Friday, November 11, 2011

The trouble with modern economies (1)

Say you have a family. Everyone pitches in to do housework. Mom cooks and does dishes, Dad does the heavy work, and the two kids clean the house up. Maybe everyone spends a couple hours a day on doing housework.

As the family finances improve, they buy more and more machines to help them do the work. Mixers and dishwashers help Mom to finish her work fast, a lawnmower helps Dad, while an automatic vacuum cleaner helps the kids. So everyone cuts their work down to one hour a day. Sounds good right?

Unfortunately in the real world when machines increase productivity, we don't get a reduction in work hours. What happens is some people get laid off. The remaining people have to work just as hard. Either that, or they get shifted to do new things.

I used to do consulting work for a large beer company. The factory itself was really empty; there were only a few workers walking around checking instruments and operating the machines, which were mostly automated anyway. There were far more people in the office upstairs doing various kinds of paperwork, such as increasingly fine analysis of accounts and operations, as well as increased marketing efforts.

Wouldn't it be wonderful if we didn't have to increase all this paperwork? I really don't see what benefit it brings our society. Yet it wouldn't be a good idea for a company to go "screw it, we don't need to get our people to do this elaborate marketing campaigns", as they might lose market share to companies that did get people to do elaborate marketing campaigns. The sad truth of competition is preventing all of us from reducing our work hours to 6 hours a day due to modern technology.

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