Keynes Predicted We Would Be Working 15-Hour Weeks. Why Was He So Wrong? (2015)(npr.org)
npr.org
Keynes Predicted We Would Be Working 15-Hour Weeks. Why Was He So Wrong? (2015)
https://www.npr.org/2015/08/13/432122637/keynes-predicted-we-would-be-working-15-hour-weeks-why-was-he-so-wrong
47 comments
This is basically it. Rent scales with average income in a location, so no matter how wealthy a society is, the struggle to pay the most basic living expense (shelter) will always remain. You can't escape the rat race without owning property or earning above average income.
Always is a strong word, just abolish private property.
Wealth inequality. We could all take massive raises and work way less if we didn't structure the economy specifically to benefit the richest 2k people in the country.
Has anyone done the calculation, adding up the wealth of the richest and determining the difference it would make in the lives of everyone else? Is it $100/year? $1000/year? $10,000/year? $100,000/year? $1,000,000/year? $10,000,000/year? (or whatever currency you'd like to see the results in.) I would guess it's in the tens of thousands per year. It's an imperfect calculation since investments have benefits to society (sometimes) and you can't convert all wealth to cash without destroying some value. But it would be interesting to know the ballpark effect on non-rich individuals.
No, it’s in the realm of the tens to hundreds of thousands one-time, depending on how many wealthy people one robs (see the sibling comment by 'edanm).
One of Æsop’s fables is about a goose who laid golden eggs: https://read.gov/aesop/091.html
Confiscating all the wealth of the richest folks and dividing it up evenly amongst everyone would be similar. Sure, there would be a one-time benefit, everyone not among the richest would get a bit extra — but soon enough it would all be gone. And what would be the follow-on consequences? Who would invest in new technologies, knowing that profits would be socialised and losses privatised?
One of Æsop’s fables is about a goose who laid golden eggs: https://read.gov/aesop/091.html
Confiscating all the wealth of the richest folks and dividing it up evenly amongst everyone would be similar. Sure, there would be a one-time benefit, everyone not among the richest would get a bit extra — but soon enough it would all be gone. And what would be the follow-on consequences? Who would invest in new technologies, knowing that profits would be socialised and losses privatised?
you would have to make many changes to society to change the process that causes wealth to accumulate. there's no way these people would agree to a one time event (or structural changes for that matter as it goes completely against their interests), so you'd clearly have to make it a structural change for it to happen at all. these changes would have to account for R&D and other roles that the ultra-wealthy take upon themselves to select arbitrarily. theoretically such a system has the potential to be far more egalitarian than our stratified modern society.
Elon Musks's entire net worth right now is $334 billion. If you take all his wealth somehow and divide it among all US citizens, each would get $1000 total.
You could make the case that we're actually working what he'd consider 80 hour weeks since we've been maneuvered into requiring two incomes to support a household instead of one.
Keynes had a key observation that if people like both consumption and leisure and have to trade them off against one another, that the income effect of getting richer will dominate the substitution effect between consumption and leisure, so people in richer societies will both work less and consume more. The exact number of hours worked is just a function of the elasticity of substitution between consumption and leisure which he incorrectly guessed (not having the methods back then to empirically estimate it).
Basic human greed is why. It has made the cost of shelter astonishingly expensive. That has a knock on effect to all other aspects of life.
Oh and because a new iDevice comes out every year.
Oh and because a new iDevice comes out every year.
> It has made the cost of shelter astonishingly expensive. That has a knock on effect to all other aspects of life.
Many people in tech have had a moment in life where they either had a windfall or could have saved aggressively for a few years before moving somewhere low cost and working a 15-hour workweek. (Or retiring.) Almost nobody I know who has had this option, self included, took it.
Many people in tech have had a moment in life where they either had a windfall or could have saved aggressively for a few years before moving somewhere low cost and working a 15-hour workweek. (Or retiring.) Almost nobody I know who has had this option, self included, took it.
I'd be happy to work a 15 hour week for less pay, but I don't see any companies hiring part time, so the only option is to become a freelancer. But becoming a freelancer requires additional skills (particularly selling yourself) that most of us industry workers haven't developed.
Yeah, thats the problem as well. Pretty shitty employment flexibility. Part time worker? Nah, we will take someone who will work fulltime for us. Remote job? Hmmm
Ill take one who will sit in office. Freelancing is indeed solution for that.. Albait, a bit risky...
Because they want access to high-quality (including intellectually stimulating) jobs, which are overwhelmingly in high COL areas.
I noticed there wasn't so much as a word about labor substitutability and the tyranny of logistics. Just like the famous example of how nine fertile women can't produce a baby in one month, there are task differences between hiring say one programmer for eight hours or two programmers for four hours. More communication overhead at the very least, let alone other logistical changes. In order for such changes in practice they would need to demonstrate that the change would be better for such a retooling to take place.
All this is before getting into scarcity of labor as a factor for making such changes unviable to undesriable. Even if we had fully automated basics provided for it wouldn't make sense to cut down on the hours for the remainder that are in high demand and limited supply due to reasons like requiring talent and/or other personality qualities (most people don't have it in them to be a surgeon cutting people open even if their skill level is irrelevant), and have a high lead time in "production". We just plain wouldn't have enough qualified top end people to deal with the number of people who need say brain surgery to have brain surgeons working fifteen hour weeks. Even if it was somehow the norm elsewhere in the economy they would be paid/incentivized up to work longer hours than others.
And this is before touching the final issue of "would there be enough productivity produced with a fifteen hour week" to support the resulting society? You have to do the math here, you can't just assume "it's the CEO's fault for being paid so much" when if the math actually says that even if you could do that they would actually get $2.52 more a year.
Unfortunately upon closer examination the projection of fifteen hour work weeks amounted to just wishcasting.
All this is before getting into scarcity of labor as a factor for making such changes unviable to undesriable. Even if we had fully automated basics provided for it wouldn't make sense to cut down on the hours for the remainder that are in high demand and limited supply due to reasons like requiring talent and/or other personality qualities (most people don't have it in them to be a surgeon cutting people open even if their skill level is irrelevant), and have a high lead time in "production". We just plain wouldn't have enough qualified top end people to deal with the number of people who need say brain surgery to have brain surgeons working fifteen hour weeks. Even if it was somehow the norm elsewhere in the economy they would be paid/incentivized up to work longer hours than others.
And this is before touching the final issue of "would there be enough productivity produced with a fifteen hour week" to support the resulting society? You have to do the math here, you can't just assume "it's the CEO's fault for being paid so much" when if the math actually says that even if you could do that they would actually get $2.52 more a year.
Unfortunately upon closer examination the projection of fifteen hour work weeks amounted to just wishcasting.
You could work 15 hours a week if you are okay with early 20th-century living standards.
For a similar reason I think most definitions of poverty are silly. The poorest people in Western societies today are living like kings compared to the living standards of 1800. It's a moving goalpost that doesn't mean anything. You can measure wealth inequality, but that's a different thing.
because we still have to compete with each other over resources (opportunities, wage, customers, etc)? Working less wouldn't give you an advantage? It's a race to the bottom and you see it everywhere.
Not an economist.
Not an economist.
We generate 30% excess calories more than what is required to feed the world even after wasting 25 calories to create one beef calorie for the developed world. There is no competition. There are only distribution problems under capitalism.
After that what’s left? Wants. We should be able to work way less to just survive in this world. We shouldn’t need to work 70 hours a week to afford a small apartment.
After that what’s left? Wants. We should be able to work way less to just survive in this world. We shouldn’t need to work 70 hours a week to afford a small apartment.
I don’t quite follow your argument. We don’t generate nearly as many small apartments (especially in places people want to live in) as calories. Solving food scarcity did little to increase the supply of real estate (if anything it resulted in higher prices because people don’t need to spend as much money on food anymore).
I'm not so sure that every industry generates excess to the point where working less doesn't result in loss. I haven't really kept up with the housing conversation either.
edit: I was going to speculate about equilibrium in the housing market, but it looks like there's already a conversation about that
edit: I was going to speculate about equilibrium in the housing market, but it looks like there's already a conversation about that
You can afford a small apartment on way less than 70 hours a week of work if you're willing to live in unfashionable places. Try Toledo instead of San Francisco. The people whining about costs are mostly those who feel entitled to live in a particular city with a lot of cultural amenities and nice weather.
What a nice bubble world view. "People don't work less hours because they would gain so much more money if they worked more"
What is actually much closer to the reality of the majority of working people is that they work 15hours a day and STILL they can't earn what they need to live a quality life.
His prediction was wrong because his theory was wrong
What is actually much closer to the reality of the majority of working people is that they work 15hours a day and STILL they can't earn what they need to live a quality life.
His prediction was wrong because his theory was wrong
Both points seem pretty detached from reality? The majority of workers obviously are not working 15 hours a day..
I am wondering where you got your facts from. You are saying that of the majority if people on earth got double the wage (work 8 hours and get paid the equivalent of working for 16) they would live a human life. You have new yorkers in mind maybe? Or londoners?
A source for you and the classic HN bubble living downvoters
44% Of global population lives under the line of poverty:
https://www.worldbank.org/en/topic/poverty/overview
A source for you and the classic HN bubble living downvoters
44% Of global population lives under the line of poverty:
https://www.worldbank.org/en/topic/poverty/overview
You can look up the average/median working hours I guess.. no country is even remotely close to 15hours per day.
> A source for you
Seems tangential to your original claim ?
> A source for you
Seems tangential to your original claim ?
Seems, but isn't. The original argument I criticized says:
People dont work less because they will make so much more money that they just don't want to leave it on the table.
I said: it is more realistic to say that people don't work less because even if they worked for 15 hours they would still not make a living wage.
The difference: The first argument says people work more because they are greedy. My argurment says people work more because they can't survive if they work less.
> no country is even remotely close to 15hours per day.
People don't only work for what their legal framework says. Apart from working un-registered overtime that can go up to 9-10-12 hours, many people also work second jobs, participate in gig-work and such. Easily adding up to 12-14 hours a day, and factor in 6days out of 7days per week instead of your regular 5.
Yes, 15 hours may be an exaggeration, but not by a lot. And definitely closer to the reality of things than what Kayne said.
People dont work less because they will make so much more money that they just don't want to leave it on the table.
I said: it is more realistic to say that people don't work less because even if they worked for 15 hours they would still not make a living wage.
The difference: The first argument says people work more because they are greedy. My argurment says people work more because they can't survive if they work less.
> no country is even remotely close to 15hours per day.
People don't only work for what their legal framework says. Apart from working un-registered overtime that can go up to 9-10-12 hours, many people also work second jobs, participate in gig-work and such. Easily adding up to 12-14 hours a day, and factor in 6days out of 7days per week instead of your regular 5.
Yes, 15 hours may be an exaggeration, but not by a lot. And definitely closer to the reality of things than what Kayne said.
Specifically it's wrong because cost of living goes up as productivity rises.
This is counterintuitive because the cost of producing anything goes down, so you'd assume cost of living goes down. Unfortunately all production (and consumption) requires land, and as productivity rises, so does the cost of land. This isn't because the inputs into land get more expensive. It's for no other reason than that landowners are able to charge more because the land is able to produce more.
To point out the obvious: a landowner in a low productivity region does just the same as one in a high productivity region, which is to say nothing at all.
The land would be there available for use even if no one at all owned it.
This cost gets baked into every single input into every single good and service. The reason a meal is so expensive in New York City as compared to Oklahoma City isn't shipping costs. It's the rent of the restaurant and then the higher wages needed to pay everyone in the restaurant due to their elevated rent needs.
Rent rises (and falls, but more slowly) to exactly the level required to keep some portion of people in poverty and near-poverty, no matter how productive the local area is.
This is counterintuitive because the cost of producing anything goes down, so you'd assume cost of living goes down. Unfortunately all production (and consumption) requires land, and as productivity rises, so does the cost of land. This isn't because the inputs into land get more expensive. It's for no other reason than that landowners are able to charge more because the land is able to produce more.
To point out the obvious: a landowner in a low productivity region does just the same as one in a high productivity region, which is to say nothing at all.
The land would be there available for use even if no one at all owned it.
This cost gets baked into every single input into every single good and service. The reason a meal is so expensive in New York City as compared to Oklahoma City isn't shipping costs. It's the rent of the restaurant and then the higher wages needed to pay everyone in the restaurant due to their elevated rent needs.
Rent rises (and falls, but more slowly) to exactly the level required to keep some portion of people in poverty and near-poverty, no matter how productive the local area is.
> Rent rises (and falls, but more slowly) to exactly the level required to keep some portion of people in poverty and near-poverty, no matter how productive the local area is.
That's an interesting claim. While it does seems there are some kind of structural forces that all but guarantee a certain percentage of people will live in poverty, I'm not certain that changing rent prices is necessarily a significant factor. I tried to find evidence that changes in rent prices "keep[s] some portion of people in poverty and near-poverty."
Can you point to any references that suggest this is the case?
That's an interesting claim. While it does seems there are some kind of structural forces that all but guarantee a certain percentage of people will live in poverty, I'm not certain that changing rent prices is necessarily a significant factor. I tried to find evidence that changes in rent prices "keep[s] some portion of people in poverty and near-poverty."
Can you point to any references that suggest this is the case?
There is an equilibrium. When rents rise, workers at the margins demand higher wages or move away. This particularly applies to low-wage unskilled workers employed in service jobs like restaurants. There is friction in moving to a cheaper location and finding a new job so unfortunately some of those people will always be living in poverty.
It's self-evidently the case: go to any city in the world and you will find people in poverty regardless of the city's productivity and, as nradov points out, countless more who fled as the baseline cost of living overtook their own productivity potential.
An extreme example is Palo Alto where local productivity is so high that a family income of ~$200k/yr qualifies for public housing assistance. These are people who are outputting massive amounts of productivity but in dire need of public assistance.
Why? Rent.
There is an equilibrium between rent prices, people's willingness to live in a region, and the productivity of that region.
An extreme example is Palo Alto where local productivity is so high that a family income of ~$200k/yr qualifies for public housing assistance. These are people who are outputting massive amounts of productivity but in dire need of public assistance.
Why? Rent.
There is an equilibrium between rent prices, people's willingness to live in a region, and the productivity of that region.
Land values increase, though it is still possible to make a specific plot of land available to more people by building tall buildings on them and installing elevators. The total rent of a small plot can then potentially be divided amongst hundreds or thousands of people.
Correct, which increases the land value even further.
Trivially: If you imagine a plot of land next to One World Trade Center in Lower Manhattan that for some soil/geological region can't sustain a building taller than 2 stories, that lot will be worth far, far less than the lot upon which One World Trade Center was built.
Another example: If you imagine that elevators were outlawed for some reason, suddenly the value of all high-density developable land would fall.
Trivially: If you imagine a plot of land next to One World Trade Center in Lower Manhattan that for some soil/geological region can't sustain a building taller than 2 stories, that lot will be worth far, far less than the lot upon which One World Trade Center was built.
Another example: If you imagine that elevators were outlawed for some reason, suddenly the value of all high-density developable land would fall.
Because whenever economic progress (eg offshoring, efficiency improvements, better competition) happens and gets expressed to the market (ie lower prices), the explicit government policy is to consider this as some kind of failure and create enough new money that not only do prices stay the same, but rather actually go up.
This might even be workable if there were a corresponding government policy to gradually redefine full time employment as an ever lower number of hours. But instead we've been steeped in fallacious "free market" ideology that would paint any such thing as government meddling, even as it hypocritically gives a pass to the inflation treadmill itself.
This might even be workable if there were a corresponding government policy to gradually redefine full time employment as an ever lower number of hours. But instead we've been steeped in fallacious "free market" ideology that would paint any such thing as government meddling, even as it hypocritically gives a pass to the inflation treadmill itself.
Positional goods
Maybe I'm just jaded, but it seems increasingly obviously that when you ask "where did society go wrong?", the answer is almost always "capitalism"
How many hour weeks do you think people worked in socialism?
This isn't jaded, but is wrong insofar as its an incomplete understanding of the world or problem domain.
It would take quite a lot of studying to complete the picture, and it also requires a high level of discernment (this area often becomes a deranged quagmire on both sides), and a lot of mental gymnastics due to the high level of indirection and false methodology are needed to come to a sound conclusion.
As a TL;DR, Socialist propaganda often blames Capitalism while ignoring its own faults. Capitalism has issues as well and does the exact same.
Both versions today create a false dichotomy without provable identity (necessary for rational thought), that systems of truth seeking can then be used to identify the truth of reality. The truth is somewhat more nuanced.
Many cohorts regardless of classification engage in push-pull dynamics; you may be more familiar with the term "shock doctrine". I've heard that variations on forms for this date back to Rome.
It is impossible to have a power base within the population without a strong need. This works out in practice that a group has part of it, which calls on and publicizes the abuses of the other to engage their platform to rise up, and a small part of that group also that subverts and seeks to induce and create those same publicized problems within the other group.
So Capitalists are not necessarily Capitalists but a mixture of both, the same goes for Socialists, and the failure domains are at the edges (where the extremes of both meet).
It also works out that in modern fiat economies, dynamics with money printing can create trends that appear like Capitalism, while not meeting the requirements of such (i.e. there being a market).
This can progress right up until the market itself disappears. Participants in a market are adversarial, they do not cooperate.
Adam Smith's requirements are no longer met for the two groups involved in economies when the only participants cooperate, and when certain measures are met fiat economies collapse and become non-market Socialist economies. These then fails for a number of reasons best covered elsewhere.
So if you look closely, the problem areas are really at both of the extreme ends of the perceived groupings, and when Capitalism goes too far to the right; it becomes Socialism which structurally is just another form of statism. The fundamental underlying structure and its inherent failures are derived from the central hierarchy which any society based in statism meets as a function of structure.
Mises wrote extensively on this subject, but has largely been dismissed today without a rational basis for the dismissal.
To muddy the waters as well, there is also the problem of mass delusion. Given the high level and number of indirection, and mental gymnastics needed to get to the bottom these things which are often more falsehood than truth, or in other words to make a correct distinction; Many cannot do this on their own as they lack the mental capabilities, wherewithal, or gumption.
Mises often refers to these people as destructionists because the outcome of blind support towards falsehood inevitably leads to destruction, especially in the cases of non-market Socialism.
Those that are deluded and delusional are quite common in all camps, which is why its important to keep a proper and rational head on these matters when discussing such things.
It would take quite a lot of studying to complete the picture, and it also requires a high level of discernment (this area often becomes a deranged quagmire on both sides), and a lot of mental gymnastics due to the high level of indirection and false methodology are needed to come to a sound conclusion.
As a TL;DR, Socialist propaganda often blames Capitalism while ignoring its own faults. Capitalism has issues as well and does the exact same.
Both versions today create a false dichotomy without provable identity (necessary for rational thought), that systems of truth seeking can then be used to identify the truth of reality. The truth is somewhat more nuanced.
Many cohorts regardless of classification engage in push-pull dynamics; you may be more familiar with the term "shock doctrine". I've heard that variations on forms for this date back to Rome.
It is impossible to have a power base within the population without a strong need. This works out in practice that a group has part of it, which calls on and publicizes the abuses of the other to engage their platform to rise up, and a small part of that group also that subverts and seeks to induce and create those same publicized problems within the other group.
So Capitalists are not necessarily Capitalists but a mixture of both, the same goes for Socialists, and the failure domains are at the edges (where the extremes of both meet).
It also works out that in modern fiat economies, dynamics with money printing can create trends that appear like Capitalism, while not meeting the requirements of such (i.e. there being a market).
This can progress right up until the market itself disappears. Participants in a market are adversarial, they do not cooperate.
Adam Smith's requirements are no longer met for the two groups involved in economies when the only participants cooperate, and when certain measures are met fiat economies collapse and become non-market Socialist economies. These then fails for a number of reasons best covered elsewhere.
So if you look closely, the problem areas are really at both of the extreme ends of the perceived groupings, and when Capitalism goes too far to the right; it becomes Socialism which structurally is just another form of statism. The fundamental underlying structure and its inherent failures are derived from the central hierarchy which any society based in statism meets as a function of structure.
Mises wrote extensively on this subject, but has largely been dismissed today without a rational basis for the dismissal.
To muddy the waters as well, there is also the problem of mass delusion. Given the high level and number of indirection, and mental gymnastics needed to get to the bottom these things which are often more falsehood than truth, or in other words to make a correct distinction; Many cannot do this on their own as they lack the mental capabilities, wherewithal, or gumption.
Mises often refers to these people as destructionists because the outcome of blind support towards falsehood inevitably leads to destruction, especially in the cases of non-market Socialism.
Those that are deluded and delusional are quite common in all camps, which is why its important to keep a proper and rational head on these matters when discussing such things.
(2015)
a) As he titled the paper "possibilities" then the "predicted" vocabulary is clickbait; has anyone explored if it's possible to buy a 1930s basket on 15 hours of 2020s labour?
b) From: https://www.aspeninstitute.org/wp-content/uploads/files/cont...
> I would predict that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is.
Note the qualification "in progressive countries"; have we any?
c) I've heard that the ratio between the cost of nails and the price of lettuce is still more or less the same as it was in the 1770s; the big difference is that in the 2020s a "yeoman farmer" doesn't want to buy nails with their market goods, but wants to buy cars and smartphones.
d) Finally, on the parochial basis that my life revolves around informatics, we've vastly exceeded the 4-8 times Keynes actually predicted.
His future is here — it's just not evenly distributed.
Lagniappe: https://www.smbc-comics.com/comics/1729266273-20241018.png
b) From: https://www.aspeninstitute.org/wp-content/uploads/files/cont...
> I would predict that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is.
Note the qualification "in progressive countries"; have we any?
c) I've heard that the ratio between the cost of nails and the price of lettuce is still more or less the same as it was in the 1770s; the big difference is that in the 2020s a "yeoman farmer" doesn't want to buy nails with their market goods, but wants to buy cars and smartphones.
d) Finally, on the parochial basis that my life revolves around informatics, we've vastly exceeded the 4-8 times Keynes actually predicted.
His future is here — it's just not evenly distributed.
Lagniappe: https://www.smbc-comics.com/comics/1729266273-20241018.png
> c) I've heard that the ratio between the cost of nails and the price of lettuce is still more or less the same as it was in the 1770s.
This feels like it can’t be correct.
Nails were expensive and difficult to obtain in the American colonies, so that abandoned houses were sometimes deliberately burned down to allow recovery of used nails from the ashes. This became such a problem in Virginia that a law was created to stop people from burning their houses when they moved. [0]
And nails were a significant expense in Thoreau’s cabin in _Walden_, c.a. 1850s
Maybe lettuce was a lot more expensive back then than I realize, though. I assume that produce is close to “free”, since you can grow it yourself.
[0] https://en.wikipedia.org/wiki/Nail_(fastener)
This feels like it can’t be correct.
Nails were expensive and difficult to obtain in the American colonies, so that abandoned houses were sometimes deliberately burned down to allow recovery of used nails from the ashes. This became such a problem in Virginia that a law was created to stop people from burning their houses when they moved. [0]
And nails were a significant expense in Thoreau’s cabin in _Walden_, c.a. 1850s
Maybe lettuce was a lot more expensive back then than I realize, though. I assume that produce is close to “free”, since you can grow it yourself.
[0] https://en.wikipedia.org/wiki/Nail_(fastener)
Prior to the invention of refrigerated train cars, fresh lettuce wasn't available at any price in certain parts of the country outside of harvest season.
Great point, I wasn't thinking of that.
So, especially in the northern cities, maybe the lettuce:nails ratio held true.
That makes it feel like a trick question, though. I wonder what the situation looked like for hardy vegetables like potatoes, onions, corn, squash.
So, especially in the northern cities, maybe the lettuce:nails ratio held true.
That makes it feel like a trick question, though. I wonder what the situation looked like for hardy vegetables like potatoes, onions, corn, squash.
c) and d) could interact better if we replace smartphones with erm, ASICs, as yeomen farmers who nerd out on postindustrial commodities number in the ... thousands (it's hard to snare them even on HN/reddit?)
(Of course an even better substitution would be purity level 9-n quartz sand but such farmers number in the zero to one)
(Of course an even better substitution would be purity level 9-n quartz sand but such farmers number in the zero to one)
[deleted]
Change the tax policy to one with a Georgist bent and this issue should be rectified.