Outline of Economics
There is no doubt that if the human race is to have their dearest wish and be free from the dread of mass destruction they could have, as an alternative, what many of them might prefer, namely, the swiftest expansion of material well-being that has ever been within their reach, or even within their dreams. By material well-being I mean not only abundance but a degree of leisure for the masses such as has never before been possible in our mortal struggle for life. The majestic possibilities ought to gleam and be made to gleam before the eyes of the toilers in every land and ought to inspire the actions of all who bear responsibility for their guidance.
It might be remarked that the Idle Theory of Evolution is only a slight variant of modern evolutionary theory (sans Darwin), and that Idle Theory's ethics is only a variant of Utilitarianism (sans Utility). But Idle Theory's Economics offers a radically different, and perhaps mysterious, account of economic systems to that set out by Classical and NeoClassical economic theorists.
Probably the principal difference is that, while it is orthodox economic doctrine that the primary purpose of an economy is as far as possible to provide work for everybody, in Idle Theory the primary purpose of an economy is quite the opposite: it is to as far as possible relieve everybody of the need to work. This is an inversion of understanding that is perhaps as great as the change from thinking that the Sun goes round the Earth to thinking that the Earth goes round the Sun. Such an inversion will strike many people as being completely upside down, and entirely contrary to common sense, and with alarming consequences that extend far beyond the confines of economics. And indeed they do.
The Economic Orthodoxy
Orthodox economic thought, Classical or NeoClassical, might be described as being primarily concerned with the generation of Wealth - where what is meant by Wealth is almost exclusively ownership or access to material goods and services of every variety. The rich typically own large villas or mansions on large private estates serviced by maids, chefs, butlers, and gardeners; own a variety of expensive cars, yachts, and private jets; are dressed in the finest clothes; eat the choicest foods; drink the finest wines; live long lives with the best medical care; etcetera, etcetera. By contrast, the poor live in shacks or hovels; travel on foot; dress in cheap clothes; eat bad food; drink contaminated water; and die young with inadequate or non-existent medical care. The rich are held to enjoy a high 'standard of living', and the poor a low 'standard of living'.
And the orthodox political goal of economic growth is to raise standards of living, by increasing available wealth. If there is political dissent over the goals of economic growth, it is almost entirely concerned with the distribution of wealth. Socialist political systems are generally concerned with lifting the poorest members of society out of poverty, providing them with housing, roads, services, education, and medical care, usually at the expense of the richest members of society. In the extreme, socialist political systems aim for an almost exact equality of wealth across society. By contrast, extreme liberal laissez-faire political systems are unconcerned with the distribution of wealth within society, and regard personal wealth as the just reward for enterprise, innovation, and hard work - with the poor usually being dismissed as lazy or feckless. In between these extremes, there are a variety of political systems which try to both reward enterprise with wealth, but also to ensure that the poorest members of society are provided with some sort of 'safety net' to keep them from utter destitution.
Regardless of the distribution of wealth within society, socialist or laissez-faire political systems tend to advocate policies of 'full employment in wealth creation'. The busier people are in creating wealth, the more wealth there is to go round. If the gross national product of a country is regarded as a cake - as it frequently is -, then full employment in wealth creation means making a bigger and better cake, regardless of quite how it is sliced up and divided within society.
The formal study of the operation of economic systems, in which goods and services are manufactured and traded, has been an oddly late development within Western laissez-faire societies. And it has also been one which has been subject to a variety of radical changes of approach, which amount almost to fashions, usually associated with single individuals such as Adam Smith, Karl Marx, John Maynard Keynes, Milton Friedman, or some other guru.
In the 18th century Classical theories of value of economic thinkers such as Adam Smith, David Ricardo, and the like, the exchange value or price of goods was generally regarded as being a function of the time and effort taken to manufacture or otherwise acquire them. This is usually known as the Labour Theory of Value (where 'value' means 'exchange value')
If among a nation of hunters, for example, it usually costs twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer. It is natural that what is usually the produce of two days or two hours labour, should be worth double of what is usually the produce of one day's or one hour's labour.
One consequence of this theory was highlighted by Karl Marx in the 19th century, who pointed out that if goods exchanged at their costs of production, then it followed that the labour employed in the production of goods would also be sold at its cost of production, and that wages must therefore tend to fall to subsistence levels that simply kept labourers alive.
However, at more or less the same time as Marx was writing, another group of economic thinkers, the NeoClassical theorists, who included Jevons, Walras, Menger, and others, began to suppose that the price of goods was not so much determined by their cost of production, but instead by their value in use, or their utility - the pleasure or satisfaction derived from their use.
Neither school of theorists, however, had a very good explanation for profit - the tendency for goods to be sold at prices higher than their cost of production. At present, profit is generally explained as being the compensation for the risks taken by entrepreneurs in making and selling goods in volatile markets. Others have said that it was simply the consequence of naked greed. Profit was, and has remained, something of a dirty word.
At the foundations of both Classical and Neoclassical economic thought there lies the largely unstated assumption that the time needed to perform work is the everyday datum of human life - that everyone is in some sense given a lifetime, to freely dispose of as they will. And if they are able to freely dispose of this time, it follows that such a lifetime is a lifetime of leisure. And indeed Neoclassical economic thinkers have frequently stated this quite explicitly, asserting that when work is performed, leisure is foregone.
It is this assumption that Idle Theory rejects. The simple fact is that a human lifetime is no sort of gift at all. Humans have to work to survive. They have to grow food, haul water, build houses, weave garments, without which they would starve or freeze to death. And because they must work, on pain of death, there is no sense in which their lives can be described as lives of leisure. On the contrary, given that many societies have historically had one sabbath day of leisure a week, it would be more accurate to describe such societies as 1/7th leisured, rather than entirely leisured. To this it might be added that it is around work, rather than leisure, that human life revolves. As children they are taught the skills needed for a life of work, which as adults they perform, and from which they retire in frail old age.
And so the true reality of human life is that it is made up not solely of leisure, but partly of leisure and partly of work, and is thus inherently dual in its nature. And the fundamental dimension of this part-busy, part-idle life is the degree to which it is idle (or conversely and symmetrically, busy). And this degree of idleness is one that can range from a minimum of zero idleness - a life of unremitting toil completely devoid of leisure - to a maximum of perfect or unit idleness - a life of complete leisure completely devoid of toil.
In addition, it may be added that a life of zero idleness, or continual work, is a life lived at the threshold of death. For if living should get any harder, and more work needs to be done to survive, there will not be enough hours in a day to do it. Conversely, the more idle a life anyone lives, the greater their cushion against the prospect of death. In times of difficulty, which a busy man might not survive, a relatively idle man merely finds himself working harder.
And also, it must be pointed out that in work, an individual is constrained to some particular necessary activity - ploughing fields, drawing water -, and it is only in their idle time or leisure time that they can freely choose between a range of leisure activities which are theoretically infinite in number. And so work corresponds to complete constraint, and leisure to complete freedom. Or, more starkly, leisure corresponds with life, and work with death.
And this introduces an ethical dimension. Work and leisure are not interchangeable. Men who naturally prefer life over death must also prefer leisure over work. And this, in real life, they regularly do.
The primary economic problem is not the production and distribution of wealth as it is ordinarily understood, but the emancipation of humanity from toil, and their liberation into a life of the highest degree of leisure. Given such leisure, people may well choose to forego leisure in the manufacture and exchange of luxuries and amusements, which are valued for the pleasure or satisfaction that they afford. But this Neoclassical luxury economy is entirely secondary in nature, and dependent on the amount of leisure available in society. If no leisure, then no luxuries.
The Origin of Money and Profit
The economic goals of humanity, as described by Idle Theory, are thus in direct contradiction of the economic goals of humanity as set out by modern economic orthodoxy. Instead of seeking to keep everybody busy working to create wealth, Idle Theory seeks to keep everybody as idle and leisured as possible, while allowing that in their leisure time they may choose to make and trade amusements and luxuries.
In what ways may individuals reduce their work, and increase their idleness? One principal way is through the use of tools that speed or otherwise assist them in their work. For example, if in the course of their work, someone is required to carry 100 large fruits from one place to another in a return journey that takes 10 minutes, then if only one can be held in each hand, it will take 50 journeys and 500 minutes to move them all. But if a bag can used, which will hold 20 fruit, then only 5 journeys and 50 minutes will be needed to move all the fruit. Thus, in this case a bag will save 450 minutes of work. And in this saving lies the value of the bag in use. Of course, it will take some time to manufacture such a bag, but even if it costs 50 minutes of effort to make a crude bag, and it disintegrates after 5 trips, the net saving of time will still be 400 minutes.
In this manner, a small outlay of time - the cost of making the bag - will yield a larger return in the time it saves in carrying fruit - the value of the bag -. And what is true of bags will also be true of ropes, knives, hammers, spades, and every other variety of useful, time-saving tool.
And if someone makes such a bag, but does not use it, but a second person desires to use it for the same task, then the first may sell the bag to the second at some price, which may take the form of a promise by the buyer to work for some period of time for the seller. At what price should the bag be exchanged? Its cost to the seller was the 50 minutes it took to make it, and any lower price than this would result in a net loss of time for the seller. The value of the bag to the buyer is the 450 minutes of work it will save in carrying fruit, and any price higher than this will result in a net loss of time to the buyer. But at some price in between these two extremes, both buyer and seller will gain approximately equally from the transaction, and it will be on some such equitable price that they will settle.
In this manner, both buyer and seller profit from the transaction, even though the bag has been sold at a price - say 150 minutes - which is over three times its cost. And herein lies a robust and simple justification of the origin and necessity of profit in exchange. If the phenomenon of profit has regularly appeared inexplicable, and therefore reprehensible, it is because the Classical economic theorists recognised only the cost, and not the value of some commodity. Thus while Adam Smith could see the cost to the hunter of killing a deer, he could not see the value to its buyer of its flesh as food, nor its skin as clothing. And the value of some item of food is that it provides the energy required to power continued life for some period of time.
The monetary unit of such exchanges need not, of course, be unreliable promises of work. If a fruit, or a knife, or a piece of metal are customarily bought with some amount of work, then conversely these commodities can buy the same amount of work, and be used as monetary units. But fruit rot, and knives are large, and so it much more likely that highly divisible metal bars come to be used as money, and in the longer term non-rusting metals such as gold.
It is possible to explore the logic of such economic systems by building computer simulation models of them, using imaginary tool costs and values. It is also possible to consider them analytically. Using such models it is possible to begin to build a theoretical understanding of the behaviour of such economic systems, and the various malaises that can afflict them.
The Dual Nature of Economic Systems
As men make and trade useful time-saving tools in a primary, idleness-generating economy, and thereby increase their idleness, they begin to have long periods of time in which they have nothing to do. But in such idle time they can invent and play games, create art and music and poetry and literature. And as they come to make things like bats and balls and sculptures and paintings, these also may be exchanged for money, in exactly the same way as useful tools. And thus a secondary, idleness-using economy may come into existence, in which luxuries and amusements are manufactured and exchanged. And such a secondary economy is the economy described by Neoclassical economic theorists. And should any economy attain perfect idleness, so that the primary economy ceased to exist, the resulting secondary economy would be perfectly well described by modern Neoclassical economic theory.
In the secondary economy, the value of luxuries and amusements lies not in any work time that they save, but in the pleasure which they afford to their owners. In many ways, all such amusements simply provide ways of disposing of idle time. A book takes hours or days to read. A movie takes an hour or two to watch. A game of cricket may last for days. A painting or a sculpture may be closely examined for hours.
Such a secondary economy might be regarded as acting in a completely opposite sense to a primary economy, disposing of idle time rather than producing it. It is perhaps helpful to think of a primary economy as being akin to a supply of pure fresh water into a household, which is subsequently used in drinking, washing, cooking, and a thousand other ways, before finally being disposed of as waste water through drains.
In some ways, this analogy with pure and waste water may be more apt than it might otherwise seem, in that it suggests that just as the supply of pure water should be kept separate from the waste water drainage, so also the primary idleness-generating economy should equally be kept separate from the secondary idleness-using economy.
The two economies, primary and secondary, ought furthermore to be of entirely different characters. The primary economy is a matter of profound seriousness, and of cold calculation, and absolute necessity, and also - as far as possible - entirely equitable in its distribution of the idle time it generates. The secondary economy ought, by contrast, to be convivial, playful, optional, and inequitable.
The primary economy ought to be equitable in that everybody in society has an equal stake in it, and an equal claim to an idle time that is the foundation of their existence as free agents. But if, in their idle time, some people choose to busy themselves making and selling luxuries and amusements, while others opt to do nothing but sit and talk, then there can be no requirement or necessity for the industrious former to share their wealth with the indolent latter. Or, put another way, nobody ought to get rich, in the ordinary conventional sense, by making and selling the necessities of life; but anyone may get rich by making and selling luxuries and amusements.
The Modern Dragon Economy
In the ideal progress of society, an innovative and dynamic primary economy would act to steadily increase social idleness, progressively and gradually emancipating its members from toil. And as the idleness of society rose, a separate playful and convivial secondary economy would gradually emerge to fill idle time with amusements and diversions and pastimes.
But, in the present day, both primary and secondary economies are entirely confused together with one another. And the result is neither equitable nor convivial.
The principal problem would seem to be that in present day economies, a great many luxuries and amusements, which properly belong in a secondary economy, are sold so as to acquire the necessities of life generated in the primary economy. There are artists and authors and musicians who earn their daily crust through their art. This means that it has become a matter of necessity for people to make and sell luxuries. And it never ought to be necessary to perform such unnecessary work. If such a thing is happening, it is most likely because monopoly producers of the necessities of life (food, clothing, shelter, etc.) are selling them at such high prices that they are obliging consumers to work far harder than they would if prices were reduced through competition to something approaching costs of production. While monopolies exist, and prices remain sky high, the result is that a great deal of social idle time ends up in the pockets of monopolists, who spend it buying the luxuries and amusements that others are obliged to make, in what is called a 'trickle-down economy'. The result is a society with idle and super-rich people at one end, and toiling poor people at the other, and a great many people in the middle trying desperately to move from poverty to wealth by any means possible.
In this kind of 'dragon' economy, in which pretty much everybody is dragooned into work, almost all social idle time is converted into luxuries and amusements. Dragon economies generate a wide range of consumer choice, but very little time in which to choose what to do. And an economic system which should be liberating people from work is instead forcing them to work, and sometimes to work harder and harder. And one result of this is that as the primary economy grows, and generates more idle time, this idle time is simply converted into yet more luxuries and amusements. And so economic growth, which should be increasing social idleness, instead results in the ever-increasing production of luxury consumer goods. And this vast, overheated economic engine chews its way through natural resources, forests, oil and gas reserves, and spews out wastes and toxins, at an ever-increasing pace.
And since ultimately, according to Idle Theory, a society's survival demands that it seek to be as idle as possible, it follows that the harder a society is perversely working, the nearer it approaches disintegration and collapse. In seeking 'full employment in wealth creation' our political and economic orthodoxies have set the ship of state on course for the rocks. What is really needed is to reverse course, and throttle back our overheated, overstressed, overworking economies. If that were done, then if present day advanced economies are nominally (rather than actually) over 80% idle (this is a wild guess), then over 80% of the work now being done, in the obligatory production of luxuries, would cease. Most factories would cease production, cease consuming resources, and cease generating wastes. Real human idleness, as experienced by humanity, would leap from its present approximate one day a week (14%) to perhaps something like six days a week (86%). There would be less choice, but far more choosing.
However, given an almost universal economic orthodoxy which regards full employment in wealth creation as being benign rather than malign, it is unlikely that any such step will be taken. But if there is a single iota of truth in the economic vision of Idle Theory, then it follows that our economic orthodoxy is fundamentally mistaken about the nature of economic systems, and that we do not have a realistic economic science, and thus have little or no real control over economic events. So most likely our vast, overheated, overworking economies will simply keep barreling on, making life worse and worse for everyone, rich and poor alike, until they finally hit the rocks.
Idle Theory's fundamental dualism of busy and idle time results in a dualistic vision of economic systems. They are regarded as made up of primary economies which produce idle time, and a secondary economies (or trading systems) that consume idle time. A primary economy is a matter of necessity, in which an approximate equality of outcome is sought, and in which goods are valued in terms of the time labour cost of making them, and their time value in the labour that they save. A secondary economy is, or ought to be, a matter of pleasure, in which there is no requirement for an equality of outcome, and in which goods are valued according to the pleasure they provide, or the time that they waste. These two economies, which are entirely different, and indeed opposite in nature, ought properly to be separated from each other. And it is when they become enmeshed together that economic maladies of one sort break out.
And Idle Theory's vision may be helpful in clarifying the modern left-right divide between those who, on the one hand, seek a regulated economy that produces complete social equality, and those who, on the other hand, believe that the economy should be allowed to take its own course, throwing up winners and losers. The main problem here is that the two sides of this argument are generally arguing over the same single economy. If the economy is divided in two, then the primary economy is one that should be regulated to produce equality (left), and the secondary economy is one that should be entirely unregulated (right). Left and right should learn to stop arguing over these apples and oranges: they are completely different things.
Idle Theory doesn't at present propose ways of regulating economic systems. In the absence of a fully developed economic science, such regulatory devices are going to be rather hard to find. What is needed is a complete economic theory, of which Idle Theory is, at best, another single small foundation stone. In many ways, the principal conclusion of Idle Theory is that we really don't know very much about the behaviour of economic systems, despite the best and honest efforts of over 200 years of economic thinkers. We are, quite simply, ignorant.
A further conclusion of Idle Theory is that nobody is to blame for our present state of affairs. In their ignorance, men blunder around doing stupid and often murderous things. They are forever acting out of a partial understanding of the world, and one whose partiality and incompleteness and uncertainty frequently drives them to become paradoxically dogmatic. It seems to be almost a law of nature that, the less mankind knows about something, the more obtusely dogmatic they become about it. And so none of the foregoing is intended to point any finger of blame at anyone whatsoever. Our greatest problem is not human greed, or lust for power, or anything else. Our greatest problem is human ignorance.
Finally, it might be added that it was in constructing this rather perverse and upside down view of economic systems that Idle Theory was born. Everything else - the physics, the theory of evolution, the ethics, the politics, the law, and the religion - were simply a series of afterthoughts to its peculiar economic vision. I searched the libraries for this vision, but never found it. And so I concluded that it was in some sense my duty to myself try to set out its strange and paradoxical perspectives.
Author: Chris Davis
First created: January 2007