{"id":213,"date":"2014-06-04T18:09:10","date_gmt":"2014-06-05T01:09:10","guid":{"rendered":"http:\/\/kelsoinstitute.org\/louiskelso\/?page_id=213"},"modified":"2016-10-04T14:58:47","modified_gmt":"2016-10-04T21:58:47","slug":"are-machines-supposed-to-make-work","status":"publish","type":"page","link":"https:\/\/kelsoinstitute.org\/louiskelso\/literary-legacy\/are-machines-supposed-to-make-work\/","title":{"rendered":"Are Machines Supposed to Make Work?"},"content":{"rendered":"

by Louis O. Kelso*<\/strong><\/p>\n

Not long ago I helped interview several potential executive trainees, fresh out of business school, who were applying for a scholarship to spend a summer in Europe studying business, industry and politics. \u201cWhich of these alternatives do you consider most desirable?,\u201d I asked one of them. \u201cMaximum production with maximum employment? Or maximum production with minimum employment?\u201d<\/p>\n

\u201cThe first, of course,\u201d he snapped.<\/p>\n

\u201cVery good,\u201d I nodded. \u201cNow suppose we change the word \u2018employment\u2019 to \u2018toil\u2019? Would you answer still be the same?\u201d<\/p>\n

The boy looked puzzled. \u201c\u2018Toil\u2019 and \u2018employment\u2019 don\u2019t sound the same,\u201d he said at last, \u201cbut I guess I\u2019ll stick to what I said.\u201d<\/p>\n

I aimed for the moment of truth. \u201cNow suppose you are the president of Standard Item Manufacturing, Inc. You\u2019re sitting in your office when the door flies open to admit your youngest, most ambitious junior executive. \u2018Sir!,\u2019 he exclaims, \u2018I have been thinking about the antipoverty war and how our company can do its part to help. I think I have it. I want to tell you about a sensational new plan with which Standard Item can turn out the same number of items per year with twice<\/em><\/strong> our present number of employees!\u2019\u201d<\/p>\n

\u201cI guess I don\u2019t go on that trip,\u201d said my candidate, looking stricken. Naturally he went. It would have been unfair to blame the boy for stubbing his logic on the glaring incongruities of the manpower myth when they go unchallenged in the highest councils of business and state. The manpower myth is our official faith, although like the Roman gods, it is more honored in public utterance than in private observance.<\/p>\n

According to this myth, \u201cpeople\u201d produce all our economic goods and services, and \u201cpeople\u201d are becoming more and more \u201cproductive\u201d every day. Our economy has become the wonder of the world because of our \u201cmanpower resources,\u201d and these \u201cmanpower resources,\u201d with the negligible assistance of nearly a trillion dollars worth of productive capital, will produce even more magnificent wonders tomorrow. As a recent U.S. government publication put it \u2014 artistically staggering the lines to suggest a paean to the economy in blank verse:<\/p>\n

Our manpower potential is great enough, with an improving technology,<\/em><\/p>\n

to increase the production of goods and services by about 50 percent from 1960 to 1970.<\/em><\/p>\n

We begin the 1960s with a gross national product of $500 billion.<\/em><\/p>\n

We can reach a level of $750 billion by 1970.<\/em><\/p>\n

Naturally since people are producing all this opulence, the way to reach even greater heights of future opulence is to have as many people as possible \u201cfully employed.\u201d \u201cHeigh-ho, heigh-ho, off to work\u201d they go \u2014 fathers, mothers, grandmothers, uncles, brothers and cousins, all just one big happy labor force pitching in to produce an ever bigger gross national product.<\/p>\n

As an explanation of what is going on in our economy, of course, all this is sheer nonsense. It treats the most sophisticated and complex collection of capital instruments ever assembled in the world as if they were extensions of man himself, or magic helpers, or natural resources functioning gratuitously like the sun. It pretends that machine output is human output<\/em> or what is even more misleading, that it is the output of the machine operator<\/em> himself. And this fiction, to use a polite word, is the launching pad for an even more curious delusion: the notion that human labor is, through technological advance, becoming more and more \u201cproductive.\u201d Any humble truth-lover stubborn enough to challenge this assertion is de facto<\/em> anti-labor, if not downright antihuman.<\/p>\n

But calling a cow\u2019s tail a leg does not make it a leg, as Abraham Lincoln used to say. Similarly, calling people \u201cproductive\u201d does not make them so. \u201cIf us working guys were really producing everything, we wouldn\u2019t either be unemployed or scared stiff of losing the crummy little jobs we\u2019ve got,\u201d a San Francisco deliveryman told a friend of mine the other day. This flawless logic has yet to escalate up to the policy floor.<\/p>\n

The President\u2019s Council of Economic Advisers could learn a thing or two from this knight of toil. As one of the nation\u2019s four million known moonlighters, he works literally night and day to maintain a rather bleak living standard. The family\u2019s furniture, bought on time, goes in and out of hock. \u201cI\u2019ve got to run all the time to keep from slipping back,\u201d he said. He spoke for millions of his fellow Americans, dependent on their labor in an economy that has less and less use for it. Nor is this the language of rising productivity. It is just the opposite.<\/p>\n

An inventor in the automotive industry used to say that machines were designed by geniuses to be run by dopes. That is much nearer the truth than the claim that the genius of the machine resides in the operator. The Industrial Revolution broke down crafts which had previously required years of arduous apprenticeship and experience \u2014 crafts so exacting that they were properly called arts \u2014 and reduced them to a simple rote that could be performed by untrained women and even children.<\/p>\n

As sorry as we feel for those helpless victims, crushed by the violent impact of technology on a world that had not the slightest comprehension of what was happening to it, we cannot say that they were more \u201cskilled\u201d or \u201cproductive\u201d than the craftsmen they supplanted. They themselves entertained no such notion; certainly the factory owners did not. Like good management today, they knew to a penny what they had spent on capital instruments; nor did they labor under the delusion that the purpose of such capital investment was to create jobs<\/em> or utilize the manpower resources of their day. They were not obliged to bow to the manpower myth, for the simple reason that it had not been invented yet.<\/p>\n

The manpower myth is a relatively recent arrival to our ideological pantheon; its striking resemblance to Marx\u2019s labor theory of value is probably coincidence. Historically, we Americans understand very well the value of capital; it is what our forebears came to America for. Generations of life in Europe had schooled them well in the hard truth that labor without capital means subsistence toil. \u201cO God! that bread should be so dear, and flesh and blood so cheap,\u201d is the laborer\u2019s cry, not the capital owner\u2019s. Americans know this, or used to. But the overwhelming success of our capital instruments has temporarily made us lose our nerve.<\/p>\n

The manpower myth is our collective attempt to wish away the automation crisis; it is our hopeful whistle in the graveyard of full employment.<\/p>\n

Even five years ago, reports from industry were at least candid. \u201cFor every $5,000 worth of investment, you can get rid of one worker,\u201d confided one AFL-CIO official to the press, while the vice president of a major steel company artlessly babbled: \u201cIt costs $25 a day for every steelworker that walks through that gate. Naturally, there is a great incentive to eliminate that cost.\u201d But this was before the automation curtain. As the Sixties came in, it descended with a heavy metallic clank.<\/p>\n

No longer does one hear such vulgar expressions as \u201celiminating labor.\u201d The process is now called \u201ccreating jobs.\u201d Nobody knows how many jobs are being \u201ccreated\u201d by automation. Nobody wants to know \u2014 officially. Corporation executive, politician and labor leader publicly adopt the stance of the three wise monkeys. Management tells nothing, the politician hears nothing and the labor leader sees nothing. Privately, of course, they are in a flap.<\/p>\n

Standard Item plans to install the Triple Whammy Computer system, thereby increasing its production by 125 per cent and [blast the public relations bugles] creating six and one-half new jobs. How to conceal the fact that the Triple Whammy will simultaneously wipe out 124 old jobs keeps the PR department walking the floor nights. The union negotiating committee has not been sleeping well either. Its problem is how to force Standard Item to admit that 124 thumpingly redundant employees are absolutely indispensable on the scene of production, and how to convince its dwindling membership, and the public at large, that unions are equally so and that the \u201cproductivity\u201d of the obsolete 124 has \u201cgone up.\u201d This situation, repeated on a smaller or grander scale in virtually every industry in the country, has led to an economic farce. It is now being solemnly enacted by a full cast of distinguished national characters, who are beginning to look as if they had sleepwalked on stage in their nightshirts, or were enacting an American version of the Kabuki dance.<\/p>\n

The political personages, of course, are in most imminent danger of losing face. Congress, in its wisdom, has decreed how goods and services in the second half of the 20th<\/sup> century are to be produced. They are to be produced through full employment<\/em> of the labor force. This is another way of declaring that economic goods and services are created mainly or entirely by human labor. A century ago, reality would not have so rudely contradicted the Congressional edict. Then labor was<\/em><\/strong> the most important factor of production. When road building was a job for picks and shovels, the traditional sign \u201cMen at Work\u201d told most of the truth. With today\u2019s vast array of construction machinery, \u201cMachines at Work\u201d would be far more honestly descriptive \u2014 with perhaps, in parenthesis, \u201cMen Also Present.\u201d<\/p>\n

The Congressional idea of how goods and services ought<\/em> to be produced is at variance with the facts of technology as well as its logic. Let us seek this logic in the most simple class of machines, the household appliances.<\/p>\n

Suppose we are reading the evening\u2019s news; the following advertisement catches our eye:<\/p>\n

SENSATIONAL NEW SISYPHUS<\/em><\/p>\n

MAKES HOUSEHOLD CHORES<\/p>\n

TAKE TWICE THE TIME<\/p>\n

Why waste your potential? Why read, watch TV, play golf, pursue hobbies and other time-killers when the SISYPHUS MACHINE can keep you fully employed up to 16 hours a day?<\/p>\n

Scrubbing, cleaning, cooking . . . now, they all take longer<\/em>. Thanks to sensational new SISYPHUS, you can spend almost all<\/em> your waking hours in meaningful, productive work.<\/p>\n

SISIPHUS gives you that \u201cretired feeling.\u201d Banishes boredom. Makes you sleep like an ox. Best of all, SISYPHUS gives you that inert satisfaction of knowing that you are using 96.5 percent of your woman-power potential.<\/p>\n

Remember SISYPHUS means work!<\/p>\n

Only $89.50<\/p>\n

Presidents\u2019 Council of Economic Advisers<\/p>\n

Seal of Approval<\/p>\n

The original Sisyphus was condemned to push a stone up a mountainside for all eternity; this was the Greek idea of hell. Even today, committed as we are to the manpower myth, the Sisyphus machine would be something less than a best seller. Men do not invent machines to make toil.<\/p>\n

Embarrassing as it is to have to state such a commonplace, the purpose of the machine is to eliminate work; the more work it eliminates, the greater its success. Americans, in particular, have always delighted in their \u201clabor-saving devices.\u201d However enthusiastically our government goes in for \u201ccreating jobs\u201d in principle, we may be sure this policy will never get as far as the patent office.<\/p>\n

When our Secretary of Labor asserts: \u201cI think we are all absolutely dependent on technological development for full employment,\u201d he is using Sisyphus-machine logic. Full employment is the antithesis of technological development. They are horses pulling in opposite directions. We have only to imagine them both tied to our economy to envision the final result.<\/p>\n

If job-oriented thinking is unrealistic now, it will be even more so in the future. What about the men and women whose jobs are being automated? How are they to produce their livelihoods? This is the momentous question technology is forcing on us, but we can only chorus helplessly with Secretary of Labor Wirtz: \u201cWe don\u2019t have any well-worked-out answers.\u201d And as long as we insist on looking at automation through the pink spetacles of the manpower myth, we are not likely to have any.<\/p>\n

We must relinquish the manpower myth. We must cut the anthropomorphic umbilical cord and admit that capital instruments independently exist. The fact that they will probably always require some human attention does not change their essential separateness. Then we must admit that the goods and services machines produce are just as truly goods and services as those human labor produces; just as moral, just as real, just as useful, just as legitimate. Many things go into the excellence of a fabric, an automobile engine, a haute couture<\/em> dress, but human sweat is not one of them. In a current fashion advertisement, a pedantic gentleman tells a pretty woman that the \u201cextraordinary textured pattern\u201d of her white robe was put in without needles or thread or even a sewing machine. \u201cI couldn\u2019t care less if they did it with chemistry. It\u2019s the look I love!\u201d is her pragmatic reply. Human labor adds to the cost of a product, but it is no mystical enhancer of value. The question is not whether a thing was produced by the human factor or the nonhuman factor; it is whether we like it, find it useful, and want it.<\/p>\n

Every economist should repeat firmly to himself every night before he falls asleep: \u201cThere are two<\/em><\/strong> factors of production. There are two<\/em><\/strong> factors of production.\u201d When this truth has percolated through enough craniums, the answer to the automation crisis will suddenly be as obvious as the machines themselves.<\/p>\n

If the economy no longer needs our personal toil, there is another way for us to be economically productive. We can own the capital instruments that are doing the producing.<\/em> If technology is obsoleting the human factor, and increasing the productivity of the nonhuman factor, isn\u2019t this just common sense?<\/p>\n

But there is a difficulty. Labor power is diffused throughout society by nature; everybody gets it at birth. But nobody comes into the world owning capital. Property is a social arrangement, conferred by custom and law. Even in the slave-owning societies of the past, the master could not extract the labor power of his slaves and concentrate it in his own person. Capital is different. Theoretically, one person could own it all. And under our present financial customs that decree \u201che who has gits,\u201d ownership of capital is automatically invested in a very small fraction of our total population.<\/p>\n

Most of us, like the San Francisco deliveryman, owe instead of own. And the less the economy needs our labor, the less able we are to \u201csave\u201d our way to capital ownership. Thus the very people who most need to own capital have the least chance of ever getting any.<\/p>\n

This is the paradox in which the solution to the automation crisis must be sought. We must adapt our financial machinery to enable people without savings to buy and pay for the machines that are automating their labor. Dividends \u2014 like wages \u2014 are income. Dividends could also be a source of mass purchasing power if stockholders were the people with unsatisfied economic needs and wants \u2014 i.e., if there were many of them instead of few, if their holdings were of sufficient size to produce significant income and if corporate earnings were actually paid more fully to stockholders. Standard Item\u2019s current quarterly dividend of $1.75 represents, of course, only a fraction of what the stockholder would<\/em><\/strong> receive if the earnings represented by his capital were not diverted by corporate income taxes and other government and corporate policies.<\/p>\n

Years ago an automobile executive showed Walter Reuther Detroit\u2019s first mechanized assembly line. Reuther\u2019s crack is now famous: \u201cBut will those machines buy cars?\u201d When we have buried the manpower myth, perhaps we can at last supply the logical riposte that did not occur to the executive. \u201cNo, Walter, it is the owners of machines who buy cars. And given enough of them \u2014 assuming they receive the income their private ownership entitles them to \u2014 they can buy everything the machines can turn out.\u201d<\/p>\n

* Patricia Hetter, Co-Author<\/strong><\/p>\n

\u2014 Originally published in CHALLENGE, The Magazine of Economic Affairs, April, 1965<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

by Louis O. 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