Keynes wrote a lovely little essay, Economic Prospects for our Grandchildren, in which he airily forecast that in a century's time (he wrote in 1930) we would all be working 15 hour weeks. For we would have, essentially, conquered the economic problem of scarcity. Every month or two someone new pops up to complain about this. Well, Keynes said we'd only be working 15 hours soon enough so why are we all still working 40 hours a week? Are we being oppressed by capitalism or something, gouged by the plutocrats? Why don't we all just take the pedal off the metal and enjoy ourselves more?
The problem with this complaint is that Keynes' 15 hour work week is in fact here already. He was absolutely spot on in general but inaccurate in detail. It is this wonderful chart (drawing on this data) from Max Roser which tells us both why Keynes was right and wrong: and also what people aren't noting today.
It is the bottom part that is important there, the decline in household working hours.
From Keynes' essay:
But this is only a temporary phase of maladjustment. All this means in the long
run that mankind is solving its economic problem. 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 to-day. There would be nothing
surprising in this even in the light of our present knowledge. It would not be
foolish to contemplate the possibility of afar greater progress still.Let us, for the sake of argument, suppose that a hundred years hence we are all
of us, on the average, eight times better off in the economic sense than we are
Keynes on Possibilities
to-day. Assuredly there need be nothing here to surprise us.
Economic growth over that time has been of that order. We are about 8 times richer than our grandparents were in the early 1930s. No, this isn't some unusual effect of the Great Depression: it's the effect of compound growth over the decades since then.
Now it is true that the needs of human beings may seem to be insatiable. But
they fall into two classes --those needs which are absolute in the sense that we
feel them whatever the situation of our fellow human beings may be, and those
which are relative in the sense that we feel them only if their satisfaction lifts
us above, makes us feel superior to, our fellows. Needs of the second class,
those which satisfy the desire for superiority, may indeed be insatiable; for the
higher the general level, the higher still are they. But this is not so true of the
absolute needs-a point may soon be reached, much sooner perhaps than we are
all of us aware of, when these needs are satisfied in the sense that we prefer to
devote our further energies to non-economic purposes.
That's also entirely true and it also explains why much of the complaining about inequality is so ill founded but also why it is happening. Because we have much, much, less inequality amongst our absolute needs than was true back then. Back then to be poor was to be eternally hungry, cold and ill-clothed. Yes, I know the complaints about food insecurity these days and so on but they are entirely trivial by comparison with then.
But among the wealthy of our society there is that complaining about inequality. And it is among the rich because that's where the inequality has grown into a vast gaping chasm. The difference between the top 98 to 99 % of our society and the middle class, or the bottom 20%, isn't really all that different from what it was. It is the 1% pulling away from everyone else: and within the 1% it is the 0.1% pulling away from the 99 to 99.9%. And of course at that level of society no one at all has any shortage of those absolutely necessary goods. But those goods which display superiority are also called positional goods and there's obviously a limited supply of them. For example, in London, being in the 1% would give you a reasonable shot at a decent sized house in a good area of the city. These days merely being in the 1% won't manage it: you need to be in the 0.1%. Or have bought many moons ago. Amusingly, Danny Dorling even wrote a whole book about how it is exactly this which is driving the complaining about inequality. It's the upper middle classes seeing the bankers pull away from them, nothing else.
However, here's the crucial forecast by Keynes:
For many ages to come the old Adam will be so strong in us that everybody
will need to do some work if he is to be contented. We shall do more things for
ourselves than is usual with the rich to-day, only too glad to have small duties
and tasks and routines. But beyond this, we shall endeavour to spread the bread
thin on the butter-to make what work there is still to be done to be as widely
shared as possible. Three-hour shifts or a fifteen-hour week may put off the
problem for a great while. For three hours a day is quite enough to satisfy the
old Adam in most of us!
And now back to that chart from Roser. That is exactly what has happened, isn't it? Except that it's happened in the unpaid household labour, not the paid market labour that we all do. So Keynes was right in general, we do all work hugely fewer hours than our grandparents did. Where he was wrong was in the detail. We mechanised the household and that's what has given us the extra leisure.
And there is of course a public policy point behind this. Because we now know that we can simply dismiss people who claim that we are working ever longer hours. On the simple enough grounds that it's not true. But more than that, now that we've got our heads properly around this difference between household and market hours we can start to think about differences across nations. I think we're all familiar with the idea that Americans work longer hours than Europeans? And with paid work that is indeed true: not all that much of a surprise when you consider the differences in tax rates upon income (as at least one Laureate has pointed out). However, there's also a difference in household working hours as well. And Europeans tend to do many more household working hours than Americans. So much so that one study, drawing on the Luxembourg Income Study, found that American women had more leisure time than German women: despite their doing more paid market working hours.
And that is our public policy point. When people start talking about working hours we must insist that they concentrate on the important point. Which is not the number of paid working hours, but the residual that is left, leisure time, after we add up paid and unpaid working hours. And on that measure America isn't the laggard that the general debate assumes.
