Farting around (and “economic rationality”)

by Chris Bertram on November 9, 2004

Will Wilkinson’s thoughts on the (alleged) European taste for leisure over work had me scurrying over to my bookshelf to find a copy of Marx’s Grundrisse . Will surmises that the real reason that Europeans work shorter hours than Americans is that European taxes are too high. After all, anyone who is “economically rational” would surely work more if only the rewards were there, wouldn’t they? So goes human nature according to libertarians. Well, no Will, they might work even less if they could satisfy their consumption needs with fewer hours at the grindstone. As Kurt Vonnegut says , human beings “are here on Earth to fart around, and don’t let anybody tell you any different.” Anyway, that quote from Marx:

The Times of November 1857 contains an utterly delightful cry of outrage on the part of a West-Indian plantation owner. This advocate analyses with great moral indignation—as a plea for the re-introduction of Negro slavery—how the Quashees (the free blacks of Jamaica) content themselves with producing only what is strictly necessary for their own consumption, and, alongside this ‘use value’, regard loafing (indulgence and idleness) as the real luxury good; how they do not care a damn for the sugar and the fixed capital invested in the plantations, but rather observe the planters’ impending bankruptcy with an ironic grin of malicious pleasure, and even exploit their acquired Christianity as an embellishment for this mood of malicious glee and indolence. They have ceased to be slaves, but not in order to become wage labourers, but, instead, self-sustaining peasants working for their own consumption.

Good for them!

{ 100 comments }

1

abb1 11.09.04 at 11:23 am

Not so much the tax rate, but rather government-paid education for your children, adequate government-guaranteed old-age assistance and social safety-net in general. These things probably have something to do with it: less anxiety – more relaxed life-style.

2

des von bladet 11.09.04 at 11:27 am

Cf, Marshall Sahlens’s Economics of Stone-Age Life

A good case can be made that hunters and gatherers work less than we
do; and, rather than a continuous travail, the food quest is
intermittent, leisure abundant, and there is a greater amount of sleep
in the daytime per capita per year than in any other condition of
society.

That’s a quality of life metric worth optimising for, for sure!

But once again I am reminded of the only puzzling thing about Libertoonians and their beloved -Ism: that anyone gives a toss about them or it.

3

Kieran Healy 11.09.04 at 12:34 pm

Weber has a line somewhere about the irritating tendency of Swabian peasants to work less when their wages went up. And E.P. Thompson’s “Time, Work Discipline and Industrial Capitalism” is full of examples as well.

4

jet 11.09.04 at 12:42 pm

And just how long do you think this can last? If current trends continue, will have grown 100% from 1990 to 2020. The EU will have grown 50%. How sustainable is it to have a shiny example of productivity and the benefits wealth begits and the EU falling into realitive poverty?

Apparently it is very sustainable, no one in the EU has noticed their decline so far.

5

Matt 11.09.04 at 12:46 pm

When I see the sort of claim that Will makes, I can’t help but think of the joke common to many law school- the good thing about graduating from them is that the average starting salary is about 100K/year. The bad think is that its because you work two full-time jobs. I’d certainly prefer to have only one of those jobs and a 50K/year salary, but that’s not an option at law firms. (I hope to avoid law firms, but it’s a problem for many of my colleagues.)

6

no economist 11.09.04 at 12:54 pm

Higher taxes can lead either to income or substitution effects. Quite rational to work more if taxes are higher.

7

Matt McGrattan 11.09.04 at 12:55 pm

The very idea expressed by Wilkinson that people work less because they earn less (since they are taxed more) seems so obviously dumb.

I don’t know anyone who would choose to work any more than they actually had to — except for those lucky people I know who have jobs that coincide with precisely the kind of things they’d do in their free time anyway. Some academics, musicians, etc.

8

harry 11.09.04 at 1:03 pm

Jet, you mean production, right, not productivity?
What I doubt is sustainable is the taste for consumption/work over lieaure/life/family.

9

bob mcmanus 11.09.04 at 1:26 pm

what abb1 said.

Low taxes,economic insecurity, pointless consumption (toys never used, 3000 sq ft homes barely inhabited)….and 16 hour workdays is not only a revealed preference but the natural state of man.

I congratulate Will on his new position at Cato. They deserve each other.

10

Jane Galt 11.09.04 at 1:28 pm

While it certainly could be true that the substitution effect is strongly positive for leisure, I believe that recent empirical evidence shows that in fact Europeans end up using much of that increased leisure to do things that Americans pay others to do, such as paint their houses or work on their lawns. Perhaps there’s some moral value to painting your own house (and I certainly feel the satisfaction of a job well done when it’s over), but I wouldn’t call it “leisure”. So the high taxes and forced vacations seem to some extent to be switching labour out of the (high productivity) paid workplace and into the (low productivity) home, rather than actually increasing leisure. In my own case, I work for a european company, on European wage scales and vacations, and I find I use a lot of my vacation for things like rearranging my closets, since I can’t afford to travel 6 weeks out of the year.

11

Rob 11.09.04 at 1:36 pm

How many times does supply side economics need to be disproven before those supposed rational libertarians realize it doesn’t work?

You know what Jane, outside of your small clique most people do cut their own lawns and paint their own houses.

12

bob mcmanus 11.09.04 at 1:39 pm

“…increased leisure to do things that Americans pay others to do, such as paint their houses or work on their lawns. Perhaps there’s some moral value to painting your own house” …Jane Galt

Heck, I din’t even have to leave CT to find a relevant Chesterton quote…

“Our society is so abnormal that the normal man never dreams of having the normal occupation of looking after his own property. When he chooses a trade, he chooses one of the ten thousand trades that involve looking after other people’s property.” – Commonwealth10-12-32”

13

Merkin 11.09.04 at 1:39 pm

So Jane, while you’re rearranging your closets during your forced vacations, do you imagine rich, go-go Americans paying lackeys to rearrange their closets for them?

14

Bernard 11.09.04 at 2:13 pm

All the analysis i’ve seen so far looks pretty dodgy.

The key question, I believe, is ‘how far can my effort influence my situation?’

The more socialist the state, the less far personal effort will influence personal outcome.

Fairly straightforward analysis, I would think.

For those above who think that European style government is likely to lead to harder work, how do you explain the fact that they don’t?

15

Ray 11.09.04 at 2:16 pm

The obvious solution for Jane (and anyone else forced out of work six weeks a year) is to hire herself out as a closet re-arranger and house painter in her spare time.

16

des von bladet 11.09.04 at 2:23 pm

Bernard: You’re another of the nutters then, is it?

What we (those of us who are I, at least) actually think is that the workaholisme (AKA presenteeisme) endemic in your once-great nation(TM) is to be explained other than by free individual choice in the pursuit of wealth (“happiness”, as the local idiom bizarrely has it).

This is certainly obvious to anyone who starts from a position other than ideologically conditioned to insist on psychique atomisme, and it is this from which I conclude you are a Libertoonian.

Americans work so hard, in plain language, because _other_ Americans work so hard, and they cannot afford (ha!) to be seen to do less.

17

dsquared 11.09.04 at 2:31 pm

I believe that recent empirical evidence shows that in fact Europeans end up using much of that increased leisure to do things that Americans pay others to do, such as paint their houses or work on their lawns

Curious … do Americans all mow each other’s lawns for money, or is there some American who mows the lawns of all and only all those Americans who don’t mow their own lawns?

[Of course, the real answer to this conundrum is that you’re not really an “American” if you can’t afford to pay someone to mow your lawn]

18

Bernard 11.09.04 at 2:31 pm

Des, I’ll ignore what looks like it might be in-jokey ad hominem because I can’t even begin to interpret it.

With regard to your ‘The reason why Americans work hard is because other Americans work hard’ analysis, presumably if I asked you why those other Americans worked hard you’d tell me it was because still another set of Americans worked hard?

Circular reasoning is an amusing leisure activity, but it doesn’t actually get to the root of the question of why, on the whole, Americans work harder than Europeans.

19

Ray 11.09.04 at 2:38 pm

Obviously, the lawns are mowed by illegal immigrants.

20

Luc 11.09.04 at 2:45 pm

I work for a european company, on European wage scales and vacations, and I find I use a lot of my vacation for things like rearranging my closets, since I can’t afford to travel 6 weeks out of the year.

Someone with an MBA on a European wage scale can afford 6 weeks of travel. Try the future EU country Turkey. Nice country, easily affordable.

If on the other hand you have chosen a career path that didn’t maximise you income, it could be true. But then that would be real un-American.

21

des von bladet 11.09.04 at 2:45 pm

In universes other than yours, Bernard, there is a concept called “culture”. Perhaps you could hire Jane to spend her holidays studying it, and seeing if she can translate some of the basics into American?

Take Matt’s law firm example, though: as he points out, many white collar American jobs don’t offer “less work” as an option. Which is a pretty good explanation for why people don’t take it.

Imagine a world with no job security, and where losing a job might mean going without health insurance. Imagine that the working environment is competitive, and that persons perceived not to be pulling their weight are at risk of having their services dispensed with.

I think persons might work harder in those circumstances than in some others, for reasons not necessarily especially to do with a distaste for paint fumes.

22

Matt McGrattan 11.09.04 at 2:50 pm

Bernard wrote:

“For those above who think that European style government is likely to lead to harder work, how do you explain the fact that they don’t?”

Bernard, that’s precisely not what everyone was arguing above. They were arguing that Europeans work less and there are perfectly rational reasons for thinking that working less might be desirable and further, that there might be good rational reasons for preferring a social and economic system in which it’s possible to do so without grave risk of immediate desitution and ill-health.

It’s not that we want to work more but don’t because of our Evil Socialist Overlords(tm).

And you ‘circular reasoning’ argument is just daft. There’s nothing circular about appealing to, say, the past prevalence of some behaviour to explain it’s current prevalence. Or, for that matter, appealing to some common cultural shared values to explain the presence of some set of behaviours.

No-one’s saying that in some wierdly circular process of instantaneous and simultaneous causation everyone’s ‘desire’ to work more is caused by everyone else’s similar ‘desire’.

23

Bernard 11.09.04 at 2:56 pm

Des, so to counter my point about Americans working harder because their hard work is more closely correlated to their personal situation, you’ve raised the point that when job security and unemployment benefits are absent, people are likely to work harder.

Are you even aware that you’re actually saying the same thing I am?

By the way, I’m loving your exceptionally witty satire on my American way of thinking. I just hope to God you never spot the fact that my spelling is quintessentially British.

24

Matt McGrattan 11.09.04 at 3:02 pm

Bernard, you’re not getting it are you?

You triumphally claim that Des (and everyone else) is saying what you are. That lower personal security leads to harder and longer working hours.

Which, up to a point, is true. We are all saying that. However, where we differ is that we take entirely opposite positions on the value of such longer and harder work.

That is, we are saying that the fact that the European system encourages people to work less is a GOOD thing.

25

Walt Pohl 11.09.04 at 3:09 pm

Jet, the problem with saying “if current trends continue” is that they never do.

26

Hard Work 11.09.04 at 3:10 pm

“I don’t know anyone who would choose to work any more than they actually had to — except for those lucky people I know who have jobs that coincide with precisely the kind of things they’d do in their free time anyway. Some academics, musicians, etc.”

Well that may say more about you and the circles you travel in… I think those who have chosen to work for pay is probably fairly large. E.g. myself. I’ve chosen a profession with long hours because it – pays more ! I’m willing to put in the long hours because today I could retire accepting a substantial reduction in lifestyle or in five years with pretty much the same that I have now. Well, if I live that long…

27

Bernard 11.09.04 at 3:16 pm

‘That is, we are saying that the fact that the European system encourages people to work less is a GOOD thing.’

Matt, we certainly disagree there, but I have no inclination to argue over a simple point of preference.

My query was over the various ideas presented above which specifically did run contrary to what I said. My questions about Des’ position, including the accusation of circular reasoning, remain.

28

yabonn 11.09.04 at 3:17 pm

No but seriously.

Do you people realize how many billions/year are not spent into paying people painting, and thus do not contribute to the painting economy, and thus do not contribute to the overall well being of everyone, just because of the socialists?

Do you thing that our present well being and happiness should have been possible with our founding fathers doing their painting?

Isn’t your time worth more than that painting?

Do you think the rugged people on the last frontier paint their stuff?

That whole activity is, right here, right now, escaping the market and the economy, harming us all, threatening our lifes and our grandmothers and we do nothing?

Well, sheesh.

29

Matt McGrattan 11.09.04 at 3:19 pm

Hard Work:

Did you actually READ what I wrote? I said that I know hardly anyone who would choose to work more rather than less hours. This is precisely because they (and I) primarily work for money. Clearly if they NEED to work more then they do. but given a choice not dictated to them by necessity, then they wouldn’t.

The few people I know who would choose to work more hours are precisely that minority of people that have jobs that are (to simplify) “nice” or “interesting2 jobs.

Sheesh. I don’t even think we disagree here.

The average cleaner doesn’t do it because they WANT to. if they could get £40 for it, then they’d probably work a lot less hours than they do. How hard can that be to understand?

30

nick 11.09.04 at 3:20 pm

Does ‘Jane Galt’ have any other anecdotes that she’d like to share with us, in lieu of facts? Is there an under-reported economy of people hiring themselves out on Craig’s List to re-arrange closets? Please, Megan, enlighten us.

31

des von bladet 11.09.04 at 3:24 pm

Bernard: Apologies on the nationality question, for sure. Were you dropped on an Ayn Rand as a child or something?

The questions “How much do I have to gain by working more?” and “How much do I have to lose by working less?” are certainly intimately intertwined, but they’re not the same.

It looked like you were initially offering Yoorpeans a glittering future of working all hours so that they could pay people to do their hobbies for them; now it seems you really want to dismantle the safety nets that mean they can afford not to.

As a devout Yoorpean, I would say your second argument is more convincing but also less persuasive: greed doesn’t motivate me to work harder, and I see no advantage (to me) in changing the system so that fear does instead.

32

Dubious 11.09.04 at 3:36 pm

I think I remember hearing in grad school that (in the context of modern industrial societies) the backwards-bending labor supply curve was a mythical beast.

Swabian peasants and neolithic hunter-gatherers aside, can anyone actually point me to a (say) review article which actually finds multiple examples of backwards bending labor supply curves in a developed economy?

33

David 11.09.04 at 3:36 pm

This is not an endorsement, just a pass-through. I’m surprised Will or some other libertarian hasn’t mentioned Ed Prescott’s recent article, “Why Do Americans Work So Much More Than Europeans?” (Prescott is this year’s Nobel in Econ)

link: http://minneapolisfed.org/research/qr/qr2811.html

abstract: Americans now work 50 percent more than do the Germans, French, and Italians. This was not the case in the early 1970s, when the Western Europeans worked more than Americans. This article examines the role of taxes in accounting for the differences in labor supply across time and across countries; in particular, the effective marginal tax rate on labor income. The population of countries considered is the G-7 countries, which are major advanced industrial countries. The surprising finding is that this marginal tax rate accounts for the predominance of differences at points in time and the large change in relative labor supply over time.

34

nick 11.09.04 at 3:41 pm

is there some American who mows the lawns of all and only all those Americans who don’t mow their own lawns?

Oh, yes. Or rather, there is a class of Americans, called ‘teenagers’, who are expected to mow those lawns. It’s an early induction into the low-wage service economy on this side of the pond. (If you’re pre-teen, of course, you’re sent round begging at the door for your church, or sell chocolate bars and whatnot to raise money for school-books.)

That said, there’s also another group of Americans, for whom mowing the lawn is certainly an amusing leisure activity, thanks to John Deere Incorporated.

35

Rob 11.09.04 at 3:46 pm

Central to the libertarian argument must be the claim that those living under low tax regimes actually earn more (in real after tax pay). and thus are working harder so as to gain more income. I don’t have the figures to hand, but it doesn’t seem immediately obvious to me that Europeans do earn less after tax than Americans, particularly in real terms (considering the cost of healthcare, education and so on in the States). This is quite beside the point why we should care about what people would do under an institutional arrangement that is, after all, so patently unjust.

36

Bernard 11.09.04 at 3:47 pm

Des, re: what i said to start with.

~
The key question, I believe, is ‘how far can my effort influence my situation?’

The more socialist the state, the less far personal effort will influence personal outcome.

Fairly straightforward analysis, I would think.
~

With the ‘how much do I have to gain…’ vs ‘how much do I have to lose…’ analysis, you appear to be alluding to the fact that the work/leisure tradeoff will vary according to current levels of work/leisure. I doubt anyone will disagree with that, least of all economically minded libertarians. The point Will made (which I think was only half-right, as i’ve said in the comments section) is that tax and spend policies have a real impact on the choices workers make.

37

Sam Dodsworth 11.09.04 at 3:48 pm

As an addendum to des von bladet’s point about social safety nets reducing fear as a motivating factor – suppose some of the higher taxes went on providing improved leisure opportunities? Or is that unthinkable?

38

Nicholas Weininger 11.09.04 at 3:52 pm

david: if you actually went and read Will’s post, you’d notice that that Prescott’s article was about the first thing he mentioned.

The key issue missed here, I think, is that utility of leisure varies a lot from individual to individual and people with like utilities of leisure tend to cluster. Thus one’s sense of what the general level of utility of leisure “ought” to be or would “naturally” be can be rather distorted by one’s own social milieu.

This blog, for example, is dominated by academics, who as a profession choose to achieve– after the new-faculty publish-or-perish stage– a remarkably high amount of leisure in exchange for relatively limited opportunities for salary advancement. Such people are in a very poor position to make confident statements about how everyone really values leisure more than those nasty hard-working Americans think.

39

Matt McGrattan 11.09.04 at 3:59 pm

The causal-explanatory question is all very interesting… why do Americans work much more than Europeans?

But the ‘pro-American’ side of the debate seems to make the normative assumption that working more is a good thing — all things considered equal – and the ‘pro-European’ side takes the opposing point of view.

[yes, I’m aware that some of those on what I’m calling the ‘pro-American’ side are in fact European, and vice versa]

The normative question is at least as interesting as the causal-explanatory question.

I’m put heavily in mind of the Gang of Four song “Return the Gift” in which the song’s prize-winning protagonist repeats the “Please send me evenings and weekends” refrain.

40

des von bladet 11.09.04 at 4:01 pm

The more socialist the state, the less far personal effort will influence personal outcome.

This requires an unhelpfully idiosyncratic definition of “socialism”, of course. (There is even, horror, a suspicion of circularity – you aren’t secretly defining socialisme so that this is a tautology, I hope?) And the word “far” there also appears to be polemically motivated.

But even I wouldn’t dispute that redistributive taxation and social welfare policies reduce the gain on life’s great effort-to-outcome transducer.

But that certainly leaves open the question of what persons (and societies) are or should be optimizing for.

41

jet 11.09.04 at 4:12 pm

Given there is no reason to believe that the US’s almost doubled growth (in production) over the EU will stop or slow down anytime soon, how long before the difference in the resultant standard of living becomes so glaringly obvious, even the academics figure it out? I’m guessing never. If you can’t watch 1 hour of American tv and figure out that American’s are consumers who always want more, today, then you are unconvinceable.

And I for one enjoy the trappings of relative wealth, the reality of social mobility, the knowledge that hard work will definitively improve my situation, and the knowledge that most US STATES have more diagnostic medical equipment than all of the UK.

42

Bernard 11.09.04 at 4:14 pm

Matt, the problem with questions which tend to be more interesting is that they’re quite a bit harder to nail down. Would you measure the marginal benefits of hard work in terms of happiness, success, enlightenment?

43

abb1 11.09.04 at 4:15 pm

Proponents of the American-style economic system do have a valid point: free riders. Theoretically, once a significant portion of the population is satisfied with the level of benefits provided by the safety net in a welfare state, then they aren’t motivated by either greed or fear and they are likely to drop out of the labor force altogether. Then the system will collapse.

Empirically, I don’t see it happening, but it’s a legitimate concern, isn’t it?

44

jet 11.09.04 at 4:16 pm

Given there is no reason to believe that the US’s almost doubled growth (in production) over the EU will stop or slow down anytime soon, how long before the difference in the resultant standard of living becomes so glaringly obvious, even the academics figure it out? I’m guessing never. If you can’t watch 1 hour of American tv and figure out that American’s are consumers who always want more, today, then you are unconvinceable.

And I for one enjoy the trappings of relative wealth, the reality of social mobility, the knowledge that hard work will definitively improve my situation, and the knowledge that most US STATES have more diagnostic medical equipment than all of the UK.

45

Tracy 11.09.04 at 4:23 pm

Lots of people work more than they absolutely have to. I do. It’s because I like a glass of wine with dinner, and gore-tex raincoats for when I go hiking in the rain, and I like travelling and being thoroughly warm in winter, and I need to pay my library fines otherwise they stop me from getting any more books out, and etc.

Of course my consumption is entirely a result of brain-washing by the capitalist corporate vultures and in Europe no one feels pushed to indulge in such empty, materialistic, pleasures as appreciating the flavour of a NZ sauvigon blanc, risking hypothermia for the sake of experiences such as Lake Angelus by full moon, or curling up with a Donna Andrews.

Hiring a professional to do housework vs doing it yourself is not a straightforward substitution. People who do the same thing lots and lots tend to get better at it over time. (E.g. consider how long it takes me to sew a skirt vs. my mother in law who did that for a living for several years) Or at least safer. My dad once wound up in hospital after falling off a bridge, of the 6 people in the ward, the 5 others were there from falling off ladders while doing DIY.

And Americans only work long hours because of a lack of social security? This is the same country that spends umpteen billion on their pets?

46

dk.dk 11.09.04 at 4:26 pm

It’s easy to throw words like ‘utility … empirical evidence suggests … backwards-bending labor supply curve … gain versus loss’ back and forth. What any discussion of work in a post-industrial context (a ‘knowledge society’ if you will) needs is also consideration of consumption. Here I’m talking about Bauman – that society is no longer governed by modernist work ethics, clear separation between work and leisure, and supply side theory (cf. Baudrillard’s critique of Marx’s dualism of exchange and ultility.) Aesthetics – symbols, status, gifts – offer far more explanatory power for why someone would pop up with the name ‘hard work’ to justify their chosen profession; why Jane is an apologist for her patterns of work. Now I’m no clandestine post-modernist, but pure number crunching won’t take you very far either.

47

ladder 11.09.04 at 4:28 pm

“the knowledge that most US STATES have more diagnostic medical equipment than all of the UK.”

Jet,
cite please.

48

dk.dk 11.09.04 at 4:29 pm

It’s easy to throw words like ‘utility … empirical evidence suggests … backwards-bending labor supply curve … gain versus loss’ back and forth. What any discussion of work in a post-industrial context (a ‘knowledge society’ if you will) needs is also consideration of consumption. Here I’m talking about Bauman – that society is no longer governed by modernist work ethics, clear separation between work and leisure, and supply side theory (cf. Baudrillard’s critique of Marx’s dualism of exchange and ultility.) Aesthetics – symbols, status, gifts – offer far more explanatory power for why someone would pop up with the name ‘hard work’ to justify their chosen profession; why Jane is an apologist for her patterns of work. Now I’m no clandestine post-modernist, but pure number crunching, and overarching transcultural talk of free loaders and rationality won’t take you very far either.

49

Bernard 11.09.04 at 4:31 pm

~~
‘The more socialist the state, the less far personal effort will influence personal outcome.

This requires an unhelpfully idiosyncratic definition of “socialism”, of course. (There is even, horror, a suspicion of circularity – you aren’t secretly defining socialisme so that this is a tautology, I hope?) And the word “far” there also appears to be polemically motivated.

But even I wouldn’t dispute that redistributive taxation and social welfare policies reduce the gain on life’s great effort-to-outcome transducer.’
~~

You appear to be agreeing with what I said after struggling manfully to find a way not to.

~

‘But that certainly leaves open the question of what persons (and societies) are or should be optimizing for.’

~

It certainly does. Care to start?

50

puzzled 11.09.04 at 4:33 pm

Jet: And just how long do you think this can last? If current trends continue, will have grown 100% from 1990 to 2020. The EU will have grown 50%. How sustainable is it to have a shiny example of productivity and the benefits wealth begits and the EU falling into realitive poverty?

I am a poor grad student in Economics but I can’t see how number of hours worked have an effect on growth rate. You should use some endogenous productivity growth model and it is still hard to get this result. Please, enlighten me.

51

Matt McGrattan 11.09.04 at 4:36 pm

Jet:
You can smugly point out that “most US STATES have more diagnostic medical equipment than all of the UK.” but hey, we still (on the whole) have better life expectancy and infant mortality rates than the US.

Having lots of stuff isn’t any good unless the having of that stuff translates into the right kind of outcomes.

If, for example, the posession of large quantities of medical diagnostic equipment led to a correspondingly vast increase in life expectancy and reduction in infant mortality AND it could be proven that US-style working practices were directly responsible for the acquisition of those diagnostic machines then that’d be a seriously good reason to adopt, say, more US-style working practices. No such relationship is proven.

As has been discussed ad infinitum US health care expenditure typically exceeds expenditure in most EU countries and yet doesn’t result in substantially more favourable health outcomes.

Similar questions can be asked about ‘productivity’. It’s not an end in itself. If high levels of productivity translate into the right kinds of outcomes then yes, we ought to be pursuing higher levels of productivity. Perhaps at the expense of less leisure time.

However, here again the relationship is far from clear. it’s by no means obvious that citizens of the US enjoy a much higher standard of living than those in the EU.

As has come up on Crooked Timber before, the US doesn’t score incredibly well on WHO health measures, crime statistics, literacy levels, etc. etc.

I’m not trying to be too simplistic here. I’m sure there are arguments to made that, perhaps, US-style working practices to lead to substantially better outcomes. However, it’s far from straightforwardly obvious.

52

Jeremy Osner 11.09.04 at 4:48 pm

Thanks Matt — I love that song but never really had a good idea what the meaning of it was.

53

Rob 11.09.04 at 4:53 pm

Jet’s comment seems to me rather disingenuous. As I said earlier, I’m not sure that the median (the mean would be distorted by the huge income disparities in the states) real after tax income of Europeans is lower than that of Americans: thus Americans are not relatively more wealthy. I would also like to see figures showing that the US is more socially mobile, and a plausible explanation that links this to a relatively laissez-faire economic structure, as opposed to the greater availability of economic opportunity due to natural factors like size and relativ youth. In so far as the greater availability of medical equipment goes, that is because American hospitals compete against each other in a spectacularly wasteful manner: there is no need for every hospital in a city to have an extremely expensive piece of diagnostic equipment, unless one has a system whereby that diagnostic equipment is used to attract patients to that hospital rather than another. Americans spend vastly more on their healthcare that Europeans, yet don’t live any longer. Lastly, hard work is no guarantee of being able to improve your situation unless the rewards that accrue to it are sufficient to do so: I can work twelve hour days at a job that pays a pittance and stay poor all my life.

54

Rob 11.09.04 at 4:58 pm

Yeah, um, everything Matt says…

55

wjh 11.09.04 at 5:14 pm

I think that one has to differentiate between hours worked for workers and middle and upper management in europe. while it is true that workers work less than in the us i am not so shure whether this holds true also for middle & upper management.

Why people work more or less is usually not directly their choice. I haven’t seen much contracts with free choice of working hours. So it might be related to the relative bargaining power of unions in the past.

An interesting question is whether working more is “good” or “bad”. Three short comments.

1. Lets be true neoclassical. The important choice parameter is utility. Working time has disutility which is compensated in monetary terms. Now if my first statement is true. The discussion of working time is related to workers. Here it is relatively innocuous to assume that working has a disutility. Therefore European workers should be better off in terms of utility (but not necessarily in terms of income).

2. What regards productivity. We know that hourly productivity is in some European countries higher than the productivity in the us. This would imply that the optimal working hours to maximize hourly productivity is closer to the lower euorpean level.

3. According to new research (Oulton & I forgot the names, Gordon) a large part of the productivity differences between Europe and the US is due to retailing. It has to be noted in this respect that the american model cannot readily implemented in Europe as there is not that much cheap space to set up shopping cneters. And if shopping in historical city centers costs some degrees of productivity growth, I still prefer car-free city centers to city centers as highways…..

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abb1 11.09.04 at 5:15 pm

Similar questions can be asked about ‘productivity’. It’s not an end in itself.

Actually, 8 European countries have higher productivity than the US, according to this.

Between 1992 and 2002 the US lost ground against most European economies in terms of GDP per hour – the best measure of productivity in the workplace. By 2002 eight of the 15 EU economies (Luxembourg, Belgium, Italy, Netherlands, France, Ireland, Denmark, Germany) had higher workplace productivity (GDP per hour) than the US.

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Matt McGrattan 11.09.04 at 5:22 pm

Abb1:

I looked up those figures too. Productivity growth was higher in the EU throughout the whole of the 90s. In fact EU productivity growth was almost double the US during the period 1990 – 2001 despite the EU having a decrease in working hours over that period.

However, for 2001-2002 (which was the latest year I could find figures) the US did in fact have a significantly higher productivity increase.

So Jet’s right if he’s basing his figures on one single year out of a 12 year period.

I leave assessing whether cherry-picking the figures in this way is a valid way of approaching the ‘productivity question’ as an exercise to the reader.

However, personally I don’t care much about EU productivity levels unless it can be proven that they a) are lower and b) there are some meaningful negative real world consequences that follow as a direct result.

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kevin donoghue 11.09.04 at 5:24 pm

As my contribution to the stock of useless information, may I point out that in 1870 Switzerland’s GDP per capita was 5% higher than that of the USA. The most recent figures I have show that the USA is now 2% ahead of Switzerland.

If we extrapolate this trend over several centuries, the implications for the Swiss are frightening.

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Rob 11.09.04 at 5:36 pm

The fact that the Swiss have had lower per capita GDP growth than the Americans probably doesn’t have anything to do with the structures of their economic systems: one of them is a tiny densely populated state with little or no natural resources, and the other is an enormous, relatively sparsely populated state with huge reserves of natural resources (at least in 1870). It would be quite odd if America was unable to take advantage of that substanial disparity in prospects.

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Bernard 11.09.04 at 5:41 pm

‘In fact EU productivity growth was almost double the US during the period 1990 – 2001 despite the EU having a decrease in working hours over that period.’

Matt, if you’re using the same measure that abb1 is (GDP per hour), this makes quite a bit of sense. To take things to the extremes, if British workers were obliged only to work 20 hours a week, they’d likely be a lot more productive in those hours just because of the need to get things done, wheras if we had to work 120 hours a week our hourly productivity would inevitably dive. If overall productivity per worker grew faster in Europe over that period, that would really be something. If not, we’re still on the same sloping utility curves for work and leisure which individuals will navigate according to their preferences(because people with more leisure tend to value it less too, in my experience).

On the rest, I have some thoughts but my work day is finished (damn lazy European and all that). If the debate is still in progress later i’ll see if I can articulate my perspective.

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dsquared 11.09.04 at 5:55 pm

Unemployment is higher in most European countries, which helps the old productivity a bit (it’s the “batting average effect” – the very worst and least productive workers aren’t part of the labour force in Europe).

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novakant 11.09.04 at 6:05 pm

Well all those hard-working Americans sure seem to have ample time discussing idle questions on blogs.

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jet 11.09.04 at 6:24 pm

Matt,
I’m not talking 1990-2004 productivity growth. I’m talking real GDP growth. Productivity growth might make the EU smile, but real GDP won’t. So do you want more productive per capita workers, or richer per capita workers ;)

Rob, by your arguement, Russia should be the richest country on Earth. I think it takes more than a sparsley settled population and lots of natural resources for rapid growth. And how does this explain Japan?

Argue as you may, the US’s real GDP growth speaks for itself and requires no explanation. Yankee consumerism rules! Viva la clean well supplied hospitals (that anyone can go to and can’t be refused treatment), abundant air conditioning, plentiful heating, plethora of housing, (relatively) low taxes, social mobility, high standard of living, and very ecclectic cultural mix.

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Mrs Tilton 11.09.04 at 6:28 pm

I’m put heavily in mind of the Gang of Four song “Return the Gift” in which the song’s prize-winning protagonist repeats the “Please send me evenings and weekends” refrain.

Yes, but then at least he’ll never need face the question raised in Natural’s Not In It:

‘The problem of leisure
What to do for pleasure?’

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John Kozak 11.09.04 at 6:29 pm

jet: social mobility is greater in Europe than America (hasn’t this has been done to death on this blog?)

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des von bladet 11.09.04 at 6:39 pm

Bernard: I agree with you no further than I have to, for sure.

In particular (although you may not hold the view with which I wish to disagree) I hold that Americans, in particular, do not have an especially free choice in their choice of employment – if employers aren’t offering Yoorpean-style working weeks and holidays, they simply can’t choose them.

And expectations in the jobs they are offered are determined to no small extent by the behaviour of others in similar positions. You called this circular last time, but it is simply the breakdown of a model that overvalues the significance of individual choice (and underestimates the constraints on it).

It may turn out in developed economies that the equilbrium point for work is constrained by (eg) tax policy, but the fact that those are the jobs there are and those are the jobs people take doesn’t strongly imply that they are expressing a preference for that kind of job, except for the militant sort of revealed preference fallaciste (of which Libertoonians are generally magnificent cartoon examples).

If you don’t disagree even with _that_, then I’m all fizzled out, and I apologise for all the names I called you.

As for the kinds of goals I want my society optimized for, it is certainly no coincidence that my second langwidge is often Swedish.

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Rob 11.09.04 at 6:58 pm

I might remind Jet that I never said that the social and economic system had no effect on GDP growth, I merely said that it would be odd if certain natural physical advantages did not have some effect. It would be interesting to compare the GDP growth of the former USSR under communism with that over the same period as the US, although incredibly difficult, as the effects of repeated invasion and accompanying destruction might have had some significant effect on the soviet economy. I’m not sure what to say about Japan, but to regard it as a success for laissez-faire capitalism, given the extensive ties between industry and state, seems to stretching the facts somewhat.

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Uncle Kvetch 11.09.04 at 7:03 pm

Argue as you may, the US’s real GDP growth speaks for itself and requires no explanation. Yankee consumerism rules!

Damn straight, Jet. And while we’re at it, I think we should point out that those silly Euros never factor in the inherent excitement of living in a winner-take-all society like our beloved USofA. The knowledge that I could join the 40 million+ Americans without health insurance just by losing my job adds such spice and zest to my life!

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kevin donoghue 11.09.04 at 7:19 pm

Rob,

I wasn’t seriously suggesting that the Swiss have much to worry about on this score. If it takes America more than 130 years to transform a five percentage-point lag into a two percentage-point lead, it will be many generations before the Swiss become conscious of the relative poverty Jet refers to. They have rather more reason worry about whether Uncle Sam will pay his debts.

To the extent that Switzerland is losing ground, I suspect it has more to do with an aging population than the lack of natural resources; but I don’t pay much attention to the Swiss economy.

“Argue as you may, the US’s real GDP growth speaks for itself and requires no explanation.”

Precisely. It speaks for itself and it has nothing much to say. That was my point.

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Another Damned Medievalist 11.09.04 at 7:24 pm

I miss my forced six weeks, dammit! I worked just as hard in Europe as I do here, but I had better downtime. What I didn’t have was huge house, car, tons of material possessions, too many clothes, etc. What I did have was time, good medical care, public transport so efficient I didn’t need a car, and a community where all of the neighbors (and we lived in a very blue collar neighborhood in Germany) had plenty of time to spend with their kids and families. I work harder here, pay lower taxes (barely) have less time, and still have to mow the lawn and clean and do my own yards — it just means I have no weekends.

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Rob 11.09.04 at 7:30 pm

Kevin,

I confess I don’t pay much attention to the Swiss economy either, but the point was that it is an obvious fallacy to assume that any greater per capita GDP growth is automatically the result of ‘Yankee consumerism’. I think we’re probably agreeing with each other violently here, although the clarification does help.

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abb1 11.09.04 at 7:42 pm

To the extent that Switzerland is losing ground, I suspect it has more to do with an aging population than the lack of natural resources…

What do you mean – losing ground?

World-wide quality of life survey (2004)

Mercer Human Resource Consulting’s overall quality of life survey has revealed that Zurich and Geneva are the world’s top-scoring cities, with 106.5 points. Geneva moves up from second place last year (score 106) and pushes Vancouver down a place (score 106). This move takes account of Geneva’s schools, where standards of education, both in public and private schools, are now rated among the best in the world.

Cities in Europe, New Zealand, and Australia continue to dominate the top of the rankings: Vienna shares third place with Vancouver (score 106), while Auckland, Bern, Copenhagen, Frankfurt and Sydney are joint fifth with a score of 105.

US cities have slipped in the rankings this year as tighter restrictions have been imposed on entry to the country. Increased security checks on arrivals and departures from the country can be very time-consuming for expatriates. Honolulu and San Francisco rank highest, both at position 24 (score 102). Among US cities included in the survey, Atlanta ranks lowest at position 66 (score 94.5).

Cities are ranked against New York as the base city which has a rating of 100. The analysis is part of a worldwide quality of life survey, covering 215 cities, to help governments and major companies to place employees on international assignments.

Recently liberated Baghdad was at the bottom of the list – number 215 with quality of life index=14.

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Jason McCullough 11.09.04 at 7:47 pm

Mysteriously, these analyses tend to use “average income” when “median income” is a lot more meaningful, seeing how virtually all the income gains of the post-1960s has gone to the top 10% or so.

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jet 11.09.04 at 8:13 pm

Uncle Kvetch,

A minor point, but one that is often overlooked is that in the US those 40 million uninsured americans have to be served in an emergency room reguardless of ability to pay. And that all states have programs to help pick up the tab for the uninsured. And (yes another and), one of the largest cost to public hospitals is writing off the debt of those who had no insurance, didn’t get on the state programs, and were forced into payment programs that they coulnd’t make good on.

So while you may rack up an amazing amount of debt, there will be 0% interest, a good chance of having it written off, and only a few more hoops to jump through for treatment. It isn’t like we have people dieing in the streets because they are refused chemo.

CSPAN often shows some interesting quips from PM’s in England telling Tony to do something about the untreated. I’d certainly rather have a system where the problem is the uninsured (in debt) rather than the untreated (dead).

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ladder 11.09.04 at 8:16 pm

“rather than the untreated (dead)”
Cite please.

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jet 11.09.04 at 8:20 pm

Abb1,

Haha, good one. Maybe the South side of Manhattan ranks 100. That meta-scoring of cities is about as useful as a yard stick at an inch-worm contest.

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Rob 11.09.04 at 8:32 pm

Free access to an ER is not the same as free access to all medical treatment (apart from some cosmetic surgery and fertility treatment, I think). Knowing you have to pay for a minor complaint is a substanial disincentive to going and getting it treated now, cheaply and efficiently, rather than waiting until it is more serious, when it’ll be free at the point of demand, although more expensive to the tax payer. There are very occasionally cases of people dying in Britain because they are shipped between hospitals for treatment, but because the Tories like to use them to bash the NHS, they inevitably get quite high coverage, and I can’t remember one for a couple of years now. The fact is Americans spend more on health care and their health care system is no better.

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Uncle Kvetch 11.09.04 at 8:43 pm

And (yes another and), one of the largest cost to public hospitals is writing off the debt of those who had no insurance, didn’t get on the state programs, and were forced into payment programs that they coulnd’t make good on.

All of which contributes to enormous waste, with the result that we spend far more than any other industrialized country on health care and have nothing to show for the additional expenditure.

An emergency room is about the least efficient place imaginable for the delivery of non-emergency primary care.

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jet 11.09.04 at 8:45 pm

Rob,

How about a metric for your claim that US health care is no better than UK health care. How about we use the number of per capita diagnostic tests prescribed by Dr.’s in both systems? Maybe the per capita incidents of staph (or any new infection) while undergoing treatment in a hospital? Maybe average age of medical equipment? Survival rates for disease?

And these don’t even touch the issue of how to deal with malpractice.

And your disincentive arguement doesn’t hold much water with me (or most). So kids with ear-aches don’t get treated as often. Kids with ear aches for more than a week or so still get teated. And from a consumption point of view, this disincentive is a positive not a negative. People with unserious conditions that will resolve themselves shortly shouldn’t be wasting medical resources unless they have the ability to pay for the waste. And if they are the ones footing the bill, then they can waste all they want. Hard to argue against that.

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Rob 11.09.04 at 8:56 pm

So far as the incentive argument goes, I think you must miss my point. Most of the time people get ill, it’s not immediately obvious that it is potentially life-threatening: it’s apparently unserious. If you have to pay to get non-emergency medical treatment, you don’t go. If it then develops into a serious condition, you are likely to cost enormously more to treat, and to die. That’s the disincentive effect. Treatment costs more and more people get seriously ill and die.
As far as the quality of medical care goes, I don’t have the stats to hand, but I think it is generally recognized that UK medical care is generally of the same standard as American health care (despite decades of chronic under-funding, I might add) by organizations like the WHO and OECD and so on. Also, using comparisons like the number of diagnostic tests is particularly unhelpful: of course a medical system run on a for profit basis is going to do more expensive tests than one that is merely run with the aim of making people better. I suspect that the same is true of comparisons like the age of equipment.

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jet 11.09.04 at 9:00 pm

Uncle kvetch,
Perhaps we are on this than you think. I’m all for strengthening the state programs that provide care for the uninsured. This, to me, is a much more optimum solution than blanket coverage that vastly alters the culture of our medical system, which many would argue is mor dynamic, better designed to create progress, and more appropriate to a consumer culture (you get to pick and chose).

So while emergency room visits for non-emergency room care is expensive, the solution is not solialized health-care, just an expansion of our already existing socialized system for the uncovered.

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Glen 11.09.04 at 9:03 pm

No time to read all the comments above, so maybe someone’s already said this. But really… all you’re talking about is the backward-bending supply curve. That theoretical and sometimes actual possibility hardly refutes Will’s hypothesis. Yes, individual labor supply curves sometimes slope downward, but *usually* they slope upward.

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John Kozak 11.09.04 at 9:05 pm

On gross indicators like infant mortality and life expectancy the UK does slightly better than the US.

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jet 11.09.04 at 9:10 pm

Rob,

I think it would make for an intresting study to see if the “disincentive” effect offset the harm done by fewer diagnostic tests and older equipment. I enjoy newer machines and hospital staff’s fighting for my business. In the US, hospitals advertise on tv touting their wares. If they suck, you can go to another place trying to take their business. No one would argue that a centralised economy is better than capitilism, why doesn’t this hold true in medicine? Shouldn’t service providers compete? Long lines tend to cure themselves.

This is of course at the cost of 40 million stuck on state programs in county hospitals. But do you sacrifice the health of 260 million for the marginal benefit of 40 million?

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abb1 11.09.04 at 9:13 pm

Jet,
what is useful? At least this a survey based on certain methodology, unlike your rhetoric: Yankee consumerism rules! Viva la clean well supplied hospitals… etc. Haha, indeed.

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harry 11.09.04 at 9:29 pm

Jet,

we’re still waiting for the figures on social mobility. By all traditional analyses it is no greater in the US than in other OECD countries, and *is* greater in Sweden. I have a not-very well-worked out from the traditional way of doing the analyses, which would push Sweden back into the rest of the groups, and might even get the US into the lead. Have you worked it out?

But my ill-worked out dissetn doesn’t take quality of life issues into account. I’m glad you enjoy being richer than your comparators. I hope they don’t get as much disbenefit from being be.ow you as you get from being above them.

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Rob 11.09.04 at 9:36 pm

I think you misunderstand my point with regard to diagnostic tests. My point is that if there are two ways of checking for some illness, a profit-oriented one will uniformly tend to choose to use the more expensive one, whereas one oriented towards the health of its patients will tend to choose the cheaper one. Profit-oriented systems will be able to get away with this because it is quite hard to create a properly functioning market in health care: for one thing, the informational costs are very high. My point is, US hospitals cost more for no better treatment.
I also think that you misunderstand the situation in Britain. We have a private health care system for those willing to pay. On the perhaps dubious assumption that those who were not happy with the NHS would pay, people must be happy with the NHS since they don’t defect in large numbers. Further, it’s not like you don’t have some degree of choice about where you treated on the NHS. If you don’t like one hospital, you can be treated somewhere else (at least in cities). It’s just that we don’t use market criteria to fund or pay for (most) medical treatment because we recognize (as do you, regarding emergency medicine) that there are substanial moral and economic externalities that a market would miss, even if we could get a perfectly functioning one. I don’t think our basic positions, at least on this issue, are that far apart.

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ladder 11.09.04 at 9:47 pm

jet,

How is that going to reduce costs?

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paul 11.09.04 at 9:56 pm

I keep reading threads like this and they’re almost as tedious as those on Israel and the Palestinians.

As I understand it, the trade unions in Europe engaged their industries in various ways — industrial actions or negotiations — and took cuts in work day/work week rather than money as their reward. Here in the US, we went the other way, striking for a higher wage (wages != standard of living).

In other words, it’s a choice: we chose money over time. Interestingly, time can’t be devalued or debased: a week with your kids on the beach is seven days long, while the dollar’s value is more volatile.

For whatever reasons, a nation that could go from guaranteed launch failures to sending two men to the moon and back in less than a decade — 40 years ago — won’t agree to work less that 50 hours a week into one’s 70s and won’t establish a reliable system of healthcare for everyone, regardless of ability to pay. Some choice.

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Uncle Kvetch 11.09.04 at 9:56 pm

So while emergency room visits for non-emergency room care is expensive, the solution is not solialized health-care, just an expansion of our already existing socialized system for the uncovered.

You mean something like the one Kerry was proposing?

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Slex 11.09.04 at 10:12 pm

I haven’t read the paper in question, so maybe I’m missing something, but working more is the last thing that would occur to me once taxes are lowered. I will just dispose of more money to spend during my leisure time.

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washerdreyer 11.09.04 at 11:26 pm

Dsquared –
When I was learning quantificational logic, the example was barbers who only cut the hair of…, not lawnmowers. I can’t remember if it was in our text or if it was the professors example though.

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jet 11.10.04 at 1:34 am

Harry, there I go misusing those pronouns. I’m certainly not rich by anyone’s standards.

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wood turtle 11.10.04 at 5:22 pm

Farting around, farting around….Did anybody ever figure out exactly what that expression means?

Are we making the world a better place by fartingaround? How so? Think about it. Then THINK AGAIN! HAHAHAHAHAHAHAHAHA

Oh, abb1 I see you are are reverting back to your old obnoxious presumptuous cantankerous self. I had high hopes for you and you have really really let me down.

Oh, and one more thing abb1. I remember once when you were in a similar mood you said “What is your f—ing problem anyway,” and I would just like to inform you that I have not had any problems in this area so far, but REST ASSURED that you will be the FIRST PERSON on my list that I will contact because you are so EMINENTLY KNOWLEDGEABLE on so many subjects, because all you probably do is READ READ READ and so of course you would have all the answers for me. So, in other words, abb1, YOU’RE MY MAN!@!

HAHAHAHAHAHAHAHAHAHA. Get ready abb1, SUPER FUN TIMES AHEAD!@!

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Kevin Carson 11.10.04 at 6:13 pm

Ummm, here’s how it works: if labor had full disposal of its product, and full control over its work hours, people would work until the marginal disutility of another hour’s labor exceeded the marginal utility of consuming another hour’s labor product.

What about that is so friggin’ hard for alleged “free market” economists to understand?

The slave-owner’s lament in Grundrisse was only one example of a complaint that has been common to the owning classes throughout history, when they have perceived that the working classes had too much access to the means of production and too much control over their own labor. “If we don’t rob those shiftless laborers of most of their product, they’ll only work until their needs are satisfied–and then we might have to work ourselves. Egad!”

You can find many expressions of this same sentiment in the following chapter from Mutualist Political Economy: Chapter 4: Primitive Accumulation and the Rise of Capitalism

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Kevin Carson 11.10.04 at 6:32 pm

BTW, Bernard,

As one of those free market libertoonians (who apparently aren’t popular among some on this thread), I’d also like to comment on this remark of yours: “The more socialist the state, the less far personal effort will influence personal outcome.”

What you’re describing, the divorce of effort from reward, is less a result of what you call “socialism” (which apparently equates to centralized control) than of centralization and hierarchy in general. The less decision-making control that workers have over how they do their own work, the less fully are the utilities and disutilities of a given action internalized in a single actor. Most large corporations have grown to the point where it is prohibitively expensive even to track the results of an individual action, let alone see that those results are internalized by the actor.

Government is, primarily, a mechanism for creating externalities: especially for forcing the taxpayers to absorb the operating expenses of big business, and thereby rendering large, inefficient organizations artificially profitable. Without such interventions in the market, production on the average would be much smaller-scale and less centralized. Labor would have much more control over the production process, and would keep its full product (as Benjamin Tucker said, the natural wage of labor in a free market is its product).

That’s what *I* mean by “socialism.”

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Kevin Carson 11.10.04 at 6:38 pm

BTW, Bernard,

As one of those free market libertoonians (who apparently aren’t popular among some on this thread), I’d also like to comment on this remark of yours: “The more socialist the state, the less far personal effort will influence personal outcome.”

What you’re describing, the divorce of effort from reward, is less a result of what you call “socialism” (which apparently equates to centralized control) than of centralization and hierarchy in general. The less decision-making control that workers have over how they do their own work, the less fully are the utilities and disutilities of a given action internalized in a single actor. Most large corporations have grown to the point where it is prohibitively expensive even to track the results of an individual action, let alone see that those results are internalized by the actor.

Government is, primarily, a mechanism for creating externalities: especially for forcing the taxpayers to absorb the operating expenses of big business, and thereby rendering large, inefficient organizations artificially profitable. Without such interventions in the market, production on the average would be much smaller-scale and less centralized. Labor would have much more control over the production process, and would keep its full product (as Benjamin Tucker said, the natural wage of labor in a free market is its product).

That’s what *I* mean by “socialism.”

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Tracy 11.11.04 at 11:07 am

I’ve been thinking about those Quashees enjoying their leisure time once they’ve covered their basic needs, vs. modern people working considerably longer than would be necessary to keep body and soul together, and I think there’s an explanation other than “modern advertising creating an empty demand for material goods”.

I suspect that at the time an extra hour’s labour by the Quashee would not have bought much at all – maybe enough to buy a hair ribbon. And if you took that time in leisure you could make yourself an ornament out of some flax and shells or coloured stones. And I would not be at all surprised to learn that the Quashee had ample reason to believe that any effort to accumulate assets in the long-term would risk appropriation by the whites. (In other words, why bother working on your home if there’s a large risk it will be burnt down in some riots?)

Nowdays that extra hour’s labour can buy a bottle of wine, or a DVD, or a day’s air-conditioning. Assuming that the value of an extra hour spent lounging around in the sun, or playing with kids has not changed since the time of the Quashee, we would expect at the margin as the value of what an extra hour’s labour buys in terms of pleasure increases, more people would choose an extra hour’s labour.

Interestingly, if all other things were equal, I wonder if there would be more work done by people in countries with miserable weather than by people in countries which the climate is such that it is more frequently nice to sit in the sun and watch the world go by.

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Pete 11.11.04 at 11:37 am

I just wonder what all those people describing life in terms of income-maximisation are doing posting to this thread. Is the marginal utility of reading comments and typing in a textbox higher than the marginal value you’d recieve for working?

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W. Kiernan 11.15.04 at 10:25 pm

jet sez: A minor point, but one that is often overlooked is that in the US those 40 million uninsured americans have to be served in an emergency room reguardless of ability to pay. And that all states have programs to help pick up the tab for the uninsured.

No, you’re wrong. If you’re absolutely, positively dead broke you can get ordinary medical care utterly for free in the local emergency room. But of the forty million plus Americans without health insurance, only a small percentage are completely penniless. If you’re too poor to buy insurance, and you become sick or injured, and if you own anything, once you resort to the emergency-room to get medical treatment, you’ll get the treatment all right (probably far too late) but you’re also going to lose everything you’ve got.

For example, imagine your family brings in $25,000 a year. That’s not totally unskilled burger-flipper wages, incidentally; it’s better than twice the minimum wage. I’ve met intelligent, industrious workers who told me with something like joy, something like amazement, how they had never earned so much as twelve dollars an hour at any job before, and what a delight it is, being able now to take the kids to WalMart and buy them all the school clothes they need.

On $25,000 a year gross, you can’t afford rent, food, clothing, gas-insurance-repairs for your car and health insurance. You obviously can’t do without the first three and you need your car to keep your job.

One day your kid falls ill. Too bad you can’t afford a clinic when the first symptoms kick in, but that’s Life in America, ain’t it. Your kid gets sicker. And sicker. Now what’s going to happen to what little your family has got? And once the repo man has taken all that away, and once you’ve been evicted, where and how is your family going to live?

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