Take This Job

And It Won't Come Back

There is an old story about a Western economist visiting China during the time of Mao. Taken to a place where a large dam was being built, the economist saw thousands of workers crawling over the vast construction site with shovels in their hands. He asked his guide, why is there no heavy equipment? Because, the government official explained, the use of heavy equipment would put most of these people out of work. Said the economist, I thought you were building a dam here, but now I understand that this is a jobs program. In that case, I recommend that you take away their shovels and give them spoons.

Though it is probably apocryphal, the story nonetheless underscores one of the basic problems of all modern economies. It has been so long since most people, at least in the so-called developed world, performed work that directly supported their own survival, that we have long ceased to think of economic activity as relating in any way to the basic functions without which life would be literally impossible. When people no longer grow crops and livestock to fill their own stomachs, or build their own dwellings, or fashion their own tools, or weave their own clothes, it is difficult to think of work as something essential to being, as opposed to being important to personal ambition or the vitality of national economies.

We are told by news reports that consumer spending accounts for 70 percent of economic activity in America. The interconnected crises in home mortgages, banking and the financial markets are undeniably bad in themselves, but it seems logical that if we could only somehow induce most people to keep on buying the things they were buying before the crisis, then somehow we could keep the engines of capitalism humming just well enough to help us ride out the storm. This was precisely the logic behind the stimulus that was passed last year by Congress and enthusiastically endorsed by the dearly departed Bush Administration. Did you already forget about that stimulus? Do you even remember what you did with that delightful, if negligible, check you received in the mail last summer courtesy of the U.S. Treasury? By all accounts, you put it into savings or paid off some of your household debt. Ordinarily, this would be a laudable example of the dying art of thrift, but not at all what the government had intended.

The Bush gang, who believed deeply in the notion that perception can always trump reality as long as the presentation is convincing enough, were unable in this instance to convince enough of us that everything would work out just fine if we would only keep on shopping. Not this time, but who can blame them for trying? It worked after 9/11, didn't it? Economics is, to a large degree, determined by flawed human psychology and is therefore not always altogether rational. People do indeed follow the herd. How else can we explain why banks that only a few months ago were handing out mortgage loans to anyone with a pulse are now turning away even borrowers with spotless credit records? The previous administration too often forgot that perception must be based on at least a small dose of reality (see Katrina, Hurricane), so when companies are shedding jobs by the hundreds of thousands and everybody knows somebody who is out of work, the bully pulpit just isn't loud enough to drown out the sound of a million feet trudging toward the unemployment office.

Which leads us back to the question: what were all those people doing in those jobs they have just lost? Apparently, they were making a lot of things and providing a lot of services that the economy as a whole, if not the redundant employees in particular, could do without. For more than a generation, economists of the sky-is-falling school have been arguing that our way of life is unsustainable: that we cannot continue to produce vast amounts of goods that no one really needs while slowly but surely making the planet uninhabitable in the process. In the typical American shopping mall, with its hundreds of stores and millions of pieces of merchandise for sale, there isn't a single item that anyone actually needs for daily survival. Think about this for a moment: try to name one thing you can buy at the mall that you literally cannot live without. Granted, there are any number of lovely things — clothing, jewelry, cosmetics, furniture, electronic gadgets and so on — that many of us find highly desirable and which we feel improve the quality of our lives. But it stretches the imagination to suggest that we need them.

This principle was stated famously by John Kenneth Galbraith in "The Affluent Society": "Production only fills a void that it has itself created." Would I want to live without my CD player? No, but before the CD player was invented, I never felt the lack of it. Who among us does not have more clothes than we need, more food than we need, more of almost everything than we need? The dramatic drop in personal spending over the last few months proves the point. People have not stopped spending money altogether. They are still picking up groceries and replacing underwear with holes in them, and, for the vast majority who still have jobs to go to, buying enough gasoline to get them to and from work and to run their errands. Parents who are not out of work are no doubt keeping their kids in hockey sticks and ballet shoes. But they are clearly not buying the flat-screen TV that they've been pondering, or the long holiday weekend in the Caribbean they might otherwise have taken, or a hundred sundry other things they can do without.

In other words, when people restrict themselves to buying only what they truly need, the economy is in big trouble.

This is not to suggest that the answer to today's economic troubles is a world-wide return to an agrarian economy. Even if such a thing were possible without mass dislocation and starvation (a lá the Khmer Rouge), a life of subsistence-level poverty could only be attractive to urban revolutionaries who have never slept on a dirt floor. Even though there are still vast numbers of men and women, even in our relatively advanced society, whose work consists of repetitive drudgery and whose main career goal is to wake up one day and not have to do any more of it, contemporary life and its many creature comforts is incomparably preferable to the life of most of our ancestors. The average factory worker in a developed country today lives a physically more comfortable existence, is better nourished, has superior medical care (except, perhaps, in the United States) and countless more entertainment options than aristocrats of centuries past. A world without chemical fertilizers, industrial pollution or nuclear waste is also a world without overflowing supermarkets, central heating or vaccinations. Who would want to go back?

No one with any sense, of course. But neither should we be surprised to discover that our highly variegated and specialized economy, in which so many people find so many different things to do, is a house of cards. When everyone is riding high, it is easy to forget that most of us are employed in activities that were entirely unknown a hundred years ago, and many of which will become obsolete in our lifetimes. Some occupations are built into our natures, like teaching and healing and music. But progress has meant that most human activity is fundamentally useless. As one famous economist supposedly said, only when the tide goes out do we discover who has been swimming naked.

February 8, 2009

For more on this topic, read "Work is Good for You", Chapter 3 of "Cruel Jokes."