Timesizing® vs. DownsizingTM
© 2014  Philip Hyde, The Timesizing Wire, Box 117, Harvard Sq PO, Cambridge MA 02238 USA 617-623-8080 - HOMEPAGE

A System Requirement in the Age of Robotics

*Henry Ford: "Let's see you unionize these robots." Walter Reuther: "Let's see you sell them cars."

Let's give a member of the power elite the first crack at articulating this counter-intuitive fact. In the midst of the Great Depression, Edward Filene, founder of Filene's department stores, wrote in Successful Living in This Machine Age:

"Mass production is not simply large-scale production. It is large-scale production based upon a clear understanding that increased production demands increased buying, and that the greatest total profits can be obtained only if the masses [a CEO using a Marxist term?!] can and do enjoy a higher and ever higher standard of living. For selfish business reasons, therefore, genuine mass production industries must make prices lower and lower and wages higher and higher, while constantly shortening the workday and bringing to the masses not only more money but more time in which to use and enjoy the ever-increaing volume of industrial products [and services]. Mass production...is liberating the masses..from the struggle for mere existence and enabling them..to give their attention to more distinctly human problems."
(From Floyd Norris's article "Don't believe the number? Consider the source" in 11/07/2014 New York Times, B1)
With updated wording... real economic growth is not simply rising productivity. It is rising marketable productivity based upon rising consumption which demands rising consumer spending, which demands rising consumer earning, which demands rising consumer employment, which during the age of machines-automation-robotics demands spreading the shrinking amount of private-sector human employment via workweek reduction. And to put that whole chain in a nutshell, you can't get growth or upsizing by downsizing, but you can by responding to technology by cutting hours to maintain your workforce, and cutting hours deeper to spread the work and grow your workforce - and consumer base. They don't call it "consumer base" for nothing and it's based on the employment basement. And without it there is no fundamental possibility whatsoever of real economic growth.

What Filene didn't mention is that this chain of events starts with something of even more intense interest to the decision-makers in the topmost brackets than "mass production" or "real economic growth." It starts with profitable or at least fundamentally solid investments - which demand real economic growth and so on along the rest of the chain.

Without real economic growth and the rest of the chain it depends on finalizing in workweek reduction during the introduction of automation and robotics, the whole process shifts into reverse, from back to front, and you wind up, instead of with a diagonally upward spiral of growth, a diagonally downward spiral culminating in weakening across-the-board investments. But one big factor conceals this weakening. The mounting labor surplus and sinking wages at the end of the chain allow unprecedented percentages of the money supply to funnel up to the topmost brackets, who of course have taken care to get little small print and hidden fees throughout the economy ratcheting revenue up to them. They need more nummerous and larger solid investments with fundamental support at a time when there is lessening solidity and weakening fundamentals. So the real problem that an unreduced or lengthening workweek creates for the rich is that it cuts their choice of new attractive investments, and weakens and destabilizes the investments they already have. They wind up pyramiding the stock market for lack of alternatives. Wall Street counters by dreaming up a confusing diversity of supposedly cleverer and foolproof and technologically supported investments like derivatives and hedge funds and swaps and CDOs and single stock futures, but in the end they're all bogus and hollow as revealed when Wall Street goes to the extremes of unchecked-background (NINJA) loans and outright "liars' loans" in its desperation for growth of its at-base lending business in the face of ever-fewer qualified borrowers. The whole investment landscape inflates with happy helium and drifts off planet surface, and we wind up with inflated investments denominated in insubstantial currencies.

Back to the words of Wall Streeters themselves: "On the day of the midterm elections came the news that Paul Singer, a hedge fund billionaire and top Republican donor, thinks there is a lot of faking going on now. He sees economic disaster ahead. 'Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth,' Mr. Singer wrote to his investors, according to a report by Bloomberg News." And in the same article (Floyd Norris's "Don't believe the number? Consider the source," 11/07/2014 NYT, B1), "The economic statistics are fake. There is no real economic recovery. That refrain was heard in 2012, when Jack Welch, the former chief executive of General Electric, claimed that a reported decline in unemployment was 'unbelievable.' He added, 'These Chicago guys will do anything,' referring to the Obama administration." It seems even Wall Streeters can come up with the truth if they can blame it on government. And don't forget Warren Buffett's "Tax the Rich!" including himself.

As jobs disappeared in agriculture, people could run to a job in manufacturing. As manufacturing got automated, people could run to a job in services. But now services are getting robotized, there's nowhere to run. So the do-nothing idea that "technology creates more jobs than it destroys" isn't working else, Where Are The Jobs??

And as for the Growth Will Provide Jobs, where are the full-time jobs with good pay?? What about pay will go up with productivity? Well productivity has gone up by leaps and bounds and pay hasn't. What about pay and job access will go up with education? More and more people, young and old, have been going back to school during and after the Great Recession and merely racking up student debt with no job. And as for the Do Makework idea, private-sector makework (posterchild: trucking) isn't providing enough jobs. And public-sector makework isn't providing enough jobs - including military (wars too small and robotized) and healthcare (no epidemics have had the same job increase and jobseeker decrease as the Black Death despite AIDS, Ebola and a list of others, and then there's the GOP resistance to public-sector involvement despite the failure of the massive reduplication in the private-sector to deliver sufficient job increase or jobseeker decrease).

That only leaves one thing. Braving the ridicule of all those intimidating but superficial economists and their sneer about the Lump of Labor Fallacy, and going for worksharing, now established in 28 of the U.S. states and much of Europe, especially Germany ("Kurzarbeit") and beyond. Worksharing tends to be designed for temporary emergency use. "Beyond" would come up with a permanent sustainable design such as Timesizing.

As Sherlock Holmes said, once you eliminate all the probable and improbable solutions, you have to look at the impossible solutions. And workweek reduction is far from impossible, since the United States (and much of the rest of the world) DID it haphazardly from 1840 to 1940, actually systematically those last three years, 1938-40. And it worked. And it's worked for Lincoln Electric and hundreds of other companies for decades. And despite the massive academic attack on France for its "radical" and "failed" 35-hour workweek, France has shorter hours, longer vacations, better healthcare, and higher productivity than the U.S. and there are hundreds of thousands of perfectly smooth-working 35-hour jobs throughout the economies of the U.S. and the U.K. that the talking heads carefully overlook. It remains only for the super-rich to remove the taboo on discussing it and get it back on the table before their huge groundless stock bubble bursts again.


There are three layers of sophistication in economics today:

1. Most economists are still in the surface structure. If they're what's currently misnamed "conservative," they think what's holding us back are too-high taxes, so lower them; too many government regulations, including tariffs against US-Industry-bashing imports, so cut them; and too many shiftless Americans are "opting" for welfare and disability, so drop them. If they're currently misnamed "liberal," they think what's holding us back is too weak a safety net so deepen the $17 trillion government debt and the $ trillion deficit to handout to them more moola and it'll help spending too; and there's too low a minimum wage so raise it; and there's too little low-income housing so increase it...

2. A few economists have made it to the upper surface structure and concluded that the super-rich create recession and depression by funneling into their own bulging pockets unlimited percentages of the money supply, and basicallly taking it out of circulation, at least out of the warpspeed circulation of the nonrich, especially the bottom brackets who spend 100% of their income - but these few economists have no market-friendly solution, they want only higher graduated taxes on the superrich or deeper debt for taxpayers in general. Krugman has now (Nov.2014) entered this group, glimpsing the coagulation of the money supply but stopping short of an account of the mechanism that funnels money to the wealthy and a simple market-based solution, sticking back in the realm of increased government spending on additional makework.

3. Almost no one has made it to the bottom of the matter where a correct identification is made of the mechanism that allows unlimited percentages of the money supply to funnel out of circulation in the topmost brackets by default...labor surplus...and the simple market-based solution...workweek reduction...with bonus points for realizing that workweek adjustment is no use without an efficient overtime design that effectively transforms chronic OT into training and hiring.

And without the traditional "solutions" of war and plague to decrease the labor supply, or public and private sector makework to increase the employment supply - since current global population levels are pushing that makework-based overproduction unsustainably against many biosphere limits - as pointed out by the Limits to Growth study in 1972 - we are left, perforce, with only one safe and sustainable approach..."doing more with less" by employing more consumers doing more spending based on less human employment - and experiencing a condition of more people with more free time and money. Workweek reduction has become a system requirement.

And satisfying that sys req is not only in the top brackets' interest because of the resulting increase of social cohesion and safe dismantelability of much of today's governments which are devoted to making up for the lack of sufficient free-market employment but also from a much greater choice of stable and sustainable - and non-illusorily profitable - investment targets. The greater social cohesion greatly enhances the personal security of the top brackets and allows less spending and inconvenience on security systems and restriction of personal circulation in terms of exposure to non-rich. It allows more substance to the wealthy's dream of normalcy, and less stretch in their narratives to themselves about how they're not actually all that abnormal, stretch that can cause medical and psychological problems if only hypochondia.

Thus emergency worksharing and sustainable timesizing are Required by the overall economic System to enhance system feedback and allow the wealthy decisionmakers to return to planet Earth and receive some relevant feedback, especially of the important course-adjusting kind namely negative feedback, very little of which they naturally now receive. Workweek reduction with corresponding overtime-to-training&jobs conversion allows them to Get Over their ambivalent attitude toward and impact on government (and taxpaying in general and nonrich taxpayers in particular), needing it for investment backup and bailout and attacking it for self-funding with taxes, a very inefficient and wasteful contradiction.

For more information, see our handbook Timesizing, Not Downsizing (140 pages) available for US$12, plus $3 shipping, from:   Phil Hyde, Timesizing.com, Box 117, Harvard Sq PO, Cambridge, Mass. 02238, USA.

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