Introduction

Economics 1a

Economics 1b

Economics 2

Economics 2a

Economics 3

Economics 4

Economics 5

6. Economics: A Review

A New Measure of Wealth.

In Idle Theory, wealth is measured as idleness. The only thing of any value that anyone really ever possesses is their idle time. For it is only in their idle time that they can look around themselves, and like what they see. It is only in their idle time that they can actually do any valuing at all.

But this is not how most people see wealth. For most people, wealth consists of things of one sort or another. A rich man is someone who owns cars and yachts and houses. Or who has the money to buy them.

But all those Ferris and Porsches and trimarans and Palladian mansions and diamond necklaces are just luxuries and amusements, and they are the products of idle time. If there are fast cars and yachts and stately homes, it is because there has been the idle time availbale in which to make them. And, just as importantly, there has been the idle time in which to enjoy them. If there had been no idle time in the societies which have made and enjoyed these things, none of them could ever have been made. If there is no idle time, there can be no luxuries.

And the same is true of all the other pleasures of life. There can be no art without idle time. There can be no music without idle time. There can be no philosophy without idle time. There can be no invention without idle time. There can be no science without idle time.

If humanity had survived all these many millennia at some low level of idleness, there would have be no innovations, no inventions. Humans would still be living like animals, many of whose lives are very busy, and very short. For it was only in his idle hours that a man could chip away at a flint to make an axe or a knife, and learn how to perfect their production. It was only in his idle time that the inventor of the wheel could study the behaviour of things that rolled. If either of them had been too busy to perform these investigations, there would have been no flint axes and no wheels. And nothing else either.

Idle time is like the water which is delivered to households in pipes these days. Almost nobody wants it for itself. Nobody runs the tap in their kitchen sink, and marvels at the sight of it. And yet it has thousands of uses, in washing, and cooking, in almost every activity from the dampened finger that turns the pages of a book, or the little bottle beside the water colour paints. Plain water is rather boring stuff, and people usually mix it with something else to drink. With fruit juice, with sugar, with alcohol, with any number of other flavourings and tinctures. But, at root, every drink that anyone drinks, even the strongest whisky, is mostly water. But nobody ever goes into a tavern and asks for "a pint of your finest water, please." Water is everywhere, and in this way it sinks beneath attention, and passes unnoticed. Yet nobody could live a day without it.

And so also is it with idle time. It is as boring as plain water. And as unnoticeable, and as tasteless. But, like water, it can be used to make all sorts of other things. Things that are interesting and exciting and amusing. Like fast cars. And yachts. And elegant mansions. For all those cars are the product of hours of forging and welding and hammering. And all those yachts are the product of gluing and sawing and sanding. And all those mansions are the product of many hours spent lifting and cutting and shovelling. It takes a measurable amount of idle time to make each one of these things. Everything that humans make - houses, cars, roads - are the product of human idle time that has been employed in this productive work. Anything anyone wants to do can only be done in idle time; all other activities are obligatory.

The notion that leisured humans set themselves to work to make things that they want, and thereby increase their happiness and wellbeing, is hardly a new idea. But what sets Idle Theory apart is its assertion that humans do not start off with leisure as a given, as the datum of life.

For idle time is neither ubiquitous nor omnipresent. Life does not consist entirely of idle time. Idle time is something that itself must also be manufactured. It is not something that people are given when they are born - 70 years of idle life on a plate - to do with it whatever they choose. People have to work to live, and that work must be subtracted from their idle time. The idle time they have is what is left over after they have assured their survival for another few days.

And because there is, as a consequence, always a shortage of idle time, the primary economic task of humanity is that of producing idle time, so as to give people the time in which to do the things that they want to, rather than do what circumstances demand.

And the availability of idle time in any society, or any individual person, is measured by their idleness - the fraction of their time in which they can do as the please rather than do as they must. In low-idleness societies, people must work most of their time simply to survive, and have little idle time left over to do as they would please. And in high-idleness societies, where people have to work little to survive, there is a great deal of idle time available. And it is these idle societies that are able to produce all kinds of luxuries and amusements, and to produce art and music and literature and philosophy. And in the busiest societies there can be none of these things.

And so, in Idle Theory, the primary task of an economic system is seen as that of the provision as much idle time as possible. The production and distribution of luxuries and amusements and toys and games is not the primary task of an economic system. It is entirely secondary. It is something that can only happen when there is enough idle time available to make these things and also to enjoy them.

But idle time is not attractive. It does not glitter. It does not evoke envy. It is not even visible. All the luxuries in the world are far more alluring. And it is these things that men almost always want. And so the source of their wealth, the condition of relative idleness that made it possible for the abundance of these glittering and gleaming things to be made in the first place, is completely neglected.

Internally consistent

Idle Theory explores the logic of an economy whose primary purpose is to make idle time. And one thing that seems to emerge from this logic is a world that is internally consistent, and all made out of the same thing. In orthodox neoclassical economics, people are regarded as disposing of their leisure in order to come by goods which provide happiness or pleasure. One thing - time - is used to make another thing - happiness or pleasure or Utility -. And happiness itself produces nothing. But in Idle Theory, idle time is both a means and an end. Humans use their idle time to make idle time. And this idle time can be used to make more idle time, or to make happiness-generating luxuries.

And so in Idle Theory there is no switch from the units of time (seconds and minutes) to units of happiness (hedons or utils). In this manner, Idle Theory is internally consistent in its units.

In this respect, Idle Theory is far closer to physics, in which the units used - of mass and length and time and momentum and energy - are treated with very great care, so as to not confuse one thing with another.

And Idle Theory would also be closer to physics if it was entirely formulated in the terms of physics, so that instead of idle time being disposed of while making things, physical work is performed. For whenever anyone makes anything, there must be physical work performed to a greater or lesser extent. The builder of a house is not only using idle time, but is also using energy, as he lifts bricks and puts them in place. And even when this work is entirely intellectual work, this mental work must also use energy, to power a working brain. So to deal solely in terms of time is to engage in a simplification. And in many cases a dangerous oversimplification.

Objectivism and Subjectivism

Idle Theory's economic vision is also non-subjective. It is not concerned with how anyone feels, or what they do or do not like. Idle Theory's time economy is not driven by desire. The same cannot be said of a neoclassical economics in which highly subjective goals - happiness and pleasure - are being pursued, and which most of the goods for sale - luxuries and amusements - only have psychological utility, and are wanted for their own sake.

In Idle Theory, the goods on sale are tools. And nobody wants these tools for their own sake. Nobody wants to own a hammer or a chisel in the same way they might want to own a painting by Renoir. Nobody looks forward to going shopping for hammers and nails in quite the way that they look forward to shopping for fashionable shoes or music. Nobody comes home in the evening from a day spent buying nails and hammers and says excitedly, "Look what I bought today!"

The assessments of tools and raw materials are abstract and rational. Will this tool do the job I want it to do? Will it provide value for money? Will I be able to get a replacement if and when I need one? The buyer of tools is calculating their value and their cost and all sorts of other things. How he feels about hammers and saws and bricks forms no part of his thinking.

The assessments of luxuries and amusements are quite different. They are more emotional than rational. They are all about how the buyer feels about them on the spur of the moment, rather than any rational calculation of their utility. They are typically things that a buyer instantly likes and wants to have. If there is any calculation about it, it is over whether to spend money on this much liked jacket or that fine pair of shoes, the one irrational desire struggling with the other.

In this sense primary economies, in which tools are made and traded, are rational and numerical and objective. And secondary economies are irrational and impulsive and subjective, and hence wholly psychological in character. One is concerned with what objectively is the case, and the other with what is subjectively felt.

The difference between Idle Theory's primary and secondary economies marks a division between what might be called an objectivist and a subjectivist vision of economic life. In the objectivist view the rules governing economic behaviour are the immutable laws of nature, and perhaps the laws of physics. The cost and value of useful tools is objective, and measured in time. In the subjectivist view the rules governing economic life are essentially subjective and psychological. The value of luxuries to anyone is something entirely subjective in nature, and the rules governing economic life are man-made, like the rules of chess or any other game.

Adam Smith took an objectivist view of economic life. It was for him another natural process with its own inherent governing rules. But, a century or more later, the neoclassical economic theorists began take a subjectivist view of economic life. While for Adam Smith the value of a deer or a beaver was the amount it cost to come by them, for the neoclassical theorists the value of a piece of chocolate to its buyer was entirely subjective, and dependent on how many chocolates he had already eaten.

Idle Theory incorporates both views. The primary economy that produces idle time is objective in nature. And the secondary economy in which idle time is disposed of is the subjective economy. And whether people regard economic processes as objective or subjective may be largely determined by the idleness of the society in which they live. Adam Smith lived in an almost pre-industrial Britain in which, it may be supposed, life was fairly simple and spartan, and there were no shops on every street filled to bursting with luxuries and amusements. 150 years later, Victorian Britain was becoming awash with such luxuries and amusements as befitted a nation with a global trading empire. The idleness of the British economy had risen, and the result was a flourishing secondary economy in which the entirely subjective value of these new amusements came to be recognised by the neoclassical theorists of the time.

At one the extreme, in an economy at or near zero idleness there can be no luxuries, and all goods that are traded will be objectively useful tools, within an almost entirely deterministic economic process, with zero individual freedom of choice. And at the other extreme, in an economy at near perfect idleness, nearly all the goods that are traded will be subjectively pleasurable luxuries, within a completely indeterminate economic process, with individual complete freedom of choice. And over the 150 years between Smith and Jevons, the British economy moved from being a relatively low idleness economy to being a relatively high idleness economy. And this was reflected in the economic theories that were produced at these times.

And since that time, the British economy has remained relatively prosperous, and consequently neoclassical subjectivist economic theory has remained the orthodoxy. But if the underlying idleness of the British economy should begin to decline, and the shops to empty of toys and luxuries, a classical objectivism would probably make a return.

And Idle Theory is primarily an objectivist economic vision, with a secondary subjectivist tail tacked on to it. It grows out of a Newtonian physical understanding, rather than from a psychological view of life. In Idle Theory, it is the primary economy which is important, with the secondary economy being entirely trivial and insignificant - even if, in practice, most people are far more interested in the luxury goods produced in the secondary economy.

Explanatory Ability

Idle Theory's economics is also able to provide a new explanation for some economic phenomena. And in particular the phenomenon of profit. In orthodox accounts, it usually explained as the reward for bearing risk, even if the business engaged upon is almost devoid of risk.

And in Idle Theory, the explanation of profit is that useful tools generate more idle time than it cost to make them. The axe that will save 10 days of labour in cutting down trees may only have taken a day to make. And this is usually reflected in the price, which can range anywhere between the cost and the value of a tool. Useful tools actually are profitable in their use, generating more idle time than it costs to produce them, and this profitability is reflected in the prices they acquire.

And Idle Theory's explanation of profit is also its explanation of interest. For tools do not usually provide their full value all at once, but gradually over time. The axe that saves 10 days of labour over its useful lifetime may do so over several months or years, providing a steady stream of idle time, the sum of which will exceed its original cost. And so, in the same way, some capital amount of money will provide a stream of interest over time, the sum of which will exceed the original investment.

And such explanations are not trivial. There are a great many people who believe that there is something iniquitous about about profit, about selling goods for a higher price than they cost to make. For such people, profit is a dirty word. And to them, the explanation of it as the "reward for taking risks" seldom seems plausible, and looks more like a feeble excuse.

And the same people very often feel that money itself is the root of all evil, and that we would be more equitable to simply give goods away free. But again, it is quite easy to show using Idle Theory that when goods are given away free - i.e. at zero price - the result is not social equity, but inequity. Paradoxically, it is only through the use of money that it is possible to produce the social equity that they so desire.

If there are many such people, it is almost entirely because of the inadequacies of the conventional accounts of money and prices and profits, which tend to treat the economy as a game that people play, and in which there must be winners and losers.

And again, the phenomenon of unemployment is quite simple to explain in Idle Theory. And it is that it is the entire inherent purpose of a primary economy to minimize work, and in so doing 'throw people out of work'. The appearance of unemployment in an economy is a mark of rising social idleness, but of economic mismanagement in re-allocating work.

The Rosy Vision

The dispute between Idle Theory and economic orthodoxy has already been described in the introduction to these essays as one about the availability of idle time. In Idle Theory the idleness of an economy never reaches 100%, while in the orthodoxy it is in effect assumed to be 100%, and the entire economy is regarded a secondary luxury-producing economy in which all should be fully employed in creating as much of this 'wealth' as possible.

From Idle Theory's perspective, this economy orthodoxy appears to over-optimistic, to say the least. It is a positively Rosy Vision of life. And in it an economy is regarded as a sort of trading game that people play, and a game in which, like all games, there must inevitably be winners and losers.

If the economy is just an elaborate game, it equally follows that, like all games, its rules are a human invention. And as such, they can be changed. And a different game can be played instead. All that is needed is enough people who are tired of the old game, and want to play a new game. From this perspective, the rise of Socialism and Communism over the period during which neoclassical economic theory became the orthodoxy (roughly from 1850 onwards) was simply the growing desire to play a different game. Rather than having rejected neoclassical theory, it may be argued that the Socialists and the Communists had fully absorbed it, and seen the revolutionary possibilities inherent in it.

Utopian Socialism, from this perspective, was never in the least bit radical or unorthodox. The Socialists fully bought the idea that human economies were a sort of game that people played. They simply wanted to change the rules so that the outcomes were less inequitable, and so that there would be no losers in life's game.

Economic thought is not disconnected from any other thinking,and influences and is influenced by other strands of thought. And once the economy had come to be regarded as a sort of compulsory game that everybody played, so also the importance of real games also rose. In England games like cricket and football began to attract growing numbers of both players and spectators in the latter half of the 19th century. And this rise of the status of games in English culture might be seen as a ritual celebration of the newly central cultural role of The Game. Games like football reflected the new economic reality. Games took on a profound new importance. Thus, in the heat of battle, a poet exhorts his fellows to

Play up! Play up! And play the game!

Some people think that football's a matter of life and death. But it's more important than that.

And, as Russia and the Western powers engaged in diplomatic and military maneouvres in Asia at the outset of the 20th century, this contest was dubbed The Great Game. It is a 'game' that seems to still be being played a century later.

The neoclassical economic orthodoxy that emerged in the latter half of the 19th century was a boundlessly optimistic vision of human life, and it raised enormous economic and political expectations. It also generated an an unforgivingly moralistic and demanding view of human conduct. For if all time was idle time, and the economy was a vast Monopoly^TM game that people played, whose rules could be rewritten at will, then it also followed that it was human will that was the most important determinant of economic outcomes, and so individual humans became personally responsible for the state of the world. If life was inequitable, it was their fault.

The neoclassical subjectivist vision of pleasure-seeking human life was also inherently psychological in character. The motives and drives of economic life were to be found in the human mind. It is perhaps no accident that the rise of neoclassical economic theory was accompanied by the rise of the psychologists, in the persons of Freud and Adler and Jung.

But from the point of view of Idle Theory, all of this appears quite mistaken. Human idleness is never perfect, and seldom gets anywhere near perfect. Economic systems are not games whose rules can be changed at will to accommodate shifting preferences. Economic systems instead have their own inherent objective logic. The task of economics is to understand that logic, and use this understanding to find ways of mitigating the worst effects. In the meanwhile we are caught up in a logic of something we do not understand, and we will only free ourselves from the grip of that logic when we at last understand it - in exactly the same way that we could only escape from the Earth into outer space when we understood the laws of gravity and motion. And in the meantime nobody is to blame for our unhappy condition. We are simply victims of our own ignorance.

Significant Omissions

In Idle Theory's treatment of economics, there are a number of significant omissions.

Firstly, there is no data. There are no measured costs and values of tools. Largely because there are none published.

In principle the task of getting real data does not look very hard. The cost of production of some tool is the time it takes to make it. And the value of a tool is the labour time it saves. Both of these, and the lifetime of tools can be measured with clocks. But in practice getting this data is almost certainly rather harder to obtain.

Secondly, the treatment omits the real world of men and women earning their living with greater or lesser difficulty. It barely touches upon unemployment, inflation, boom and bust (and crash), and many of the other economic issues of the time. Nor does it proffer any solutions to any of the pressing problems of the time. Instead it is an abstract approach to theoretical economic systems.

There no doubt remains far more that can be added to this brief exploration of economic theory.

Last Word

It should perhaps be added that, from the point of view of Idle Theory, humanity still lacks anything that realistically approaches an objective economic science. If nothing else, the long reign of subjectivism has ensured this. But it means that modern economic adventures sail into uncharted waters which may well be hedged with reefs and shoals.