Working Less Helps the Poor

A comment on a site mentioned in the previous post included a link to a blog post that reproduced an email reply from "a top economic adviser to Labour governments in the U.K."

That reply included this assertion: "a) by the lump of labour fallacy I mean simply that changing the labour supply of group A will impact the employment probabilities of group B. Eg, that early retirement policies can create jobs for young people, or that restricting immigration reduces native unemployment. Except in the short run -and often not even then - this is a fallacy. That's all I mean, and I believe the empirical evidence - literally hundreds or thousands of empirical studies - supports this. [...] I do think society would be better off in welfare terms if income was more equitably distributed, those in employment worked less and enjoyed more leisure, etc - ie Germany/Northern Europe rather than the US. But that won't create jobs."

As pointed out several times on this site, if wealthy people work less this will lead to structural changes in employment. This could include economists losing their jobs, but the financial sector and zero-sum patent litigation have been mentioned as two other examples of work that might see lower demand, especially if government budget deficits and inflation go away. With this in mind, it is worth examining how someone could make the statement that working less would not create jobs and the implications of this conclusion.

Imagine an alternative currency based on hours worked where everyone was paid at the same rate and could be trusted not to slack off or 'invent' useless types of work. One hour of work would allow you to purchase an hour's worth of product from someone else. Someone who enters a large community does not affect how much work anyone else can do, and the same can be said for someone who leaves the system.

This is not how the real economy works. If every unemployed person were to be relocated to another habitable planet, the unemployment rate would not stay the same; it would decrease, although more people would enter the labour market due to better job opportunities, or would lose their jobs selling to people on welfare, so it wouldn't stay at zero.

However, another way to reach that conclusion would be to assume that the decisions made during spending are not important. Maybe 20% of every person's income goes to 'the rich' who are already spending as much as they can, which is why unemployment exists, and so sharing a job will lead to the exact same results because the same 20% of the total goes to the rich.

That idea of unavoidable 'rents' would give no explanation for why unemployment rose sharply and has remained high despite government spending, or how to keep employment high in the long term if the only reason it was high before the financial crisis was people were taking out loans and spending money they didn't have, but that's not surprising since mainstream economics has no explanation for why unemployment exists. This deficiency is seen as acceptable since people aren't rational right?!

The key to this is that economists do not understand that people with too much money tend to buy from other people with too much money, which when combined with the 'lower marginal propensity to spend money' of the wealthy is what leads to unemployment.


...well, I don't know the point of making this longer. Already had feedback from the OWS forum that many people don't think working harder helps the poor. More links:
http://www.mckinseyquarterly.com/Recovering_from_information_overload_2735
"...leaders need to become more ruthless than ever about stepping back from all but the areas that they alone must address. There’s some effort involved in choosing which areas to delegate; it takes skill in coaching others to handle tasks effectively and clarity of expectations on both sides. But with those things in place, a more mindful division of labor creates more time for leaders’ focused reflections on the most critical issues and also develops a stronger bench of talent."

http://www.theatlantic.com/technology/archive/2012/07/are-we-addicted-to-gadgets-or-indentured-to-work/260265/

This post was supposed to help someone understand how it helps the poor for a wealthy person to work less; see the 'non-unique' case of the effects on tax revenues and the oversupply of educated workers, but I don't know whether anyone besides economists make the assumptions in the below notes or would find the argument worth reading. Was going to explain how economists could morally justify supporting the 'some people on welfare' system instead of the "share jobs" system given the below model of 'maximum happiness' but I'm not sure if anyone would be interested.

'working less helps the poor'

the idea that 'sharing' jobs does not 'create' jobs.

'flows' critical

talking about the poor working less makes it sound like a 'trap', possibly a way of identifying 'lazy' workers.

standard of source of earnings vs destination of spending. not everyone can 'win' but good enough for many people

errors: fixation on money as the 'reward' from working, and therefore the idea that sharing work is zero-sum for 'happiness'. meanwhile, unemployment or poverty is an excuse for government to spend money using deficits, which creates 'extra' happiness beyond market equilibrium. result is more money being obtained and spent than for sharing work.

assumed to be a closed system in the sense that spending will tend toward earnings and any savings are intentional and probably short-term... does not account for earning more than can be spent.

assumption: money may be 'worth less' on average to someone with a high income but also easier to obtain, so the 'utility from working' might be thought to be the same regardless. full-time work and welfare would raise 'total amount of free time'. only logical if money has constant utility regardless of free time and productivity is constant. would be the responsibility of workers to contradict assumptions about goals and utility of money and time.

It isn't getting better.

Older sister said that instead of creating a new system, we should revise the old system incrementally. This could still happen, but data shows that things are not getting significantly better and there would have to be substantial changes to the current system to fix the problems with the economy. Charts follow.

From the St. Louis Federal Reserve:

Observation 1: although unemployment has decreased, the civilian employment to population ratio has not increased during the recovery.
http://research.stlouisfed.org/fred2/series/EMRATIO/

Observation 2: males are at a historical low for employment.
http://research.stlouisfed.org/fred2/series/LNS12300001

So corporate profits are up, but we're not really creating jobs so much as people who can afford to are giving up looking.

Observation 3: kicking anyone out of the workforce is completely out of the question.
http://www.theatlantic.com/politics/archive/2012/06/1-percent-wives-are-helping-to-kill-feminism-and-make-the-war-on-women-possible/258431/

Observation 4: job growth has "settled into a slower trend".
http://www.mittromney.com/news/press/2012/07/architect-obama-economy-concedes-weve-settled-slowdown

And yet...

Observation 5: there has been a huge increase in government spending over the last century. Federal government spending made up about 3% of GDP in the first decade of the 20th century, compared to 20~25% during the last decade.
http://www.ritholtz.com/blog/2011/07/government-spending-as-a-percentage-of-gdp-2/

To fix the economy through incremental changes to the current system requires either higher taxes or deficit spending, which would continue for the foreseeable future. The problem with taxes is that it introduces inefficiency as well as greater incentive to cheat the system. Suppose you want to hire someone to do something you could also do yourself, but they are taxed at a 50%  marginal rate. They will naturally set their prices so that unless they are more than twice as efficient at the task as you are, you might as well do it yourself unless you're very wealthy. The result is a bunch of people doing stuff inefficiently to save money, and other people using business expenses to avoid taxes which is another layer of complication.

If jobs are created through deficit spending, it means endless payments on the national debt and higher inflation. Deficit spending does not necessarily lead to inflation, see Japan for example, but in the US people have come to expect regular wage increments which means prices must increase as well. And inflation causes people to invest in financial markets, which causes much of their money to go to financial sector profits.

Observation 6: financial sector profits have increased from 8% of all corporate profits to about 30%.
http://www.ritholtz.com/blog/2011/12/measuring-the-financial-sector-2/

Observation 7: the 'FIRE' economy has greatly surpassed manufacturing in size.
http://www.ritholtz.com/blog/2011/02/manufacturing-vs-finance-insurance-real-estate/

There is another story here, of the wealthy running out of money. A key point is that many people did not really have any particular goals, but were determined to capture a fair share of company revenues through labour unions. So everyone continued to work full-time and spend with low sensitivity to prices—just like now—except that wealthy people couldn't afford to buy luxury goods while also loaning money to the government. Since government demand for long-term loans to finance debt was inelastic for political reasons, this led to high inflation and high unemployment.

Observation 8: the share of income for the top 0.01% was at a record low during the 1970's.
http://krugman.blogs.nytimes.com/2012/07/25/zombie-straw-men/

Observation 9: Interest rates for all sorts of loans spiked during the same period; for the government borrowing money long-term, for the government to lend short-term, and for people lending to banks.
http://krugman.blogs.nytimes.com/2012/07/12/very-serious-predictions/
http://research.stlouisfed.org/fred2/series/FEDFUNDS
http://research.stlouisfed.org/fred2/series/TB3MS
http://research.stlouisfed.org/fred2/series/CD1M

Observation 10: market capitalization compared to GDP was unusually low when all this was happening.
http://www.ritholtz.com/blog/2012/05/market-capitalization-as-a-of-gdp-2/

So there were many ways to 'invest' money if you had any and end up with more than you started. Although the stock markets were not really rising faster than inflation, they would have been a good long-term investment. The only problem was that then, just like now, it was the specialists in the financial sector who stood to profit from all the changes going on and so many people just spent their excess money on material goods, leading to inflation.

This situation ended when labour unions were weakened and taxes on the wealthy were lowered in the 1980's, which led to greater sensitivity to prices for the typical person and let wealthy people buy their expensive toys while also being able to loan money to the government.

Observation 11: inflation dropped to significantly lower than the interest rates for loans. (second chart)
http://www.ritholtz.com/blog/2012/04/questioning-the-measurement-of-inflation/

Since people were addicted to getting money for simply having money, lower interest rates led to stock market bubbles but this isn't very important. What you should know is that it is not going to get better through incremental changes to the current system. The wealthy are unable to spend substantially more money, and the only way to create enough jobs in the private sector as productivity increases is for people to work less.

Observation 12: the billionaires who have agreed to donate the majority of their wealth to charity are not deluded into thinking this will fix unemployment.
http://www.economist.com/node/21555605

Observation 13: many poor people are severely burdened with the cost of basic necessities like housing, and cannot accept lower wages.
http://www.nextnewdeal.net/rortybomb/rental-income-percentage-gdp-too-damn-high-and-households-severely-burdened-housing-costs

Observation 14: the best way to ensure people can afford food and health care without government assistance is full employment.
http://jaredbernsteinblog.com/full-employment-a-force-against-rising-inequality-and-stagnant-incomes/

Observation 15: inflation is an indirect subsidy to banks and other financial institutions, which creates financial sector jobs.
http://smirkingchimp.com/thread/mark-ames/28354/confessions-of-a-wall-st-nihilist-forget-about-goldman-sachs-our-entire-economy-is-built-on-fraud
http://brontecapital.blogspot.com/2012/06/macroeconomics-of-chinese-kleptocracy.html
http://jobcreationplan.blogspot.com/2012/06/inflation-scam.html
http://www.amazon.com/Where-are-Customers-Yachts-Marketplace/dp/0471119792

Observation 16: neither political party seriously intends to reduce government spending since tax cuts need to be larger to create the same number of jobs.
http://thinkprogress.org/economy/2012/05/25/490532/romney-budget-cuts-recession/

Observation 17: the idea of 'austerity' is just a political ploy to gain votes, or supported by economically illiterate politicians. While people are deluded into thinking the government directly pays Wall Street and won't support higher spending, taxes or inflation, they will also vote out of office politicans who don't fix the economy.
http://jobcreationplan.blogspot.com/2012/06/responsibility-for-changes-to-society.html
http://jobcreationplan.blogspot.com/2012/07/market-failure-of-economics-profession.html

High unemployment is a global problem, which has affected many major economies such as the European Union, the United States, and even China and Japan. It is not really possible to 'export' unemployment by lowering wage costs because no nation is prepared to accept the lower outside demand, and this would just be seen and labeled as currency manipulation or some other term. Incremental changes to the current system will only create jobs through the mechanism of higher financial sector employment and profits and higher inequality.

Observation 18: economists can only think of a limited number of 'useful' things that people would agree the government should spend money on.
http://jaredbernsteinblog.com/what-should-we-do/

Since people are opposed to higher government spending, that is not likely to happen anyway and the political parties will just switch control of the government as they scramble to create jobs before being voted out of office for not reducing spending.

Observation 19: by encouraging wealthy people to spend less time working, we could employ more professionals and fix unemployment without more government spending. However, this might cause the inflated financial markets to crash.
http://tickerforum.org/akcs-www?post=208975
http://jobcreationplan.blogspot.com/

it isn't getting better.

employment/population ratio flat, while unemployment is still around ~. press release.

narrative: market capitalization vs interest rates. ran out of money, now lots of money. ... vs income of top 1%, only the rich lend to the government while the poor just drive up prices (not even save in bank)

lower tax rates but also weaker unions

tax rates lead to inefficiency. 50% tax rate on babysitting

(trend: taxes going to welfare)

'austerity' follows from assumption that government directly pays financial institutions (see: bailout)

(rent)

Eternal love

Three posts were removed due to "<!--more-->" not working with the 'dynamic' theme this site is currently using (added to the first collection of argument notes), but not counting those the last post brought the total number of published posts up to 42... which might be familiar to some people as "the answer to life, the universe and everything". Oh well.

I was going to give an example of the type of possible result from fixing unemployment as the result of a surplus of intelligent effort devoted to problem solving... and something else, which might have been the 'gap' of feedback between awareness of the underlying problem and actually fixing it. There were two things, and while I briefly forgot what the second one was I think that may have been it. Then a bunch of notes.

People may have various concerns they think are important for society to fix. For example, feminism, global warming and 'proper behavior at atheist conferences' have all been mentioned on this site as things people care about. The feasibility of addressing these problems will be discussed later but for now I will discuss another problem which I have been involved with.

It isn't even really clear who the audience of this site is. Efforts to 'mobilize' the average person have been almost completely unsuccessful. As was identified early on, people like to have an enemy and this site has always maintained that the most obvious group to blame, the rich, were not responsible for economic problems. James Holmes might have read this site, one article says his academic performance started to deteriorate in "the spring" of this year without any actual dates which is the only thing that contradicts that tentative hypothesis, but new posts here often get only 5~10 views or less unless I recently linked to here from a comment on another site—which has become more difficult now that the URL seems to be on a spam blocklist. So if the solution was to have been supported by the masses/'proletariat' in the style of the book 1984, this future doesn't seem likely without the help of people who are intelligent enough to be in the 'feedback gap' formed by knowledge of the evolution of the accuracy of social standards or "signals". In other words probably no need to keep this post simple.

So back to the example..!

The difficulty of maintaining an enjoyable PvP environment in online games

o.0 Wow my URL history actually still has the film critic Roger Ebert's blog... I commented on the purpose of art and why most games are not really 'art', but those comments weren't published at the time. Basically the bit about conflicting goals at the end of the first post on this site. As examples of how a game could be used as art, I linked videos like one about a Forsaken individual.

Player-versus-player is when characters in a game world fight, often used for MMOs which are a type of online game. There were questions about whether to include PvP when the World of Warcraft was designed (around 2001~2003) and the designers were more familiar with the large-scale boss fights in games like Everquest. The type of world PvP that eventually developed was unexpected and WoW's developers had difficulty in finding a solution that allowed character progression without 'bullying' behavior by players against weaker opponents.

I suggested a solution on the forums but what it was isn't very important. Later events suggested that the threads I had made had not been seen by the game's designers, and even when other events suggested that the current developers had seen a different set of ideas and possibly considered using them, the decision was made not to. The game may have declined somewhat in popularity after that as a result of not addressing certain problems that many people agreed it had.

A similar situation was seen with a competing MMO, Aion. While its designers viewed PvP as a central aspect of the game, they made certain cultural assumptions about how players would act and these assumptions were less valid outside of Korea, and so the game experience of many players was reduced in quality. It seemed likely that the North American subsidiary was writing proposals for improving the game for Western audiences, with suggestions I had made maybe having been of use, but almost no changes were made by the Korean developers. The game eventually declined in popularity and became free to play in North America and Europe despite being the most popular MMO in Korea.

It seemed that the common theme in these cases was not only the lack of support by people who should have been able to understand the benefit to the game from the suggested changes, but also hesitation about using ideas from people outside of the company that had developed the game. Just as a professor at a university needs to publish research to advance in a hierarchy even if their teaching quality suffers, people in other industries must pay attention to their 'reputation' even if it means the quality of the product ultimately declines. The only way to get rid of this idea is to increase access to jobs that provide a reasonable standard of living.

The feedback gap

I don't know what else can be said about this. Intelligent people are avoiding serious discussion about the idea which is the 'theme' of this site. After contacting something like 200 local governments about fixing unemployment, I was very surprised when just before creating this site I received a response from one of them... something like that. A later response made me think there was actually some kind of continuity of interest. Other than that it is just various people going on vacation, other strange coincidences, etc...

Oh, and the idea that due to their greater understanding of something, the system of reputation-building regardless of detriment to society is a necessary construct. This site has described how many of the problems in society or in organizations can be reduced to a single variable—the awareness of varying reliability of signals or of authority, and the changes in attitude that result when significant numbers of people are not so aware such as acting like sheep. Since people do not like to discuss the root cause and until now no one has offered a lasting solution, it may have helped to listen to people even if they were unable or unwilling to explain why a given solution was logically the best; but now that these things have been said reputation should be less necessary in the future. Even art should be vulnerable to critique with a proper understanding of the culture it acts on and the goals which precede it and which it invokes.

The curve of a falling object

Can people be trusted? As mentioned before, it is not really possible to answer this question. But it is possible to influence the likely outcome from answering either way, and prevent someone who does trust other people from having worse outcomes than someone who does not trust others.

Oh, and I was going to mention Zombie by The Cranberries, and for some reason a trope on tvtropes.org which actually has little relevance to this site. Trusting people does not mean you can't fight them—you just have to trust them to want to lose. Young humans and many other entities such as cats may 'fight' each other without intent to harm, and for example it has been said that different cultures in Iraq might fight each other just as a way to spend time while being prepared to stand united against outsiders; an inability to understand this can best be explained by someone making simplistic assumptions about whether exploring a situation that ends in failure has personal benefit.

As an example, someone might assume that everyone, or most people of a certain age has encountered the apparent conflict which is at the base of the problem, and that all intelligent people have tacitly agreed to 'defect' or use the strategy of choosing your own goals over those of others. Allowing oneself to fail might then be seen as a 'signal' of not being selfish and by implication of not being intelligent enough to understand the assumptions many people would have made about the root problem.

Critically, people will make errors when they assume everyone else has made the same assumptions about trust that they have, or more precisely when they assume that everyone is using the same strategy toward conflict instead of a population of mixed strategies. When we are young we are taught to be "good", and that being "good" will lead to success in life, or at least some people are... and it is only natural that, while young, some of us will trust the people saying this and apply it to our future course of action.

In some cases this leads to conflict between nations. In other cases, it leads to attacks on individuals with the understanding that there will be some positive result. For example, if people can be trusted when they say that they think unemployment is the most important issue in the United States, and it has been shown that unemployment is associated with a substantially higher suicide risk, someone might logically conclude that people who oppose available ways to create jobs literally want unemployed people to kill themselves and acting in a way that causes people to support job creation could save lives even if some are lost in the process. If people don't want this to happen, all they would have to do is openly come out in opposition to the idea that people should be trusted or that they, personally, can be trusted. In this way, it is not realistic to expect everyone to 'secretly' agree that people cannot be trusted.

So who is responsible for the fact that four years after the financial crisis, unemployment is still very high in the United States and many other countries around the world? People might want an answer to this before allowing society to advance beyond this point in history.

The answer, as said before, is that it is only the result of everyone's prejudices and assumptions. This might be long...

If economists were more competent, the problem would have been fixed in the 1930's or even earlier. The world had no nuclear weapons, but most wars are basically because one or both sides wanted them to happen or refused to devote reasonable attention to preventing conflict and the use of the idea on this site might have prevented the second world war entirely.

But it should be clear that the underlying psychological explanation for the problem is pretty complicated, and isn't taught in economics courses. Even social psychology is somewhat lacking for the same reasons that have lead to more retractions of published articles in many fields—lack of incentive to produce useful results. The faulty assumptions about markets that result can be seen in many discussions. For example, thinking that marginal utility to a firm from additional product is always positive, instead of marginal utility becoming negative as prices would need to be lowered to sell the additional product which would lead to lower total revenue; or thinking about products as something that depends only on the work needed to create it instead of the perception of that product in the minds of social contacts; or not thinking about work or income as signals which in turn inflate the cost of certain products without a proportionate increase in utility for other people.

But part of it is the apathy of people themselves. No matter what economists say or do, the idea of the government creating jobs is very simple and only lacks support from voters. Focusing too much on this issue and thinking it is important to everyone can easily lead to assumptions about homogeneity of strategies toward conflict and whether people can be trusted, and neither polarized scenario implies the nuance which is necessary to interpret support for proposals with unknown viability.

So economists are not really responsible for high unemployment any more than the average voter is. Government workers cannot be held accountable either, because they are just doing the jobs given to them. Wall Street is not responsible either, since much of their profits are just the result of inflation due to budget deficits and people not wanting to raise taxes to match government spending. It would be logical to blame the middle class but people don't really seem interested in doing that. People might want to blame the opposing major political party, but in fact people from both ideological extremes tend to follow their political leaders while accusing both their allies and political enemies of not thinking independently. Maybe people think the United States would be better off if the government regulated Wall Street out of existence or disallowed any use of leverage for example, but while this would lower the profits of financial institutions it would also lead to fewer high-income financial workers and significantly higher unemployment unless the idea on this site is used.

People might think that high profits for financial institutions is irrefutable proof of corruption, but this is easily explained by inflation and trends in economic inequality. 'Government corruption' as an explanation for Wall Street's profits is at best only a distraction, which keeps people hoping for a solution to the "problem" through political change. However, financial workers and government leaders understand that as long as unemployment is high, financial sector profits lead to an objective positive benefit to society by reducing unemployment when people are not willing to vote for the government doing this through more visible means of directly hiring more people or contracting them to do work. Wall Street is thus seen as a 'necessary evil' in response to the greater injustice of an incompetent voting population that refuses to raise taxes to support higher spending.

To be clear, the use of the idea on this site would allow the government to cut spending. It might or might not allow lower taxes since they're already pretty low.

It is the responsibility of a leader to choose good advisors. Machiavelli said to ask for advice while still making your own judgements. While it is true that the current Presidential administration is the most open in history, previous attempts to contact the administration have not resulted in this idea being used, and unemployment is still high which could possibly cost the current President the upcoming elections so it must be said that the quality of advisors chosen is lacking.

If the idea on this site is used and it causes unemployment to quickly be fixed, people might feel the current President should be rewarded with reelection but there is really no strong reason to do this. Both major political parties in the United States see unemployment as the major issue and should agree on this solution, which will allow the electoral debate to shift to other issues.

A more complicated argument can be more difficult and time-consuming to refute, but the idea on this site is only as complicated as you want it to be—starting out very simple, and getting more complex as no one was taking it seriously. Since people have different, and incorrect, assumptions about the economy—or the nature of society—and why this idea wouldn't work it does not seem possible to convince everyone of its validity in a small amount of space.

Hesitation

I wonder if people look at it this way:

Someone says to you, if you don't press this button it is very likely millions of people will die. Then they take a sip of hot chocolate drink and resume reading a book.

You don't press the button. Millions of people die. They say, "Didn't I say so?" and indicate there is another button you should press if you want to prevent millions of people from dying. Repeat.

It makes me think of a scene from the end of the first season of the drama Liar Game. But I can't really say more.

"Why can't people understand that I have only the best intentions?" ...as someone once said.

Of course, it must be said that this works both ways—that it should be possible to say that anyone who has not endorsed (yay for thesaurus) this idea also has only good intentions.

(Over an hour later...) Now, it is possible that people wanted to avoid reaching certain conclusions if they acknowledged that the basic argument was correct. One of these might be that many middle-class voters secretly believe in "social Darwinism" and want the poor to die, or conversely that other people do not see any need for a mechanism in society that rewards high performance. This shadow or illusion was cleared away by the lack of support for the "nonviolent solution" that was posted on the Occupy Wall Street forum, and which of course could have easily lead to violence since the amount of welfare in the United States is not really enough to accomplish reasonable goals. If anyone who read that post had knowledge of middle-class attitudes that supported the line of argument, they should have agreed to that solution as the best way to fix economic problems without lowering GDP.

So the group of people who are the most visibly upset about inequality in society still trust the middle class despite that voters have allowed unemployment to continue at high levels. This goes back to the "taxes going to wasteful spending"/inflation/"lack of national wealth" nexus of ideas, which may seem like reasonable justifications for not wanting higher spending, especially if people assume that economists will have the same views about inflation as the general public does. If people trust economists to care about unemployment, it follows that there must be some reason unemployment is still high... oh, and "lack of education".

The above probably accounts for most of the lack of discussion or support. It does not explain why intelligent people with apparent desire to help society have not been vocal in support of this idea.

One reason might be that a more accurate 'system' can lead to problems for future generations due to assumptions about authority and so on. This would be valid to the extent that the arguments about how to fix this problem are incorrect, but all available evidence seems to confirm the initial analysis.

A second reason might be that there would be consequences from the use of this idea or from showing support for it that would negatively affect one or more persons to an important degree.

For example, if "overestimation of the value of the self" was no longer valid as an explanation for mistakes, some other explanation might need to be used, which might include a mismatch in the "strategies toward conflict" used by various people.

But this seems like just thinking too hard about the situation and consequently making mistakes as a result of losing perspective. At best, it would be a way to help someone 'lie' about their own capabilities by allowing them to think that the success or failure of a particular goal has a significant effect on their overall self-worth. For someone who does not make that assumption, the inaction resulting from this line of thought is just a waste of time.

Ethical Standard Guaranteed to Fix the Economy

Two options for job creation:

1) Higher government spending and taxes: http://wh.gov/aJ6T

2) Working less so companies can hire more: http://wh.gov/cVNr

If you do not take a minute to sign either one, or both, of these petitions, you are unethical, immoral, or colloquially, "evil". This is completely legal of course.

Anyone who benefits by association with someone who has not signed either of these petitions is also "evil".

A brief description of how to encourage people to work less for those unfamiliar with the concept:

The first 20 hours are paid at 1.2 times the normal hourly rate for full-time work.

Work beyond 20 hours in a single week is paid at 0.8 times the normal hourly rate.

In the event neither petition receives enough signatures to earn a response, we can conclude that everyone else in the United States is "evil" and people should be made aware of this so the unemployed and poor do not keep hoping for a peaceful resolution to their problems and intelligent people do not feel they need to look for one.


A thank you to Yoko Ono for allowing comments to be published on her site.

Another Perspective on the Batman Theater Shooting

This topic has been mentioned before on this site. However, that explanation is insufficient to explain that kind of attack in the United States, which is often regarded as one of the most independent or 'selfish' cultures among the so-called developed countries.

One description of the shooting says that James Holmes (24) "methodically stalked the aisles of the theater, shooting people at random, as panicked movie-watchers in the packed auditorium tried to escape".

The best explanation is that he was trying to determine if the problems in U.S. culture are the result of maliciousness, or just stupidity. It seems that if he was trying to kill as many people as possible, there would have been more casualties. And yet it probably would have been easy for one or two determined people to, for example, attack him from behind and prevent any further injuries or deaths to other people in the theater.

The fact that no one did is significant, as is the lack of discussion of this aspect of the situation. There have been questions about whether "one person with a concealed weapon could have ended the attack", but James Holmes was wearing full body armor so it is questionable whether such retaliation would have been more effective than simple hand-to-hand combat.

What James Holmes and anyone who reads the account of the event should have concluded is that if the United States is a nation of 'selfish' people, who place priority on their own goals (survival) instead of the reasonable goals of other people (survival), the people using this strategy are not competent enough to prevent unwanted and unexpected alteration of their physical condition by other people.

Conversely, if the United States is a nation of selfless people who are only pretending to be selfish, no one had enough confidence in their abilities to attack the shooter and prevent further injuries or deaths. The conclusion is that when it comes to important things, people really are 'sheep' and it is necessary for people with authority to use that influence to accomplish goals that benefit society, even if there appears to be opposition or a lack of popular support for a specific policy.

The motivations in the 'selfless people' case might be a little more complicated; people in the theater might have wanted to avoid propagating the idea that attacking the shooter was the 'morally correct' thing to do, since it would have meant that anyone who didn't was unethical... but the implication is that 'appearing to act ethically' for one person is more important than 'staying alive' for another person.

That leads to situations like someone destroying their house and killing themselves rather than be evicted and their home taken by Freddie Mac, because of other people who don't want to 'unethically' support higher government spending and taxation to create jobs.

Another good example of the phenomenon is the apparent support for 'honor killings' by other women in the countries where that practice is used. A study showed that people with ambivalent feelings about a policy are often the strongest supporters of it in public to prove their 'sincerity'... but as James Holmes showed, this is one way to get yourself or other people killed.

If the above is true, that people feel that upholding the appearance of correct action for one or more people around them is more important than ensuring the survival of one or more other people, the only logical explanation for how people would feel this is justified is that the people in the first group are seen to be selfish, and would prefer being seen as ethical over other people remaining alive. This perception would explain many things, and it has already been shown how this conclusion might be reached from nothing more than mistakes arising from misjudgements in value—which in turn happens because of people who not aware of inaccuracies in the 'system' formed by common social standards of judgement.

Of course, as was remarked in a blog that was eventually lost from the Internets—even archive.org!—thinking is only useful to the extent that it leads to a useful result. If most people are sheep, or 'granite rocks on a mountainside', it means that few people have the confidence to redefine reality to the benefit of themselves and other people who are intelligent enough to express a consistent preference.

Lack of experience

I will admit that in the beginning, I was looking for someone else who was willing to take 'responsibility' for this idea. Since no one out of the 100+ people I happened to have in my email contacts at the time thought it was worth replying on topic (or maybe at all... can't remember), as I said I tried contacting a recent Nobel-prize winner of economics listed on Wikipedia via email, then several news organizations, etc... all with no reply. Tho, someone I know did say that the message used economic terms in very inappropriate and annoying ways, but nothing about the actual idea.

So eventually it become important to determine whether the idea was incorrect or if there was some other reason almost no one was willing to discuss or acknowledge it, or take it seriously. Such a bother...

I have never watched or read the series Death Note, but other people have. In one story following the main series, the events of the main series have resulted in considerable discussion and interest among the 'death gods' of the story. The implication is that the events of the original story were relevant to their interests and goals.

If it is not already clear by now, the expected result of using the concept described on this site would be an improvement in the life outcomes for very intelligent people. It is very possible that intelligence actually has negative marginal returns beyond a certain point, and by fixing basically every social and economic problem with a 'system' that is understood to also encourage people to think about and prevent future problems, very intelligent people might 'succeed' in life more often, particularly in the area of romantic relationships.

No one is talking to me so I am not really sure. Someone even deleted a blog at a suspiciously coincidental time and there were things I was unable to read.

..and it was in English even~

Which is to say, if my present course of action leads to my death, the use of the concept described on this site should be able to prevent that outcome for other people by altering the assumptions people make about the reason for mistakes. This is similar to making safe other dangerous things that someone might encounter.

There is only one other petition listed on whitehouse.gov in the category of job creation, meaning a petition from the past 30 days with at least 150 signatures. If anyone with some influence should like to encourage people to sign the one associated with this site (due to lack of space to include supporting information without linking here), now would be an appropriate time.

Hidden Gardens

As you can see the petition created yesterday has gained no signatures, despite having accumulated several hundred views in various places online:

U.S. Politics Online — Endorse a Drama-Free Solution to High Unemployment
US Message Board — Endorse a Drama-Free Solution to High Unemployment
City-Data.com Forum — Endorse a Drama-Free Solution to High Unemployment
We the People: Endorse a Drama-Free Solution to High Unemployment | OccupyWallSt.org
People with strong ideologies are sheep | OccupyWallSt.org


It is possible this is due to the limited input field (800 characters) and the complexity of the underlying situation, but this is unlikely. The main concerns raised by comments on a proposal for the United States to use the same type of government-funded work-share program that Germany does, also known as 'short time compensation' and mentioned in a previous post on this site, were that workers who are currently unemployed tend to not be qualified to do skilled work and people currently working in jobs that the unemployed are qualified for cannot afford to work less in their current jobs; both of these issues were addressed in the condensed description used in the petition.

There are several ways of looking at the social and economic changes which would result from the use of this concept that have not already been mentioned on this site.

The first is why poor people might be able to rationalize not supporting the concept. This would be done by constructing a standard of achievement where being poor is praiseworthy and being rich is a sign of selfishness or otherwise 'bad'. As summarized in this post, people doing unskilled work would unambiguously 'win' from an economic standpoint if this concept was used, but at the same time the lower viability of 'unnecessary skilled work' would mean that more people would assume that income or wealth is an accurate measure of ability, and people would no longer be able to "countersignal" wealth or ignore its relevance in judging value by maintaining an alternative culture in which wealth is not relevant, as described at the end of this post.

So poor people would win in the economic sense, but in the short term would be redefined as losers in the social sense.

The reason people with more money might be able to rationalize not supporting the concept is more simple. They are more likely to 'lose' in the economic sense and furthermore, people they know are also likely to lose in same way. As described in the paper mentioned in this post ("Party over policy: The dominating impact of group influence on political beliefs"), people tend to emphasize the aspects of a situation that support the stance of other people in their social group, while ignoring aspects of the situation that contradict this stance.


As mentioned in the notes for a previous argument, maybe people are hoping they can somehow 'starve' the poor over a historical time period. One example of this might be the situation with Palestine and Israel, but it has been pointed out this is not working and should not be expected to work, due to the simple fact of high birth rates.

But that was just a tangent. The second perspective on this concept is to an analogy of a spinning tire which cannot gain traction, but analogies are frequently misinterpreted to humorous effect. With this view, either the low coefficient of friction is due to people with high incomes working too much and spending their money on luxury goods with high profits for other rich people which causes this circulation to not go to poor people...

Maybe it's like a supercavitating ship propeller! Um, the ones not designed to do so because it makes them less efficient, not the ones that are designed to do so for higher performance.

That, or the "spinning" of the tire is the effort which people put into trying to change the system, and it is prevented from being effective by the inefficiency introduced by wasteful government spending. High unemployment or uncertain expectations cause decision makers in government agencies to authorize wasteful spending since it creates private-sector jobs, but this causes some people to focus on the wasteful spending instead of on ways to create jobs without wasteful spending. Resistance to wasteful spending causes opposition to any increase in government spending, including programs that would benefit society, and so by eliminating job creation as an excuse to wastefully spend this opposition to helpful programs can be removed, making it more likely society can allocate spending in an efficient and proactive manner.

The third way of looking at this idea of working less, and specifically the increased awareness of the inaccuracy of the system, is to look at what people do who are aware of this. It should be clear that the underlying problem of reliance on authority is very real, for people of all political orientations, and even people who are aware of the problem may have to deal with the resulting problems in the system from inaccurate standards. The idea that economists will know how to fix the economy, or will at least support the solution when exposed to it, is one such assumption that many intelligent people probably made.

Currently, people who are aware of the problem are experiencing "task overload". There are so many problems in the world that many people are just "cultivating their gardens" while leaving responsibility for larger problems to those who are interested in them and confident of their ability to identify a correct solution.

There is, then, a vague sense that this would be qualitatively different if the concept described on this site was used.

After all, the first public post describing the idea got over 2000 views, not sure where from, after it was linked to from many places including, for example, a discussion about proper behavior at atheist conferences... so some people must have thought it was worth looking at!

A Drama-Free Solution to High Unemployment

The United States has no skills problem, and does not lack wealth. All we need to fix unemployment is an innovative and sustainable way for people to choose to work less time. Once we as a society accept that unemployment is very easy to fix, the only thing left is to do it.

The recent Washington Post story about the lack of jobs for scientists, which has been a growing issue for decades:
http://www.washingtonpost.com/national/health-science/us-pushes-for-more-scientists-but-the-jobs-arent-there/2012/07/07/gJQAZJpQUW_story.html

Graduates in mathematics, physics and even astronomy are enticed to go into finance because of the high pay and the lack of jobs in their fields. It is not fair to blame people without a college degree for their joblessness when lack of demand means that many college graduates still end up working minimum-wage jobs.

Meanwhile, the rich are doing all they can to boost consumer demand in this time of high unemployment. From the New York Times at http://www.nytimes.com/2011/08/04/business/sales-of-luxury-goods-are-recovering-strongly.html:

“This group is key because the top 5 percent of income earners accounts for about one-third of spending, and the top 20 percent accounts for close to 60 percent of spending,” said Mark Zandi, chief economist of Moody’s Analytics. “That was key to why we suffered such a bad recession — their spending fell very sharply.”

Funneling more money to the rich does not help when they already have more than they can spend. We must recognize that for most people, spending on luxury goods or investing in financial markets does not help the economy, since it only causes more money to go to the rich. In order to fix high unemployment, wasteful government spending and inflation, we should encourage people in high-income occupations to work fewer hours while still retaining most of their responsibilities and earning a reasonable income. This will allow companies to hire more workers using the resulting payroll savings to do the remaining work.

This might cause people to buy products manufactured overseas due to their lower price, but the government can always just print more dollars. We're constantly complaining about how other countries keep their currencies weak compared to the U.S. and giving them dollars would help fix that. In the worst case those countries would use that money to buy products sold by U.S. companies, with the money going to the rich who could then spend it.

http://wh.gov/cVNr

"Not a serious blog"

This isn't supposed to be a bloggy blog but I found this very interesting...

First, I should note I was considering approaching the issue from the angle "employment is important, and so it is inevitable that government spending will increase possibly paid for by higher taxes on the rich" vs "wasteful spending is important, so it is inevitable taxes will be lowered to increase the pressure to eliminate wasteful spending".

This would also include the concepts of inflation as the reason to limit the gap between revenue and spending, and unemployment as the reason to increase it. As seen historically 'lower taxes' would be seen as a way to focus attention to wasteful spending, with the amount of assumed waste being proportional to the deficit. Spending might be seen the same way with a low deficit being seen as clearly indicating that more spending is possible.

The relevant paper is referenced by this blog post.

From the paper:



(no attached zip)

About 25% of the participants classified as liberal, less as conservative. The paper explains the results as that people made decisions based on the demonstrated preferences of the associated group, not on policy details, but also notes that everyone was more likely to agree to a policy when the demonstrated preferences contradicted the policy details.

The paper explains it as "This result could reflect people’s preference for moderates over extremists, their tendency to consider the merits of expectation-violating messages more carefully than those of expectation-consistent messages, or their trust of communicators who express positions contrary to their assumed biases, beliefs, or self-interests."


However, another explanation is that people tend to make decisions they think will lead to successful results, and information on the demonstrated preferences of each party is only used as an estimate of probability of success. If the 'opposing' political party is willing to agree to something that seems to be against their interests, it is unlikely a better deal could be reached by the party which continues to oppose it.

"In the Democrats favor condition, the report noted that the policy was supported by 95% of House Democrats (and 10% of Republicans). In the Republicans favor condition, these percentages were reversed. The reference group information was buttressed by including policy-relevant rhetoric . . ."

If people assume that a certain issue, or group of issues is of overriding importance, this might affect their perception of the competence of people who disagree with that assessment—the idea that people who disagree are either crazy or malicious, and that this will eventually be revealed for any given issue. However, if a proposal seems to be extremely favorable to an ideology and yet the supporters of that ideology continue to refuse to support it, the possibility exists that those supporters are, in fact, the ones who are being irrational and 'breaking ranks' becomes more likely.

So extremists believe that other people are crazy... but only up to a certain extent.

Since people are more likely to make a decision on a choice they think is optimal, it seems the way to convince people is to show that their faction has, in fact, 'overextended' and is irrational...

Market failure of the economics profession

Most normal people intuitively understand that inflation is harmful and think the government should try to avoid it.
http://www.politonomist.com/gdp-deflator-and-measuring-inflation-00491/

It prevents people from saving money in a bank; wages tend to rise slower than inflation so real purchasing power goes down; and it forces people to invest in the financial markets where most people will underperform the market or even lose money.

This transfers money from people who try to save to financial workers (such as hedge fund managers), which leads to a short-term increase of spending, higher GDP and employment if unemployment is high, so most economists think inflation is good for 'the economy'.


Any reasonable person will admit that governments provide some useful services, but also waste money. This is why when asked how much money the US government wastes, people answer that it is about half for the federal government and somewhat less for state and local governments, instead of saying that it wastes 0% or 100% of what it spends. People do not feel the need to distinguish between political corruption and wasteful spending, because it is difficult for anyone outside of the government to do so.

It is therefore not possible to either eliminate all wasteful spending when unemployment is high or spend enough to fix unemployment through fiscal stimulus. Since political corruption rewards unethical actors while taxes punish everyone, a spending deficit is the natural result of this conflict.


Because inflation from spending deficits also raises GDP via the financial sector, many economists do not see any benefit to the economy from raising taxes to pay for spending and prevent inflation. This means any economists that do suggest raising taxes will not get any support from the rest of the profession and the proposal will basically be ignored by everyone.


Another poll:

Q12b Would you say that your vote is more FOR Barack Obama or more AGAINST Mitt Romney?
Results shown among Obama voters
More for Barack Obama .........................................72
More against Mitt Romney ......................................22

Q12c Would you say that your vote is more FOR Mitt Romney or more AGAINST Barack Obama?
Results shown among Romney voters
More for Mitt Romney .............................................35
More against Barack Obama ..................................58

Barack Obama's approval ratings high: 47% very positive, 21% positive, 12% neutral, 9% negative, 10% very negative, February 2009. Compare overall low for any president: George W. Bush in October 2008, 15% negative, 45% very negative.

President Obama had hope for the nation. He was let down not by his economic advisors, but by the economic profession as a whole.


Job creation without higher government spending, inflation, bubbles, or trade barriers: [this site]

Psychology of the rich

(Note: "the accelerated work week" is derived from the reviews for a fast electric car. Though some people might not feel any reason to be impressed by any terrestrial or existing technology... speed of thought and all that.)

Someone I know said that most people are not aware of the many ways in which they cause damage to society, but expressed hope that in teaching piano lessons they were not helping to create the next Adolf Hitler.

The world is complicated, and it isn't realistic for everyone, or even anyone, to completely understand everything important about it. As long as people acknowledge the possibility of their shortcomings this doesn't need to cause any problems, because it allows other people to distinguish between malicious intent and simple mistakes. Of course, there is no reason to expect that anyone is completely sure that their actions will lead to the intended result but people like to think this of other people anyway because it simplifies decision-making.

So why do rich people work just as hard, or even harder than people with less money? It must first be noted that states or regions with higher average income tend to be 'progressive' or support the US Democratic party, while states with lower average incomes often have a majority of conservative Republican voters. At the same time, extremely rich people are often thought to be mostly supportive of the Republican party.

It has been empirically shown that people with higher incomes tend to have a lower marginal propensity to consume, and it is also thought that money has diminishing marginal utility. The fifth private yacht is not nearly as enjoyable or useful as the second one. So one might assume that once a rich person has enough money to buy everything they could possibly benefit from having in the rest of their life, they might stop working or at least work less.

But evidently many don't and furthermore feel resentful that others would criticize their wealth or attitude toward economic problems.

This is best explained using the ideas of two previous posts on this site: the first describes the 'market failure' which leads to inaccurate standards of judgement, while the second provides evidence that this leads to harmful effects which everyone should be concerned about.

Since the economy is a competitive environment, many rich people are intelligent enough to be aware of the underlying problem and its implications. The idea of 'good' and 'bad', separate from the legal structure, is one of the most fundamental concepts of culture and this explains the role people give it in demonstrating that things are not always as they seem. Rich people can only hope that people will realize that the assumptions they make about economic benefit are wrong and that the judgements of other people are likely to be of limited use in deciding how to accomplish goals, especially economic ones.

So to summarize the above, many rich people feel the need to continue working harder because it might cause them to be thought by others as selfish. This is intended to improve the success rate of things like relationships by not worrying about specific inaccurate standards of judgement, but at the same time rich people cannot conclude that doing so is the most likely to lead to accomplishment of personal goals or the greatest benefit to society as the sum of individual goals.

However, this has the unintended effect of causing people to think that earning a lot of money is also the best way to accomplish the economic goals of society.

As a result, people with mid-range incomes are reluctant to work less when those with even higher incomes, who might be more aware of the underlying problem, are not doing so. Someone with an income of just $450k or so might still find useful things to spend their money on, like private school for children, paying off education loans, hiring gardeners or domestic help etc. Someone with an income of $450m is less likely to find 'useful' things to spend their money on, but revealing this to the less affluent would be tantamount to admitting that earning a lot of money is not, in fact, beneficial to society, or that it represents a sort of sacrifice or compromise in the face of an unsolved problem.

It is almost an amusing situation: poor people think that having some money is good, so having lots of money must be great and the key to being happy even if it is more selfish than, say, donating that money to charity. And so rich people continue to work hard, because this is what causes other people to think they are selfish even if the more intelligent of rich people are completely aware that this is all somewhat of a sham.

If people are to make a dramatic reversal of attitude and agree that perhaps GDP is not the only important number when it comes to how 'successful' an economy is, there might be questions about whether we should expect people with say, $100~500k incomes to decide to work less before people with $10m+ incomes do.

But this is the wrong question, one which implies that we can have an expectation of who might decide to work less. Even if reducing the hours worked was a moral imperative for anyone who could do so, we should still not expect any specific individual to work less because the United States is based on ignoring the prevailing opinion if it is within your interests to do so, and it has already been shown there can be harmful effects when too many people agree on what the "right" thing to do is.

So it is completely fine to say that as a society, we should encourage the use of the accelerated work week while personally choosing not to do so, even if unemployment remains high. If everyone were to agree that the accelerated work week would be good for society and yet no one expresses any desire to work less despite that it is seen as socially acceptable to do, then we simply have another conversation about whether we prefer high unemployment, or taxes or inflation from fiscal stimulus.

But the accelerated work week doesn't work unless the entire management of a company supports it, otherwise working less just leads to discrimination in promotions. Anyone who is interested in fixing unemployment should be prepared to spend at least a little time convincing themselves that this would, in fact, fix unemployment and associated problems, with a minimal or no net cost to the company.

I still don't know if anyone is interested in discussing the problem since there has been so little support up to now. I don't want to think it's because people aren't smart enough to understand it.

Anyone who has played WoW to some extent should know about the 'zerg' that takes place between flags in the PvP battleground of Alterac Valley. AoS-type maps had it a little too but I guess that was just about the travel time causing greater resistance to a wave of units with momentum... I have not played League of Legends though. Alterac Valley was different because 'reinforcements' only happen when defeated but since the other formats have static defenses or three sides I guess the stability isn't that different. More importantly a single individual can have a greater effect in Alterac Valley if they are prepared to ignore the pointless zerg taking place between the two flags. Which of course is partly a result of the incentive design... need more non-shooter games with actual strategy! And intelligent people to play them.

Lower taxes vs fiscal stimulus is the pointless zerg, of course. And people wonder why many female persons are not interested in economic or political discussions..! I hereby declare that anyone who argues for lower taxes or more government spending will get no points for their efforts. Please spread the message that arguing about those issues is not a productive activity.

Consequences of Inaccurate Prices

An example:

Seller "α" sells products. Wanting to help customers, and not having anything else to do, "α" increases production and lowers prices in an attempt to get more sales.

β buys from α. Due to lower prices, β spends less money. Because they are using the accelerated work week, they are then able to choose to work less and earn slightly less money due to lower expenses. This lets β's coworker, γ, work slightly more and earn more money.

Because γ is not as good of a worker and not as efficient as β, γ has to spend more time working to do what β was previously doing, but because the business is aware of this γ is paid at a lower average wage rate and the cost to the business is the same. In a large enough business, there will always be someone who would prefer to work and earn more at any point in time so there will always be a γ.

It doesn't matter what γ does with their money. Maybe they spend it on the casinos in Las Vegas. Maybe they gamble it away in the financial markets. Maybe they use it to buy luxury goods like Louis Vuitton. The point of the accelerated work week is to ensure that plenty of people are willing to work less if they earn lots of money which means there are no ways of spending money that are harmful to the economy — as opposed to the environment.

δ also buys from α. However, when δ saves money due to α's lower prices, they don't decide to work less. Because people with lots of money tend to eat the same amount of food as people with less money and often (if they're male... sorry :P) buy the same number of pants, if they end up with more money than they planned they will probably spend it on luxury brands or invest it in the financial markets.

(Apparently these are some relevant books:

• Where Are the Customers' Yachts? Or, A Good Hard Look at Wall Street
• The Money Game
• The Richest Man in Babylon)

Then you have ε, who sells luxury brands, and ζ who specializes in the financial markets — maybe they work with clients, maybe they give free advice on a popular website, or maybe they're just a "quant" who makes money from technical analysis of price movements instead of by choosing and investing in promising companies. An important point is that no matter how much money ε and ζ have, they are not going to spend more on α's products than the price that α charges. So while by working harder they end up selling more to γ and δ, this doesn't help α at all except, possibly, by increasing 'GDP' and the taxes they pay so that α can pay lower taxes.

But if α really cared about how much money they had, they could just raise their prices (or if unemployed, they could support this). β would end up working more, γ would have less work to do unless something else changed, δ would also spend more on α's product and so ε and ζ would end up with less business and less money.

On the other hand, maybe when γ works more they use that money to buy food or essential health care. If β was like δ and just spent the savings from α's lower prices on luxury brands and investing in the financial markets, then γ wouldn't be able to buy these things.

If α wants to help γ, someone they have never met, instead of trying to figure out whether to raise or lower their prices they just need to support the use of the accelerated work week so β can work less when α lowers their prices, allowing γ the opportunity to earn more.

Recent Developments

The common-sense idea that plentiful jobs are the best way to address things like workplace discrimination, poor working conditions due to inadequate regulations, or illegal unpaid overtime: Labor Market Regulation: Freedom and Property Rights Are Red Herrings

("Lack of jobs for scientists story goes mainstream": U.S. pushes for more scientists, but the jobs aren’t there)

Low recruiting intensity continues despite a fall in the job fill rate, which critically suggests that some people might have more bargaining power than they think: Why That Great Interview Didn't Land You a Job: Recruitment Intensity Rates and Mass Unemployment

Nobel-prize winning economist says that there are no negative consequences for the economy from working less, except maybe a decrease in tax revenue: What You Add Is What You Get - NYTimes.com


It seems some people have the idea that if everyone just works hard and is nice to each other, then productivity will increase and people will get paid more, allowing them to buy more stuff. This might be based off a mental economic model of "The US's wealth vs the amount of wealth in other countries, including ownership of US government debt" and by encouraging everyone to work hard, the US will 'win' and jobs will be created due to abundant wealth.

People might even think of "success stories" where encouraging people to be 'nice' seemed to lead to positive results, like the cancellation of the plan to add a banking fee to customers of some major bank. But the well-intentioned reporting of this type of story in the news media is only a distraction from the fact that generally speaking, wages are the result of supply and demand. Maybe as a result of OWS, more people are aware that productivity gains are not being shared with workers.


Another reason people seem reluctant to work less is the idea of 'consumer surplus' when something is sold for less than what someone would be willing to pay. This assumption was mentioned in the first post on this site and described in more detail in "The Occupy movement is wrong about the rich". Specifically, the reason for this assumption seems to be a cognitive overemphasis on "people with unmet needs" as well as "situations of which one has personal knowledge". If someone is selling a product X, and other people are also selling X, someone might be inclined to discount the gain to competitors selling X that would result from a reduction in the amount of work one does, possibly to guard against invitations for collusion. Simultaneously, it is seen as beneficial to help and offer low prices to poor customers, or even rich customers, again as described in the first post on this site.

Concerning the idea that working less leads to a lower contribution to tax revenues, there are several possibilities but the end result in all cases is that working less is a morally neutral decision from the point of taxes.

Possibility 1: you are a monopoly provider, no one else can offer the same level of service you can, and if you work less someone will just not spend any money.

Compare this to a hypothetical situation: rich people collectively agreed to "starve" the nation by not spending any money, or just the bare amount needed to survive. For example see Economy is in Crisis, Yet Luxury Brands, Tiffany's, LVHM Still Report Sales Growth — "The high prices do not seem to ruffle customers – in fact, many high-end businesses have been able to mark-up items to attract clientele who liken quality with price."

If this situation were to happen, people would probably conclude that rich people did not have the nation's best interests in mind and would be much more supportive of fiscal stimulus. This option is also available in the unlikely case that many 'extremely unique' people decided to work less and customers decided not to purchase similar products from other providers as a result.

Possibility 2: you work less, but there is a shortage of other providers and so prices go up instead of the business just hiring someone else less experienced to fill in. If this is such an exclusive occupation you are probably selling to the rich who can afford to pay higher prices, both to you and to your competitors. This means increased income and taxes for your competitors will partly make up for the lower taxes paid by you, while the customers who were forced out of the market can just spend their money on something else.

Possibility 3: you work less, and a competitor offers the same product at a similar price or a slightly inferior product at a lower price. If at a lower price, then lower taxes will be paid due to both lower revenues for the entire market and the progressive tax code but the sales are being made to someone who might otherwise not have had any work and would have had to be supported by welfare from taxes.


The "decisions based on well-known local information" also applies to where money goes. When taxes are too low compared to spending, sometimes useful programs that prevent poverty etc. get cut even when the government is spending money on $100k+ pensions, $17k drip pans that could be made for $2.5k, signs announcing stimulus spending instead of on actual projects, etc. Paying more in taxes might thus contribute to keeping useful programs, and it becomes difficult to use taxes as the reason for working less.

However, when the 'taxes' go to the company one works for, such as an investment bank where the average salary is already over $200k, it can seem much more acceptable to work less time at a higher wage rate.

The limits of trust

(overuse of "The" in titles)

I will point out that the assertion that "people cannot be trusted" is not really falsifiable. It is always possible that people are being dishonest, either about things they have managed to conceal or mistakes which are openly known. For example, in a recent incident maybe local police really did believe that a female university student in China with 13 knife wounds had committed suicide despite how unrealistic this seems. The best that can be done is to align incentives so that people can be expected to accomplish goals without being dishonest, with an understanding that deception has a cost to oneself and others in the form of greater complexity, which can potentially decrease performance. This includes dishonesty about the awareness of inaccuracy in ethical or competitive standards of achievement.

A brief summary of the reasoning behind the accelerated work week...

• most jobs include some amount of inefficiency or unnecessary activities, whether it is Facebook use at work, TPS reports, or other types of corporate bureaucracy.
• jobs that do have standards which push employees to maximize efficiency are generally deemed to be exploitative.
• people in the United States cannot compete for low-wage jobs against workers in China because of higher costs of living for necessities like housing and imperfect price discrimination which prevents those who control things like land or certification-awarding institutions from offering lower prices while retaining profits.
• people do not want the government to spend more to create jobs, but are also unwilling to encourage use of welfare.
• most spending beyond a certain point is on things like brands.
• completely dropping out of the work force is seen as unacceptable to many people.

Given all of this, earning a higher wage rate when working fewer hours is essential so people are willing to do so. Even with unemployment still very high and many college graduates looking for work, many companies say they are having difficulty filling positions because they would prefer someone with prior work experience, which schools cannot teach. Unless educated workers agree to reduce their hours, employers will have no incentive to hire any of the unexperienced graduates looking for work.

Now, the question is whether it is the responsibility of economists to support the accelerated work week as a way to fix unemployment. It has previously been suggested that economists are only concerned with GDP, and might not be willing to advocate a solution which fixes unemployment and all its associated problems like crime and poor health outcomes if it does not also lead to an increase in GDP. It is disingenuous for economists to imply concern for the unemployed by suggesting an increase in government spending when it is already clear that these efforts have failed due to widespread public opposition to the wasteful spending and misallocation of resources that results.

If economists are not willing to support the accelerated work week, then any sympathy for the unemployed is deceptive or, at best, insincere and this must be pointed out. If this conclusion is reached, then it will become the responsibility of people interested in fixing unemployment to appeal to policy makers directly in support of positive change.

The ideals of freedom and independence

What is to be avoided: Girl Escapes Boyfriend’s Abuse, Covered with Infected Cuts – chinaSMACK

How to avoid it: as mentioned in a previous post, pursuit of a goal which is commonly seen as being in the interests of society, or at least a community, until a decisive point is reached of either success or failure. It is difficult to justify failure for more important goals, which means that it must come from an external source. Since this retains ambiguity in whether one is being "good" or "bad" by avoiding any benefit from lying about being good, it is then possible to isolate mistakes as being the result of misjudgements of value, specifically an overestimation of the value of the self.

Random song~




An informal poll on the Occupy Wall Street forums found that many people do not believe that working harder helps the unemployed. However, as mentioned before on this site the United States was built on the idea of personal success, even if it means risking one's life or ignoring the majority opinion—only about 40~45% of the white population of the thirteen colonies supported the revolutionary cause during the American rebellion against Great Britain, while the rest were neutral or actively opposed to the revolution.

The implication is that if someone is "successful", then unless laws have been broken that person deserves to enjoy their success due to the fundamental assumptions of the moral system. Similarly, if someone else is not content with their fortune then in most cases it does not matter what the basis of their decisions were to reach that point. The system may change through democratic participation, but until that happens, exploiting the flaws in the system is not only allowed, it is encouraged. One might be lead to assume that the current mapping of income and wealth to individuals is not only fair, but also an accurate measure of ability if everyone desires to have the financial security that a high income provides.

But this is not a reason to keep the current economic system or the assumptions which support it. If, for example, the financial sector becomes much less profitable due to a policy of no inflation, then people who did not spend time and effort learning how to be proficient at financial markets become the winners and people who were proficient become the losers in the sense of opportunity cost of work experience, although they might feel that the investment was worth it. Predicting, or causing, changes to the economic system is also a form of skill. As a previous post mentioned, the rules in life are not fixed.

So who would be the winners and losers if the accelerated work week was used to fix unemployment? This depends on who uses it, and is somewhat hard to predict without knowing the goals that people have. Stereotypes are part of what cause people to act in ways that economists do not expect, and someone might choose to work hard because they believe it reflects on their skin colour, gender, or some other attribute and feel that the economic impact of their actions is less important than the social benefit to these categories of similar people.

But types of work can be identified based on changes to demand for work and compensation rate: unskilled work, 'necessary' skilled work, and 'unnecessary' skilled work. Skilled work is defined by the length of education required to get a job. Unnecessary skilled work is simply that which has a lower value to society and is sometimes seen as unethical, such as the financial sector and the work that results when wealthy corporations file large numbers of lawsuits against competitors.

Unskilled work would be the clear winner vs unnecessary skilled work, which depends on the high profits that come from spending excess income on brands or unwisely investing in financial markets. However, necessary skilled work, such as that done by doctors, is more complicated. Lower inequality would reduce the optimum prices for skilled work, but demand is less elastic than for unnecessary skilled work so if this was all that changed, we would just see a reversion to the income distribution by sector of previous decades, with roughly the same number of doctors but fewer financial sector workers.

But there are two other considerations. By definition, the supply of labour for any particular skilled job is limited and if people choose to work less this will cause prices to rise and reduce use of that service. At the same time, the option of working less may induce people to make an investment for education or training for that job if working less is not realistic with the compensation rates for unskilled work. Many high-paying jobs come with the expectation that someone will work as much or more than someone doing unskilled work, and combined with the opportunity cost of education this may lead to a substantial reduction in the lifetime amount of 'free time' someone has. According to one estimate, a physician will spend nearly twice as much of their life either working or in training as a teacher will. Regardless of pay, talented people might be more willing to pursue these occupations if the demands on time were not so high.

It was also mentioned that some types of skilled work might see oversupply if people become willing to do that work for free in their spare time. This has been seen in the popularity of open-source software like Firefox, with much of the work being done by volunteers.

Any changes to college, such as reversing the historical trend toward grade inflation, are more difficult to predict as are improvements of other standards for deciding employment or promotion within a company. However, the clear winners would be those who are prepared to succeed within the new system and not too invested, emotionally or otherwise, in the old system.

TL;DR: costs of moral integrity or time are too high for some types of skilled work in the current system, reducing supply and causing employment in these jobs to not accurately reflect skill or the allocation of talent with the greatest benefit to society.