Wednesday, June 13, 2007

More Time Off?

Max Sawicky has the gloriously-named blog Max Speak, You Listen! How can you not like this guy? As near as I can guess he is a center-left economist - or perhaps a maverick-left economist - who works at the Economic Policy Institute and writes for Pajamas Media.

A recent article by Max at PM takes issue with the prevailing wisdom among American conservatives that the economies of Old Europe, particularly France, are going to hell in a handbasket because of their socialistic, managed economies. Sawicky makes several good points about differences in how unemployment is measured and popular economists' over-reliance on GDP as a measure. He notes, for example, that the French are as productive as the Americans per hour worked, they just work fewer hours, both weekly, and in number of weeks worked. I have neither the skill nor the inclination to challenge his figures, and his numbers look reasonable enough, so I will take them at face value for the purpose of this comment.

Max Sawicky believes that GDP is an inadequate measure because vacation and leisure time is a valuable thing that is not figured into the final total (I simplify, but I hope not unfairly). When measuring the wealth of a country, is it not valid to include the mandatory 6 weeks of vacation as part of the equation? Why should that not count for something in the overall tally? It is not money, but it is something valuable, and may be a lifestyle that many would prefer.

It is an intriguing thought, and not without merit. I do find a significant flaw in that reasoning, however. Vacation and leisure time is a valuable thing to most people - but not to everyone. Even if 90% of us would like more time off, and would be willing to sacrifice some income to get it while still holding onto our jobs, that still leaves 10% who would just rather be at work.

We trade lots of things for money. That's what it's for. Money isn't anything in itself, but just a vehicle for what you'd like to trade for. If we are going to count something besides money as "wealth," because life's value can be measured in so many ways, why stop at leisure time? By that metric, shouldn't job security count as something of value? The French would score high on that one, also, BTW. How about low crime? We could include a dozen, a hundred other valuable things in our definition of wealth. Some would consider the mere opportunity to make a lot of money as valuable. Some would point to stability of neighborhood, or happy family life, or a chance to be useful as their preferred measure of wealth. If we wished to create some new definition of wealth of nations that included the personal definitions of its citizens, we could not balance these things. We would eventually conclude "Each to his own. If you wish to consider nearby museums as wealth, while your neighbor wishes to value the view from her window, you should both have what you wish."

We could all have far more money than we do. Any one of us could have chosen work that was very dangerous, or in unattractive locations, or immoral - or to work 100 hours/week, or give up job security or reputation to make more money, if money were the thing we wanted. We made other choices. We all chose to make less than a fortune in money because other things were more valuable to us: honor, time with family, opportunity to serve, love of a particular kind of work. We in effect trade money for these things. We never see that money, because it never came in a paycheck, but it is a trade we made.

As an aside for those worrying about the spiritual implications and Jesus's cautions about money, I will note that this flexibility, this fungibility of money is what makes it such a powerful draw. Because you can trade it for just about anything, when you have it, you are focused on what you can trade it for. What you are focused on - where your heart is, to put it in more biblical terms - is in fact your god. That is also true of any other type of wealth that you have already made the trade for. Did you trade your money for a house that occupies most of your pride and waking thought? Then that may be your god. All these false gods are sweet at first. Money is just a bit sweeter because its flexibility causes it to own even more of you.

Mr. (Dr?) Sawicky has a possible out which he did not mention but I can anticipate. What if you do indeed value time off greatly, but the American economy does not allow you to easily make that trade? It is likely true that many of us would take more time off, even for less money, if we could find a job which would allow this. By that metric, perhaps many of us think the French do have the better deal.

First, I doubt that. The job of teaching school is available to many of us, but we don't take it. Either it doesn't pay well enough, or we find children too annoying, or it doesn't have the opportunity for advancement we would like.

Second, even if that were so, why stop there? If we think government-mandated vacation is such a general good, why not government-mandated travel? Why not legislation that all jobs have a certain amount of physical and intellectual stimulation because it's good for us?

The government does in fact mandate some other things we think of as such obvious general goodnesses that they should be provided. Physical safety. Some minimum of respectful treatment. Sick time. Perhaps we should factor those into our national wealth as well. There is certainly movement that health care be mandated for all, or job retraining. Each society does mandate what it thinks non-negotiable. People push for these new mandates because they feel so strongly about a value that they think everyone will be happier if it is adopted. We actually do have a fair consensus about these things. We might tussle over how many hours a 16 y/o should work while school is in session, but we don't want it to even be allowed for 8 y/o's to work as chimney sweeps 60 hours/week. We agree as a society on certain values.

Why then, would we add vacation and leisure time to that list? I will hazard a guess why some folks think we should do things more like the Europeans do. They think we will be a different type of person, a type they like better, if we all sought money less and leisure more. This is similar vision to the one of many environmentalists, who think that if we had simpler lives, less focused on monetary gain, we would be happier, better people. If we would only try it, they think, they would see how much better it is to have a life where we walked more, and made less noise, and didn't play with so much electrical stuff.

I don't know if we'd be happier if we lived lives more like the Europeans. But I know the Europeans would be happier if we did that, because they would envy us less. I don't know if we would be happier if we valued the same things environmentalists do. But I know they'd be happier, because honor and status would be measured in terms of the things they've got lots of.

When people want to make all of society be a certain way, it's always because their status would improve under the new system.

5 comments:

Dubbahdee said...

What about accounting for hard capital assets held in common? This is not "Product" but does amount to wealth. When a company creates a balance sheet they weight assets against liabilities. Assets includes cash certainly, but also the value of real property and certain kinds of equipment with capital value.
When assessing the wealth of a nation, how would you allow for such commonly held public assets such as roads and sewer and water systems. Try running a highly developed economy without either of these. They are certainly assets with add to the capacity of a nation to create value.
That's a concrete example, but let's go even farther out than your questions about assessing the value of time off. How would you assess the value of laws that enable the easy and profitable exchange of value? Some countries (like for instance....I don't know...the USA maybe?) have structured laws the make doing business easier for everyone. Other countries have laws that make doing business prohibitive for all but the most rich and powerful. Yeah, I know. You can't really quantify that sort of thing, can you? But still, it is a difference.

Anonymous said...

As Blair said, the value of a country can be determined by the number of people that want to go there.

Assistant Village Idiot said...

Excellent points. And isn't there some value to not have to live with the French?

Carl said...

AVI:

I agree that Sawicky downplays the fact that Europeans essentially have no choice but to work less, and less hard, than Americans. He also overstates the difficulty of comparing national employment statistics--the BLS tracks some adjusted measures here and here. GDP may overstate some differences with the US in some ways, but the measure understates it in others, as Danish-born Henrik Rasmussen details on TCS:

Anecdotal evidence and hard numbers concerning material goods support this conclusion. If we look at housing, the Heritage Foundation estimates that Danes have an average of 558 square feet per person available compared to a US average of 721.2 - almost 30% more living space. The difference is even more striking if we look at cars: According to Eurostat, America has 759 cars per 1000 people compared to 354 in Denmark -- a difference of more than 100%. In particular, large passenger vehicles such as SUVs are extremely rare in Denmark.

In addition, Danes tend to have fewer household amenities than Americans. A case in point: my wife and I recently hosted a Danish friend at our home in Virginia. During the clean up after dinner, our guest was astonished by our garbage disposal, having never seen one or even heard of one before in her life. . .

True, on paper Danes and Europeans in general have much more free time than Americans. However, as Constantin Gurdgiev points out in this article, recent research from Sweden and Germany suggests that Americans have just as much leisure time as Germans and Swedes when one accounts for the time spent on "do-it-yourself" services such as cooking, grocery shopping and home repair. While Americans spend more time on the job, Swedes and Germans spend more time working at home performing basic services that Americans pay others to do for them.

Anecdotal evidence suggests that the numbers from Germany and Sweden apply to Denmark as well. For instance, Danes rarely go out to eat compared to Americans, and shopping for groceries, clothes and other everyday items requires more time in Denmark due to smaller stores, higher prices, and a lower variety of goods. In addition, Danes tend to spend long hours stuck in public transportation due to the high cost of cars and gasoline. High taxes tend to complicate life and cut into people's free time in more ways than immediately meet the eye.

Assistant Village Idiot said...

Great comments and links, Carl. Thanks.