Functional Inefficiency: The Unexpected Benefits of Wasting Time and Money - Rilegato

Wenz, Peter S.

Rilegato

ISBN 10: 1633880400 ISBN 13: 9781633880405

Casa editrice: Prometheus Books, 2015

Riassunto

How can we reduce unemployment? As this insightful and counterintuitive book shows, the surprising answer is inefficiency. Some of the most labor-intensive sectors of the economy, the author notes, are also the most inefficient. But this inefficiency is functional—rather than impairing the economy, it bolsters employment and fosters economic growth.

Technological progress increases efficiency and reduces the need for workers in manufacturing, mining, agriculture, and many services. So how do we keep people working? By maintaining inefficiencies in other areas, such as in our systems of transportation and healthcare. The author documents the waste of time and money in hospital systems, the insurance and pharmaceutical industries, automotive travel, and road construction and maintenance. These inefficiencies are tolerated because they provide a lot of jobs and promote economic growth, making them functional inefficiencies.

Some of these inefficient systems come with added environmental and health costs, meaning we sacrifice more than simple efficiency for the sake of jobs. Our inefficiencies may be functional, argues Peter Wenz, but they are too often harmful for us as well.

The good news is that most of these inefficiencies can be reduced without increasing unemployment or impairing economic growth. Wenz explores different methods of combating unemployment, evaluating each method carefully to determine its basic efficiencies and inefficiencies, as well as its impact on human wellbeing and on the environment. He also assesses whether it is culturally and politically acceptable and actually serves to reduce unemployment. Some inefficiency will remain, he concludes, but its negative impacts can be lessened through increased investment in physical and human infrastructure.

Functional Inefficiency offers a wealth of details and a unique analysis of our economic system, plus hope for our future prospects through reduced inefficiency.

Su questo libro

Informazioni sull?autore

Peter S. Wenz is emeritus professor of philosophy and University Scholar at the University of Illinois at Springfield and an adjunct faculty member at the University of Canterbury in New Zealand. He is the author of seven previous books, including Take Back the Center: Progressive Taxation for a New Progressive Agenda; Beyond Red and Blue: How Twelve Political Philosophies Shape American Debates; Environmental Ethics Today; and Political Philosophies in Moral Conflict.

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Functional Inefficiency

The Unexpected Benefits of Wasting Time and Money

By Peter S. Wenz

Prometheus Books

Copyright © 2015 Peter S. Wenz
All rights reserved.

ISBN: 978-1-63388-040-5

Contents

Acknowledgments, 9, 
1. Introduction: How Inefficiency Can Be Beneficial, 11, 
2. Idling Workers I: Convicts and Women, 39, 
3. Manufacturing for International Markets, 63, 
4. Environmental Limits: Food and Water, 86, 
5. Environmental Limits: Food and Warming, 109, 
6. Functional Inefficiency in Transportation, 132, 
7. Functional Inefficiency in Healthcare, 159, 
8. Consumerism and Individual Discontent, 189, 
9. Consumerism, Competition, and Social Disaffection, 219, 
10. Idling Workers II: More Vacations and Paid Leaves, Fewer Hours, and Earlier Retirement, 242, 
11. Physical Infrastructure and Public Goods, 268, 
12. Human Infrastructure, 297, 
13. The Service Sector and Indefinite Economic Growth, 326, 
14. Summary and Conclusion, 355, 
Notes, 367, 
Index, 413, 

CHAPTER 1

INTRODUCTION

How Inefficiency Can Be Beneficial

How can inefficiency be beneficial? Contemporary Americans value efficiency. We assume that efficiency is a good thing, and we take inefficiency to be dysfunctional. In this book I explain how problems of unemployment stemming from increasingly efficient uses of labor lead us nevertheless to tolerate certain inefficiencies that serve the function or are meant to serve the function of reducing unemployment. I identify six categories of social practices that address or are meant to address unemployment, investigating efficiencies and inefficiencies associated with each category, and suggesting ways to promote American economic growth and job creation within environmental limits with less inefficiency. I use four criteria to evaluate each category and its component practices. Do the practices in the category actually reduce unemployment? Do they embody efficiency or inefficiency? Are they environmentally sustainable? And is adoption of the practices culturally acceptable and politically feasible in the current American context? I conclude that the American economy can grow indefinitely and create an unlimited number of jobs within environmental limits while many inefficiencies that impair human welfare are eliminated. But to keep unemployment at acceptably low levels, some forms of inefficiency must remain.

The First Opium War (1840–1842) between Britain and China illustrates how, under conditions of increasing labor efficiency, inefficiency can function to forestall or reduce unemployment. In 1839, Chinese Commissioner Lin Tse-hsu addressed an open letter to the young Queen Victoria of England. His concern was that smugglers using British ships were supplying opium to the people of China, resulting in massive addiction. His complaint will sound familiar to twenty-first century Americans concerned about cocaine from Columbia and heroin from Afghanistan.

Commissioner Lin assumed incorrectly that opium was illegal in England, but he was certainly correct about the drug's baleful influence. Opium consumption slows the heart and general metabolism, causes irregularity of basic bodily functions, and leads to loss of body weight. Worst of all, it's addictive, becoming as necessary to the addict as food or water. Withdrawal symptoms are severe, including "extreme restlessness, chills, hot flushes, sneezing, sweating, salivation, running nose ..., nausea, vomiting, and diarrhea. There are severe cramps in the abdomen, legs, and back; the bones ache; the muscles twitch; and the nerves are on edge. Every symptom is in combat with another. The addict is hungry, but he cannot eat; he is sleepy, but he cannot sleep." Most addicts will lie, cheat, steal, ignore work and family obligations, and violate all other moral norms essential to society's peace and prosperity just to get another dose. It's hard to imagine a more baleful use of resources than to promote such an addiction. This is why Commissioner Lin assumed opium consumption to be illegal in England.

"We are of the opinion," Lin wrote, "that this poisonous article is clandestinely manufactured by artful and depraved people of various tribes under the dominion of your honorable nation. Doubtless you, the honorable sovereign of that nation, have not commanded the manufacture and sale of it." (This was true. The queen had not commanded the manufacture and sale of opium, but neither had she effectively prohibited it.) Lin continued, "To manufacture and sell it, and with it to seduce the simple folk of this land, is to seek one's own livelihood by exposing others to death, to seek one's own advantage by another man's injury. Such acts are bitterly abhorrent to the nature of man and are utterly opposed to the ways of heaven." Commissioner Lin then appealed to the Golden Rule,

Let us suppose that foreigners came from another country, and brought opium into England, and seduced the people of your country to smoke it. Would not you, the sovereign of the said country, look upon such a procedure with anger, and in your just indignation endeavor to get rid of it? Now we have always heard that Your Highness possesses a most kind and benevolent heart. Surely then you are incapable of doing or causing to be done unto another that which you should not wish another to do unto you.

The commissioner recommended that Queen Victoria destroy the poppy fields and punish manufacturers of opium. His letter, which probably never reached the queen, was intended to solicit cooperation regarding illegal opium traffic, thereby reducing tensions between the two countries and averting war.

For his part, the commissioner was determined to catch and punish those who tried to smuggle opium into China. He had been sent by the Chinese emperor to Canton, the main locus of legitimate trade between China and the rest of the world, to eradicate the illegal traffic. He knew that ships anchored offshore contained huge amounts of opium and demanded that this contraband cargo be given to him for destruction. He wouldn't accept the word of British and American sea captains that they would abandon efforts to move the heroin to the mainland. When the cargo was not turned over to him, he confined all the foreign merchants in Canton's factory district (the area of foreign trading), denying them some of the comforts of life for forty-seven days until they finally relented.

The merchants who owned the opium complained that the seizure of their property was illegal and demanded compensation from the Chinese or from their own governments. But Commissioner Lin didn't think he owed them anything, any more than current drug enforcement agencies feel obligated to compensate manufacturers and smugglers when they confiscate and destroy illegal drugs.

While all of this was taking place, British naval officers in the area appealed to England to send war ships, which arrived the following year. The British were determined to force the Chinese to allow free trade along the Chinese coast. Against international trading rules then and now, the British had no intention of interfering with the illegal opium traffic because that traffic helped Britain sell the enormous quantities of cotton goods that were then pouring out of the recently mechanized and increasingly efficient mills in Lancashire.

The nineteenth-century conflict between Britain and China over opium may be the first indication in history that labor efficiency often provokes countervailing inefficiency. Cotton textiles were the foundation of early British industrialization and remained its backbone until about 1840. Textiles are important in every society because there's always a market; everyone needs at least one set of clothing. English manufacturers started to meet this demand in novel ways with James Hargreaves's invention of the spinning jenny in about 1764, which mechanically drew out and twisted fibers into threads. Around the same time, carding and combing machines were developed to prepare thread for spinning. In 1769, Richard Arkwright added nonhuman power to the process by developing a water-powered spinning machine. Cotton worked better in these new machines than either wool or linen, which is why the revolution in textiles was initially confined to cotton. Even in cotton, however, weaving was still done by human power until, after some unsuccessful attempts, power looms took over in Manchester, the center of textile manufacture in England, in the first two decades of the nineteenth century.

Increases in productivity were astounding. Already by 1800, before large-scale introduction of power looms, the production of cotton cloth had increased eight fold over what it had been just twenty years earlier. In spinning, one English worker in 1812 could equal the output of two hundred people in 1770. In weaving, "by 1833, one worker with a child helper could operate four looms that could produce twenty times the output of one handloom weaver." Power looms soon replaced hand looms.

As the labor efficiency of production improved, prices declined and demand for inexpensive cotton goods increased at home and abroad. Formerly, India had exported cotton goods to Britain because cotton is native to India and Indians were masters of cotton textile manufacture. As late as 1813, India was still exporting £2 million of cotton goods to Britain, whereas by 1830 the same value of cotton goods was imported by India from Britain. Historian Jack Beeching explains,

By applying steam power to textile manufacture, and filling their mills with little children who worked until they dropped, Lancashire manufacturers had managed ... to produce cotton cloth so cheap and yet so good that a native craftsman depending on his spinning wheel and hand loom could hardly hope to compete.... British textiles poured into India. The 30,000 looms that had woven the famous Cashmere shawls were slowly reduced to 6,000 and the weavers made destitute.

At first, because cotton doesn't grow in Britain, the British increased the amount of cotton it imported from India. But it was soon much cheaper to import cotton from places closer to home, such as Surinam, Demarara, Berbice, Grenada, St. Lucia, and the southern United States. This created a problem. British manufacturers depended on exporting their finished textiles to India and elsewhere to keep their factories operating profitably. "By the 1830s, three fourths of British exports were textiles and clothing." But the Indians had just lost a major source of their own earning power owing to reduced exports of raw cotton and cotton textiles to Britain. Where were the Indians to get the money they needed to continue to pay for the extraordinary output of Britain's Lancashire mills?

India needed to create a demand for something else it produced, and Britain was ready to help because profits in textiles hung in the balance. "This explains," historian Tan Chung writes, "why the [British] Indian interests were bent on increasing Indian exports to China to an excess over Britain's demand for China's goods." Why China? China was attractive to Indian and other exporters for some of the same reasons that the United States is an attractive market today. China had then, as it has now, a significant percentage of the world's population and, before 1860 or so, it was among the world's wealthiest societies.

However, the Chinese felt little need to import goods from India or elsewhere, because they were satisfied with their own products. When King George III tried to improve commercial ties with China in 1793, the ageing Emperor Ch'ien Lung replied to the King's letter,

Our ways have no resemblance to yours, and even were your envoy competent to acquire some rudiments of them, he could not transplant them to your barbarous land.... Strange and costly objects do not interest me. As your Ambassador can see for himself, we possess all things. I set no value on strange objects and ingenious [devices], and have no use for your country's manufactures.

A generation later the British found an item that was not produced in China and that the Chinese would find attractive enough to buy from India: opium. Efforts to sell other goods were still unsuccessful. In 1832, the East India Company sent a ship to China with two hundred sample bales of textiles and lost £5,647, whereas that same year a ship selling opium in Amoy, Foochow, and Ch'uan-chou Bay China came back with $330,000 in silver. "As a result [of Indian sales of opium to China], silver began to flow from China to India as her payment for Indian goods. Indian revenues got replenished in this process." This gave India silver that it could use to pay for British goods, including textiles. Thus, a harmful practice, which we will see below is reasonably called "fundamentally inefficient," was highly functional; it helped to maintain profits and forestall unemployment in England's increasingly labor-efficient textile industry.

* * *

This episode in history would have little current significance except that it illustrates a phenomenon of enormous importance today–inefficiency often counterbalances efficiency. Inefficiency (of one sort) maintains employment when efficiency (of another sort) throws people out of work.

Efficiency is a matter of inputs and outputs; the greater the desired output from a given quantity of necessary inputs, the more efficient the operation. So, there are many types of efficiency corresponding to different inputs and outputs. Fuel efficiency in cars, for example, measures how many miles the car will go (desired output) per gallon of gas (needed input). A common measure of efficiency uses human labor hours as inputs and desired product as output. For example, people often say that American agriculture is the most efficient in the world because it takes the full-time work of less than two percent of the American population (input) to grow enough food to feed the nation (output). This is labor efficiency. Other countries use a larger percentage of their populations to grow enough food for everyone, so their agriculture is considered less efficient on this measure. However, labor hours are not the only reasonable input. Because fresh water is in short supply worldwide and is necessary to grow crops, it's reasonable to measure agricultural efficiency with water as the input and crops as the output. On this measure of efficiency, water efficiency, some Israeli agriculture is more efficient than most American agriculture. Another plausible measure of agricultural efficiency emphasizes the importance of arable land because it, too, is in short supply: the more food that results from an acre of land, the more efficient the agriculture. On this accounting, some labor-intensive (less labor-efficient) agricultural methods in other countries are often more efficient than America's more labor-efficient techniques.

Judgments of efficiency are inherently comparative, although the comparison is often implicit. A car that gets 45 mpg is considered fuel efficient because most cars get much less. If most cars got 85 mpg it wouldn't be considered fuel efficient. As we'll see in chapter 7, the American healthcare system is very inefficient, a judgment based on the fact that other advanced industrial countries get better health outcomes with much less per capita spending on healthcare.

Labor efficiency, one of the most important types of efficiency in the modern world, is both a blessing and a curse. The curse is unemployment created by increasingly efficient uses of human labor hours. Because labor-efficient productivity allows fewer workers to produce the same product, many workers are thrown out of work when there is insufficient demand for an increased supply of that product. For example, if automated production methods enable a soda-bottling company to use only one third the number of workers to bottle the same amount of soda, all workers could be retained if the company had customers for three times as much soda as it was selling previously. In most cases, however, although demand may increase somewhat owing to the lower price of the more efficiently produced soda, demand is not likely to triple. Keeping all workers on the job would therefore result in overproduction. Unemployment stems from increased labor efficiency because overproduction results in unsold product and financial loss.

This was evident early in the Industrial Revolution as skilled workers, displaced by increasingly efficient manufacturing processes in the textile industry, tried in vain to retain their jobs by smashing machines used to improve labor efficiency. Richard Hargreaves's original spinning jenny was destroyed in 1767, and its newer version was destroyed in 1769. In Normandy, France, writes historian William Rosen, there were dozens of such incidents in 1789 alone: "In July, hundreds of spinning jennys were destroyed, along with a French version of Arkwright's water frame. In October, an attorney in Rouen applauded the destruction of 'the machines used in cotton-spinning that have deprived many workers of their jobs.'"

The most notorious machinery-destroying rebellion was at its height in 1811 and 1812 in England. In March 1811, weavers of stockings began smashing efficiency-improving stocking frames, a practice that they continued for weeks. After a summer lull they resumed in the fall, by which time they had destroyed almost one thousand of the twenty-five thousand to twenty-nine thousand such machines in Nottingham, Leicestershire, and Derbyshire. Their commander used the name Ned Ludd in honor of a young stocking maker, Ned Ludham, who had earlier smashed a stocking frame in Leicester. By December 1811, these Luddites were smashing both weaving and spinning machinery. In 1812, the Crown deployed twelve thousand troops to put down the rebellion. Rosen concludes, "The Luddite rebellion failed for the most obvious reason: an enormous disparity in military power." In addition, "the Luddite idea lost the historical battle–'Luddite' is not, in most of the contemporary world, used as anything but an insult." The Luddite idea lost because their opponents had economics on their side. The opponents "produced more wealth, not just for individuals, but for an entire nation."

(Continues...)

Excerpted from Functional Inefficiency by Peter S. Wenz. Copyright © 2015 Peter S. Wenz. Excerpted by permission of Prometheus Books.
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Dettagli dell?edizione

• Editore: Prometheus Books
• Data di pubblicazione: 2015
• Lingua: Inglese
• ISBN 10: 1633880400
• ISBN 13: 9781633880405
• Rilegatura: Copertina rigida
• Numero di pagine: 444
• Contatto del produttore: non disponibile