The paradox of efficiency in a gifting economy

In the critique of the exchange I described the paradox of efficiency, where businesses were motivated to implement labour efficiencies to accrue more exchange capacity and workers were motivated to resist them to protect their exchange capacity. I also described a series of problems that came out of this: workplace tensions, inefficiencies as labour refused to implement efficiencies, unemployment, busy jobs and busy consumption.

But with the motivation to accrue profit lacking from a non-reciprocal gifting economy, most of these problems are gone. Labour efficiencies have a greater chance of turning into less working hours and more leisure time.

No motivation to accrue profit

With no exchanges, no exchange-value and no exchange capacity, businesses don't have the ability or motivation to accrue exchange capacity, which means that they do not have the motivation to accrue a profit. This is a radical change from the exchange economy. There is a tension in the exchange economy between two different drives of business: to produce a socially beneficial product in a socially beneficial way, and to accrue profit. For some theorists, the latter is always a clear indication of the former - if you can accrue a profit doing it, it demonstrates that the product is something that people want. For others, these two things are sometimes opposite drives, and things like regulation step in, sometimes to prevent morally or socially maladaptive products (such as rhinocerous horn or milk with chalk in it) and sometimes to prevent circumstances where a business can change a socially maladapative amount, such as increases prices of disaster relief items during a disaster.

With no motivation to produce profit, this tension dissolves. Businesses would be directed by the needs and interests of consumers and the morals of workers and potential workers, or various other non-profit motivations. One outcome of this is that businesses are not motivated to exploit workers or cut corners of product quality or safety in order to make more profit - quality and safety of the product are now not subject to the tension of the profit-motive.

One question that many economists might ask is how and if product innovation would occur without a profit-motive. Part of this question is a question of economic calculation, which I will address in a future section (after I address worker motivation). But part of this question is also a question about individual motivation, and on this front the empirical evidence is pretty strong: people are motivated to innovate and improve things without profit motivation. It happens all the time, even in liberal market economies. People build computer systems and programs in their spare time, perform research for no pay, suggest improvements, and sell their innovations at a loss, including in the fields of medicine, clean water technology, agriculture and the like.

Efficiencies don't cause tension with labour

Similarly, workers also don't have a motivation to accrue exchange capacity. The survival goods for workers, such as food and shelter, would come from gifting and not in exchange for the work that they perform in their workplace (either directly or indirectly). This means that workers don't have to defend their working hours and working capacity - they would work when necessary because they believe in the job, and not worry that if they completed their work in an efficient manner that they would not then get paid, or get more work for the same rate.

It also means that workers would not be motivated to resist genuine labour efficiencies. This is, in part, because if their working hours are cut or their job is gone completely, it will not affect their material survival. What it could increase is their leisure time. There is no need to bargain for better pay, resist automation, or any sort of industrial actin that is a response to their hours disappearing. Instead, efficiency improvements should be embraced, because they represent a genuine improvement in resource use, the potential for increased leisure time or the ability to pursue another meaningful project, and a potential increase in quality of life rather than a decrease.

Workers would also not be de-motivated from proposing efficiency innovations to their employers, because those efficiencies, rather than being used to exploit them or reduce their hours and therefore pay,would instead be genuinely helpful to implement and could increase their quality of life through diffuse reciprocity.

No busy jobs and busy consumption

The paradox of efficiency also creates busy jobs and busy consumption. Busy jobs are those jobs where the use-value of the job is lower than the exchange-value; that is, they are generally unproductive jobs that exist, in some capacity, to justify the transfer of resources to the people who work in them. Busy consumption is consumption that is generally unnecessary and unproductive.

For example, planned obsolescence - making products that deliberately break down over time so that the business can sell more of them and continue to gain revenue - create busy jobs and busy consumption. If light-bulbs are created to breakdown after a period of time in order to sell more light-bulbs later, then the labour to produce more and more light-bulbs is entirely unnecessary (given that long-lasting light-bulbs could have been created instead) as is the purchase of those light-bulbs (given that a long-lasting light-bulb would have prevented the purchase of a new one). The invention of a new light-bulb would have produced a labour efficiency - except that this would be bad for the profit of the business. Other busy consumption tactics include spending on advertising to convince people to buy a new version of something by convincing them that the old version is defunct.

But with no profit-motive, a new light-bulb design that lasts indefinitely is not in tension with the goals of the company. In fact, without a profit motive or the need to accrue exchange capacity, a company would potentially be happy creating such high-quality and long-lasting products that they satisfy customer demand completely and then close themselves down. This is not an existential threat to the people who are involved in the company.

Another way that busy jobs are created is when labour efficiencies are implemented and workers have to leave the company and find other work - even when other productive work is not immediately available. To justify their allocation of resources, these displaced workers sometimes obtain new, unproductive jobs. This is in part because governments like good economic stats and don't always like paying out welfare because it can build a poor fiscal reputation and go against the wishes of voters.

With increases in labour efficiency being genuine instead of paradoxical, labour efficiency improvements should lead to less jobs overall - both because the same outcomes can be produced with less labour and there is no resistance to this, and also because there is no need for busy jobs and busy consumption.