As an amateur-everything, I empathize with the ludicrously bad economics in Das Kapital. Marx was a polemicist, not an economist, and diluted a compelling philosophical idea with tautological economics and dystopian politics in an attempt to be a more meticulous argumentation in the mould of Darwin (to whom he wanted to dedicate Das Kapital, but was politely turned down). Whether it’s a certain admirably guileless intellectual honesty or a ideologically-possessed blindness, there’s a passage where he starts off with the basic communist premise (a worker’s hours are currency) but then has to add condition after condition to address the obvious contradictions (what if I spent 1000 hours making paper airplanes because I’m frivolous, or what if I spent 2000 hours making a single airplane because I’m inefficient?) with nuances like ‘useful work’ or ‘socially necessary undifferentiated labor’ and ends up at utility, and supply (if market price is less than value of labor, overproduction has occurred), leading us so conveniently at free market capitalism.
But strip away the weak theoretical justification and practical execution and you reveal the fundamental kernel of an idea that is deeply humanistic. I don’t mean the communal living or the cooperative ethos or labor policy, but something that’s paradoxically become entirely lost in the noise of collective identity — individualism. Marx took Hegel and Feuerbach a step farther, applying the theory of alienation to human potential. Our basic currency, our essence, is our energy and capacity for creation. Everything about current society alienates us from this essence, spending the energy on tasks we don’t care for, giving up ownership of our creation and output to a supervisor or boss, producing monotonous and low-value output like drones. So far so good. If he hadn’t ruined this quasi-mystical insight with bad economic policy and worse political policy, perhaps that great engine of our age, capitalism, might have attempted more seriously to solve the underlying problem instead of defensively doubling down.
An efficient free market, once sophisticated enough, can price into its models the cost of alienation. We have a sad stand-in for this even today, employee motivation and productivity. High performance teams show commonalities that approach something like eliminating alienation from their essence of creative spirit. Since we can’t wait for this natural experiment run by 100 people in Silicon Valley, and the HR/PR teams of Google, for a working sustainable model of work that is applicable to the majority of the labor force, we’ll instead ask that great paragon of efficiency and vision, the state, to step in and legislate. The Netherlands has a Working Hours Act, that mandates a maximum of about 40 hours a week over the year (45hrs minus vacation time). Recently, there’s been a lot of noise about Microsoft’s 4-day week in Japan, and about how the United States Making Work Pay Tax Credit act had more to do with recovery from the 2008 financial crisis than any actual financial policy. It’s a nice idea, but it’s so disappointingly incomplete.
Let’s say we want to maximize production, P = H (hours worked) * X (productivity). The research seems to be neither comprehensive nor decisive about the impact of working hours on productivity. Even if it was, one way or the other, wouldn’t it be a copout to revert to whatever the ‘mean’ results are? If we’re currently in a paradigm that assumes working hours to be directly proportional (although not linearly) with total production, then surely the new paradigm can’t be another simplified continuous function? What we should be interested in, instead of trends and functions, are clusters based not on the type of work but on the type of personality.
People are far too varied, in their essence, in their output, and in their appreciation for the process that leads from one to the other. Simple answers are for simple times. We’re too complex now to be satisfied with a result like ‘reducing work hours increases average productivity’. The social democrats of Northern Europe have too many green ticks in society for us to blindly implement their lovely strategies. There are too many correlates. In pure market terms, they have a monopolistic state that can safely execute elastic labor policies without being undercut by competitors, perfect substitutes as education is excellent enough to raise the level of the labor force, excellent market information, and fewer arbitrage opportunities as society is less unequal. For the rest of us, especially those of us with exactly none of these things and the suffix ‘ing’ in the develop status, what we need isn’t the Working Hours Act but instead better models and better variables.
Consider how different personalities might react differently to different conditions of labor quantity, quality, output, and happiness:
Productivity vs Hours
- Productivity goes way up, such that HX > P1. This fits the stereotype we have of highly intelligent and creative people, strong on openness. These are multi-taskers in the right sense, i.e not parallel or serial tasking but true multi-tasking, using their large variety of hobbies to cross-fertilize and synthesize new ideas. Our assumption of lobbying for policy like the Netherlands rests on the hope that this segment is the largest segment. I don’t want to be a pessimist, so I won’t say the probability of this is 0, instead I’ll say it is a low single digit %.
- Productivity goes up, but not enough, HX ≤ P1. The gains in productivity have difficulty overcoming the loss in hours, but as long as P is somewhere near the previous production, it is still a positive outcome. I value efficiency, and if the same amount of work can be done in less time, or we take just a small cut in work for a large cut in hours, it’s a net gain for society.
- Productivity stays the same, HX < P1. I have rote routinized work, and the hours make no difference to my productivity. I enjoy more free time, but I probably get paid less. Either way, if productivity is a flat function, I am likely commoditized labor highly substitutable in the market and a reduction on hours is a marginal cost that decreases my value further.
- Productivity goes down, HX << P1: I have a setup time with slow ramp up times or cool down times. I can’t hit the ground running nor can I pack up and leave quickly, a function of my working style, the limitations of my equipment, or the constraints of my environment. Production plummets. I’m not especially happy either, because I achieve flow states far less now.
Production vs Utility
- Arbeit Macht Frei: U(P) >> U(X). I’m an investment banker, a lawyer, an obsessive mathematician or a computer science dropout who’s convinced about the ability of my revolutionary new algorithm to rewrite the global financial system. My only problem with life is that the day only has 24 hours (like Feigenbaum I’ve tried quasiperiodicity and given up after disorienting sunset wakings), and that humans are so primitive we still need this annoying wasteful distraction called sleep. An hour worked at 5% productivity is still more production than an hour not worked. I can take a vacation after I’m dead, and I’ll attack recreational activities like reading books the way I attacked work, and read 100 books in a day. I derive utility from my work, and sure as hell don’t want the state to tell me to take a break and go salsa dancing where I’ll get picked last and my 20 years of zero attention to personal grooming will only make me feel worse.
- Arbeit Macht Knechtschaft: U(P) = 0. I hate my work. I want money to live. Same money for less work, why yes don’t mind if I do.
- Welche Art von Arbeit? U(X) > U(P). The quality of work determines my happiness above all. I am energized by high quality work and demotivated by bullshit tasks. I feel good about time spent at a high level of productivity and can go on forever at this stage.
The better variables involve a science language that is still developing. We currently think of productivity the way we think of velocity, a synthetic variable that is defined by P/H. But velocity is quite a meaningless term at any point, since it is a change in distance over change in time. What does it mean then to ask what is the velocity at t=5? It is a term of calculus approximating an ‘instantaneous velocity’ by minimizing the dt time interval over which it is measure, and the integral or area under the velocity curve gives the total distance. This is the same as productivity, it is meaningless at any defined point in time, a calculus term. Yet it has meaning. As does the integral over time that gives us total production. We need a calculus theory of work in order to analyze these properly.
If we really have gone a couple of revolutions past the Industrial one (Information and then Cognitive), it’d be nice to retire industrial revolution terminology like productivity and production, when we have a more psychologically sophisticated term for that quantity of our potential energy that Marx considered us alienated from — Flow state. Flow is great, both for you and for the output you create for everyone. It is also notoriously elusive, fickle, and transient, not the best qualities for a variable we want to optimize for scientifically. But that’s today. Flow study is a hot topic, and one should hope that it makes the jump from artists and tech startups microdosing LSD, practicing mindfulness and talking about discovering their authentic selves, to mainstream science establishing key variables to be optimized in order to reliably and consistently produce flow states.
That brings us to better models. Perfect Price Discrimination isn’t just a theoretical model, we’re approaching it increasingly in the differential pricing we encounter with airlines, segmented retail products, and preferential discounts. With Genomic science, we’re approaching an era of personalized medicine. Our empathy for outliers is encouragingly high, and we’re embracing our differences and capacity for individual expression more than ever. The next paradigm of enlightened models will ideally allow for a greater expression of personal liberties, in systems that cater to people who love work, who love working hard, who love working smart, who love playing hard. There are some difficult questions. Some people are naturally more industrious and energetic, people who actively enjoy 20hr days making boring M&A decks at Barclays. Is it self-evident that they should be valued far higher than a work-averse person? I’m very suspicious of answers that are too vehemently and obviously a yes, especially when I can think of no counter-arguments. This is one of them.
The idiosyncratic work patterns, productivity, and utility of people gets even more complicated when a single person has a certain rhythm where these values keep changing. It’s an impossible task for a system to tap each bit of productivity surplus by identifying all points in phase space like a Lorenz attractor for human energy. Seems like the thing to aim for, if we’re really interested in mopping up surplus, is to create the science and knowledge for people to actively experiment with their personal patterns and maximize individual flow, and set up a platform where this is not only possible but actively encouraged.
It’s a different matter of course that states legislate working hours to protect specific pools of labor like factory floor workers on the one hand, and even skilled labor that has reached its equilibrium in terms of P, H, and X but is now being forced to change by the external force of globalization, like the Swiss grocery store that used to shut at 5pm everyday to go for a nice sunset hike but now needs to stay open all the time because the Indian immigrant set up a 24x7 shop next door. But that’s not about productivity or production, and I find it disingenuous to frame it that way, just like the HR team changing the entire layout from cubicles to an open-plan because obviously it’s cheaper and facilitates denser sardine-packing but given the greasy shtick about ‘boosting networking, productivity, and collaboration’. All of this is of course totally irrelevant if the concept of work is abolished, that noone needs to work for a living and can pursue maximally directed output, truly the asymptote of reversing the alienation of man. Until then, hold my beer while I wait for punch-out time, when I can finally get to the pub for a beer.