Judge Posner has a blog entry entitled “Decline of U.S. Manufacturing” that, coincidentally, touches on some issues I mentioned in my prior post, “Technology and the Future of Work.” He, more lucidly, makes a point that I was sort of groping toward: there is nothing magic about having your workers employed in manufacturing versus some other kinds of work. After all, our economy did not become unsustainable just because Americans, by and large, left agricultural work to work in manufacturing jobs. By extension, there is probably no reason to believe that having Americans leave manufacturing work to work in service jobs is inherently any worse of a problem.
The decline in agricultural employment is a product of technological advance, and likewise the decline in manufacturing employment. Subsidizing manufacturing will no more increase employment in manufacturing than subsidizing agriculture has prevented the precipitous decline of agricultural employment, for a manufacturing subsidy will be used to speed the automation of manufacturing tasks and so accelerate the decline of manufacturing employment–unless the subsidy is conditioned on increased employment, which would would mean diverting workers from more to less productive work. We would not be better off if 40 percent of the labor force were in farming rather than 2.5 percent, or if 28 percent of the labor force were in manufacturing rather than 9 percent.
The problem is that we may not be diverting workers from more to less productive work. The workers themselves may not be engaged in any work at all. If we made a subsidy contingent on increased employment, we may well be requiring that the manufacturing be performed in a less efficient way. But, we’d be doing this to give the individual worker a basis for staking a claim to some of the value created by the production. This is less efficient, but it may be necessary so long as: a) we know of no more productive work that the individual worker can do; and b) we require work as a basis for making a claim for income.
That latter point touches on the issue discussed by Fred Clark in his reflections on John Kenneth Galbraith’s “The Affluent Society” which I summarized thusly:
Galbraith discusses the Puritan origins of a moral imperative to work. Goods were vitally necessary; the loss of available labor to produce those goods was extremely detrimental to society; and, therefore, the penalty – deprivation of all or most of an individual’s income – was appropriate. The penalty was so justified that there was no moral obligation to help someone who wasn’t helping themselves by working.
Now, in a world awash with goods, the loss of an individual’s productive capacity is incidental but the penalty remains almost equally severe – even where the failure to work isn’t through sloth but through lack of obvious opportunities. And, yet, the quest continues for a moral justification to allow the affluent to settle into a comfortable disregard for those not sharing in society’s affluence.
You get an economy that’s working very efficiently. But, because the world’s necessities can be created by a relatively small percentage of the population, the vast income generated pools in relatively few places; sort of a hematoma of the economic circulatory system. To remain healthy, the body politic needs good circulation, else part of it becomes gangrenous and poisons everything else. If possible, we need to find more productive work for our citizens. Otherwise, we need to figure out some other way for allocating some part of the economic flow to idle citizens.