overseas wars to increase security at home, or enforce safety protocols because we cannot evaluate risk for ourselves. However, governments are, by and large, doing what large numbers of people expect them to do or, at least, are willing to tolerate. If governments make work, it is because people allow and encourage them to. There is also plenty of work outside of government that is not, strictly, necessary. Take the rise of the service sector. How can so many people be employed in the service sector? How did we cope before? Without wanting to be flippant, it seems unlikely that the world would stop turning if less people were employed to serve hot water and coffee beans at your local Starbucks. The service sector, more prominent in wealthier societies, keeps people busy in jobs that previously were not necessary. If that is the case, are the jobs created because time is freed up to do other things that we want to do, but did not have time? Or is it as much the case that people find ways to make themselves useful and engage in exchange, even if they cannot offer anything that is really needed?
You generally need government for laws, but people are versatile and can create laws and rules in all sorts of places. In that sense, they have a tendency to create new and additional forms of government. There is good reason for them to do so. As rules get more complicated, ways to exploit and abuse them get more complicated. Nathan Rothschild was a pioneer in the early 19th century bond market, and generated tremendous wealth as a result, but that market is of trivial simplicity compared to the financial instruments that are traded today. He made a lot of money from the novel practice of speculating on government bonds, but these days, that kind of speculation is at the simple end of spectrum. Finance has never been more complicated. The increase in complexity has lead some to gain fabulous wealth, whilst there have also been some spectacular failures and cheats. The Nobel prize-winners at Long Term Credit Management offer a good example of being too clever for your own good, and Bernard Madoff’s Ponzi scheme is a great example of how greed can pervert the sense of even the most sophisticated investors in the world. Complexity in business affairs, like bureaucracy in government, is ultimately an overhead. It adds to the cost of doing things. Some people may believe that it can also generate value that offsets the cost. A simple example would be paying a manager to select the best stocks to invest in. However, the evidence that complexity has tended to bring value into the world, and not simply remove or redistribute it through some enormous zero-sum game, is mixed. If clever financial instruments help to make sure money is spent where the human race most needs it – on the assets that will generate most wealth overall – then the complexity they bring will be offset by the increased overall wealth of the human race. If, however, they are more like a greed-driven exercise in enriching some at the expense of others, then increasing complexity is a net drain on the world’s wealth. From that perspective, it is possible to imagine that the current financial crisis would have been best avoided by paying many bankers huge sums to stay at home and do nothing, instead of paying them huge sums to work diligently at making a pig’s ear of the world’s economy.
Not everyone can be rich, whether on the desert island or in real life. For some to be wealthy, others must have less. This is because wealth is as much relative as it is absolute. However, human perceptions about satisfaction – what is enough to be content – will vary from person to person. To some extent, those who have opted for Keynes’ leisure society already exist and are perfectly rational. They assess the income they can get from state benefits, compare it to what they can get from working, and conclude that the relatively low standard of living gained from benefits is good enough in absolute terms. Compared to the life of a normal person living a hundred years ago, they are perfectly right. They are fed, clothed, housed, entertained and have access to technology that was unimaginable to our grandparents’ generation. In contrast, slavery still exists, but it exists for quite different reasons to the economic factors that created the transatlantic slave trade or the slavery common to most ancient civilizations. Then, slavery was motivated by the need to have farm workers so others could be supported by the surplus created. This would free slave owners to take on other roles in society. These roles may well have included other kinds of work. The images of slavery are shrouded in stereotypes, with lazy slaves being beaten by greedy owners. However, this simple picture probably fails to provide enough nuance to the history of slavery. Slavery is ultimately a kind of economic relationship. Though some would have conformed to the personality stereotypes, others did not. Great pains are taken to present the slave-owners amongst America’s founding fathers as men who treated slaves well and regarded slavery as a kind of economic relationship with expectations on both sides. Otherwise, the words in the Declaration of Independence:
“We hold these truths to be self-evident: That all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness…”
would ring rather hollow. In another example, when the conquering Italians abolished slavery in Ethiopia after the Second Italo-Abyssinian War, many slaves reportedly complained that they had lost their station in life and hence their source of food. In contrast, and contrary to Andrea Dworkin’s analysis of the economic motivation for prostitution, modern sex slavery is not motivated by necessity, on either the part of the prostitute or their pimp. It is very debatable whether it is necessary for the customer either. At base, prostitution is another kind of exchange. The prostitute offers a service that people are prepared to pay for. That means there is enough wealth in the world to support people whose only contribution to the economy is providing sexual favours. The pimp’s motivation is obvious, but it would be naive to assume that the prostitute is mindless chattel, any more than it would be fair to apply a simple black-and-white analysis of slavers and slaves throughout history. Prostitutes are not brainless bodies under the controlled of a pimp/master. They live in a relatively enlightened time. Whether tricked into prostitution by the allure of illegal immigration to a wealthier nation, or encouraged to remain a prostitute in exchange for narcotics, the modern sex slave has rights and opportunities to act for themselves that were denied to the millions who were captured, or who were born into slavery when slavery was still legal. Even extremely exploitative economic relationships can, in this modern age, be based less on actual need and more on the perceived needs of everyone who enables it.
Looking at life’s underbelly is perhaps the worst place to look for evidence of the excess of wealth around us. There are gaudier examples, including the grotesque sums paid to Damien Hirst in exchange for pickled sheep, the flashy presenter/interviewer/reviewer Jonathan Ross reporting himself to be ‘worth’ a thousand BBC journalists, and the absurd amounts of oil and gas money offered by Russians and Arabs to their pet footballers. Paradoxically, we live at a time of great simplification of the world’s economy. All the middle men are being stripped out, as people increasingly buy direct from suppliers instead of retailers or brokers. Markets and information are getting more perfect and more international, allowing fewer opportunities to exploit customers because of where they are or how little they now. This will cause convulsions. Some jobs are not needed any more. But we still need jobs to give our society order and purpose. That is why politicians want to stimulate consumption during this downturn, instead of asking whether we really need the things being made and consumed. To my mind, this downturn is a symptom of a wider malaise: that it is getting harder to keep people motivated, because however greedy people are, and however they are motivated by relative perceptions of wealth, increasing the standard of living will eventually lead large numbers to be satisfied. There is only so much graphic design work the UK can sell to China, and only so many plastic toys that China can sell to the UK. This downturn may be the first sign that the human race is learning how much is enough.
I personally would like to work less, but earn at the same rate. From my experience, that is a very hard thing to do. Unless you are rich, or make money from accumulated capital, our society is just not designed like that. Instead of persecuting people for not working and rewarding people excessively who do work, we need to find better ways to permit people to adopt intermediate patterns of living. If I was to aim for Keynes’ prediction, and a job that employs me for 15 hours a week, I would probably end up in a low-paid unskilled job, or in a very well-paid job demanding high levels of experience and an established track record gained from previous work. The middle way is a route untrod. This means options for people to arrange and improve their lives through leisure, instead of consumption, are poorly realized. We have a binary model of success: work is good and leads to rewards, not working is bad. However, leisure is a kind of reward. Our community persists with outdated models for how people should live. Alternative models are ill-constructed for the real needs of our society. For example, having a child is now a mechanism to reduce work, whether it be taken through taking extended leave, justifying part-time employment in a professional job, or by becoming dependent on the state. However, if we are already producing more than enough to meet our needs materially, the one thing we do not need to specifically encourage is more children. In history, families needed children to support parents in their old age, but if Keynes was right, the need for children to become workers to generate wealth diminishes with each generation. Now, the problem is more one of conserving finite resources.
The obstacle to Keynes’ prediction of a leisure society is organization. We do not know, or trust ourselves, to reorder society so we consume less but still live a good, ordered and peaceful life. Economic production has dominated human history. Perhaps it is unsurprising that if it declines in importance we may not recognize that or know how to respond. There are no other island societies we can emulate and learn from. If there is a way for humans to be happy without endlessly consuming more and more each year, we will have to find the way for ourselves.