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Comment by Xophmeister | Hacker News Reader

Why did Keynes believe that, say, a doubling of efficiency (through technology) would half work time for everyone? Sure it’s a solution to the equation, but so is what actually happened[1]: half the workforce gets laid off. This halves the costs, which facilitates price reduction and thus a competitive edge. Did Keynes believe that benevolence would win over profit? Don’t get me wrong, I wish it had, but that seems a little naive.

[1] It occurs to me that another solution is to keep the work force, but double the work. This also happened; it seems like there are plenty of jobs that are just busy work with no real purpose.

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> what actually happened[1]: half the workforce gets laid off.

The article says as much:

> In a sane world, Russell thought, the factory would simply halve working hours, maintaining the same wages but greatly increasing the time that the workers could devote to the joys of leisure. But, as Russell observed, this rarely happens. Instead, the factory owner will opt to keep half the workers on the same hours and lay off the rest. The gains from the advances of technology will be realised not as an expansion of leisure but rather as drudgery for some and jobless destitution for others, with the savings enjoyed only by the winner, the factory owner.

The reason this didn't happen is two fold.

First, workers gain skill by the hour. It's more efficient to have forty hour work weeks for a workforce of half the size than twenty hour work weeks with the same size.

Second, many things in the economy are arms races. Housing[0], cost of education, status goods, actual arms for our militaries, etc. We have enough productivity for things like food to be very, very cheap but it just drives up prices elsewhere.

[0] Specifically land value, but also housing in the physical sense since raw materials and labour are not unlimited.

Zeroth, the more unemployed, the more downward salary pressure on the employed.

edit: the reasonable expectation is that half of the workers are fired and the remaining workers' salaries are cut. The Luddites were a result of noticing technological improvements lowered wages and employment at the same time.

It's kinda weird how the labour is almost always in oversupply.

Won't be if basic income becomes available :)

Is the sane solution then not some sort of encouragement of greater stock market participation? Where when the "factory owner" wins, everybody wins, because everyone has shares in the factory?

Then the incentives are aligned - the more productive, technologically advanced the economy is, the greater your stock returns and the better off you are.

Is that not more or less the case for many people that have lived in the developed world for generations? You do not need to save a lot every month in order for it to compound into a meaningful stock ownership after 200 years. Median household net worth in the UK is £300'000, and that includes many many recent arrivals. For comparison, with a net worth of £500'000, you could draw ~£15'000/year in perpetuity if you wanted - is that not a much better alternative to UBI?

Are there societies which have smooth scaling on workers? i.e. where the cost of adding a new worker for 20 hours is about the same as the cost of adding 20 hrs to a worker working under 20 hrs?

I like to think of what an amoral money machine would do as a base-case for what we set up the incentives to be. Then we can tweak the incentives to get the outcome, but we start with the machine. After all, moral outrage alone rarely has lasting change without policy change.

Things that encourage fewer-people w/ more-work-per-person are:

* Laws that explicitly disincentivize larger companies (that kick in at >24 people or >49 people, or that are flat per-person-on-payroll fees like medical benefits)

* The learn rate of individuals given sustained work

* Increased overhead with more individuals (i.e. communication costs, scheduling costs, hiring costs)

There's portions I can't immediately nail like the fact that if I share a desk with someone I can't spray my things all over it like I normally do. My hardware has to be out of the way and clean for the other guy.

> It occurs to me that another solution is to keep the work force, but double the work

I think one other solution is to keep the work force, but double the output. I think this also happened (in addition to the other two that you identified). The overall productivity and output of society has massively increased.

And, of course, output doesn't have to be number of bars of soap.

All of the automation I'm familiar with is making the design and manufacturing processes more fluid, giving faster iterations at reduced cost. This allows the tech/process/whatever to progress faster. You'll finish your product sooner, but that means you can start the next sooner.

This whole concept of having more time assumes there's nothing else to do. There will always be something to do if you're not making something static, like soap.

> half the workforce gets laid off.

Technological progress has made labor productivity itself a lot more uneven and sharply unequal than it used to be when Keynes was writing. So the currently most marginal workers tend to be laid off first, especially given the increasing regulatory barriers that have made low-productivity positions unsustainable since then.

Regrettably he believed far too much in fungibility as well.

As technology increases you need fewer people with higher skills to produce everything, but there is no reason why they should spend all their time producing a surplus to supply everybody else. They would rather stop and have Thursday and Friday off.

We all work in solidarity with those we need to work. Because it is more difficult to share out the unemployment than it first appeared.

The solution is to retire people earlier and have a public job option so younger people can always contribute their labour hours for others. Retiring people at 50 makes sense in a Covid world.

Keynes believed we would as a society, change our behavior (2 day working week etc) to maintain employment.

He was semi right. We've actually made work weeks longer, but less than 50% of people work (at all, let alone full time).

The issue here is equality. Keynes assumed everyone would be viewed ad equal and given the same time off. Instead a large number of people have been allowed to opt out entirely and others have been forced to pick up the slack...

> what actually happened

I can't find the comment, but I do remember someone on HN suggesting that the gains of extra productivity are claimed by a corresponding increase in credit and therefore debt.

If workers controlled the workplace, this is precisely what would happen. It's only because the people doing the work don't control the work that this seems fanciful.

You know, what's funny is that we'll never be sure if that's the case[0]. What guarantee is there that the median socialist voter wouldn't vote for more work for everyone because they want fancier tvs, or more dazzling musical spectacles, or fancier video games, bigger homes, etc? What if society doesn't democratically vote for idleness and quality of life / tranquility?

[0] I mean unless there's a real and successful socialist revolution.

Fancier TVs are not going to make their ~miserable~ (edit: too heavy word) lifes more meaningful. That's what capitalism has made you believe in order to keep you in its chains voluntarily.

Sitting 8+ hours at desk plus few more in a car only to get home and continue sitting in front of a fancy TV. And you call this advanced society or civilisation?

What if the workers actually controlled the factory and not a commissar sent by central planning? There are lots of different ways to do this.

For central planning, one proposal I saw offered that the workers could be organized into sectoral unions that participate as a sector in government. This weight and common interest allows them to counter the weight of voters that ask for too much. It's also large enough of an agglomeration that the workers still represent society as a whole to a great degree.

Well, we have one big agglomeration in the US for policing workers. That hasn't led to positive results for society.

I'm not sure what you're talking about? The police?

The police.

Well there are worker co-ops. Lots of farming is as co-operatives. Sunkist is a cooperative, for instance. https://growers.sunkist.com/

It's a cooperative for owners, not workers. A lot of cooperatives in the US exist for owners.

"Worker-controlled workplaces" are rather common in some industries where capital intensity is especially low, such as legal services (with firms being organized as partnerships; indeed, capital intensity is the main obstacle to this kind of structure in other industries). And yet, top lawyers tend to work quite a bit more than the typical worker.

> And yet, top lawyers tend to work quite a bit more than the typical worker.

I would argue that the reason for that is that they more directly see the fruits of their labour.

and yet a worker getting paid by piece-meal don't?

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