This post was prompted in part by a recent New York Times opinion piece by Tim Jackson, professor of sustainable development at the University of Surry, and author of “Prosperity Without Growth: Economics for a Finite Planet.” The provocative title of Jackson’s piece was “Let’s Be Less Productive.”
While Mitchell seemed to support most if not all of Jackson’s goals and those of other “sustainable” New Economy advocates, he made a strong argument that these can be best (or perhaps only) achieved when macroeconomic policies reflect the kind of job- and demand-supporting perspective embodied in MMT. I discussed this aspect of Mitchell’s argument in an earlier post entitled “MMT & the New Economy Movement: A Macro-Micro Marriage?”
Reading Jackson’s column and Mitchell’s blog post got me thinking about the meaning of the word “productivity,” and how it relates to the core arguments made in one my favorite books, Natural Capitalism.
Before considering this connection, let’s briefly review Jackson’s basic argument:
By easing up on the gas pedal of efficiency and creating jobs in what are traditionally seen as “low productivity” sectors, we have within our grasp the means to maintain or increase employment, even when the economy stagnates.
At first, this may sound crazy; we’ve become so conditioned by the language of efficiency. But there are sectors of the economy where chasing productivity growth doesn’t make sense at all. Certain kinds of tasks rely inherently on the allocation of people’s time and attention. The caring professions are a good example: medicine, social work, education.
Jackson cites a study of nurses to make the point that an overemphasis on narrowly-defined productivity can backfire:
The Royal College of Nursing in Britain warned recently that front-line staff members in the National Health Service are now being “stretched to breaking point,” in the wake of staffing cuts, while a study earlier this year in the Journal of Professional Nursing revealed a worrying decline in empathy among student nurses coping with time targets and efficiency pressures…
The care and concern of one human being for another is a peculiar “commodity.” It can’t be stockpiled. It becomes degraded through trade. It isn’t delivered by machines. Its quality rests entirely on the attention paid by one person to another. Even to speak of reducing the time involved is to misunderstand its value.
Jackson goes on to point out that “care is not the only profession deserving renewed attention as a source of economic employment. Craft is another.” As is culture.
It is the accuracy and detail inherent in crafted goods that endows them with lasting value. It is the time and attention paid by the carpenter, the seamstress and the tailor that makes this detail possible. The same is true of the cultural sector: it is the time spent practicing, rehearsing and performing that gives music, for instance, its enduring appeal. What — aside from meaningless noise — would be gained by asking the New York Philharmonic to play Beethoven’s Ninth Symphony faster and faster each year?
Jackson suggests that “avoiding the scourge of unemployment may have less to do with chasing after growth and more to do with building an economy of care, craft and culture.”
In today’s “growth-obsessed, resource-intensive consumer economy” says Jackson, “low productivity is seen as a disease.” He believes this conventional wisdom is deeply wrongheaded in that it ignores fundamental human and environmental realities.
A whole set of activities that could provide meaningful work and contribute valuable services to the community are denigrated because they involve employing people to work with devotion, patience and attention.
But people often achieve a greater sense of well-being and fulfillment, both as producers and consumers of such activities, than they ever do in the time-poor, materialistic supermarket economy in which most of our lives are spent. And here perhaps is the most remarkable thing of all: since these activities are built around the value of human services rather than the relentless outpouring of material stuff, they offer a half-decent chance of making the economy more environmentally sustainable.
Moving from “labor” to “resource” productivity
Jackson’s last point got me thinking about the book Natural Capitalism, and it’s discussion of “productivity.” A key argument of the book, published in 1999 and co-authored by Paul Hawken, Amory Lovins and L. Hunter Lovins, is that:
Capitalism, as practiced, is a financially profitable, nonsustainable aberration in human development. What might be called “industrial capitalism” does not fully conform to its own accounting principles. It liquidates its capital and calls it income. It neglects to assign any value to the largest stocks of capital it employs: the natural resources and living systems, as well as the social and cultural systems that are the basis of human capital.
The authors claim we are at a point in history where the meaning of “productivity” needs to be reconsidered:
With nearly ten thousand new people arriving on earth every hour, a new and unfamiliar pattern of scarcity is now emerging. At the beginning of the industrial revolution, labor was overworked and relatively scarce (the population was about one-tenth of current totals), while global stocks of natural capital were abundant and unexploited…
[T]oday the situation has been reversed: After two centuries of rises in labor productivity, the liquidation of natural resources at their extraction cost rather than their replacement value, and the exploitation of living systems as if they were free, inﬁnite, and in perpetual renewal, it is people who have become an abundant resource, while nature is becoming disturbingly scarce.
Applying the same economic logic that drove the industrial revolution to this newly emerging pattern of scarcity implies that, if there is to be prosperity in the future, society must make its use of resources vastly more productive…
Noting that, on average, Americans have been working harder but experiencing stagnating income (and in today’s economy, chronically high levels of unemployment), the authors contend that “[r]esource productivity presents business and governments with an alternative scenario: making radical reductions in resource use but at the same time raising rates of employment.”
Moving the economy toward resource productivity can increase overall levels and quality of employment, while drastically reducing the impact we have on the environment. Today companies are ﬁring people, perfectly capable people, to add one more percentage point of proﬁt to the bottom line. Some of the restructuring is necessary and overdue. But greater gains can come from ﬁring the wasted kilowatt-hours, barrels of oil, and pulp from old-growth forests, and hiring more people to do so.
In a world that is crying out for environmental restoration, more jobs, universal health care, more educational opportunities, and better and affordable housing, there is no justiﬁcation for this waste of people.
This brings us back to the point made by Bill Mitchell and other MMT advocates: that the environmentally sustainable and quality-of-life-enhancing New Economy envisioned by Jackson and the Natural Capitalism authors (among many others) can be best achieved within a macroeconomic policy environment that understands and embraces the sovereign currency opportunity.
To put it as simply as possible – this means that if there are unemployed workers who are willing to work, a sovereign government can afford to hire them to perform useful work in the public interest.