Busy Jobs and Budy Consumption

One of the other outcomes of improvements in labour efficiency is that the business needs less workers, and those workers lose their jobs.

One benefit of this is that there are now more workers freed up to complete other jobs that improve the quality of life in society. When less people are required to make one necessity, there are potentially more people available to make another necessity, which means that more needs can be met.

In a system of exchange, each lost job means that there is now an additional person who has no way to accrue exchange capacity, and may be unable to have their needs met by the market. There are a few possible options. One is that they use their savings or rely on some insurance that they have paid into, although there is no guarantee that their income from their job, when compared to their expenses, gave them opportunity to do either. Another is to use some way of transferring resource that is not an exchange, such as welfare - I'll get back to this idea later, of course. And the last is to get a new job.

Busy jobs are financial instruments

In a system of exchange, because the exchange is seen as the preferred method of allocating resources, something like welfare is not the preferred option. This means that for the many people who lose their jobs to labour improvements and who don't have sufficient savings or insurance income to last them the rest of their lives, they need to get a new job. And this is preferred, whether or not the job is productive. That is, the prevailing discourse in an exchange economy is that someone gets a job doing something relatively unproductive rather than being paid by the government, or even their family.

As a result, there are likely a large number of unproductive jobs that exist primarily to justify allocating goods to people's needs. These "busy jobs" largely exist to facilitate the allocation of resources through the exchange, rather than for their inherent utility. In a sense, they are jobs where the exchange-value is greater than the use-value, and function more like financial instruments - things that keep goods moving around the economy - rather than jobs that produce the goods that we want to move around the economy.

Market liquidity and busy consumption

The existence of busy jobs affects market liquidity - how easily goods can move around the market. It isn't just the case that individual people need these jobs in order to get necessary goods from the market, like food, shelter, power, and medicine, but also that the market needs these people to have jobs in order to function well.

For the individuals, if they don't have a job, they won't be able to do things like buy food. But for the market, if not enough people are buying things, the market begins to slow down and grind to a halt, preventing anything from getting anywhere.

Imagine a bustling market where people are buying and selling lots of things. Then imagine that people are buying fewer and fewer things - perhaps money is tight. Before, businesses were selling lots of things and making a profit, but now they are selling less things and they are struggling to cover costs. They have to pay rent, they have to pay for the products they have already bought or made, they have to pay their staff, but now there isn't enough money to cover it all. Now they have to make decisions to cut costs or get more income. They could put up the prices of their stock, but it might mean that less people want their product. They could lower the price and sell more, but make less money off them. Or perhaps they could sell off some of their assets and downsize their business, or let go some of their staff.

Whatever path they take, it is likely that the business will be buying less things, which in turn will affect the sales of other businesses. And if they let go of staff, there are now more people who are financially constrained and likely to buy less goods. More businesses will struggle, and they will fire staff and buy less things, and the cycle will go on and on.

For a market to work, there needs to be enough people buying enough things. This is one of the reasons that market health is measured in how many sales were made (such as Gross Domestic Product), without any regard to what things were sold. And for people to buy things, they need jobs.

Any economy should have its health measured by how many basic needs are being met, but a market economy also needs to have sufficient exchange activity or it will slow down and start to crumble. So in addition to necessary goods being made and allocation, it is also essential in a market to have other goods made and sold, to some extent without regard to what those products are. Thus, an exchange economy needs busy goods and busy consumption. The busy consumption provides a particular type of utility - although the goods of busy consumption are themselves not necessarily useful, they allow other, more useful things to flow around the economy.

Job guarantees

Jobs are so essential that one of the proposed solutions to the economic issues that systems of exchange face is a job guarantee. This is a government policy to provide a minimum-wage job to anyone who wants it, to ensure both an individual's ability to accrue some exchange capacity, and to ensure that the market remains sufficiently liquid for the right things to get to the right places. Some economists have specifically noted that, during a recession, it would be useful to hire unemployed people to do unproductive work (such as digging holes) in order to get the economy into better health. At least if people were being paid to dig holes, they could spend that money on food for themselves and businesses would also be receiving income.

Indefinite growth

If, roughly, every job lost to improvements in labour efficiency needs a new job created to ensure the well-being of the worker and the economy, then the overall productivity of the economy will always be increasing. That is, if a worker was making one product every day, and a new innovation allows a worker to make three, the business could fire two out of three workers. These two workers would need to find new jobs, where they each make more products. Overall, the number of products needs to increase all the time. And the more businesses strive for efficiency, the more other jobs need to be created that each produce something (whether it is something of value or not).

The paradox of efficiency means that labour efficiencies don't reduce the amount that people need to work, don't make workers happier that there is less work to do, and force the economy to increase in size, undermining the potential savings of the efficiency in the first place.