The Office According to the Office is a must read, especially for anyone who watches The Office (if you don't, don't worry, I don't either). Although the post is written semi-tongue-in-cheek, much of it is quite relevant. A natural question to ask after reading the link is: do we really need those pathological organizations, those clueless people, and the friction they create?
We can't easily get rid of the middle 1/3 of our population. Some of us try. That's what start-up culture is about, isn't it? Being more creative by constantly being at the start of MacLeod's cycle? Globalization is also putting pressure on getting rid of the clueless: increased competition means firms have more incentive to produce more efficiently, with less people. Goodbye clueless! Wait, why were you even here in the first place?
I think a potential answer to that question comes from an interesting dilemma: right now, only a fraction of us is needed to feed the entire population. However, because of the way the monetary system is set up, each of us needs to produce something society deems useful in order to put food on the table. As supply overshoots demand, we fight for the demand. Making a contribution becomes harder and harder the more efficient we get, even though efficiency should theoretically make lives easier.
That's what the clueless might be here for: to add friction, to mooch off of others, so at least they can be fed. It's like how in the Great Depressions, the Canadian government hired young men to build roads to nowhere in exchange for being fed (and not cause trouble). Yay for busywork.
High supply and low demand – I doubt our monetary system is built for this. Parkinson's Law states that demand will increase to match supply. Keynesian economists say that we should artificially increasing demand so the economy can grow. Is that really the best? In an ideal world, shouldn't supply be made to match demand, not the other way around? Efficiency should not make people compete doggedly to become more efficient: it should give people more time to do what matters to them the most: discovering new things, learning about the world, being creative, or even spending time leisurely.
Think about it, wouldn't the world be a better place if instead of the distracting everyone with bureaucracy and slowing the world down, the clueless class did nothing? Nothing. Free time. Zero. Of course there are problems with this- lots of problems. Some people like the feeling of importance associated with doing something. Other non-clueless people might want to pretend to be clueless so they can have infinite free time as well (a bit like how the smart guys caused the economic crisis).This change would not be "stable".
Dawkin writes in The Selfish Gene: “An evolutionarily stable strategy or ESS is defined as a strategy which, if most members of a population adopt it, cannot be bettered by an alternative strategy.” For example, the strategy “if resident then fight, if intruder then flee” is an ESS, while “adopt any baby you see” is not (think about what would happen if a majority of the population followed that strategy, but a mutant did not). There is thus no incentive to “cheat” (or deviate from the norm). An economical system should be like an ESS: it should assume that people people will do whatever they can to maximize goal achievement, and it should give no incentive for people to “cheat”. Communism fails badly at this. Capitalism does slightly better, but I think we're on a local maximum, not a global one.
All this is still very abstract. A full sketch of the economics of an ideal world will probably require more work, perhaps by someone who is better versed in economics than I am.
End of Entry
6 comments:
I dont get your ESS example: if you're a resident, then you shud fight? if you're intruder, then you shud flee? XD
I need to finish reading that link... XD but your words are are sound.
The system is screwed/skewed now. I'd think the majority of ppl are the clueless, or are on the path to cluelessness (even in univeristy - doing things just because it's the norm). If this "let the clueless do nothing" change is implemented, the world will halt, for a long time. The effect would also be multiplied by the social sucker effect (if you see everyone around you doing nothing, you would lose motivation as well). The problem is some universal attitudes such as equality (not just equal rights, but also equal responsibilities) cannot be overtaken by rationality, certainly not economic reasoning. Social structures are really rigid, and kills idealism on every step (throughout history - as you mentioned with the Great Depression bit).
I wonder how many people feign passion, in careers, relationships, etc.
On sadder news, I burnt my finger on the stove =[
ESS just means that if a majority of the population adopts a certain strategy, then it hurts anyone who does not. An example ESS happened to be "if resident then fight, if intruder then flee". If anyone deviates from this strategy, say "if resident then flee, if intruder then fight", then he will get into more fights, get hurt more on average, and be worse off (all things being equal). On the other hand, the strategy "adopt any orphaned young" is NOT an ESS because a mutant with the strategy "reproduce and leave your kids orphaned everywhere" will on average do better. ("better" in this case means evolutionarily better, or better for genes) I just thought this was an interesting analogy to draw (economics vs. evolution)
No, I don't think the "doing nothing" thing is a good idea at all. I just wanted to point out that even though it sounds like a terrible idea (for all the reasons you've mentioned and more), it's correct implementation (though impossible) is better than what we have right now. Which is sad.
Finger => owww..
Hey Lis, thought-provoking post. Although I think Keynes' ideas could be more appreciated if the historical context is considered.
Keynes proposed that government should boost aggregate demand during recessions during a period where unemployment rates were in the neighborhood of 20%. So it was a very difficult time. The boost in aggregate demand allowed many to at least not starve. Considering the times, I do not think recipients of these aid were necessarily moochers. Even if these were viewed as government handouts, considering the times, would it be morally permissible to argue for alternative policies? I think it would be too much to ask an individual to choose starving to death rather than accepting a handout. Although, with your rail road example, you are right to question whether the government couldn't have found better ways to spend the money.
Keynes' solution is only a short-term temporary fix and he recognized this. In the long-run the economic output of a country is determined by capital, labour, and technology. But, as Keynes' says in his immortal quote, "In the long-run, we are all dead". So yes, supply and demand may be in equilibrium in the long run, but the short-run conditions may be so dire such that artificial demand boosts may be warranted.
The Selfish Gene was awesome!
Hey Phil,
I agree that I did not do justice to Keynes, and perhaps applied his ideas a bit differently than what he intended. (And I was wondering who that quote was attributed to!)
Neither accepting handouts nor boosting demand to fix the economy is immoral. But imagine this: suppose the economy is in a state of high supply and low demand, with more than enough goods to feed the world. Is this not a "broken" economy in the traditional model? Yet in reality, doesn't this mean that we have a surplus of goods, which means that we can have a surplus of leisure, which means that as a population, we can spend more time on what we enjoy more? Would Keynes' (or others) say that under this circumstance, that demand needs to be increased to match supply to keep the wheels moving?
As you can tell econ isn't my strong suit, and I probably lumped together too many concepts in one post.
I think it would be helpful to the discussion to recap the traditional econ model (the aggregate supply and aggregate demand model, the model that captures both Keynes' ideas and the monetarists).
1) there are two supply curves, one long-run and one short-run. The long-run curve is influenced only by technology, labour, and capital. This is also called the potential output-what the economy is capable of producing if its resources are utilized at its maximum sustainable rate (this does not mean everyone is employed, but employment rate is at maximum sustainable rate).
2) short-run equilibrium is determined by intersection of aggregate demand and short-run supply curve. The short-run equilibrium may or may not differ from the long-run equilibrium. There maybe economic shocks that may prevent potential output from being achieved.
So in this model, long-run equilibrium is the benchmark against which the state of the economy is judged. If short-run equilibrium output is below long-run's, that means we are producing less than we are capable of and therefore there is more unemployment than warranted. If we are producing more than potential output,as a nation, we are using our resources at a higher utilization rate than the sustainable rate (say we put in a lot of overtime etc).
Since the equilibrium in this model is for the nation, it is the aggregate of all the equilibrium in all the markets that is within that nation (Although GDP has measurement problems like markets that is under the radar like prostitution or drugs). So the aggreggate demand/supply equilibrium represents the outcome of all the choices people had to make in regards to their trade offs. This includes participants in the labour market that faces the trade off between leisure time and wage.
In short, the lesiure vs. work tradeoff is already incorporated into the aggreggate supply/demand equilibrium.However, economists usually use dollar amounts to measure the trade off faced by job seekers such as wages gained from a job vs. wages foregone because of leisuring. So the traditional econ model DOES NOT address job satisfaction, happiness etc.
Keynes' policy is used to address the situation in which short-run equilibrium has fallen below potential output. The increase in government expenditure will boost aggregate demand (and therefore jobs and income).
Using the model above, I don't think your food production example points to a disequilibrium situation that needs policy intervention. So your example is not one of a "broken" economy. Yes, we need fewer people to feed society's mouths. This is because of gains in agricultural technology. There is no supply/demand imbalance. For every food product produced, there is a consumer (theoretically anyways. This may not happen if there are massive subsidies). If this is not the case, price would adjust to make sure this happens.
It is the productivity gains in the agricultural sector has enabled the movement of labour into other sectors, exactly the dynamics that you talked about, not a supply/demand imbalance.
The issues you talk about like job satisfaction are important and have a very real effect on the economy, and more importantly, happiness, but traditional macroeconomic models cannot address them.
...damn i didn't realize how long the post was..sorry for taking up so much space lis. I hope its helpful to the discussion tho..
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