Mo money mo problems

one difference between work and productivity could be relevant to this discussion. i’ve met people who do unproductive work, and people who are productive but have no job - i’m sure you have too. every now and again i meet people who combine both - i think i manage to do this, and feel pretty lucky about it.

we’re obsessed with work in europe - so it’s ironic that unemployment is so high. my own government preaches about working, in the same way that Victorians or early american pioneers did - not just useful for the economy, but redemptive for the soul, a moral duty. the flipside of this is that being unemployed takes on another dimension: you’re not just short of cash, but sinning; letting everyone else down; morally inferior. i’ve never been short of work, but i’ve had close friends who’ve been unemployed for a year or two, and the way society treats them has definitely made the matter worse.

somebody i knew at university now works for a PR firm, which lobbies european governments on behalf of ‘questionable regimes’ (dictators, juntas, etc.) overseas. we don’t talk anymore, for obvious reasons. his work is ridiculously well-paid. another friend has been out of work for two years, but spends most of his time helping out at our volunteer-run community cinema. he’s an amazing guy, intelligent and extremely productive, but unemployed.

i have a pretty set view about which role society would be better off without. i hold out hope that my former acquaintance from university will see the error of his ways, get involved in something that’s productive (rather than counter-productive), but it’s pretty unlikely - and at the same time, i deeply admire the commitment of my friend who works every day to help run a low-cost cinema space, for the benefit of a community that’s not exactly wealthy, and which needs more help from people like him.

the current government takes the opposite view to me. my university acquaintance might do things that mean we have to spend more on foreign aid, mediation and armaments, but he’s in work. my cinema friend is threatened with the withdrawal of his benefits if he doesn’t take a low-skilled job in retail, which would mean giving up most of his work in the cinema.

the government has a real problem, which ever party is in power. simple measures such as GDP, taxable income and that sort of thing, cannot differentiate between work and productivity. those concepts have been fundamentally disconnected from each other, as a result of a myriad of social and technological changes across decades. people talk of ‘McJobs’, the feeling that you’re being paid minimum wage to stand around in a cheap uniform, usually in the low-skill service sector, essentially doing nothing.

despite its best efforts and (often) good intentions, measuring productivity separately from work from the vantage-point of the government is extremely challenging.

i don’t really have a solution. it’s tempting to think, as is the current vogue, that we might solve the problem technologically, and maybe that’s possible. real-time data in a digital form, and network analysis, might allow us to see the importance of inter-related activity, and value some people because they’re a useful part of a social ecosystem, even if they make very little money. i have a different view, though, which is that the answer (when we find it) will be fundamentally social, rather than technical. we need to stop fetishising paid work, and value socially-minded productivity more. that means we need a new way to value a productive human hour - not just the current measure, which is the hourly wage.

our goal should be to work less, not more, but be more productive. and we need a way to support this - not the current, informal one (which provides very little security), where young people must survive, sometimes for years, on grants or benefits whilst doing wonderful things for others. what about a low, guaranteed wage for full-time community workers, or something similar? are ideas like that too radical? do they miss the point? it’d be nice to discuss, because i’m pretty certain the current set-up isn’t working.

Radical?

Edwin, I really like the way you lined out in a simple way a thorny problem. The disturbing part is that, as soon as you identify the problem, you are carried all the way to the theory of value. I am reminded of my days as an economics student (which, come to think of it, I still am - but it meant different things back then): we had some pretty interesting intellectual fossils to play with, stuff that could have spun a whole other economics but didn’t. One of them was the view, prevailing in the early 19th century, that you DON’T need to value an hour of human labor, because an hour of human labor is THE UNIT OF MEASURE that you use to measure other things. This  view, known as the Labor theory of value, makes a lot of sense in the context of your example.

I myself have argued  elsewhere that basic income can be deployed as innovation policy. People - especially young people - want to save the world anyway, and if they know their bills are paid a lot more of them will give it a go. This might sound radical, as you say, but it is actually pretty mild compared to throwing the whole mainstream value theory out the window. And I think it could work; but to be honest I have never done the math, and I don’t believe anybody has.

thanks

hey thanks! ahh, the old labour theory of value… i had to give away a few of my economics textbooks recently due to moving house, which has created the weird situation where thinking about economic theories can make me feel nostalgic!

i read your piece, which was great. it reminded me of a scheme a filmmaker friend of mine took part in a few years ago. the idea was this: in normal film financing, a sum of about 1 million pounds/euros is considered ‘ultra-low-budget’, and films like that have only a tiny chance of success. in the scheme my friend took part in, an investor put up £1million but instead of making one film, they got ten different directors to make a feature for £100k each. it’s almost impossible to make a film for that money, but it can be done. the idea was that the films would have far less chance of success than a £1m film, but they’d have a lot more than 1/10th of a chance, so collectively the odds that one of them would do well were much, much higher than a single £1m film. and if just one film did well, it would pay back the investment of all ten, and hopefully some more. what you were saying is obviously the same logic, though the difference is even more dramatic (citizens vs. big institutions, rather than small films vs. even smaller films)

even though, like you say, no-one’s done the maths, it would be pretty awesome if someone gave it a go…

Depends on the cost function!

Technically, that would depend nonlinearities in the cost function. I am not familiar with film making, but in general a problem is that inputs are acquired in quanta. So, 100$ will buy you a widget, but 99$ will buy you zero widgets. Any widget-deploying scheme with less than 100$ budget has zero probability of working.

Income, now, that’s different. Because a low income is still an income; and because people are eating anyway. That raises all sorts of interesting double counting problems: arguably the cost of basic income to the publiccoffer (or whoever is paying for it) is something, but its social cost is nothing. Which makes it more difficult to do the math, of course.

Power ,Current Monetary Creation, Hoarding, …

In the current mainstream system,

what I see is “political power”  :

those who are paid, are paid because they satisfy the political choices and wishes of the ones who ultimately have political power in the form of access to credit creation ( requires discussing “monetary creation” ), usually guaranteed by some already accumulated capital / property.

A hiearchy, a system of control, in my own interpretation.

Those who do not satisfy the system of control, by furthering its control even further,

are marginalized.

Those who satisfy it, get the right to survive.

The ones who feed its interests best, even if at the expense of society and our survival at large,

in my view get rewarded through benefitting from more power, often through money.

///

I do not see any relation anymore between what one produces, or contributes to society.

( in some cases, contributions by producing less )

and rewards by having access to money / the vectors of interdependence required to survive by accessing ( defacto ? ) surplus production.

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Changing such dynamics, in my view, requires using alternative resource information systems, and various forms of measurment / meta data related to our needs, contexts , available resources and conditions for their sustainability - growth - long term usage , resilience, etc

///

In the current system of monetary / credit creation,

artificial scarcity of the tools for interdependency / money

and exponential growth of debt , is embedded.

Interest means that the more we earn money, the more money exists,

the more , as a society, we enter and accelerate the spiral of exponential debt,

hence our continual and progressive enslavement to those who hoard money and concentrate power by purchasing and controling more and more of the economy through concentration of property, further monetizing any resource, up to a point where we have no other choice but to accept the conditions of those in power to survive.

The hierarchy of financial wealth, through the increasing financialization of the economy, becomes to powerful in further extracting all money from the bottom, that there is no money left for a great deal of the population at the end of the month to enable any form of investment.

Wage Slavery.

Yet, as capital does not require as much workers anymore to produce, there is not as much need for wage slaves.  A great deal of the population becomes redudant. This enables capital to reduce wages, as there is more competition between workers to have access to these jobs.  As wages stay stable or decline, workers resort to borrowing from the rich to continue consumption, until borrowing has reached credit peak.

As the monetary mass needs to increase exponentially to avoid collapse, the financially rich need to find strategies to create monetary mass through speculation.

Earning money becomes totally disconnected from the “real” economy,

yet , for example through speculating on housing or on food stocks,

further creates artificial scarcity of money for the masses of the population by sucking up whatever money there might still be in the “real” economy.

If and when the economy then truly collapses ( when the cycle of exponential credit creation gets interrupted ) , accumulated money from the very rich can be used for them to buy now foreclosed properties and bankcrupted businesses for a fraction of their real value,

further concentrating wealth.

It is a truly great system of control… ! … in my opinion.

And it is up to us to create alternative resource allocation information systems.

Other information systems then the metadata of interest bearing centrally owed debt.

What about this p2p production system?

Hi guys,

I came across this article yesterday on p2p by the one and only Michel Bauwens, it may not answer all your questions Edwin, but I see it as a start.

A Blueprint for P2P [Peer to Peer] Society: The Partner State & Ethical Economy

http://heroesandhobos.org/2012/04/19/a-blueprint-for-p2p-peer-to-peer-society-the-partner-state-ethical-economy/

So, what are the economies of scope of the new p2p age? They come in two flavors:

  1. The mutualizing of knowledge and immaterial resources
  2. The mutualizing of material productive resources (eg. collab consumption)
So, what will the new system look like if economies of scope become the norm and replace economies of scale as the primary driver of the economy and social system? We already mentioned the global open design communities, and we suggest that it will be accompanied by a global network of microfactories, who are producing locally, such as the ones that the open source car companies like Local Motors and Wikispeed are proposing and which are already prefigured by the networks of hackerspaces, Fablabs and co-working spaces.

This means we also need global material organisations, not to produce on a global scale, but to organize our material activities so as to minimize the ‘common costs’ of the various networks, and not just in terms of sharing knowledgeNot sure if it may be a solution for all your questions here Edwin, and I wouldn’t have shared if it weren’t framed as a systemic approach. For now, this is limited to the immaterial fields and it had nothing on the money value of work, but on the community value, but who knows, it is step forward. 

thanks!

hey noemi,

thanks for the article, it was really interesting. i was worried as i read that it was going to collapse into ‘third way’ talk - especially when it mentioned philip blond! - but i thought it was thought-provoking.

one thing i wasn’t so keen on and one thing i loved:

it seemed to not really see a problem with technocracy replacing democracy on a local level. i have many strongly-felt problems with this, which i won’t bore anyone with because i think they’re pretty widely held!

i really, really liked the idea of ‘economies of scope’ instead of ‘economies of scale’ - as in, i think it’s one of the most fantastic ideas i’ve read in weeks! i think i’m going to spend the rest of the day thinking about it, whether i like it or not. it made me think of this - a TED video i saw a few months ago.

i’m so grateful to you for putting the article up. it’s really making me think. one of the most interesting problems is how we reward participation in that sort of economy. in bauwens’ article he seems to have little problems with the corporate sector funding it (directly or indirectly), but in jacubowski’s talk there seems no prospect of him making any money (and fortunately he doesn’t seem to want any). now, i don’t want money for its’ own sake, but i don’t want to get kicked out of my apartment either so i’ll need some. i wonder how such a fundamental shift in economic modelling could take place and be sustainable…

Frustratingly unproductive

Important topics here - thanks for the discussion. The best material known to me that examines unproductive work in all its forms is from a fellow Edgeryder:

Kevin Carson: “The Great Domain of Cost-Plus: The Waste Production Economy”

It’s a stunningly elaborate view on all the modes of waste production, also pointing to all other relevant literature. After own experiences with nonsense work for some customers, and then after reading this, I got so frustrated with economic realities that now I cannot motivate me to take part in that system more than absolutely necessary … .

One could go on and on here … adding to Carson’s treatise the waste from multi-parallel product and software development in competing companies, the waste from developing and marketing bloated product ranges of all-to-similar products, the waste from the 25% of food that go to waste before consumption (German example), the waste from dead software and disrupted systems when a company gets liquidated, and the waste from producing all kinds of non-essential goods while others die of ridiculous reasons …

Put this explicitly in the handbook?

Hi Edwin,

Tried to reach you on twitter but couldn’t remember your handle and the search was useless,… so I’m writing here :slight_smile:

I was wondering if it is worth, based on this conversation,  to make a point on productivity in the analysis of Edgeryders making a living… the one that will go in the transition handbook and was just posted online by Dunja here. There’s some reporting of youth underemployment (part time jobs or temporary work ) that apparently is caused by inability to find full time jobs,… which I’m not sure is the case for Edgeryders, who sometimes would rather take less paid work and be socially productive.

I made a comment already in this discussion here on the platform, where I posted a summary of the full paper… what do you think, worth a try to ammend the report?

http://edgeryders.ppa.coe.int/making-sense-edgeryders-experiences-where-do-we-go-here/mission_case/making-living-reloaded