Robert Skidelsky is best known for his definitive three-volume biography of John Maynard Keynes. It hardly surprising, then, that he begins his latest book, How Much is Enough? (co-authored with his son, the philosopher Edward Skidelsky), with a puzzle posed by the master himself. Why is it that we work so many hours each week and enjoy so little leisure?
Keynes’ “mistaken” prediction
In 1928, Keynes gave a talk to a group of Cambridge undergraduates on the theme, “The Economic Possibilities for our Grandchildren.” Eschewing models and data, his message was that if people were wise enough to avoid ruinous wars, those living a hundred years in the future would enjoy a standard of living four to eight times higher than those living in 1928. Here are some key passages that catch the flavor of his remarks:
We may be on the eve of improvements in the efficiency of food production as great as those which have already taken place in mining, manufacture, and transport. In quite a few years—in in our own lifetimes I mean—we may be able to perform all the operations of agriculture, mining, and manufacture with a quarter of the human effort to which we have been accustomed. .
Thus for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well. . . .
Three-hour shifts or a fifteen-hour week . . . is quite enough to satisfy the old Adam in most of us!
As the Skidelskys note, we are pretty nearly on target for the standard of living that Keynes forecast, yet, they say, he was mistaken about the amount of work. “The central puzzle remains: we in the rich world are four or five times better off on average than we were in 1930, but our average hours of work have fallen only a fifth since then.” They supported this passage with a chart showing that weekly hours worked, which, by Keynes’ estimate, should have fallen from fifty to about eighteen by now, are still stuck at forty.
The Skidelskys review three possible explanations:
- First, that people take joy in their work. They find that plausible for artists, skilled artisans, and authors but not for most people.
- Second, that the capitalist system forces people to work because employers, not workers, get to call the tune. They approvingly quote sociological theories supporting that view, but in the end, they do not find it entirely persuasive.
- Third, that wants are insatiable. Although that sometimes seems to be the case, they think that insatiability is not a fixed feature of human nature, but a flaw of our economic system. Keynes, they say, “did not understand that capitalism would set up a new dynamic of want creation that would overwhelm traditional restraints of custom and good sense. . . . Capitalism has achieved incomparable progress in the creation of wealth , but has left us incapable of putting that wealth to civilized use.”
Each of these three explanations may contain a grain of truth, but it seems to me there is another, much simpler explanation: Maybe Keynes was right after all.
The sense in which Keynes’ prediction was correct
Let’s take another look at Keynes’ prediction. He, and the Skidelskys also, focus largely on people’s demand for material goods. When Keynes spoke of a four-fold or more increase in productivity, it was in reference to,“the operations of agriculture, mining, and manufacture.” When the Skidelskys disparagingly catalog the insatiable wants of our capitalism-corrupted contemporaries, they, too, focus on material goods. “A trip to the seaside or holiday resort,” they write in a typical passage, “becomes incomplete without barbecue, windbreaks, wetsuits, surfboards, tennis rackets, footballs, beach balls, and golf clubs.”
Yet the surprising fact, unnoticed by the Skidelskys, is that we already spend less than 15 hours a week, on average, working in the areas of agriculture, mining, and manufacture. In that sense, Keynes’ prediction has already come true, fifteen years ahead of schedule. Let’s look at some numbers.
First, it turns out that in the United States, goods-producing industries, including mining, logging, manufacturing, and construction, account for just 13.7 percent of all nonfarm payroll jobs. Add in the 1.5 to 2 percent of the labor force that is engaged in farming, and we can round that up to about 15.5 percent. Workers in goods-producing industries work about forty hours per week on average, which is about five hours a week longer than the average for the labor force as a whole. If we adjust for the longer hours, it appears that goods production accounts for about 17.7 percent of all hours worked. If we take 17.7 percent of the average workweek of 35 hours, we come to the surprising conclusion that on average, each working American already spends just 6.2 hours a week producing the products of agriculture, mining, and manufacturing, with construction thrown in for good measure.
But, you may say, isn’t that just because so many of the goods that Americans consume are produced in China and elsewhere? Fair enough. Let’s do the numbers a different way that captures imports and exports.
Instead of starting with employment, let’s look at data for GDP. Consumer goods (including durable and nondurable, farm and nonfarm, but excluding services) account for 25.5 percent of U.S. GDP. That includes consumption of imported goods. (Imports of goods are equal to 13.5 percent of U.S. GDP and exports of goods to 9.4 percent, making net imports, including both consumer and non-consumer products, equal to about 4.1 percent of GDP.) Let’s suppose that Americans were to produce all goods consumed in the United States, at an average level of productivity, and at the same time were to drop production of goods for export. Even so, it would still only take 9 hours of our average 35-hour week to meet our demand for consumer goods in full–well below Keynes’ prediction of “three hours a day to satisfy the old Adam in most of us.”
These numbers cast a different light on the puzzle of leisure. The question is not why we spend so many hours a week producing wet suits and golf clubs that we don’t really need. The fact is that goods production doesn’t really occupy much of our working time. The puzzle, instead, is what is important enough to occupy the rest of our working hours, rather than devoting more of them to leisure?
Working to provide government services
A big part of the answer is that many of those hours go to pay for the services of government. Even in the United States, and more so in the UK, we expect far more of government now than in 1928. In terms of nonfarm payroll, government jobs account for 16 percent of U.S. employment, which is a little more than the total for all goods-producing jobs. By itself, that suggests that government workers account for about 5.6 hours out of the average workweek.
However, just counting the hours of government employees understates the amount of time we work to pay for services of government. Many government services are performed by private contractors, especially in the case of the federal government, which accounts for only 7 percent of payroll jobs. Three other numbers can give us a better perspective.
One such number is government consumption expenditures and gross investment, a line item in the national accounts that equals 18 percent of GDP. That item includes the salaries of civil servants, those of government contractors, and all of the goods purchased by government. If we convert that to a share of the average workweek, we are up 6.3 hours.
A second way to look at the matter is to ask how many hours a week we need to work to pay taxes. Tax revenues at all levels of government account for about 29 percent of GDP in the United States, or about ten of our average weekly working hours.
A still broader measure is total government expenditures, including transfer payments as well as government consumption and gross investment. Government expenditures at all levels amount to about 40 percent of US GDP. Arguably, someone needs to work to pay for all of that, even the part that is, in any given year, financed by borrowing rather than by taxes. By the total expenditure measure, it would be reasonable to say that on average, 14 hours of work a week go to pay for the services we get from government.
We could, of course, free up more time for leisure if we accepted a smaller government, but that is another discussion for another time. In any event, the Skidelskys, whose politics run to the left of center, do not put much of a priority on downsizing government.
What do we do with the rest of our time?
We have now accounted for about 23 hours of our average 35-hour workweek—nine to produce goods and 14 to pay for government services. What do we do with the other twelve hours instead of taking more leisure?
Clearly, we work some of those hours in order to pay for services that we could reasonably consider as necessities, but that are not provided by government. In the United States, the biggest item in that category would be medical services, including opticians and dentists as well as doctors and hospitals. Many families, although not all, also view higher education as an expensive necessity. Suppose, for the sake of discussion, we assume that paying for service necessities requires another four hours of work per week. That still leaves eight hours, or one full working day, that we could devote to leisure if we chose. Why don’t we?
A good starting point for answering that question is to think more closely about what we mean by leisure. The Skidelskys have some fairly specific ideas. They are dismissive of mere rest and relaxation. They think that activities that are undertaken instrumentally, like jogging to lose weight rather than for the pure joy of it, don’t count, either. They are positively disdainful of watching television and getting drunk.
They put creative activities at the top of their list—sculpting, playing in an orchestra, painting, or writing, whether poetry or popular books on the economics of leisure. They regard those activities so highly that they count them as leisure even if they are done for pay. (That neatly gets them personally off the hook in case anyone were to find them spending too many hours at the office or the keyboard.) Not wanting to sound too highbrow, they also approve of playing football in the park, making one’s own furniture, and playing the guitar with friends.
Few, if any, of these activities are purely solitary. A painter might work alone in her studio, but unless she is a very odd artist indeed, some of her pleasure in painting comes from other peoples’ enjoyment of what she puts on canvas. The singer wants someone to listen, the writer wants a reader, and the cooking enthusiast wants someone with whom to share the meal. Although you can walk on the beach by yourself, you can’t play football alone, and bridge with your friends at the local club is more fun than playing alone against the computer.
If I look at these leisure activities through my econoscope, what I see is an exchange of leisure services:
- John views and appreciates Maria’s paintings
- Maria eats and enjoys Howard’s cooking
- Howard watches and cheers for John’s football team, and so on.
I enthusiastically agree with the Skidelskys that those are hours well spent, and that people who work so much they don’t have time for them are missing out on some of the best things in life. But, as much as we enjoy these activities, there are other ways to enjoy them that add to the total number of recorded labor hours rather than to the recorded number of leisure hours. For example:
- John might appreciate Maria’s talented amateur paintings even more, and Maria might paint even better, if both of them spent some time viewing professional and classical works in a museum, for which they would need to work enough to buy a ticket, or, if it is a state museum with free admission, to pay taxes.
- Maybe Maria and Howard both love to eat, but neither likes to cook, so they prefer fine dining at a local restaurant even though that means working more to pay off the resulting credit card balance.
- Very likely John, as an amateur football player, would enjoy his play even more if he went to see a professional game now and then, even though doing so requires a ticket bought at the expense of paid work.
All of these things are leisure, and all of them involve an exchange of services, but now the exchange is market mediated. The Skidelskys seem to frown on that because the painter, the cook, and the football players are all punching a time clock and drawing a paycheck. Honestly, though, why is it bad? If we had to depend entirely on art, food, and entertainment produced by amateurs would we really be better off? If Pavarotti had sung only for his friends, after dinner, would we really be living more exalted, noble, and civilized lives? I can’t see that we would.
Resolving the puzzle
Here, then, is how I resolve the puzzle posed by Keynes’s “mistaken” prediction of a 15-hour work week:
First: Keynes was right in thinking that his grandchildren would be able to satisfy their demands for the products of agriculture, mining, and manufacturing with a 15-hour workweek. In fact, we are already doing a good deal better than that.
Second: Being able to put our enhanced capacity to create wealth to “civilized use,” as the Skidelskys put it, requires that we live under a civilized government. Regrettable though it is, we have to devote some hours of toil to pay the taxes needed to support it.
Third: In addition to working to buy the material necessities of life, we work to buy necessary services, such as education and medical care, that we cannot reasonably provide for ourselves.
Fourth: After accounting for the time spent on production of goods, paying taxes, and buying necessary services, we have, by my calculation, about eight hours out of a standard forty-hour workweek that we could realistically devote to leisure if we chose to do so. Here is what my preference would be for using those hours: Take every other Friday off and play football in the park or fool around in the kitchen trying a new recipe. Use the working Fridays to earn money to indulge in some market-mediated leisure, say, watching a professional team play your favorite sport or dining out in a good restaurant.
That is what I would call, to use Keynes’ phrase, living wisely and agreeably and well. It comes out to about 35 hours a week—and oh, guess what? That’s just our national average.
Leisure is only one of many themes discussed in How Much is Enough? Watch for the next installment of this book review (when I have the time free to write it): “The Economics of the Good Life.”