The Australian economist and author of Zombie Economics says we need to inspire people with a view of a better society. In short, we need a new utopia.
John Quiggin is an Australian economist. He is currently the Hinkley Visiting Professor at Johns Hopkins University, and is one of the most prolific economists in Australia, best known for his work on utility theory. Quiggin’s most recent book is ZombieEconomics: HowDeadIdeasStillWalkAmongUs. He is also a regular contributor to the blog CrookedTimber
Before we get onto the issue of whether utopias are a good or a bad thing – Thomas More’s Utopia was about communal property and freedom of religion, Aldous Huxley’s Brave New World was about freedom from emotion and the complications of family life. What does John Quiggin’s utopia look like?
The reason I chose this topic is because of the current political situation, particularly on the left. We’ve moved from a situation where the left offered a utopianvision that inspired people, to a situation where the left is primarily trying to stave off the tribalism that dominates politics on the right. That doesn’t really seem to be enough to mobilise and engage people. We need to recapture the kind of vision and language of utopia that used to be part and parcel of left politics. But I suppose I like the idea of utopia more than the work of specifying the details.
You don’t think the whole idea of utopia now has negative connotations because of the spectacular failure of communism?
That’s obviously one of the factors in play. Even when social democrats were in competition with communism, we had much greater comfort with utopian language than we do now. But for me the real problem is the way in which neoliberal (for want of a better word) values have permeated the whole of social discussion and made any kind of thinking beyond very narrow self-interest sound unreasonably utopian.
So is your utopia a social democratic one?
Yes. There’s an important sense in which the social democracy of the postwar era wasn’t merely a compromise between communism and capitalism. It really was something new and different, which seemed to promise and to a significant extent deliver a much better society than either capitalism or communism could offer – one in which people were free of the fear of mass unemployment, of having their lives destroyed by ill health, and yet one in which freedom was a positive value. We’re seeing all that being ripped away and eroded now under the banner of austerity. It’s not sufficient to say, “Austerity is a really bad policy – here is a Keynesian macroeconomic critique showing you won’t be able to reduce debt in this way.” You need to rekindle the notion that there is a better way of life that we could achieve, though without the utopian element of a fundamental transformation of people that was part of the communist project, particularly in places like China.
So give me an example of the kind of utopia that the left can get excited about. What would be its chief characteristics?
Part of the way I’ve been trying to think about this is in bits and pieces. So, say, in the British case, with the introduction of the National Health Service. This was quite a big change that happened quite suddenly in most of modern societies – with the notable exception of the US. Ill health changed from being something that was not only a personal disaster, but a complete financial and economic disaster – somebody who became ill couldn’t be employed anymore and was dependent, essentially, on charity – to something that wasn’t, quite suddenly and pretty much permanently. This is one thing all the assaults of market liberalism have failed on. Thatcher tried hard and failed. So have the attempts that have been made in New Zealand to undermine public health provision. We have accepted that society as a whole has to look after people in sickness and in health.
So it seemed – in the sixties and seventies – as if we were going to extend the domain where we didn’t have to rely on market incentives and competition. Instead, of course, we’ve been contracting it. Part of my story is a feasible utopia – it’s talking about things that are actually achievable, rather than purely abstract goals, or the goals that characterised the communists, for example. They talked a good game, but their actual actions were very much in the opposite direction, with the promise that once the days of building it were over, everything would be a lot better.
One of the earliest great achievements was to make education universal and free. That was largely achieved, up to school-leaving age, in the 19th century. And again, we seemed, for a long time, to be moving in the direction of extending education, and the kind of education we need in the modern world, to the entire population. That, in my view, goes well beyond a high-school education, though not necessarily in the direction of a university education. Again, we’re seeing, very noticeably in the US and to a significant extent in the other English-speaking countries, that being eroded away in favour of a market model that doesn’t work, that reinforces inherent inequalities and so forth. So the notion that education up to and beyond high school is a universal right – rather than something that is rationed out in various ways, particularly by price mechanisms – is an essential feature of the kind of utopian vision that I would embrace.
Your utopia is a fairly practical one then, not one with a lot of slogans.
It’s certainly not one that depends on a fundamental transformation of the human character. It’s one that’s trying to re-embrace the kind of language and the kind of hopes that seemed within reach 30-40 years ago, and that we’ve been backing away from since. There’s a central role being played here by the financial sector. Since the 1970s, it’s really dominated and permeated all sorts of domains and its values have percolated through those domains. The notion of public provision or support of things on a non-market basis is the exact antithesis of that.
The problem is that in the US everyone always has to apologise for bringing government into the equation. When he’s making a speech, Obama has to start with: “You know, government can be good.”
That’s why we need to start talking in these much more ambitious ways. Obama seemed to have the right language, in his campaign period. But his first action was the bailout of Wall Street that he inherited from Bush and he proceeded to go right ahead and do that while being much more cautious with anything else. The need, really, is to point to the possibility of a better life for everyone or nearly everyone. In the US, hopefully, the growing realisation that so much of the wealth generated over the last 20-30 years has gone to the top 1% is important here. Not so much to say, “Here’s these terrible rich people” as, “Here is this huge amount of wealth in society that is just being squandered on people who really don’t need any more than what they had 25 years ago.” We could have done a much better job with it. That’s why we need a positive vision, rather than this notion, of “Here’s the market, and governments intervene round the corners of it.”
Are there countries you look at and think that’s what we should be aspiring to now?
No, I don’t think anybody’s achieving it. It used to be – from the distant perspective of Australia – that Sweden was seen as being as close to this goal as possible. But clearly those values and goals have been very much eroded in the Scandinavian countries, as much as they have in English-speaking countries. When you read, for example, TheGirlwiththeDragonTattoo books, not only are the people not heroic, but there’s this atmosphere of a welfare state that’s a thing of the past. There are continuously characters saying, “Well, in the old days we might have been able to do something, but now we can’t afford it.”
What are your thoughts on Japan, because if we’re trying to address inequality, Japan always strikes me as one of the most egalitarian societies?
It’s quite egalitarian in terms of living standards, but at the same time intensely concerned with status. That’s a complicated story, which reflects history. Once you get beyond a simple market model, the underlying social institutions matter a lot. In Japan these are complicated and have a mixture of positive and negative values that are a bit difficult to get into from the outside. In important respects Japan has quite an inclusive society, although there are people pushed to the margins more than you might imagine. But it has maintained more of that pre-modern hierarchy than the Western countries. Those kinds of social conditions affect what kinds of structures you can put in place. It’s certainly part of this story that culture matters, and there isn’t a one-size-fits-all solution that’s going to work the same way in every country. The worst case is when all of these things are aligned closely and very steeply, so that the very rich are also the most respected and the most powerful. That is the danger of the kind of society towards which, for example, the US is moving.
I always though Holland with its Calvinist traditions might have resisted neoliberalism, but my older sister still lives there, and she says the whole money-obsessed, negative sides of Anglo-Saxon capitalism have been fully embraced there too, which is a bit disappointing.
It’s not so much that people have looked at it [neoliberalism] and found it good, but that you can’t really embrace the alternative on your own. That’s why I’m interested in the utopian idea: We really have made the kind of progress where we don’t need huge financial incentives in the way we’re supposed to. The economic crisis has shown the failure of these models, and that they don’t deliver the goods they promise. But it’s not sufficient, as I have been doing, for example in my Zombie Economics book, to say, “This stuff doesn’t work.” We see that the people who are most disillusioned by these values and most energised are on the right rather than the left. To overcome the appeal of the tribalist right, it’s not a matter of trying to compromise with them, or to hold up the grey managerialism that has come to characterise social democratic politics. It’s a matter of offering something with the kind of emotional appeal that simple-minded appeals to ethnic solidarity have.
Let’s talk about this a bit more in the context of the books. Your first choice is Aldous Huxley’s Brave New World.
So, in the jargon that was popular 20 years ago, he’s presenting a Fordist world – Ford is the model. It’s one where the ultimate value is consumption. People keep working to consume, and there are incredibly elaborate opportunities for consumption provided to them. It’s obviously an anti-utopia.
It’s an anti-utopia?
Yes. Of course, in a much more subtle way than, for example, 1984, or your typical dystopia. It’s a society in which all our material needs are met and we get to have sex with anyone we want to. We all enjoy our jobs, thanks to a combination of genetic sorting and continuous hypno-conditioning. It’s a satire on a particularly narrow vision of utopia. The lesson I would draw from Brave New World is that the purpose of utopia is not so much as an achieved state, as to give people the freedom to pursue their own projects. That freedom requires that people are free of the fear of unemployment, or of financial disaster through poor healthcare. They should be free to have access to the kind of resources they need for their education and we should maintain and extend access to things like the Internet. Then we would have a situation where everyone is free to participate in whatever way they choose – rather than aiming for the mindless state of contentment that is the implied goal in Brave New World.
Huxley had an odd relationship with America didn’t he? He ended up living there, but he’s horrified by it. It’s what he’s describing in the book, isn’t it?
If you had a society that was centrally controlled and run by corporations, that would be exactly the kind of thing that would be produced. You have the combination of a sharp class division, but one in which everybody knows their place and is happy about it, and in which the whole machine rolls along slowly with no real purpose except to reproduce itself.
Huxley is a bit mixed though – I never quite know if he loves it or hates it…
Exactly. The alternative is the world of the Noble Savage, the few people who live on a reservation. They haven’t been brought up in modern society. They live in squalor and dirt, but reproduce naturally and have both all the sorrow and all the joys that go with that. So in the end, the only really heroic figure is the Savage, and he ends up killing himself.
Let’s go on to your next choice, which is the Iain Banks Culture novels – there have been nine so far.
Iain Banks is the writer you probably think of as being furthest from utopia in all sorts of ways. But the underlying conceit is that this is a post-scarcity society where people are free from any kind of material concerns. If they want to tear down their existing planet and build a whole new one, they can just go ahead and do it. It’s quite a successful imagining of what things might be like, and how people might react to an end to scarcity.
I read an interview with Iain Banks and someone asked him if it really was his utopia. He said “Good grief, yes – it’s my secular heaven.” So it really is a utopia rather than a dystopia?
It is. It’s set indefinitely in the future – there’s space travel technology there to make the action work – but you have a situation where there are a vast number of species of various kinds out there in the universe and the heroes or central figures are a post-human culture called the Culture. They are pursuing this project of trying to make the galaxy safe for civilisation. So there are conflicts that go with that. In one of the novels, the Culture has interfered in this other society, they’re trying to bring them forward into this positive culture, and they produce this hideous civil war. The action, set some time in the future, flows from that ancient disaster. But the background to all of it is Banks’s ability to describe this society – how people would live without scarcity, what they would choose to do. It certainly is an exceptional achievement in terms of fiction, to produce a utopia that actually sounds appealing.
It’s a world without money isn’t it? There’s one quote from it: “Money is a sign of poverty.”
Yes, that’s quite right. If you have all you need, if there’s no scarcity, you don’t need money. The Queen, supposedly, never carries money. In the Culture, everything is done with gift exchange – which is by no means utopian in the sense of being free from things like the bad and good motives that people have, but that’s one aspect of it.
How does it help the left, though?
I don’t know – that’s a good question! The books capture, to my mind, the notion that we’re not looking at a static state of achieved perfection. Although Marx wasn’t in any way a utopian – and didn’t think incredibly carefully through this – in his early writings he talks about somebody who herds cattle by day and criticises literature by night, and switches from one to the other as they feel the need. That kind of freedom from alienation, and capacity to achieve your own projects, is what’s very evident in those novels. What we need is a utopian concept that recaptures the language of freedom, both from the authoritarian left of the past and from the market liberal notion that freedom is the freedom to work as hard as you want in order to have as large a bunch of consumer goods to choose from as you might desire.
Freedom has become a bit of a problematic word.
That’s because it can mean freedom for you to do what I want you to. But if you look at the question, when have people been most free to pursue their own projects? That freedom has been much greater in social democratic societies than it has been under either communism or market liberalism. To be free to do things, you also have to be free from want and poverty.
Let’s talk about John Kenneth Galbraith’s The Affluent Society. I’m glad you chose it because I’d never actually read it. It’s quite economics-based, isn’t it? It’s not quite the populist call to action I imagined.
Galbraith didn’t invent the role of public intellectual/social critic but he certainly occupied it incredibly effectively. He’s making the point – about the US in the 1950s, but it’s even more true today – that at the same time as we have this incredible array of consumer goods, the goods which we rely on the public to provide are decaying. Private affluence and public squalor is the great catchphrase of that book.
It’s in a vein of literature from the 1950s and going into the 1960s. In a different way, Betty Friedan’s FeminineMystique made a similar point. Here is a society that has achieved material wealth beyond the imaginings of any previous society, and with a relatively high degree of equality. (The US at the time Galbraith was writing in 1960 was more equal than it had been at any time before or was to be any time since.) And, yet, it seemed as if, in important respects, the quality of life was well below what you might hope for. His diagnosis was that while the machine was doing a great job in producing market goods and services, the really valuable things – those which for a bunch of reasons have typically been left to the public to provide – were far less well supported than was needed for a good life.
We were having an erosion of public space in all sorts of ways, so the quality of our public lives, the increasing ugliness of cities, the growth of air pollution, along with chronically inadequate health services for a large proportion of the population and an education system which only served part of the population adequately – all of those things were the kinds of lacks that Galbraith was pointing to. If you think about the gleaming 1950s kitchen, with all its labour-saving devices, and compare it to the hard physical labour involved in getting a house going with the technology of even 30-40 years before, it’s unsurprising that, in some ways, it seemed like we were living in a utopia. We’re used to that technology now, but it’s still a real achievement and one that’s largely to the credit of capitalism. But both Betty Friedan and Galbraith were saying, “That’s all fine, but it hasn’t actually delivered us the kind of freedom we really need.”
As an economist, how do you feel about the efforts by Joseph Stiglitz and others to stop excessive focus on GDP as an indicator of economic health?
I’m sympathetic, though people possibly get too hung up on the fact we’re mismeasuring things. There’s no doubt we are. Whether getting the measurements right would then lead to better outcomes is less clear. In important respects they would. I have a bunch of technical work on ways we could improve those measurements, but the point is to actually do it, rather than to measure it right. GDP, which is the classic target, is a really terrible measure. There are better measures even within the official national accounts. For example, there is something called Net National Income in the official accounts which is rarely headlined. That would overcome a bunch of the criticisms made of GDP. But I suspect the answer is that even though GDP appears as this important thing, most people don’t have a clue what the GDP of their country is, or what GDP per capita is. I’m not sure even policymakers are as distracted by GDP as some of the critics think. It’s much more the spell of market liberal dogma than the measurement issues that’s the biggest problem.
When he did an interview with us, Francis Fukuyama used a term I liked, which was “intellectual capture”. It’s not just to do with naked self-interest – many people seem to genuinely believe that unfettered free markets are best.
Neoliberalism had a fairly plausible promise, coming out of the chaos of the 1970s and 1980s. It said: “Forget about all these utopian ideas, those things don’t work and never will. The only freedom that can be delivered is the freedom of market choices, and if we give those to everyone, even if the outcomes initially aren’t equal, everybody will be better off in the long-run.” A large part of my work is about pulling that down, saying, “Now we’ve had 30 years of this stuff, let’s look at what’s actually happened.” The answer is that in the US the average person is very little better off, in material terms, than they were 30-40 years ago. Real wages for high-school educated workers haven’t risen since the 1970s. There are more people below the poverty line now than there were in 1960. The model – in its most sophisticated and well-developed form – hasn’t delivered the goods. The people who are being paid incredible fortunes to manage it have shown themselves to be a bunch of incompetent screw-ups who continue to be rewarded. But we need more than critique. To overcome this intellectual capture, we need a plausible alternative.
In preparing for another of these interviews, with Peter Boettke on Austrian economics, I read both von Mises and Hayek. I was surprised to discover that if you read them in the context of 1930s Europe, criticising Soviet Communism, they seem very sensible.
I find Mises pretty unreadable. Hayek is kind of slippery – you never quite know where you are with him. Look at The Road to Serfdom, a book which is most naturally read as predicting that the policies of the British Labour Party – which were, of course, actually implemented – were going to lead to a communist dictatorship. Obviously that didn’t happen. Then Hayek spends the next 40-50 years – the rest of his life and his successors going even further – trying to duck and weave whether they really were saying that, or whether, in the manner of prophets, they’d warned about something and it was their warning that averted it and produced moderate social democracy. Hayek is a clever writer, appealing in some ways. I guess, at the end of the day, I don’t trust him.
But yes, one point I would concede to Hayek and von Mises is their critique of central planning. I’m actually about halfway through Red Plenty, a semi-fictional account of the Soviet Union in the heyday of planning. I haven’t finished it yet, but the idea that we could really achieve great gains by centrally coordinating everything is something which Hayek and von Mises criticised very effectively and that certainly has influenced my thinking about it.
But why have all these East Asian economies been so successful at achieving rapid growth then? Isn’t it partly because they are government-led?
I don’t think there’s a mystery as to why countries rapidly catch up. The mystery, historically, is more why they failed to. The surprise coming out of World War II is how unsuccessful development was. Here was all this modern technology that these countries didn’t have but which was now easily accessible and any person could be trained to use. They could use money that they either saved and invested themselves or they could import foreign capital, depending on the system. Granted, these countries were starting from a long way back, but we ought to have seen a very rapid catch-up of the poor countries to the rich ones, at least in the space of a couple of generations. That didn’t happen. Particularly in the generation after World War II, many of the poor countries went backwards in relative terms.
Paul Collier’s book The Bottom Billion is a good one to look at for this. He’s looking at the very poorest group, who if they’ve had a take-off, it’s only happened in the last 10 years. It turns out that there’s a trap there – that at a certain low level of development, studying hard, or setting up a business isn’t the right thing to do. The right thing to do is to go into the army, become a sergeant and sooner or later stage a military coup so you can just take what you want. So it’s getting out of that trap that’s really proved crucial. The appeal of just taking stuff is much greater than we imagine.
So there are a wide range of institutions that are important, but the evidence shows that having a substantial role for government doesn’t stop you experiencing very rapid and strong economic growth, and certainly elements of it – for example a high quality education system – are essential. But I don’t think there are lessons for the countries that are already developed to learn from this, unless it is to disabuse you of the notion that unless you stick within the golden straitjacket, the fashionable prescriptions of the Washington consensus, you can’t possibly achieve strong growth. The evidence shows you need to have a decent education system and a society where the way for people to achieve things is to work and produce things. Achieving that is hard, but once you’ve achieved it, growth is actually pretty easy.
I didn’t realise that Galbraith pretty much coined the term “conventional wisdom”.
Yes, it’s a great phrase. He was a social critic who did it with great panache. The word “affluent” was also a word that was in the dictionary but he brought it back into popular use. And my favourite, which hasn’t made it out of very limited circles, is the bezzle. The bezzle is the amount of money in the financial system that people have surreptitiously stopped away in hidden accounts. It grows and grows and grows until a crisis comes, at which point the accounts are inspected and everyone is caught and the bezzle shrinks to zero – it’s a big contraction of embezzlement. As an economist, Galbraith had some interesting ideas but ultimately didn’t have a lot of influence on the way the profession developed. But as a writer and a critic he was incredibly good.
I guess the difference now is that bezzling is legal.
What’s really striking about the most recent crisis is that, on the one hand, the illegal bezzle was huge. Bernie Madoff’s came to $60 billion. Ponzi himself, adjusted for inflation, was but a tiny fraction of this. There were also a whole bunch of smaller Bernie Madoffs, who, because their thefts ran only in the tens of millions barely made it to the front pages of the newspaper. But all the Madoffs put together pale into insignificance when compared to what Goldman Sachs, Royal Bank of Scotland and so forth did – all of whom have been rewarded and promoted for their role in the disaster.
Your next choice is Envisioning Real Utopias by sociologist Erik Olin Wright. Is this the book that comes closest to your actual topic?
It does. It’s much more a book from the conventional left. It’s looking at the question, “If we abandon not only communism, but the whole idea of a revolutionary overthrow of the existing order, what kind of utopia can we think about?” Reorganising the labour movement, industrial democracy and things of that kind are a lot of the central themes of the book.
Can you give me an example?
The classic example that people look at is Mondragon in Spain, which is a quite large network of largely manufacturing enterprises that are worker controlled. The big question for utopians is, “Why hasn’t that model been replicated on a large scale elsewhere? What are the obstacles to achieving that kind of transformation? To what extent can we extend that kind of model? How many of the constraints on it are to do with the market economy, and the financial sector” and so forth?
What do you think?
It’s a question I haven’t got a good answer to. Part of the problem is you need to have lived experience of these things. For me, as an academic, in a sense I’m part of a historical tradition that is very like that. But it’s hard to imagine a university faculty as a global model for the future.
Part of the story has to be a return to the trend that was continuing for most of the 20th century – and has been reversed, particularly in the US – towards shorter working hours, more leisure and more generally a situation where bargaining powers are on the side of the workers rather than the employers. How can we reverse the huge erosion of trade union rights and trade union density and membership that’s happened, particularly in the Western countries, over the last 30-40 years, while, at the same time, avoiding the kinds of economic failures that happened in the seventies and eighties? The last time we seemed to be on the verge of achieving some of these things, the whole thing ended in this inflationary spiral and blow-up. As a result, all the goals that were being pursued, things like the Meidner Plan in Sweden, and the general push towards some form of industrial democracy were derailed. We need to not only restore the balance, but figure out how we can manage things better, based on the failures of the 1970s.
Isn’t Wikipedia one of his examples as well?
Yes, my experience with Wikipedia has been like being a character in a Culture novel. On the one hand, it’s this incredibly utopian achievement – in the space of a decade or so, lots of people, including me, have built an encyclopaedia that has long since surpassed the best achievements of Britannica. On the other hand, you see people at their worst, fighting intense battles about a sentence or the spelling of a particular word.
But to come back to the broader utopian theme, Wikipedia – and the Internet generally – does point to a way of doing things differently. Amateur efforts have built so much of the Internet, things like open source software, Wikipedia, blogs. The Internet itself was built, essentially, by the university sector. It outperformed and displaced a whole bunch of commercial networks that were attempting to extract rent. And the capitalist, or commercial, society has been very much parasitic on these efforts that weren’t driven by market motives. Dan Hunter and I have written a bunch of articles on this. Google relied on open source and public type efforts, the Internet protocols were all developed in a non-commercial framework. The same is true of blogs that things like Facebook and Twitter are commercial adaptations of. They still depend entirely for their value on the contributions of people, not on anything that is being provided by the enterprises themselves (beyond the framework on which this stuff happens).
A very simple thing we would have achieved in the social atmosphere of the 1960s – which has been a failure because of market constraints – is free public Wi-Fi. That’s something a bunch of places have attempted, but because it’s had to pay its way and had commercial sponsors, it’s never really been achieved. But it’s something that governments, with the kind of visions they had in the fifties and sixties, would have laid on. We have a small attempt at this in Australia with the National Broadband Network, which is being rolled out now. It’s something that really cries out, to quote the cliché, for information wanting to be free.
But the important thing in terms of the broader intellectual argument here is that all the really striking innovation of the last 20-30 years, all the real productivity growth, has come from the Internet, and the Internet itself has come, initially, from the university sector and then from the household sector, from people just doing stuff. All the attempts at applying a business model, to the extent that they haven’t been failures, have really just been taking advantage of the unpaid efforts and unpaid inputs of others.
Let’s go on to your last choice, the Keynes essay Economic Possibilities for our Grandchildren, which you can read directly online, or as part of his book, Essays in Persuasion.
Keynes was writing in 1930 or so, a time of deep depression in the UK, so it’s impressive he could have such an optimistic view of the potential for the future. He has quite a limited view of the world – a view very characteristic of a male academic, Bloomsburyite sort of person – and that comes through a lot in the essay. But the central point is that with technological progress, we’ll rapidly reach the point where the material needs of at least a male Bloomsburyite academic will be met for everybody. The number of working hours needed will be limited, which not only means extra leisure, but, more importantly, if we only need an average of 15-20 hours of work per week out of each person, we don’t need a powerful management to drive them to do that work. We can expect that people will be happy enough to do a fair bit of what we need, without the need for everybody to be driven hard by financial incentives. So we can move away from a situation where everybody is enslaved by money to one in which we do things primarily because we find value in doing them.
At the time he was writing, Keynes was making the important point that it was really only in the 100 years or so since the Industrial Revolution that this idea was feasible. The living standard of the average person had barely moved in the thousands of years before that. Life has been radically transformed by the growth of technology, and there’s every reason to think that will continue. Also, Keynes only looked at the developed countries, but now we are finally in a situation where the world as a whole has the capacity to achieve the kinds of things he was talking about. A striking illustration of this is that some time around the turn of this century, the number of obese people exceeded the number of malnourished people. That says something about our capacity to feed the world. Just now I mentioned the bottom billion, the billion or so people who are still desperately poor. But at the other end of the spectrum you have a billion rich people whose income is many times that of these poor people. If we could arrange a quite modest transfer from the very rich to the very poor, we can eliminate extreme poverty very rapidly. Technological capacity is a precondition for a utopian vision, but we can’t really hope to achieve that in the context of utopia in a single country. It has to be something global.
What about Keynes’s prediction that we would only have a 15-hour workweek by now? I think it’s only France that’s made headway in achieving that.
The lesson you learn is that just because something is technically feasible, doesn’t mean that it’s going to happen. Working hours in the US have generally been increasing for the last 30-40 years. That’s not because people inherently like working, it’s because we have a set of social structures where social inclusion demands that. So a characteristic feature of the market liberal economy – as it’s developed in the US – is an extreme polarisation on these things. On the one hand, you have the middle class, the top quintile of people who typically are the group most likely to be in stable marriages. You have these two income couples both on high incomes, both working long hours, at the same time as trying to raise children. At the other end of the income distribution, you have a huge number of people who have been displaced from the labour market altogether. As for the French, the 35-hour week wasn’t looking forward to a better future in total. It was a response to the macro problem of how we share out the work.
The fact that Keynes’s prediction hasn’t happened, that attempts to achieve it have run into trouble, is why, I think, we need a utopian view. We need to inspire people with a view of a better society that we can achieve within our available resources. We can’t just think about it in a day-to-day managerial context.
I spoke to Paul Krugman last year, he’s also a fan of this essay, but pointed out that the blissful state of affairs where people would be content not to try to consume more and more hasn’t come to pass. “Somehow greed always finds a way,” he said.
I’m not convinced by that. It’s true that if you look not at the calculations, but the idea of the good life that someone like Keynes would have advocated, the first thing is that he didn’t think about the question of who was going to clean the toilet. He certainly wasn’t going to, I’m sure! When he thinks about how easy it’s going to be he really is forgetting about the housework and all the drudgery that has to be done and still hasn’t been automated out of existence in any way. Also, there are plenty of people with much more of a focus on material goods and services than the kind of personal ideal that Keynes would have had. For example, I don’t know what his mode of transport was, but I don’t think having a big flashy car would have mattered to Keynes. And yet there are a lot of people for whom that really is a source of great joy.
At the same time, I do think the US perspective tends to be a bit misleading. In Australia we had a huge increase in work intensity and the pace of work in the 1990s. That was very clearly imposed on us, because we’d had a terrible recession and people were scared of losing their jobs. In the last decade, times have been good for a number of reasons, and we’ve seen people slacking off much more. The figures of authority and the talking heads are constantly complaining about how terrible our productivity is, because essentially, we have recaptured a lot of the leisure that was taken away from us in the 1990s.
I don’t think people are inherently and desperately keen to work hard to acquire more possessions. Rather, this is a complicated story about how society works, and you can’t easily opt out of it as an individual. In the Australian context the big thing that still has us trapped is our housing bubble. Unlike most places, ours hasn’t burst. People are trapped with huge mortgage payments that they have to keep working to pay, and that in turn makes them much more money-focused. This isn’t something that can be easily solved at the level of individual preferences, which is why I come back to this notion of putting forward a utopian vision where people work, they contribute to society, but ultimately they’re free. There will be some people for whom the work is so exciting and valid that that’s all they need, but there are lots of others for whom the goal in life is something quite different – whether it be restoring old cars, or running triathlons, or just reading a lot. Those kinds of goals you need a certain amount of income to support, but it is a pathology to think that the primary goal of life is to pile up more and more possessions.
Keynes also talks about aristocratic women having nervous breakdowns because they have nothing to do. I do think it’s part of the reason we keep busy and work, because we’re worried about going crazy if we don’t.
That’s very much the point Betty Friedan makes 40-50 years later [about the American middle-class housewife]. Keynes maybe was less aware of what was going on here than Friedan was. In both cases, what you’re talking about is an incredibly constricted set of opportunities that are open to people in that situation. Whether it’s middle-class American housewives in 1960 or British aristocrats in the 1920s, both are in a situation where although they are welcome to go along and help out at the church fête, they weren’t expected to take up kickboxing or anything like that. There was a limited set of projects that were available and approved for people, while also maintaining their social position. So I think the problem was this lack of freedom, rather than “What shall I do with all this leisure?” Maybe it’s a matter of disposition, but I certainly can’t imagine having too much leisure. There are so many projects that I look at and think that would be fun, but there’s simply no way I’ll ever get the time to do. I think that’s pretty common. If people have free time, and they have the resources to pursue their projects, I think most people will find good projects to pursue.
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John Quiggin is an Australian economist. He is currently the Hinkley Visiting Professor at Johns Hopkins University, and is one of the most prolific economists in Australia, best known for his work on utility theory. Quiggin’s most recent book is ZombieEconomics: HowDeadIdeasStillWalkAmongUs. He is also a regular contributor to the blog CrookedTimber
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