Let's Reason

When we look back at the pandemic experience, we will realize that one of the most unusual and radical policies enacted by governments was to pay people to stay out of work.  Whether by personal choice or public policy people had to separate themselves from lots of non-essential jobs that required physical interaction.  To support the livelihoods of these people governments chose to either subsidize wages, as in Europe, so workers would nominally continue to be employed, or extend unemployment benefits after they were laid off, as it happened in the US.  As a result, 2020 will arguably register as the year with the lowest number of working hours in recent memory.

So, the question is why did we need a severe health crisis to lessen the work burden?  Why don’t we proactively finance leisure and work holidays?  Why don’t we work less?  The answer is a long and interesting story that has to do with the unintended consequences of human “progress.” 

Let’s first look at some numbers about work.  (The data come from Our World In Data of Oxford University.)   It is estimated that around the year 1870 people in western countries (for which we have data), like Germany, France, the UK, Sweden and the US, worked more than 3000 hours annually on average.  By 2017, the number had fallen in all these countries, with Germany recording an average of 1370 hours and the US an average of 1750.  The reason the US ranks high in working hours among western economies is the low number of “paid time off” for vacation, holidays, sick, maternal and paternal leave.

We also know that working hours move in opposite direction relative to labor productivity.  As more goods are produced per working hour, people need to work less to produce the same or even more output.  The major factor behind this inverse relationship is, of course, technology which increases labor productivity.

Here are some data on changes in productivity and number of working hours between 1970 and 2017 from the same source.*  In the US, productivity increased by 117% and working hours fell by 12%; in Germany, productivity went up by 347% and working hours went down by 44%; in the UK, productivity rose by 166% and working hours declined by 27%.  Indeed, we see that productivity gains are associated with fewer hours of work per worker.  But we also see another important pattern.  The decline in work hours is relatively far smaller than the increase in productivity.  Why is this so?  I can think of two main culprits.  One is our desire to accumulate wealth and its unequal distribution.  Since 1970, the overwhelming gains from productivity improvement have gone to a miniscule fraction of the population, not only in the US, but also in other countries, including Nordic countries and China.  This forces the majority of people to work more to make ends meet.

The second and more insidious culprit is our growing number of wants or non-essential needs.  There is a name for this: “the malady of infinite aspirations.”  China fits this paradigm quite well.  Since 1970, productivity in China has risen by 517%!  But the number of working hours instead of falling, it has gone up by 10%.  I suppose that starting from a very low level of material goods, the Chinese had to work longer, despite their productivity gains, in order to close their aspirational gap with Westerners.

Given the strong work culture we observe around the world, one would expect that people like what they do.  Not true.  Gallup surveys in 155 countries conducted from 2014 to 2016 show that only 15% of workers feel to be engaged in their job.  Not only that.  Even in modern times, work exposes workers of all types of jobs to risks of physical and mental harm, to family, and social problems.  Some of that is self-inflicted due to workaholism, a diagnosable condition.  Most of the risks, however, are due to pressure from employers and exacting working conditions.  We have recently read about the tight working schedules of Amazon workers.

At the beginning of the 20^th century, Frederick Taylor founded scientific management to  promote industrial efficiency.  This turned the production process into automatic, codified small tasks to be followed with religious exactness by workers.  Thus, work was regimented.  But, in a telling sign of how humans “enslave” themselves, modern consumers do not simply desire ever more new products and services; they also demand cheaper and better-quality products, and faster delivery.  Under unrelenting consumer demand, companies succeed or fail depending on how well they meet consumer whims.  We have become, therefore, our own worst enemy in how we use work.  We have literally turn ourselves from masters of our work load and schedule to being serfs to our outsized wants and aggrandizing consumer experiences.

It was not always like this.  To turn again to our underappreciated ancestors, those scrappy hunter-gatherers, studies of still surviving indigenous communities show that they need to work only about 20 hours per week to cover their few basic needs.  (Being immune of our insatiable needs, that’s all they have to work for.)  The advent of farming, cities, division of labor, and delayed consumption (through wealth accumulation) raised the number of working hours far above those necessary for hunter-gatherers.  By the end of the 19^th century and after two industrial revolutions, the work burden had risen even further, including child labor.  Laws,  unionization, and technology eventually reduced the work burden, at least with respect to time, and that’s why we now have the lower numbers of working hours I cited above.

Still though, we have allowed work to become part of human nature.  We indoctrinate children with a glorified work ethic.  Many of us don’t know how to enjoy leisure time.  And many postpone retirement for fear of work withdrawal symptoms.  Paradoxically, even well-paid professionals overwork themselves.  Thus, most of modern human civilization and modus operandi revolves around our work responsibilities and schedules. 

The utopia of a post-work future thanks to technology will never come as long as our malady of infinite aspirations continues and intensifies and outpaces the relief from technology.  It is possible that eventually an all-encroaching work culture will alter our genetic predisposition to resemble that of bees and ants which are programmed for a life of incessant and steady work. 

Gaining control over our dependence on work may be a lot harder than we think.

* Productivity is measured in dollars adjusted for inflation and differences of purchasing power across countries.

The restrictions imposed due to the pandemic brought out some strong libertarian sentiments among, mostly, conservative Americans.  Statements like “It is my right to …. “ were heard a lot more often than before.  Individualism is an important component of libertarianism and we can suppose many of those who saw it to be their right to act as they preferred during the pandemic might have found an ideological cover under the banner of libertarianism.

Relatively recent polls show that libertarians may comprise between 10 and 20 percent of the American population.  The range is so wide because the public has a rather vague idea of what to be a libertarian means.  A 2014 Pew survey revealed that about a quarter of those identifying as libertarians had no idea what it means.  The result is a selective libertarian behavior. 

In the website of the libertarian Cato Institute, libertarianism stands for: individualism, individual rights, limited government, free markets and peace.  The organizing principle of libertarianism is that individuals acting out of their personal interests find a way to arrive at outcomes that are also good for the whole.  This would be a compelling recipe for social organization if it accorded with human nature and experience.  But it’s not, and that’s why libertarianism has been met with heavy criticism and little acceptance.

The libertarian movement, especially in its mistrust of authority, has, nonetheless, a noble history.  It came out of John Locke’s critic of the absolute authority of monarchs and Adam Smith’s ideas that the production and exchange of goods could be accomplished through the mechanism of markets without planning by a central governmental authority.  Others see in libertarianism the same unplanned (no designing authority) evolutionary process we see in the natural world, which would explain the libertarians’ sense that government interference is unnecessary if not harmful (see, for example, Matt Ridley’s Evolution of Everything). 

Pitting, however, the individual against organized authority misses the point that in its most basic functions, individual behavior is shaped and bounded by social forces.  That is, it is not the individual versus the authority, but rather the individual in relation to its social environment that matters.  Today we know that humans obtain many of the features that distinguish us from other species not by living in isolation but within social settings that help us survive, learn, and grow.  Humans survive thanks to innate altruism and cooperation.  Part of our social living is to limit the boundaries of our individual freedoms in the interest of the survival and prosperity of our social group. 

Adam Smith foresaw some of these modern insights when he proposed that individual behavior should be moderated by mutual sympathy and that people would be pleased to contribute to the happiness of others.  His market economy implied cooperation and working for each other rather than individuals acting as they please. 

The belief that individual autonomy can produce benevolent outcomes for all ignores the fact that very often individual and collective interests diverge.  It also ignores that individual actions can produce negative externalities, to use an economic term, that is, harmful consequences on others as well as on the social group.  To go, for example, around without a mask seems to be your right until you are reminded that you may infect somebody else or generate stress in others.  Now think of the consequences of a mask-less behavior.   Cautious people avoid venues frequented by mask-less people.  Social contacts diminish and ill will rises.  The result is gradual social disintegration.  Unless you value your right not to wear a mask more than the well-being of your social setting, why do it?

Next consider the libertarian adherence in unfettered capitalism and its corollaries: that markets do not fail and winners and losers are determined by individual effort and merit alone.   We know that both are wrong.  Markets can fail for various reasons, one of them being the presence of asymmetric information between market participants.  How, in the absence of laws, do you get ex ante protection against, say, the sale of dubious financial products or drugs?  The promise of long-term gain from maintaining a good reputation is often tramped by the allure of a quick profit.  In a recent New York Times article, Robert Frank (a retired professor from Cornell University) reminds us of another example of market failure.  To lower the risk of car injuries some consumers switch to larger cars, say, SUVs.  For a while they enjoy a lower risk advantage.  But then many more consumers switch to SUVs, thus restoring the previous level of risk.  While that risk remains the same, there are negative consequences on the climate, road maintenance and so on.  Clearly, individual-centric behavior has generated net costs for everybody.

Behavioral economics also suggests that many economic decisions are the product of cognitive biases than the virtue of rationality and it’s best for individuals to be nudged to act optimally.  For example, presented with both choices to opt-in or opt-out, many young people refuse to participate in retirement savings programs to their loss.  Making opt-in the default choice for all employees would better serve their interests. 

Nor is the role of government redundant in the modern economy.  Since the days of John Locke and Adam Smith, the world has become extremely more complex in terms of information, technology, institutions, and possibilities.  The issue is not whether government is big or small but rather whether it can efficiently or not empower individuals to navigate complex environments.   

For all these shortcomings, it is not surprising that libertarianism has failed to be the organizing principle of old or modern societies and states.  From the time of hunter-gatherers, to the farming economies and first cities, and later through the three modern industrial revolutions, people have organized themselves through a complex nexus of informal and formal relationships and rules that have harnessed excesses of individual freedoms and rights in order to serve the collective good. 

In the end, libertarianism is an aspirational ideology but unfortunately out of touch with what makes humans humane and societies better.

In a recent column in The New York Times Ross Douthat suggested that the Biden Administration take steps to restore America’s population reproduction rate to the replacement level.  This could be accomplished with sustainable economic expansion and job stability, and by lowering the cost of raising children.  But more critical in Mr. Douthat’s view is a return to a more traditional culture, one that used to favor child bearing. 

Besides the US, sub-replacement birth rates, and for different reasons, are also observed elsewhere, including Europe, Russia and Japan, whereas China has imposed it by design.  Although low birth rates are looked at as problematic or even undesirable, they have no easy solutions nor is a boost an unmitigated blessing. 

To start with, economic prosperity does not necessarily lead to higher birth rates.   In most regions of the world, birth rates have fallen in spite of improved economic conditions.  The causes are quite interesting.  First, the dramatic fall in infant mortality has made it less necessary for parents to have more children as an insurance against early death.  It has been estimated that in historical societies, like those of Greece, Rome, Pre-Columbian America, Medieval Japan and Imperial China, 25% of newborn babies died the first year.  Today this rate is down to 2.9%, with the greatest reduction achieved in less developed countries.

Second, the shift of huge numbers of people away from farming to other occupations has lessened the need to have plenty of hands in a family to support the agrarian economy.  Third, economic and social gains open up more opportunities for women to educate themselves and join the labor force, the result being later in life and fewer births.  With help from modern contraceptive methods, these trends have reduced the average family size, especially in the less developed world.   The number of children per woman has declined from 5.8 in 1800 to 2.5 in 2017, and is forecasted to fall to 1.9 by 2100.

It is very doubtful that the powerful effects of the above factors, and especially the one coming from the empowerment of women, can be neutralized by a cultural change that is friendlier to child bearing.  But even if such a cultural change were somewhat possible, we have to reckon with the collateral effects of higher birth rates on the earth’s ecosystem.

At present, the earth’s human population stands at 7.9 billion.  It is projected to grow to 9.7 billion in 2050 and about 11 billion in 2100.  For environmental sustainability the optimal human population is estimated to be between 1.5 and 2 billion people.  Considering only the common era, humans numbered around 200 million in 1 CE and 400 million in 1000 CE.  We grew to 1,000 million in 1800, 1,650 million in 1900, and 6,100 million in 2000.    All in all, it is estimated that about 100 billion humans have been born and died.

The numbers above show that despite the falling rates of births, each century has added and is predicted to add huge numbers of humans to planet earth.  Besides this explosion of human population, there are two other factors that impact our natural environment.  One is rising technological capacity that enables us to harvest ever more from nature.  The other is our growing appetite for overconsumption.  To sustain our increasing numbers and consumption needs, we are deforesting lands for mining, timber and farming; we are depleting the seas for seafood; and we are filling the atmosphere with carbon dioxide for manufacturing, transportation, and food production.  The warnings from scientists are many and dire.  But for reasons associated with religious beliefs, our natural instinct of procreation, and economic interests we seem to turn a deaf ear and avert our eyes from this reckoning.

The most potent explanation for ignoring the ecological consequences of population growth and overconsumption is that countries look at the issue from their own perspective.  Let’s concentrate for now on the economic argument.  Population growth is economically-speaking important because along with productivity it impacts economic growth.  An economy needs increasing numbers of workers and consumers to grow.  An economy also needs more young people in order to sustain the cost of its aging population, that is, the cost of health care and retirement income.  It is easy, therefore, to understand why each country individually is concerned with its population trend.  But what is good for each country separately can be harmful to all if a deteriorating ecosystem eventually puts all humans at risk.

So, we have a three-pronged conundrum.  First, as economic conditions improve birth rates fall.  Second, adherence to the goal of economic growth requires a replacement birth rate.  And third, rising human population and overconsumption depreciate the planet’s ecosystem and threaten our existence or way of life as we know it.  What gives?

Some will argue that new technologies will sustain us with less damage to the environment.  Others will argue that it is possible to use science and technology to restore any damage we inflict on the ecosystem.  What about stemming overconsumption?  Or returning to simpler modes of living that reduce the human footprint in nature?  All these are tough choices because they require global cooperation and huge cultural change.  The human record is barely encouraging in that respect.

What about rearranging the geography of global population by moving poor people to developed economies with declining populations?  Assuming for a moment we overcome anti-immigration attitudes, this may help individual countries but not the ecosystem.  For example, moving people from Africa to the US would turn users of an average 4,220 kWh of energy to users of 79,897 kWh as US residents.  Not so good for the environment.

Birth rates, population growth and ecological sustainability are intricately linked and have no easy answers.  In one of his lectures James Watson, discoverer of the DNA structure, was asked whether we will ever manage to extend human life to 150 years.  With a grin on his face, Watson replied “before we do that, we need to make sure our legs and brains keep going.”  In the same spirit, before we wish higher birth rates and population growth, we need to find ways to save our ecosystem from collapsing, because if that goes so will we.

The cold war I am referring to is the one brewing between the US and China.  From the American side it is tooted as the competition for economic (and not only) supremacy in the 21^st century.  From the title, you can guess that I am not in favor of waging this war.  It will be damaging to the world and it may not produce the results American policy makers expect.

The US won the previous cold war with the Soviet Union because, while maintaining military parity, the US enjoyed an unrivaled economic superiority.  China though is a whole different opponent.  China’s leaders have successfully combined Communist Party rule with the power of the markets to lift China out of poverty and turn it to an economic superpower.  Economic heft has also allowed China to raise its international profile and make up for past humiliations in the hands of foreign powers.  Achieving and maintaining economic well-being and significant presence in world affairs are the two-fold objectives of China’s nationalist policy.

But China wants to go beyond these legitimate goals.  It is China’s new ambitions that have sounded alarms in the US.  The Belt and Road Initiative (also known as One Belt, One Road) was announced in 2013.  It aims at investing economically, culturally and educationally in a long list of countries and connect China to the world economy as the Silk Road connected China to Europe in the late Middle Ages.  This initiative has already given China a non-trivial presence in the global supply chain of raw materials and transport.  Two years later in 2015, China announced the Made in China initiative that aims at making China self-sufficient in all critical high technologies and a leader in Artificial Intelligence by 2025.  It is exactly the potential of losing not only superiority but also independence in cybertechnology (including AI) that defines the new cold war from an American standpoint.

So, how has America done in the years that China was turbocharging its economic growth following its admission to the WTO in 2001?  Not very well.  This twenty-year period exposed America to the risks of its capitalist model and its unsettled racial, social and political divisions.  The list is sobering: Corporate scandals spearheaded by Enron and WorldCom; collapse of the housing market and near-failure of the financial system; intense polarization leading to the Trump presidency and the questioning of democratic institutions, including the integrity of elections. 

The fall-out has been dramatic and consequential.  It includes the deindustrialization of the Rust Belt, the loss of well-paying manufacturing jobs, the decline of towns and communities, the “deaths of despair” from opioids, the squeezing of the middle class, and the exacerbation of income and wealth inequities.  The pandemic provided further evidence of the devastating consequences of unequal health care and job security in America.    

Even before the 1990s, it was America that from a position of strength had evangelized a liberal international economic order to the world.  We now realize that this policy was not well-thought out.  The paradigm of achieving aggregate GDP growth and then expecting firms and workers to adjust to the evolving realities proved to be overrated.  Big firms were able to move abroad to exploit reservoirs of cheap labor but their laid off workers were left without support for retooling and reentering new jobs that paid as well as those lost.  The low unemployment rates of recent years fail to reveal the paucity of good jobs for blue-color workers.    

Workers were not the only piece of the economy affected by globalization.  The productive side of the country was also affected by the new geography of manufacturing sectors.  In a globalized market, each firm is interested in securing its production factors from the lowest-cost producers.  Minding the national or the geopolitical interests of the home country is not necessarily high in firm strategy.  A free global market is non-threatening as long as there are no nationalist agendas.  US administrations and politicians now realize that China’s nationalist economic agenda threatens the American national interests.  The mistrust is fueled by fears that China may use its cybertechnology industries to acquire access to information and manipulated it in order to further the interests of its centralize communist political system.  Such capabilities can become even more worrisome if coupled with mastery of Artificial Intelligence. 

Thus, to counter China’s inroads into these high-tech sectors, American policy makers are coming around to two important compromises.  They are retreating from their internationalism and are embracing what has sounded like an anathema, that is, industrial policy.   Both compromises though pose serious challenges.  Adopting an industrial policy carries the risk of institutionalizing crony capitalism by extending political favoritism to well-connected firms.  To ensure that an industrial policy serves legitimate national interests requires that the American political system accepts and learns to run joint projects between the state and the private sector.   Given the inordinate influence money can buy in America, adopting an industrial policy that truly serves the national interest may prove to be too high a mountain to scale.  

Forcing American firms to repatriate their operations will put pressure on them to contain the higher labor costs either through robotic technology or by suppressing wages or workers’ rights, like the right to form unions.  If so, the scarcity of good jobs for blue-color workers is likely to persist.  With the prospect of sanctions and counter-sanctions much is also at stake for the global American businesses in social media and banking, which will, therefore, be unwilling to countenance to a retreat from lucrative foreign markets.  That’s an additional challenge to policy makers in government and Congress.

Even if the American retreat from globalization comes to pass it is unlikely it will hinder China’s economic advancement.  In the next several decades, population growth in regions, like Africa, will be much higher than in the developed world.  And PriceWaterhouseCooper forecasts that between now and 2050 emerging economies will grow at twice the rate of developed economies.  These trends present China ample opportunities to grow without full commercial ties to America or Europe.   And it is doubtful to what extent Europe will damage its own interests in the huge Chinese market out of solidarity with the US.   

For all the above arguments America’s best approach may be one of competition with proper respect for vital national interests without resorting to fruitless and damaging antagonism.  The remarkable story of America and China is that two superpowers have established a rare interdependence built on the common ground of commerce.  It is in their mutual benefit to work out their national interests without sliding into a damaging cold war.  

If an accidental visitor (let’s use the name Siya*) to planet earth took a good tour of the globe would easily come to the conclusion that the planet had been made to serve only its human species. 

A quick search would have shown that there are over 7 billion humans living in practically every corner of the planet; that they are surrounded by billions of domestic animals that provide companionship or food; that this trio of mammalian mass (of which 36% is human) comprises 96 percent of the total mammalian biomass, with wildlife mammals making up the remainder four percent.  Our visitor’s best chance to see some of this scant wild life would be a visit to a zoo rather than an excursion to the wild.

And not to forget our feathered friends, Siya would find that domesticated fowl, like chicken, turkeys, ducks, outnumber wild birds by a factor of three.  By one estimate, humans consume over 50 billion chicken, 1.5 billion pigs, 500 million sheep and 300 million cattle each year.

If Siya’s assignment of reporting back home included a historical account of how humans became the masters of planet earth, our space traveler would be astonished to discover that things did not start that way nor did humans ruled the planet for hundreds of thousands of years.

First, Siya would learn that homo sapiens was the only lucky variety of hominids to survive on earth with a smitten of Neanderthal and Denisovan DNA.  Once homo sapiens secured their place on earth, they set out to inhabit the planet with devastating results for all other species.  Siya would learn the extinction came in three waves.**  The first wave started some tens of thousands of years before the agricultural revolution.  The second wave came with farming (about 11000 years ago) and the third with the industrial revolution.  Each wave was more consequential than the previous one as it wiped out more animal species, brought others closer to total annihilation or to the point of no return. 

As long as homo sapiens developed mostly biologically just like the rest of the animal world the ecological balance was kept in a fair equilibrium.  Things changed though when homo sapiens passed the cognitive threshold that gave humans the ability to intervene in the natural environment, change it and design it to serve their interests.  Thus, every leap of cognitive and technological advancement of homo sapiens has resulted in further retrenchment of the fauna and flora of planet earth. 

How could we explain to Siya why humans separated their lot from that of nature?  Part of the explanation is that, unfortunately for the environment, human thought, secular or religious, was late in developing a nature-friendly ethical code.  Classical ethical philosophy as well as Western monotheistic religions were more preoccupied with morality among humans than human morality toward nature.***  We find more concern for nature in Eastern religions like Buddhism and Hinduism than in the Abrahamic faiths with their anthropocentric views.  Nature is also more revered in animism and paganism which attribute divine or spiritual powers and properties to nature (animals, rivers, oceans, celestial objects, etc.).  Indeed, we see this still reflected in the interaction of Indigenous people with nature.  A United Nations study has found that lands managed by Indigenous people have healthier ecosystems than lands conserved by governments.

We all have heard of Thomas Malthus and his prediction that the exponential population growth relative to the slower growth of food production would bring the destruction of human race.  Contrary to Malthus’s prediction, humans proved very smart and innovative in extracting from nature ever greater yields of food.  Malthus would have been closer to the mark had he theorized that the true danger to humans and their environment was not as much population growth as the “malady of infinite aspirations” as Emile Durkheim (the modern father of sociology) called the tendency to develop endless wants.  John Maynard Keynes would also later warn us of the dangers of aspirational wants.

Our visitor Siya would notice that humans are still driven by hubris about their ability to manage nature and an impervious sense of infinite expectations about the capacity of nature to sustain human life with abundance.   Siya would discover that humans count progress and keep a score card that only accounts for the satisfaction of their material needs irrespective of what happens to the rest of life on earth.  Many derive confidence from the belief that divine providence in the sustenance of humans will last forever because of some covenant struck between them and their God.  Others simply push aside all troubling thoughts of an ultimate catastrophe because they are unable to suppress their greed for material gratification.  And others simply don’t believe in the science of environment and climate.

But Siya would also notice something else.  That humans are not only selfish toward nature.  They are also selfish toward each other.  Siya would observe small numbers of humans living in superb luxury and gluttony and many living in appalling conditions.  So Siya would come to the sobering conclusion that the plunder of nature is not committed in the interest of all humanity but, to a great extent, for the pleasure of few.  And yet, when the earth’s ecosystem suffers all humanity pays the price whether rich or poor.  Actually, the poor pay the heavier price given the hierarchical order of affordability.  Let’s call this the negative externality of redundant wealth accumulation.

By the end of this trip around planet earth, Siya would read UN reports, government policy papers, scientific papers, newspaper editorials and op-ed columns.  One of such report from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services of the UN stresses the need for transformative changes in technological, economic and social factors if we are to arrest any further deterioration of the earth’s ecosystem.  Siya could promise to send us her assessment as soon as she had returned home.  Given though that Siya’s planet is 100 years away from earth, Siya would have said “I ‘m sorry, but till then you are on your own and don’t forget the clock is ticking.” 

* Since I have no idea how that foreign planet identifies a person as male or female, I chose to name my fictitious visitor Siya from the genderless pronoun siya used in Austronesian languages.

** The three waves are from Yuval Harari’s Sapiens.  Harari calls homo sapiens an ecological serial killer.

*** This gap between religion and human duty toward nature has been recognized the last thirty years and one outlet for those interested is The Yale Forum on Religion and Ecology.  

Sickness and death from Covid 19 were visited upon many, but a whole lot more of us were afflicted by boredom.  Whether rich or poor, young or old, living in the countryside or in a city we were left with empty holes of time in our lives, holes we could not fill with meaningful activities.  And most of us I bet cursed our boredom time and again and scornfully cast it in the heap of things we loathe.

But read more about boredom and you may start having a change of heart and mind.  The New York Times had an article about boredom during the pandemic, but it looked at it narrowly as the emotion that might have changed our consumption habits in temporary or even more permanent ways.  It so happened though that around this time I was reading a book about work by the anthropologist James Suzman,* and in its pages I discovered another perspective on boredom; a perspective that is more positive and informative.

To be sure, boredom can be the mother of some bad things.  It can drive people to alcohol or drug abuse, others to binge-eating, and others yet to binge-buying (look at Amazon’s sales).  Boredom as an emotional condition can be associated with chronic depression, or inability to pay attention to things we do, or a lack of capacity to find meaning in anything.  Boredom is leisure time that goes bad.  To be bored means to be self-aware and unfulfilled.  The 19^th century philosopher Arthur Schopenhauer considered boredom to be a reminder of the meaninglessness of human existence.  Wow!

For most of us, however, the boredom we have been feeling during the pandemic is the result of the lockdown that replaced hours of work, socialization, recreation, entertainment and traveling with hours of – should we say nothing?  Full of energy and desires but nothing to do and nowhere to go.  Just the state of affairs that fits Leo Tolstoy’s definition of boredom: The desire for desires.

To have desires we must be aware of things we can do.  We must have experienced pecuniary or other pleasurable activities we desire to pursue.  And this brings us to the interesting questions about boredom.  What happens, for example, if you have a singular goal in life and you achieve it?  I knew nothing about Timothy Kim, but looking for answers to this question I came across his case.  Timothy always wanted to be vastly rich.  At age 31 he became a billionaire with his platform TubofCash.com and then he confessed he was bored!  Who runs the higher risk for boredom, a rich or a poor person?  Rich people can satisfy a lot more desires than poor people.  Does that make them more prone to boredom than poor people?  Well, I suppose it depends on whether boredom is a relative or an absolute emotion.  If it is relative, rich people suffer worse because they are deprived of relatively more pleasures than poor people.  But if boredom is absolute then rich people suffer less because they can still do some things (like ordering food from good restaurants) not available to poor people.

Instead of comparing contemporary rich and poor people, let’s compare ourselves to our hunter-gatherer ancestors.  Contrary to the popular belief that hunter-gatherers were struggling every minute of their lives to secure food and stay alive, they actually managed to be well-fed and sheltered with no more than two hours of work a day.  Remarkably then they had a lot more leisure time in their hands than their descendants who had the misfortune to discover farming and millennia later the world of machines and the intense work culture the industrial revolution brought us. 

How did they spend those hours of leisure?  The anthropologists tell us, they sat around the camp fire, slowly learning the art of socializing, mediating frictions among clan members, finding some ways to entertain each other, and eventually developing the tool that would make these activities more communicative, that is, language.

With all this free time, they had to feel bored at some point.  But we can safely guess not as much as we do. Their lifestyle was simple and their basket of desires was really small and shallow.  Not only they were able to meet their material needs very reliably and plentifully, they also had no serious desires for social status to pursue.  Their egalitarian social structure made sure that those with the potential or intention to acquire a higher status were brought back into line through shaming.

Nonetheless, boredom must have been too much to some hunter-gatherers that it set their minds loose to explore ways to escape it.  One of these mind-wandering moments discovered artistic expression.  Representational art in primitive sculptural form appeared 70,000 to 90,000 years ago, and the first cave wall paintings about 35,000 years ago.  Even Homo Erectus, our ancestor of 600,000 to 800,000 years ago, took the time (because they had plenty of it!) to put some aesthetic finish in the stony tips of their spears that was not all that necessary to their effectiveness.  Thus, boredom brought out of leisure might have possibly been the impetus for the emergence of art and language.

The comparison of our lives to those of our foraging ancestors then suggests that the negative consequences and the intensity of boredom are another curse of our contemporary life-style and civilization.  Aware of the countless experiences and pleasures that are open to us and with our bottomless basket of desires, boredom becomes so much more salient and unbearable.

Back then, thousands of years ago, when time was in abundance and not the precious good it is today, boredom played its evolutionary role by giving our innate trait of curiosity an outlet to imagination, creativity and pursuit of meaning.  Eventually though, available free time and its offspring boredom conspired to push us into food producing methods and social structures that bonded us to work, generated novel experiences and gave us a world of desires from which it has become almost impossible to escape. 

Thus, that ancient boredom that gave us the innovations that took us beyond our basic desire to just stay alive with food and shelter is now responsible for all the discontent its modern version visits upon us today.

* James Suzman, Work: A History of How We Spend Our Time, 2020.

Some numbers have the power to capture the public attention and become symbols of fears, reality or aspirations.  So 13 terrifies us; 1% reminds us of economic inequality; and $15 is the battle cry for the minimum wage in America.  This post is about that last number.  In fact, it’s more than a number.  It’s about real lives. 

First, I got curious as to what the minimum wage is in other economically advanced countries.  I found that in 2020 the minimum wage in the UK, Germany, France, Holland, Belgium and Ireland was over 1500 euros compared to just over 1000 in the US.  That’s a considerable discrepancy, so I had to look at the other side of the equation, unemployment.  From 2017 to 2019 (prior to the pandemic) average annual unemployment was around 4% in Holland, 3.5% in Germany, and 4% in the UK, that is, about the same as the 4% rate of the US.  Spain and Italy with a lower minimum wage than those countries had unemployment rates over 10%.  Denmark, Finland and Sweden do not have a minimum wage and yet their unemployment rate of about 6% was higher than in countries with a minimum wage. 

Though simplistic, these data tell me that the often-heard argument of a direct relationship between minimum wage and unemployment rate is not a slam dunk.  Numerous economic studies also fail to come to a uniform conclusion regarding the link between minimum wage and employment.  Now that we have thrown cold water on this debate-killing argument, let’s proceed with the rest of the story. 

The term minimum wage usually means an administratively set minimum price for labor. The federally set minimum wage has stood at $7.25/hr since 2009.  Its purchasing power today is clearly below that level.  When we consider that tax rates are adjusted for inflation to avoid higher taxation for high incomes and Social Security benefits rise with inflation, it becomes harder to argue against a minimum wage adjustment to protect its purchasing power.  So, that’s one point to keep in mind.  And here is another one.  The Congressional Budget Office estimates that raising the minimum wage to $15/hr will cost workers 1.4 million jobs.  This translates to a $10.15 million* of hourly income loss for workers.  But there are 27 million workers that make less than $15/hr and, hence, even a one-dollar raise of their wage translates to a $27 million hourly gain, much greater than the loss.  In a society that fetishizes aggregate income growth regardless of its distribution, the contemplated rise of the minimum wage sounds like a big winner.     

To critics, an administratively set minimum wage violates the law of demand and supply for labor.  But the labor market is full of distortions.  How do we explain, for example, barriers to entry into some professions (doctors, dentists and lawyers come to mind) that boost their wages by suppressing supply?  Or administrative requirements for an expert’s opinion (engineers, architects) even for small and mundane projects that help increase demand for such services and, hence, wages.  Not only these arrangements violate competition; they aim at elevating lifestyles from middle-class to upper-middle class or even to upper-class status.  Compare that with policies that try to pull millions of workers out of poverty to bear subsistence.  Which policies win the moral argument?

And what about the formation of horizontal (same industry) conglomerates, which by the laws of oligopoly produce at a lower level than under perfect competition and, hence, have less demand for labor, which in turn suppresses wages.  Let’s also ask this question.  If the current minimum wage is above what firms can afford, why then the slice of profits in our national income pie keeps getting bigger than the slice of wages?  Somewhere in our economy labor must be losing ground and the most likely suspect is the low end of the labor market. 

There is another definition of minimum wage that can set us on a more promising road.  That’s the wage that allows a worker to meet basic needs in shelter, food, clothing, recreation.  It’s what a living wage is meant to be.  This definition is often undermined by attempts to associate the minimum wage with teenagers or college students who just try to supplement their parental allowance, or with those who need only some part-time work that is weakly consequential to their overall wellbeing.  The truth though is that in the US the minimum wage is the only income source to millions of people struggling to have a decent living.  The reality is at the current minimum wage of $7.25/hr an American family of two lives in poverty.

Viewed from this perspective, the minimum wage is very meaningful because it helps sustain the physical and mental health of the lowest paid workers as well as their participation in the labor force.   It also humanizes labor because it shifts the focus from jobs to employees.  As many economists argue jobs are a statistic but employees are the ones who bear the brunt of disruptions in the labor market.  The humane and socially responsible approach then is to decouple the living conditions of a worker from the lowest wage that equates demand and supply.  And this is all the more so in a country of extreme wealth for few.

So, we now come to the crux of the problem.  To have jobs we need to have demand from firms at a wage they can afford.  To fairly compensate labor the minimum wage ought to be a living wage.  The only force that can bridge the gap (when such a gap exists) is comprehensive public policy.  There are several alternatives.  To ensure a poverty-free minimum wage the government could set a living minimum wage and then reduce the total labor cost, at least for smaller firms, through lower charges for programs, like Social Security and Medicare in the US.  Alternatively, the government should provide direct supplemental payments to workers that support a poverty-free living.  We already have such supplemental assistance programs but poverty still persists for millions of Americans.

The main point is that the debate about the minimum wage ought not to be about jobs lost or gained but about working lives and what it takes to keep them out of poverty and with dignity.  This approach then suggests that tackling the minimum wage calls for more comprehensive policies that support the demand for labor but also recognize the value of labor and protect the lowest paid workers from the vagaries of the labor market. 

* If 1.4 million workers lose their minimum wage of $7.25/hr they suffer a total hourly loss of $10.15 million.   Even if they lose more than $7.15/hr (because they are paid more than the minimum wage) it is still highly unlikely for the lost income to overtake the total gain the 27 million workers will enjoy from a higher minimum wage.

Invoking the concept of the common good as an organizing principle of a society is one thing; trying to define it, though, is a major challenge.  Like the Odyssey, setting out for the common good is a journey full of temptations that can throw you off course, full of risks of making wrong choices, full of adversaries that want to stymie you from ever reaching Ithaca.  Since I raised the concept of the common good in my last blogpost, it’s now time to say a bit more about it.

From early on, the common good has been discussed through two different lenses.  One is that of the individual, the other is that of society.  The first approach defines the common good as the sum total of individual interests.  This is the way the common good is attained through the invisible hand of Adam Smith.  Self-interest and ambition checked and balanced in the marketplace produce the greatest good for society.  Adherence to unfettered markets, however, threatens attainment of the common good not because Adam Smith advocated that self-interest should come free of morality (actually the opposite) but because, as we know, markets can fail, and when they do, they serve neither the individual nor the common good.     

One hundred years after Adam Smith’s The Wealth of the Nations appeared, another brilliant Scot, Charles Darwin published The Origin of the Species.  Based on a false interpretation of Darwinian evolution, HerbertSpencer coined the unfortunate expression “survival of the fittest.”  This became the premise for a very charged individualistic approach to defining the common good.  A good society is one whose members are strong enough to meet the challenges of social survival.  Society should weed out weak and free-loading individuals.  Resistance against social safety nets and welfare programs are modern echoes of the Spencerian principle.   

On the other end of the spectrum, we have the top-down approach that prescribes a common good for all in the interest of achieving salvation or state supremacy.  These are the conceptualizations of the common good by religious zealots or authoritarian political movements. 

It is between extreme individualism and top-down authoritarianism where the search for the common good becomes most challenging because it requires that optimal balance that can be so elusive.  In this tradition, the common good is realized in societies and states where there is a mutual interdependence between the interests of the individual and those of society.  For Aristotle* (considered to be the father of the concept of common good) the good society is one that enables its members to realize their full potential.  The common good is attainable only through the society and yet it is individually shared by its members.  Each person should take ownership in the attainment of the common good and contribute to its enjoyment by fellow citizens since enabling everyone to realize his/her potential is the essence of the common good. 

This conceptualization of the common good makes it the shared responsibility of the citizens and the state.  Realizing one’s potential depends on the means and opportunities to which one has access, and, hence, how a society is organized.  It is here that a modern philosopher, John Rawls, has made an intriguing proposition.  Rawls invites each one of us to go behind a veil of ignorance and forget who we are, male or female, privileged or not, well-connected or not, physically or mentally gifted or not, and then choose the social organization within which we would like to live.  That would determine then how a good society ought to be organized so that even its least fortunate and weakest members have a fair shot at realizing their potential and share in the happiness of life.  It is the value of potential self-actualization and preservation of dignity even for the weakest of us that elevate education, health and avoidance of poverty to legitimate rights and part of the common good.    

Attainment of the common good comes with the surrender of some private benefit or freedom of choice from each one of us.   Therefore, it is important to show that attaining the common good is worth this loss.  It is easy, for example, to see how a common defense or public roads system provides private benefits.  It may not be as easy though to understand that public financing of education generates private gains for all.  Only when the desire to attain the common good becomes part of the cultural fabric of a society, individuals count it as a source of satisfaction besides their own private accomplishments.

Charity and morality have been used for millennia to motivate people to subscribe to the idea of common good.  But practical wisdom also needs science to draw the circle of common interests and how to manage them.  It is the science of evolution that has shown us how sociality has enabled humans to survive and become a more resilient species.  It is science that is alerting us to the risks of climate change.  It is science that exposes the harmful effects of poverty on the cognitive and psychological growth of children.

The unflattering fact in the search for the common good is that it takes a common threat or an unbearable indignity to make us coalesce and form a more socio-centric worldview.  In the last century, it took two devastating world wars and an economic catastrophe with their respective fears of death and hunger for people to become more aware of their common destiny.  It took the indignity of racial discrimination in America to enact laws to protect the civic and voting rights of Black Americans and other groups in the sixties.

But it took only twenty years to fall back to the individualistic conceptualization of the common good here in America.   Allowing the rise of stark inequalities in economic outcomes, health care, educational attainment, child care, as well as our divisions in handling the risks of the pandemic and understanding the climate challenge are witnesses of how far we have veered from the sense of the common good.  

The common good is more than individual freedom and civil rights.  Actually they are both in peril without a social compact that gives citizens the basic means and opportunities so that they  come to accept certain interests as common and worth striving for.

*Aristotle’s common good comes with the caveat that it was not all-inclusive.  It was only in reference to the interests of free male citizens at the exclusion of women and slaves.

I have borrowed this title from a book written by the French economist Jean Tirole, winner of the 2014 Nobel Prize in economics.  Tirole’s goal is to show how a society can use the discipline of economics to pursue its common good whatever that is.  It’s like saying, let’s show how we can use the laws of aeronautics so we can fly from here to there.  In other words, Tirole reminds us that economics is a means to reach an end, not the other way around. 

That’s important because many, whether by ignorance or calculation, identify economics very narrowly with institutions and practices that advance the interests of some people and ignore or hurt the interests of others.  It’s a social loss that most students leave their secondary education with little understanding of economics.  This limited knowledge is very responsible for the rise of populist economic ideas or the support of policies that worsen instead of improving the economic interests of the society. 

Although economics can provide more informed and efficient answers to many practical problems the road to employing it in the service of the common good is full of challenges and tough choices.  Knowing how markets work, being able to design economic contracts that optimize the interests of sellers and buyers, and having answers for the economics of climate change and the digital economy do not necessarily take us to the common good.

To grasp the potential and the limits of economics as a means to serving the common good, first, we need to understand the role of the market and the state.   Tirole reminds us that markets are mere mechanisms of exchange without an a priori purpose to serve this or that common good.  They have no inherent morality of their own; nor do they and by themselves produce the distribution of gains a society prefers.  Market failures and outcomes rather reflect the moral values of societies and the market rules they set. 

The economic roles of the market and the state are not mutually exclusive; they are instead complementary.  We rely on the state to guarantee contracts and property rights; to keep competition fair; and correct market failures.  If we were very honest and had all the information we needed, transactions would be fair and the state would have less of a role to play.  Adam Smith believed that self-interest would make good markets for both sellers and buyers.  But often, self-interest veers into exploitation of other market participants.  Thus, a bank may engage in reckless lending and fail to redeem the savings of its depositors.  Or a firm deliberately withholds vital information affecting the value of its stock and bonds.  In these and other cases where behavior and information are important, state regulation is the necessary remedy.

Just as the market is open to failures so is the state.  Political power can enable special interests to capture the state authorities that set and enforce regulation and hold individuals and firms accountable for the consequences of their economic actions.  The winners and losers of an economy are often determined by the political power special interests and groups can wield.

The main actors in markets are business organizations which operate under different organizational forms.  They may be non-profit entities, simple proprietary firms, cooperatives or corporations.  Each form serves the interests of a distinct set of stakeholders, the most dominant being the shareholders.  But do their interests serve the common good?  How do we align the interests of these organizations with the common good? 

Pursuing the common good is not cost-free.  We need to decide how the cost of negative externalities (like pollution, displacement of workers, community decline) are to be shared between private business and the state.  Society as a whole can also produce unwelcome externalities.  The more innovation-intensive and globalized a society prefers to be the more turmoil will prevail in its industrial and labor fabric.  The more individualistic a society is the more economic inequality will exist.  Again, the question is whether a society will ignore any negative effects of these choices or it will serve as a shock absorber and stabilizer.  The more of the burden falls on the state the more willing we ought to be to pay higher taxes. 

The group most affected by the structure and performance of an economy are the workers.  Tirole argues that a good economic policy should prioritize employees not jobs.  Since we have very little control over jobs it is the workers we need to protect as firms, industries, even the whole economy transition to a new phase.  In the US, we have learned the hard way the costs of lacking a sound transition policy as the pace of offshoring of jobs intensified through the 1990s and beyond.  The anxiety of workers (coal miners for example) in industries in decline has a lot to do with this lack of a transition policy.

Tirole stresses that “Economics is not in the service of private property and individual interest, nor does it serve those who would like to use the state to impose their own values or to ensure that their own interests prevail.  . . . Economics works toward the common good: its goal is to make the world a better place.”

But after the impartiality of economics toward the market and the state is established and its dedication to the pursuit of a better world has been declared, the challenge of what a better world is still bedevils us along with the question of how we get there. 

As argued above, pursuing a common good requires that we accept a tradeoff.  Scandinavians trade high taxes for state services in education, health and retirement benefits.  The French trade stubbornly higher unemployment for job protection.  Many countries have minimum wage laws even if this may mean some unemployment for low-skill workers.  In the US, belief in the primacy of markets and private enterprise foreclose initiatives for universal health insurance.

Tirole’s book makes a persuasive case for the analytical rigor of economics and its ability to guide us toward more optimal solutions.  But at the end of the book our quest for the common good is still elusive.  It’s like we have been given a perfect airplane but we now have to choose our destination.   For this we need more than economics.

It is very encouraging and promising that there is bipartisan movement to seriously address the child poverty scourge in the US.  When I check international data to find where the US ranks in indicators like child poverty, I feel compelled to check and recheck the numbers and consult different sources.  I do this because I find it difficult to believe that a country that rich ranks so low in taking care of its young people and future promise.

Let me say at the outset that there are different estimates of poverty, and child poverty in particular, so that one can come up with different numbers and international rankings.  For example, research out of the American Enterprise Institute disputes the US numbers used for international comparisons and contends that the US ranks close to other similar countries like the UK and Canada. 

Even so, in a country of extreme inequality, you can have mild national averages for a socioeconomic indicator that hide the very precarious state of considerable segments of the population.  Even after one adjusts the poverty levels by counting various government programs, the fact remains that there are pockets of significant child poverty in the US.  For example, the Children’s Defense Fund reports that one in six children live in poverty in this country.  The ratio is one in three for Black and one in four for Hispanic kids.  Across the US, child poverty rates are significantly higher in lower- income states and states with significant numbers of people of color.  Thus, even California and New York State have child poverty rates above the national average despite their overall prosperity.

The consequences of child poverty are grave in terms of economic impact, social mobility, health, cognitive and emotional development, and, of course, social adjustment and crime.  The Children’s Defense Fund estimates that the effects of child poverty amount to a loss of $700 billion of annual GDP.  Social mobility studies utilizing the Intergenerational Earnings (IGE) elasticity index have found that 50% of the earnings of American adults depend on the earnings of their parents.  It means that half of the adult earnings of a child born into a poor household are predetermined by the low earnings of the parents.  Unless we believe that foregoing part of a person’s potential for economic and social attainment is not a waste or does not matter for social harmony then we must have no difficulty acknowledging that investing in children can give a society the biggest payoff.

It is important to understand that the failure of fulfilling one’s potential in economic and social attainment is the result of what poverty does to a child’s cognitive and emotional development.  The effects are the product of interactions of genetic and environmental factors that affect the brain and health of the child.  Adverse environmental conditions include poor nutrition and health care as well as problematic family and social situations.  

Thus, child poverty is very relevant to one’s adult life.  Two kids born with very similar genetic predispositions can have dramatically different adult lives.  The kid born into a favorable economic, family and social environment is a lot more likely to be successful later in life than the kid born into poverty and adverse family and social conditions.  Ignoring the effects of childhood experience on adult life impacts how we perceive and, more importantly, attribute success and failure in adulthood.  A much higher percentage of Americans than Europeans attributes success in adulthood to personal effort and merit and more Americans than Europeans also agree with the notion “people are poor because they are lazy or lack determination.”  When we fail to understand the link between childhood poverty and adversity and adult life, we are more inclined to oppose public support programs for adults.

The developmental effects of poverty come from the fact that the frontal cortex is the part of the brain still developing during adolescence and the last part of the brain to reach full development.  The frontal cortex is important for executive functions and regulating our emotions.  Any impairment in its development impairs cognitive and emotion maturation.  It is known that poverty and adverse environment during adolescence can adversely affect the development of the frontal cortex.  Because of its late-stage development, the quality of the frontal cortex is less dependent on genes and more on the environment and nurturing.

Studies have shown that childhood adversity, including poverty, raises the odds for depression, anxiety, substance abuse, impaired cognitive capabilities, impaired impulse control and emotion regulation, antisocial behavior, and troubled relationships.  In other words, born in poverty means you have a lot more barriers and challenges to overcome in order to succeed.  Since child poverty implies household poverty, inferior prenatal care and maternity conditions also contribute to possible problems in the development of the brain.

The negative effects of poverty on the physical and mental health of poor people are also accentuated under conditions of inequality.  What has been found to really matter is not the condition of being poor but rather the condition of feeling poor. Children growing in poor households and neighborhoods become aware of their low socioeconomic status and this further contributes to their uneven development.

Beyond these negative effects afflicting American children, we need also to account for inequality in educational attainment due to more limited resources in school districts attended by poor children.  Therefore, the extent of the problem of child poverty is serious and complex.  Making progress in the war against child poverty requires investments that support robust educational opportunities and outcomes, good nutrition and good health care.

If we look beyond the US, the good news is that extreme poverty (which, of course, affects children) has declined from 50% of the global population in 1966 to 9% in 2017.  This is a tremendous improvement for mankind.  A lot of this achievement is due to the lower number of births per mother from 5 in 1965 to 2.5 in 2017.  With fewer children a household can take better care of its offsprings.

A good society is not one that neglects its most vulnerable members.  The challenge for America is to become a global role model in line with its status as the richest country.