The Bullshit Industry Checklist Versus the Make-work Bias

Thursday, June 21st 2012

My washing machine is rumbling in the laundry. The reverse cycle heater is warming the room. I have a car outside. There's a massive library of everything waiting on the internet. A giant warehouse of supplies in my local supermarket. Running water, sewerage, electricity, too.

A king in the 1200s wouldn't have had these luxuries!

But nowadays a nerd like me - of modest means - can live regally.

I mostly concern myself with First World Problems

But there's something going awry.

Post Market System Technology Versus Bullshit

The problem is we are entering an age of Post Market System Technology. Ways of organising production through automation and information networks that go beyond what a simple price system and traditional business can cope with.

And much of this technology makes current institutions and many human skills obsolete. It is a direct threat to people's ability to get paid. It chucks them out of work.

So vast systems of bullshit are created control the technology.

For instance, one "choke point" is money itself. Control the money supply and you can siphon off vast amounts of cash and convert it into real things. Without most people realising the extent of the scam.

There are a multitude of ways of doing this: by lending money you create out of nothing and taking a proportion of the borrower's labour (mortgages being the canonical example). You can do it by being a middleman in transactions (credit card companies have perfected this). By controlling the cash used for trade by third parties (classic example: the US $). By printing money and nicking stuff by stealth (causing excessive inflation). And so it goes on: stocks and shares, shadow banking, derivatives, etc.

(Traditionally this is done by Evil Elites - dastardly conspirators who chomp on cigars and have gold taps, attend satanic nocturnal ceremonies in forests, and delight on donning strange masks, getting naked and muttering incantations in old latin to summon the Old Goat Lords.)

But, really, the scam isn't that hard to understand. At least in theory. And it doesn't require the summoning of Great Old Ones. It's simple. Control the transactions and control the cash, give it a fancy pseudo-scientific name (e.g. Compound Derived Future Earnings Reverse Option), drape it in indecipherable economic mumbo-jumbo and make out like a bandit.

Other related examples:

  • Intellectual monopoly rights (maintaining exchange-value by artificially limiting the technology),
  • make-work bureaucratic schemes (maintaining the exchange-value of mental labour where it would be otherwise of little value)
  • corporate rent seeking and regulatory hijacking to maintain oligopolies and monopolies
  • organised labour defending old work practices

... and so it goes on. The side-effect being everybody has to keep working hard. People don't reap the benefits the technology's ability to reduce the amount of labour required to do things. The bullshit stops us organising in new ways. (Many of these new ways of organising will have their own problems, of course. But they are a consequence of technological change and must be dealt with.)

Every time I hear about "job creation", "the work ethic" or "protecting intellectual property" I think: oh dear. Here we go again.

I've written about this topic many, many times :-). Some examples:

The question is: how does the system of bullshit work and how do we recognise it?

Abstract Value

The market system is about converting money into real things and real things into money.

The systems works - after a fashion - because prices, trade and transactions are simple (in theory). So most people can get involved to one degree or another. And all those simple transactions add up to a very complex system indeed. The system is (one) way of harnessing the power of collective intelligence. (A system no-one can conceive in its totality.)

Lets jump up one level of abstraction. Money is a token - a "means of exchange". Money's fungibility gives it its usefulness; you can convert something into money and then subdivide that money; buy different things with it, save it, lend it, etc, etc. As long as social structure around the tokens functions, and people trust that the tokens will be honoured, money acts as a store of abstract value. (Wherever cash is absent it gets reinvented - cigarettes in prisoner of war camps, for example.)

Money is no use in itself. It's a figment of the imagination. A tremendous feat of collective belief and trust. It is a strange platonic ideal that derives its power from how it informs behaviour not form what it actually is materially. Money is divorced from the mundane and corporeal.

Inherent Value Versus Transaction Value

Meet Tim. He wants to buy the Scontor 8000 you have created.

"G'day," says Tim.

Tim offers you some cash.

Why?Tim needs to Scontorify the Feep Girders he makes and sells. To Tim, your Scrontor 8000 allows Tim to engage in further trade. To him, your Scrontor 8000 is a means to an end.

Now ponder an accountant. He can't eat his reports. They are a means to an end. A professional programmer can't clothe himself in his Python libraries, either. And so it goes with most paid work.

Paid work is mostly a means to an end. It has transaction-value.

Sometimes, what you do outside paid work makes use of skills you also use for work. Sometimes work is something you'd do for its own sake, too. If so, you're lucky. But for most, work is something they do to pay the bills and buy the things they want.

Unpaid work can be quite different. You do things that have inherent value to you or people you care about. The work needs to have inherent value to you. It has use-value. (I know it gross simplification, and yes, there are people who enjoy the game of trade and money for its own sake. And, yes, there are other pressures that make people do things for others. But you get the essential point.)

So most paid work is mostly about doing things because other people want you to do them. And are willing to pay for it.

The Bullshit Dilemma

So there's a good chance that a lot of your paid work involves doing things not because you think the work is inherently worth doing. Rather, you do it because it appears useful to someone else. And to to that other person, your work may only be useful insofar as it allows that person to do work that appears useful to another person. And so on down the line.

*It could be the case that all this activity actually ends up producing nothing of inherent value to anyone at any point down the line! *

In that case, value remains purely abstract and doesn't actually produce anything with inherent value to anyone!

But people will keep doing it. Partly because of the need to produce abstract value to eventually trade for real, concrete things. As a result there is an element of compulsion and, usually, hierarchy. Combine the two and the bullshit command and control system is hard for most to escape.

It's funny - and tragic - idea.

This type of network of transactions that appear useful at the micro level but add up to a sot of macro uselessness is the life-blood of the a peculiar type of industry.

The result is a giant make-work scheme, the Bullshit Industry. In fact, you could almost say abstract value of this kind is the bullshit!

It takes many forms: but the common thing is that it involves maintaining the exchange-value of certain works or activities despite technology.

Now, in an orgy of self-quoting, I am now going to quote myself quoting someone else:

Perhaps humans, faced with obsolescence, can innovate in ways to make work for themselves. They certainly have a clear motivation to do so; if they are no longer useful, they will fall into relative penury.

Moreover, they may be part of a system where they are actually useful to others in individual transactions, even if, at a systemic level, they are entirely superfluous to actual production and distribution. This sort of work creation promotes social stability in the face of technological change.

Bryan Caplan writes:

Inside of a household, everyone understands what Cox and Alm call "the upside of downsizing". You do not worry about how to spend the hours you save when you buy a washing machine. There are other ways to spend your time. Bastiat insightfully observes that a loner would never fall prey to make-work bias:

No solitary man would ever conclude that, in order to make sure that his own labour had something to occupy it, he should break the tools that save him labour, neutralise the fertility of the soil, or return to the seas the foods it may have brought him ... He would understand, in short, that a saving in labour is nothing else than progress.

The existence of an exchange economy is a necessary condition for the make-work confusion to arise.

But exchange hampers our view of so simple a truth. In society, with the division of labour that it entails, the production of consumption of an object are not performed by the same individual. Each person comes to regard his own labour no longer as a means, but as an end.

If you receive a washing machine as a gift, the benefit is yours; you have more free time and the same income. If you are sacked, the benefit goes to other people; you have more free time, but your income temporarily falls. In both cases, though, society conserves labour.

Bryan Caplan coins the phrase "make-work bias".

The public often literally believes that labour is better to use than conserve. Saving labour, producing more goods with fewer man-hours, is widely perceived not as progress, but as a danger. I call this make work bias, a tendency to underestimate the economic benefits of conserving labour. Where non-economists see the destruction of jobs, economists see the essence of economic growth -- the production of more with less (The Myth of the Rational Voter, p.43).

Simply put, people want to have something to trade. Most people trade their labour, so most people want their skills to remain useful to others. In most cases, that means they are still useful as employees.

And, at many points along the line the market system is gamed to force people generating things of real value to exchange for bullshit. Usually through the use of force or the threat thereof. But it is often done without the gamee realising its happening. Not completely, anyway.

The truly cunning part? A lot of this activity is necessary. So it's very hard to distinguish between the bullshit and the useful stuff.

Once the market systems expands, work becomes so specialised that it is hard for the people doing it to see where it sits in the overall system of production. Often work loses its concreteness. But not necessarily its usefulness. The scale of the entire system dwarfs any individual attempt to grapple with it. To the point where people can do work that has no concreteness to it at all, even the words used to describe the activity end up incomprehensible nests of in-group jargon.

So we all know a lot of things are bullshit, but we can't quite work out for sure. We know a lot of things are just self-perpetuating circles of means-to-endness, but we can't tell for sure. Often we can't escape the loops of make-work because they all make sense at a micro-level.

"I need to pay the bills!"

Nietzsche, in Beyond Good and Evil:

Aphorism 156

er Irrsinn ist bei Einzelnen etwas Seltenes, — aber bei Gruppen, Parteien, Völkern, Zeiten die Regel.

Madness is something rare in individuals — but in groups, parties, peoples, ages it is the rule. (Source: Gutenberg-DE, Translation source: Hollingdale)

Is It Bullshit?

This is the dilemma facing the market system and capitalism right now. I've been pondering how to work out what proportion of the work force is employed in generating purely abstract value (my euphemism for bullshit). It's hard to tell. But I have a checklist.

Is it bullshit?

  1. Physical? Do you touch non-computer objects with your body?
  2. How many levels of abstraction do you use to describe your work? How far up the lexical tree do you ascend? Are you installing an air conditioner or are you preparing a presentation for social network marketing consultants?
  3. Is what you are doing fungible? Is it money-based, a digital product, or real, physical thing?
  4. Would you volunteer to do it for free?
  5. Does anyone get any direct use out of it?

Add up your points:

  1. Yes: +1. No: 0 pts.
  2. +1 per level of abstraction. A quick barometer: + 1 for each syllbale of each word in your job title that doesn't mention a real, physical object or an activity that involves moving your limbs.
  3. Yes: +2, No: 0.
  4. Yes? -5 , No: +5.
  5. Yes? -2, No: +2.

1-2 Points: Some bullshit

3-5 points: Quite a lot of bullshit.

5-8 points: Mostly bullshit.

9+: Bullshit!


What are the alternatives? Well, it will be a slow change via the rise of the exobrains of various kinds and the resulting protoconsciousness.

One possible interim measure, though:

Thanks to Emlyn for being enlightening on this topic and listening patiently to all my bullshit. You are a gentleman and a scholar!