Questions on Mises IX: One from the Readers
Jason Kuznicki on Dec 20th 2006
At Liberty & Power, commenter Andrew D. Dodd writes the following question, which I will attempt to answer.
Here is a question of my own, if I may take the liberty of inserting it. Has anyone within the Austrian School done a systematic response to William Morris, in particular to Morris’s utopian novel, News From Nowhere (1890). In the tradition of utopian novels, News From Nowhere is about half Socratic dialog, and half travelogue as illustrative example. Morris’s big point was the insight that work is fun, that creating things is fun, or to put it in his own words, “Plenty of reward– the reward of creation. The wage which God gets… If you are going to paid for the pleasure of creation, the next thing we shall hear of will be a bill being sent in for the begetting of children.” (I should add that Morris was referring to the natural way, “making whoopee,” not to test-tube babies and suchlike. Ch. 15, p. 274, A. L. Morton, ed., Three Works by William Morris, 1968,4th printing, 1977).
See also the “shopping” episode in ch. 6, pp. 216-18.
In Morris’s terms, if production is an innate drive, the finer details of money and exchange are essentially irrelevant. At present, the overwhelmingly most important development in the political economy of technology is the Open Source Movement, and Morris is a kind of unacknowledged theoretician for this movement. I do not know whether Richard M. Stallman has ever read Morris, but he and his followers act as they would act if they were all carrying around copies of New From Nowhere in their pockets.
I google-searched the Von Mises Institute website, and judging by what I found, the authors posted there seemed to lump Morris as a “romantic,” without knowing very much of his work. They seemed rather more aware of open-source software, but my general impression was that they lumped it in with the free market.
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http://www.mises.org/http://www.google.com/search?as_q=&;hl=en&num=100&btnG=Google+Search&as_epq=+william+morris&as_oq=&as_eq=&lr=&as_ft=i&as_filetype=&as_qdr=all&as_nlo=&as_nhi=&as_occt=any&as_dt=i&as_sitesearch=http%3A%2F%2Fwww.mises.org%2F&as_rights=&safe=images
http://www.google.com/search?as_q=&;hl=en&num=100&btnG=Google+Search&as_epq=news+from+nowhere&as_oq=&as_eq=&lr=&as_ft=i&as_filetype=&as_qdr=all&as_nlo=&as_nhi=&as_occt=any&as_dt=i&as_sitesearch=http%3A%2F%2Fwww.mises.org%2F&as_rights=&safe=images
As Morris would say, like the book about the snakes in Ireland
http://www.google.com/search?as_q=&;hl=en&num=100&btnG=Google+Search&as_epq=open+source&as_oq=&as_eq=&lr=&as_ft=i&as_filetype=&as_qdr=all&as_nlo=&as_nhi=&as_occt=any&as_dt=i&as_sitesearch=http%3A%2F%2Fwww.mises.org%2F&as_rights=&safe=images
Granted, I have not read the book; I have only glanced at it. But the thesis laid out above seems open to attack on several fronts.
First of all, some parts of some kinds of work are fun. Others, though, are indisputably not fun. It puzzles me how anyone can miss this who has done a day of work in his life. What sort was this man, this Mr. Morris, who simply declared, in an age of dangerous and drudging factory labor, that “work is fun,” or — he seems to equivocate on this — that all work can somehow be made to be fun?
It also puzzles me how the un-fun parts of work can all be laid the feet of capitalism, as though it were the only agent of unfunness in the entire world. Yet this is what Morris appears to claim… I think.
Meanwhile, life is un-fun. Life is full of nastiness, and it’s only productive work that keeps it at bay. Will some of that work perhaps lack the charms of a weekend in Vegas? But this is only natural.
Even today, work isn’t always fun. I adore my new job — I am genuinely and profoundly happy with it. I feel as though I am making a difference in the world. I take a great intellectual pleasure from it, which is the one thing I have always selfishly demanded of my jobs, and which they have not always given me. But even now, there are most certainly things I certainly don’t enjoy: Trivialities, menial and repetitive tasks, the displeasure that comes from having too much to do and not enough time to do it. The little failures of others, which as an editor are the crusts of my daily bread.
For all of these things, there is a universal remedy: the salary. If my job paid nothing, I would not do it — I still have to eat, after all. But also, when I am faced with a whole plate of crusts and very little bread, I just picture the money in the bank, and instantly I feel a whole lot better. It’s not a huge salary, but it’s certainly adequate to take care of the occasional feelings of discomfort. It seems a fair trade. And as I said, I’m happier than I would be otherwise. I trust that my employer feels likewise, as it still isn’t too difficult to fire people in America.
Moving on: Is production an “innate” drive? Certainly not. I could as easily choose to be unproductive as I choose to produce. Easier, even.
Breathing and eating are innate drives, which I think can conveniently be defined as “anything you also tend to do on a weekend.” Production is not; production takes an act of mental and physical focus, a conscious, considered movement. To elicit production, there must be an incentive, and there must be someone with the capacity to claim it. Where fun — the internal incentive — is not sufficient motivation, money steps in: While plenty of scholarly writing would probably get done purely for its hedonic value, I doubt that very many ditches would get dug. Not all work is fun, and there is no reason to think that it could all be made fun, if only sufficient technologies were applied.
Is it really true, then, that “the finer details of money and exchange are essentially irrelevant”? Absolutely not. Without money, we have no prices on goods, and when prices disappear, our ranked menu of incentives disappears as well. These things are not fine details; they are essential to feeding, clothing, and housing humanity, tasks that the industrialized nations have only recently learned how to perform properly (chiefly by getting the government out of all three businesses, and by allowing science and industry to operate under a regime of private property rights). Even today, many governments refuse to permit this process, and their people suffer accordingly.
These are not fine details. They are not afterthoughts or annoyances. They are the only methods we have found so far, and they might well be the only methods we can ever expect to work, at least if the Austrians are right. And I do think that they are.
Let’s consider how this would work in practice. Let’s grant that all work can somehow be made fun, and that the drudging aspects of labor have all been eliminated. Morris’ utopia has arrived.
As a consequence, there is also no longer any need for libertarian think tanks. Cato closes down (through coercion? or persuasion? And would we, following Nozick, make of those people who professed themselves uninterested in or unhappy with a utopia?). Whatever the case may be, Jason is out of a job, so he casts about for work that would still be useful, even in utopia.
“Surely,” says Jason, “a perfect society must need wine. Indeed, I can hardly picture a perfect society without it.” So Jason becomes a vintner, a profession that combines two of his real-world hobbies, brewing and gardening. “It’s work,” says Jason. “But it’s demonstrably fun work, and so I am happy.”
The first vintage is ready, and Jason finds himself surrounded by cask upon cask of wine. But his desire for wine, although it is both longstanding and passionate, is also limited. And his needs for other things — clothing, books, shelter, and more — remain just as pressing in utopia as they were anywhere else.
Now, I know from what little I’ve read of Morris that money is not acceptable in his utopia. Here’s what happened when a stranger was gauche enough to try paying for a service with silver coins. The man who performed the service replied,
You think that I have done you a service; so you feel yourself bound to give me something which I am not to give to a neighbour, unless he has done something special for me. I have heard of this kind of thing; but pardon me for saying, that it seems to us a troublesome and roundabout custom; and we don’t know how to manage it. And you see this ferrying and giving people casts about the water is my business, which I would do for anybody; so to take gifts in connection with it would look very queer. Besides, if one person gave me something, then another might, and another, and so on; and I hope you won’t think me rude if I say that I shouldn’t know where to stow away so many mementos of friendship.
So Jason the vintner must not use money, for fear that the others will laugh at him.
So he goes to the tailor, who naturally makes clothing for fun. But the tailor is besieged on all sides by people who always demand more clothing. After all, they need but ask for it, and asking is free. Again and again, the tailor must turn them down, because after a while, even tailoring ceases to be fun. “I am overworked,” the tailor declares. “I cannot possibly keep up.”
So Jason hits upon a stratagem. “I shall trade my marginal wine,” says Jason, “for the clothes that I need.” (Jason does not make the vulgar error of declaring something “marginal” when it is small or bad. No, he uses this word only to mean “that which pertains to the last economic unit in question.” His wine is excellent in quality, and very abundant. He just doesn’t need so much of it, and thus it is marginal.)
So Jason returns to the tailor. A deal is struck, and each trades a marginal quantity of one good for a marginal quantity of the other. The tailor pours himself a glass of wine and tells his many requestors — we cannot call them customers — politely to go jump in a lake.
Jason repeats this process with the bookseller, who has been printing books, also purely for fun, but who now perhaps finds himself with more books than he cares to read. (For we must not presume that all goods produced can always find someone to requisition them, not even if they may be requisitioned for free.) A deal is struck; Jason departs with a giant cartload of books, and the bookseller gets a very great deal of wine indeed.
Finally, Jason seeks to buy a house.
“Oh no,” says the developer. “I never drink wine. And even if I did, I wouldn’t want twenty thousand bottles of it, which is what I consider a fair price for a house. I’m afraid you have nothing to offer that could induce me to give you a house.”
“I’ve got an idea,” says Jason. “I’ll find some commodity that you do want, and I will trade my wine for it. Then I will give you that commodity instead, and you will give me a house.”
The developer is pleased. And the search for a commodity of exchange — a money — would be on. Mises himself explained, in a passage I have quoted, how this search would likely unfold.
Once a money had been arrived at — let’s hypothetically call it silver — things would be very different, all without anyone intending these differences at the outset. Money allows us to adjust our value hierarchies in precisely the way we discussed in part VIII of the series; it allows us to trade things we desire less for those that we desire more.
And it is only natural, in this state, that someone would trade a temporary lack of fun… for silver. In the long run, this would make them happier. So simply to maximize happiness, work as we know it would have to be re-invented in the Morris utopia.
But soon, politicians would learn that they could trade governmental favors for money, that they could give their home districts special projects and privileges in return for loyalty — and that those who face distributed, intangible penalties never complain so loudly as the clamors of those who receive concentrated, monetary rewards. The size of government would increase, leading everyone to wonder about how we might rein it in. Perhaps this wouldn’t bring utopia, but then, there are good reasons not to want utopia in the first place.
Soon, Jason might have to quit his vineyard and go back to working for limited government, probably at an organization much like the one he works for now. And where would we be? Right back where we started.
Please, though, let me know if I have misrepresented Morris anywhere, or if he offers any replies to the arguments I have laid out above. For the moment I can only consider this a provisional reply, and one that I am not terribly confident in.
Lastly, as to open source software, I confess that I know very little about it. From what I can tell, however, open source is not at all an affront or a challenge to the free market: There is nothing in market economics that forbids anyone from giving away a good. Someone might therefore think that they are dealing a blow to capitalism in giving away their goods, but they are doing no such thing. And if we accept as many libertarians do the notion that intellectual property isn’t property at all, then the open source movement hasn’t even been giving things away. Not real things, anyway. (I should add that I am not convinced by libertarian arguments to this effect, but that is the subject of another post.)
Filed in The Boardroom
I’d say the problem with Morris’s take is the same with almost all Utopian schemes - it starts with an interesting insight that contains a kernel of truth, and then tries to extrapolate an entire reality from it, ignoring all the other truths that confront it.
Specifically, for Morris, I think it is a good insight into existing reality (then and now) to observe that state managed capitalism makes people unhappy - anyone who truly believes in the superiority of a truly free market shouldn’t have any problem accepting that! Further, it seems logical to me to observe that people do generally enjoy and like being of service to their neighbors and community (as you note that you do). Based upon this, every state intervention in the market distorts the market from doing this - instead of providing value for your customers, many people are now employed in “compliance”, or even if an entrepreneur, much of their time and money is tied up in complying with myriad regulations. As you move closer to a free market, people will tend to enjoy their jobs more, as the jobs become more and more about providing a good or service to the public, as opposed to CYA in response to the state. Granted, there will always be drudgery, so it will never be Morris’s utopia, but perhaps the utopia is best conceptualized as the limit of the free market equation - the free market is constantly getting closer to it, but never actually reaching that condition.
Another point, this one more historical or empirical, regards Morris’s disdain for money. I think there is some validity here too, but once again becomes a caricature when taken too far. In most cultures before the rise of the massive states we have today, alot of value resided in non-market transactions. Heck, even with our oppressive states today, this is true (think of the “homemaker” spouse). “Money isn’t everything” is an old sentiment that reflects this reality. I think that absent some of the state’s interference with community based charity and other services, as well as a cultural shift away from self-, family-, and community- reliance due to state programs, we’d see a lot more of value created in non-market transactions.
However, Morris slips off into la-la land when he suggests that there is likely to be a society where money is un-necessary and non-market transactions will supply everything you would want. Clearly, money and exchange will have their place in a truly free market, as for example, it’s highly unlikely that I would ever be able to paint something that I would want to hang on my wall. Exchange will be necessary for that, and money, while not necessary for exchange, clearly facilitates it.
I would say the answer, regarding money and the “fun” of work, perhaps lies in a synthesis of Von Mises and Christian thought (ala Chesterton & Maritain). You could even throw some Kierkegaard in there since you stated:
“Is production an “innate” drive? Certainly not. I could as easily choose to be unproductive as I choose to produce…Production is not; production takes an act of mental and physical focus, a conscious, considered movement.”
I think questions of boredom & depression & imagination, and in general the soul, come into play here. Of course one could keep running into the metaphysical with all the tangents your discussion provided, indeed I was about to quote some Voegelin (you can see who my primary intellectual loves are…) Anyhow thanks for the good thought-provoking post, really enjoying this Mises series.
First, some pedantry:
He just doesn’t need so much of it, and thus it is marginal.
Need has nothing to do with whether something is marginal, which you seem to note when you define marginal as that which pertains to the last economic unit in question. I have one house, and I would say I have a pretty big need for it. But if I chose to give away my supply of housing, the one I’m living in would be the marginal house, because it would be the last unit in question.
Second, let’s assume that all production is fun, and we all go on producing things day in and day out, with no thought as to whether all those goods will be used. What’s to say that we’ll produce the optimal mix of goods? Presumably, the reason it’s good that you produce more wine than you consume from others is that there are people out there who need to do some boozing, and they don’t want to do the grape-fermenting themselves.
But what if there was no great demand for wine, but you continued to churn out barrel after barrel of the gods’ nectar? Then you would be converting resources that people might want (i.e., grapes) into resources that they demonstrably did not want (wine). That’s a destruction of value.
In a world of prices and exchange, your production is molded by the desires of others. In a world of joyfule production and gifting, your production is molded (at least in large measure) by whatever it is that you enjoy doing. A world where I can get anything I want for free, but nobody is producing things to make me happy . . . Sounds like a distopia to me.
AMW –
If you chose voluntarily to give away your house, wouldn’t you by definition not need it?
As to the rest of your comment, I think you’re right on. Any attempt to implement the Morris utopia would either return us immediately to the real world — or it would have to be backed by thugs with guns. Like all other utopias that have been tried.
If you chose voluntarily to give away your house, wouldn’t you by definition not need it?
Need has at least two uses. In normal parlance, a need is something that you either cannot live without, or cannot live as a civilized human being without. Food, clothing, and shelter are typically considered needs in this context. Economists typically reject the notion of general “needs” altogether, and replace them with preferences. Some preferences (food, clothing, shelter, etc.) are very strong, and people will typically secure them before buying more frivolous goods like pocket watches and hair-dye.
So imagine I give away my house because I am part of a small religious group and the group could really use a place to organize and worship. Suppose also that I have no alternative housing. My next best place to sleep is a sewer grate. (And I can’t still live in the house, because it’s against the religious group’s beliefs to use a place of worship as a place to eat, sleep, use the toilet, etc.) Nevertheless, I give the house away and sleep on the grate.
So, by definition do I not need it? That depends on the definition we’re using. To a normal person, I have just decided to go without a basic need. To an economist, I have demonstrated that I prefer my religious group to have a dedicated building for organizing and worhipping over the creature comforts of my house.
Now, back to the original question: does marginal imply unnecessary. Again I will say no. Suppose you and I are scuba diving, and your tank runs out of oxygen. My tank, on the other hand, has just enough oxygen for one of us to make it to the surface before expiring. That tank is necessary for my survival. Therefore, it’s marginal value to me is extremely high. Nevertheless, it is the marginal unit, because, if I were to give you a tank with oxygen, it would be the only one that I have to give; the one I need to survive.
Whether or not I would give you the tank is something I’ll leave for others to ponder.
As an aside, I don’t see any contradiction between the idea of intrinsic motivation and the standard Austrian concepts of scarcity, opportunity cost, property, exchange, and so on. Andrew Dodd’s statement, “if production is an innate drive, the finer details of money and exchange are essentially irrelevant,” strikes me as a non-sequitur. Even intrinsically motivated agents (say, open-source programmers) must deal with limited resources, make trade-offs, exercise entrepreneurial judgment, perform what Mises calls “economic calculation” using market prices, and so on. The basic insights and analytical apparatus of Austrian economics are not dependent on any particular psychological model of human motivation.
And, of course, there’s a lot of literature suggesting that open-source programmers are just as extrinsically motivated as wage-earners (e.g., Lerner and Tirole, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=224008).