Sunday, November 20, 2011

Emperor Vespasian has a solution for unemployment

The Roman Emperor Titus Flavius Caesar Vespasianus Augustus, known to us as Vespasian, was responsible for the building of perhaps the most recognizable man-made structure on Earth after the Egyptian pyramids, namely, the Colosseum. So massive is the structure that a fire, an earthquake, the pilfering of its iron supports, its use as an aboveground quarry for hundreds of years and 2,000 years of weather have nevertheless left much of it standing. When it was new, it was said to hold 50,000 people. Today, millions of tourists still visit and walk on its remaining structure every year.

One would think that given the scope of such a project and the other projects built under his reign that Vespasian would have welcomed suggestions for increasing the efficiency of construction practices. But he didn't. Instead, as historian Michael Grant reports in The World of Rome:
[W]hen Vespasian was offered a labor-saving machine for transporting heavy columns, he was said to have declined with the words: "I must always ensure that the working classes earn enough money to buy themselves food."

Of course, Vespasian had to contend with a slave workforce which he needed to keep busy and free working-class Romans who needed to be fed. We don't allow slavery (unless you count the sweatshops of the world as its successor); but the idle workforce, especially of the unskilled, continues to expand.

I was reminded of Vespasian when Charlie Hall, perhaps the best-known energy researcher you've never heard of, commented at a recent conference that we have built a society where fossil fuels have consistently displaced labor. This has had the unfortunate result that those whose primary aptitude is with their hands are finding less and less work.

Of course, much of the manual work which used to be performed in the United States is now done in the Far East, particularly China. And, the kind of work that most factory workers do there might very well be considered drudgery by many people. Hall's point, however, was two-fold. First, impending declines in available energy to society will likely force such work closer to the markets it serves. This is because rising transportation costs will diminish the advantage of worldwide manufacturing webs in favor of regional and local ones. Second, manual labor often requires skills that we in the United States do not teach as widely as we used to. We aren't ready to make the things we once made. And, all of this remains true even as the ranks of the unemployed swell and energy costs continue to climb.

Certainly, Vespasian's attitude would have prevented the immense advances in productivity of the modern age. But since those advances are largely premised on the growing availability of cheap energy inputs, we may need to re-examine our attitude as those energy inputs become constrained and thus are no longer cheap.

Moreover, continued policies that lessen opportunities for manual labor will, of necessity, doom an entire group of people to the unemployment rolls just because their intelligence shows through in what they make with their hands rather than what they say or write.

I am not here romanticizing backbreaking labor. The one place that mechanization has failed to progress very much in the last few decades is the picking of fruit. Researchers had been looking for ways to harvest fruit mechanically. But an onslaught of cheap immigrant labor into the United States from the 1980s onward pushed real wages down for farm labor so far that mechanized fruit picking did not seem worth the effort. Even in the exploitative world of farm labor the laws of supply and demand apply. An avalanche of new workers depressed wages and doomed the mechanization effort.

We may be facing something similar in the next decade. The financial turmoil of Europe is but the latest chapter in what I believe is an unfolding depression that will take many years to resolve itself. It is worth remembering that as late as 1931, no one alive back then thought they were in a depression, let alone what would come to be called the Great Depression. Back then, of course, governments engaged in very little of what we would call stimulus, and central banks did not regard it as their purview to save the economy and provide full employment. We have bought some time with countercyclical measures from both institutions. But now the effects are running out, and we must face the consequences of too much debt and not enough cheap energy.

During the Great Depression President Franklin Roosevelt proposed and implemented huge government works programs, the results of which can still be seen today in forests that were replanted and dams that were built. Such programs put people to work on useful public projects largely with their hands. Advances in productivity are useful, but useful work is more important to the human psyche and thus to social stability.

Jay Hanson, one of the first to publicize approaching resource limits through his site, was recently quoted as saying that the most important issue to face society in the coming era of limits is what to do with all the young men. No one needs to be reminded what can happen when this subgroup of society sees no useful role for itself. One way in which many societies solve this problem is to send the young men to war. And, certainly, the United States and others might try this as a way to harness the restless mass of unemployed young people. Of course, the stimulative effect of war on the economy is well-known. (This is assuming your country is not being destroyed by the war.)

In the coming era of limits we will need to rely less on fossil fuels and more on each other. "Idle hands are the devil's playground" will become more than a trite aphorism if we do not see that the future will require us to find more work for idle hands. The work is there to do, to restore our environment, to teach the young, to repair our crumbling infrastructure and to rework it for a lower energy future.

Those in the skilled trades are available for these tasks. Those who are unskilled will need to be brought into the workforce, paid decent wages and given reasonable working conditions. We can argue all we want about economic theory and market-determined wage rates for such people. But the alternative to providing decent wages and conditions for the least skilled among us is an army of unemployed, dissatisfied and potentially disruptive people whose potential contribution to society will be wasted because of a slavish devotion to free-market ideology.

The fantasy that machines will more and more dominate our lives will only come true if there is the energy to fuel them. Absent that, we will be forced to rely increasingly on our hands and our feet to do the daily work of living. Vespasian understood that hands and feet need something to do that produces a living. The sooner we see that, the better.


Mark said...

Great article.

I could see most of these idle hands being put to use in farming, once the cost to run machinery becomes prohibitive.

Unknown Human said...

This was so useful to me in understanding how thing might play out. Thanks.

Brock said...

I'm afraid you've smashed apart the broken window fallacy multiple times in this single post.

FDR himself, with his stimulus programs, postponed the depression for many, many years longer than it should have lasted. If the Government itself had just left it alone, it'd have been a minor bump at the end of the 1920s. It was precisely because he tried to fix it that it got worse.

I am going to just leave it at that, and recommend you read Thomas Sowell's Basic Economics, and also watch (or read) The Parable of the Broken Window (found here).

Robdesk said...

You would swear this guy has never heard of electricity, do not count on a lack of oil to stop the robots from replacing manual labor cause in reality we can have as much electricity as we want.....

.....You want to know what the problem is with capitalism? It was supposed to be this useful plan to generate and store very large sums of wealth for vast public works projects but all them capitalists decide to just keep the money for themselves.
Capital is not a thing you try to keep forever, it is "start-up money" for investing.

Also Brock, enconomies are like fire in the sense that if they are tappering off to coals than more fuel is the right choice. Can you tell me exactly why the market crashed in '29?
Flimsy derivatives and everyone was more levered than a mechanic's floorjack and once the powers got everyone comfortable way out on that limb they popped the bubble and consolidated ownership of it all. It was very similar to Nathan Rothschild's scheme after the Battle of Waterloo but bigger in scope & reward and safer cause they chose their market shock that time. All it took was the time to grow the bubble and the prepwork of carefully removing any stabilizing elements then: POP GOES THE WEASEL‼❗‼💣🎇💥👀🎆🎊🔥🎉📉