An Economic Analysis of Chomsky's Philosophy
A Response to a Recent Video Posted by Jacobin on the Future of Work
One of the things I love about podcasts is that often a single sentence can spark a whole line of thought that recalls something from memory that you thought had long been forgotten. I did something similar this week on a very different subject, Michael Pettis’ observations on the Chinese economy’s distress over troubled real estate conglomerate, Evergrande, and the connection to two economic philosophers, Frederick von Hayek and Albert Hirschman. You can check out that thread below if interested.
The initial spark was the video producer of Jacobin’s YouTube channel, Cale Brooks, noted that some corners of the left are placing too much hope in a post-work society. To extend out his reasoning, which appears to subtweet Aaron Bastani's Fully Automated Luxury Communism, I highly recommend Noam Chomsky's extremely lucid explanation of the topic moderated by the terrific interviewer, Peter Jay of the BBC (full transcript here), on Chomsky's Philosophy YouTube account. Though the subject is philosophy, I find it interesting that you can analyze his remarks according to the terminology of economics without losing the message. To emphasize this point on the intersection of philosophy and economics, I have highlighted all jargon in bold.
He starts by noting that science and technology has not yet been applied to examine this question if some work is unnecessarily onerous. This is true because so long as there exists a class of low-wage subsistence labor that can always be drawn from for menial tasks, there is little incentive for capitalists to apply already existing technologies. In a recent book, Minouche Shafik, director of the LSE, tells the story how she once discovered that Egyptian offices have secretaries go about the mindless drudgery of typing the same document three times rather than use photocopiers because their wages were so low. At the Taj Mahal, informal day laborers manicure the immaculate greenery surrounding the palace rather than use more capital intensive equipment because their wages are mere pennies per hedge trimmed.
Nor is it the case that low-productivity growth traps are limited to the developing world, especially after the dislocating shock of the Great Recession. The effect of that shock was to accelerate a preexisting trend toward precarious work arrangements more familiar to informal sector in the developing world. Shafik notes that throughout the rich world, there has been an amazing return of the hand car wash business even though machines are readily available. I worked at one of these car washes during a summer in between graduating from high school and entering university. In many ways, I learned more about how the economy works there than in my later globetrotting around China and at LSE. The author of a widely-cited book, Robert Gordon, once wrote a paper contextualizing this phenomenon. He explains that uneven adoption of technologies, particularly the digital ones that drove 90’s productivity growth, are a substantial drag on productivity. The trans-formative potential for them to uplift man's existence was also frustrated when their spread slowed in the 21st century. That second failure is why Keynes' 1930 vision articulated in a well-known essay, Economic Possibilities for Our Grandchildren, seems so foolish today.
By the logic of economics, the situation we find ourselves in with respect to novel technology is truly puzzling because there is no trade-off. The failure to expand the most advanced frontier of the knowledge economy, and transform the Brazilian philosopher Roberto Unger's "insular vanguardism" to "inclusive vanguardism", is both inefficient and immoral. In the jargon of economics, widespread adoption of innovative technologies is Pareto efficient, but access to knowledge embedded within "black box" algorithms remains restricted for political reasons well-understood to Pareto's colleagues in the Italian school, i.e. The Iron Law of Oligarchy.
Notwithstanding that very important caveat, Chomsky continues the interview by simply assuming that some menial work cannot be automated. This strikes me as a very reasonable assumption. In a recent book and podcast, journalist Alec MacGillis, notes that Amazon has actively engaged in automating everything about their business model, but in a pattern very familiar to economists, known as the low-hanging fruit principle, it is often very difficult to automate the last 5 percent of tasks. Often, this is a task as simple as grabbing and dropping the appropriate package in the right place. As a consequence of this automation at Amazon, the tasks in warehouse employment that people may find interesting because they accord to a deep legacy of the tasks performed long ago as hunter-gatherers like searching the rows and rows of stuff for the requested items have been automated away leaving only the mindless drudgery of standing in the warehouse in one spot all day. Workers at Amazon find this new hybridized model so monotonous and alienating that the company experiences extraordinary turnover, as noted in a recent story by the NYT. That turnover is not necessarily new, as the industrial assembly line model pioneered by Ford Motor Co. experienced similar problems keeping their factories staffed. But it appears to be an order of magnitude greater because the intense sociability of dense factory settings has disappeared in the post-industrial warehouses, where your workmate is more likely to be a robot.
Chomsky's next question is what should we do about this deadening but "essential" labor that cannot be performed by robots. He supposes that there are two answers to this problem, which are broadly consistent with (left) libertarian principles. The first answer is to pay this "essential" work more, to compensate them for the sacrifices they are making to their vital human needs, namely of creativity and social connection. In labor economics, we call this notion a wage premium. Of course, this suggestion lands rather strange to us in the rich world, as we know from the post-truth vortex of the pandemic that much of the labor deemed "essential", both in care and distribution, is often the most poorly paid. Chomsky doesn't like this answer to the hard problem of persisting menial work, not because he believes that the essential work should be poorly paid but because of the crowding out effect of intrinsic and extrinsic motivations. As a rule of thumb, psychologists refer to functions performed for personal growth/enjoyment or social bonds as intrinsic, whilst those tasks that are done simply to survive or meet pecuniary obligations are extrinsic. The crowding out effect is frequently discussed as a potential concern for pay for performance schemes, especially in intrinsically motivated professions like teaching. He quotes one of his formative philosophical influences, Wilhelm von Humboldt, on wage labor, “We may admire what he does but we hate what he is.”
The second solution of random lottery assignment for menial labor is in this respect even more radical than our current reality, Chomsky argues. Similar to jury duty today, Chomsky’s favored post-industrial utopia imagines a future where all people, doctors, cooks, and bankers alike, consider it their civic duty to periodically do shifts at the Amazon warehouse to sustain the wealth and convenience of modern civilization.
While Chomsky weakly prefers the lotteries to the wage premium solution, he emphasizes that both are strictly dominant to the current equilibrium of capitalist economies everywhere operating under the long shadow of British enclosure. The reserve labor pool was first created then, throwing peasants off the land and forcing them to work for a piece of bread. Technological and scientific advance has not been followed by progress in the underlying economic system, which as the examples discussed here underscore, is still in many ways stuck in the 17th century reliant on desperate workers to perform menial tasks that fall well short of the production possibilities frontier. So long as what complexity scientists call the “exponential gap” holds between technology and politics holds, the late David Graeber’s thesis that the extraordinary promise of technology will be betrayed by sclerotic institutions and habits incapable of adapting to the 21st century resonates. In articulating left libertarian principles that do not rely on Fully Automated Luxury Communism, I believe strongly that Chomsky, in spite or perhaps because of his advanced age, is an economic philosopher for the coming disruption of the exponential age.