The economics and ethics of idleness - Philosophy of Justice

American Journal of Economics and Sociology, The, Dec, 2001 by James Bughanan

JAMES BUGHANAN (*)

I

Introduction

I PROPOSE TO use this occasion to explore, in an admittedly speculative fashion, a subject that has come increasingly to occupy my own interest and which also, in a special sense, is related to the interest and efforts of Henry George, whom this lecture series commemorates. I want to concentrate attention on idleness in the use of potentially productive resources, and particularly on the ethical aspects of individuals' choices concerning the margins of productive employment. This subject matter has been neglected in modern macroeconomic analysis, which has embodied the presumption that potentially productive resources will be employed optimally, within the constraints faced by individual resource owners, so long as the choice of employment is voluntary. The whole Keynesian macroeconomic emphasis, which came to occupy the attention of economists in mid-century, and which did have profound political impact, was centered on involuntary unemployment, or, to use my terminology in this paper, on idleness that is no t chosen or preferred by resource owners.

Furthermore, the modern emphasis of economists, to the extent that they have concerned themselves at all with idleness in resource use, has been almost exclusively confined to labor; little or no attention has been given to possible idleness in the utilization of non-labor resources, something that did concern Henry George a century ago, at least indirectly.

It will first be necessary to define idleness, which I shall do in Section II. I shall then proceed, in Section III, to show that there are ethical implications of individual choices in resource utilization. Initially, I shall develop the analysis in application to labor or work input. In Section IV, I shall briefly sketch out the outlines of an argument that I have developed more fully elsewhere, an argument to the effect that voluntary choices made by resource owners need not be optimal, an argument that directly counters the conventional wisdom in economic theory. In Section V, I shift attention from labor to non-labor resources, which was, of course, the central focus of the efforts of Henry George, especially as applied to land. Finally, in Section VI, I suggest some interesting policy implications that seem to follow from the whole exercise.

II

Idleness Defined

PRECISELY WHAT DO we mean when we say that a resource, or resource unit, remains "idle"? We define idleness by its opposite; a resource is idle when it is not "at work," when it is not "employed." More generally, we can say that a resource is "idle" when it is not being used to produce value that it might otherwise produce. Such generalized understandings are satisfactory for most purposes, but they are not sufficiently specific for my purposes here.

Note, in particular, that the definition suggested could be used in application to the activities of Robinson Crusoe, all alone on his island, and totally outside any nexus of interaction, economic, political, or social, with other human beings. Crusoe may, of course, work hard and employ his own talents and time to produce something of value to himself. In some descriptive sense, we could measure Crusoe's idleness as distinguished from his work. But his choices in this respect could not carry ethical content since there are no others who could possibly be affected. And Crusoe might, for example, spend his time and energy, his "work," building sandcastles that are swept away by each evening's tides.

I want to introduce a more useful meaning of idleness by opposing this use of resources to "work in an interactive relationship with others" or "employment in producing value for others." In this more restricted, but more useful, definition, a person is idle when and to the extent that he or she withholds work effort from the market, even if, on some "private island," non-marketable and impermanent sandcastles are constructed. A resource, or resource unit, that can produce value when placed on the market, that is withheld from the market, or from own production that allows consumption purchases on the market to be replaced, is idle. The subjective value that may be produced for the resource owner is irrelevant.

I also want to rule out of consideration any non-voluntary idleness in the use of resources. Involuntary idleness may be important in many settings, but this sort of idleness is not my concern in this paper. I shall presume, for the analysis and discussion that follows, that all owners of resources may, if they choose to do so, place such resources in employment. There exists a parametric price per unit of resource supplied to the market and the owner-supplier may adjust amounts to this price, from zero to some employment maximum (or idleness minimum).

As noted, I shall initially develop the argument in application to labor, but I do not restrict the analysis, as such. Idleness can characterize the utilization of any resource, labor or non-labor, and no matter how classified. I shall make the appropriate extensions as required. There are differences between labor and non-labor resource units that are worthy of notice, however, differences that offer some explanation of economists' concentration on labor. The presumption is that, for any non-labor resource, under the assumption that resource owners face parametric prices in the market, voluntary choices will always lead to maximum resource utilization, or, stated conversely, to minimum idleness. I shall demonstrate that this conclusion does not follow if we are careful to remain with the definition of idleness stated above.