The Paradox of Efficiency

At this point I have described what we might call structural problems with a system of exchange - that is, once we have imagined a system of exchange, these problems are inherently built into that imagined system, and the system can't be coherently imagined without them existing. But I also want to talk about the problems caused by structural motivations, which are the things that people are typically motivated to do in such a system.

The biggest of these I'm going to call the paradox of efficiency. This is a tension that exists between workers, employers and customers when everyone is trying to obtain the best value, and especially when everyone is trying to accrue exchange capacity. This comes to a head particularly when considering improvements in labour efficiency.

Everyone wants to accrue exchange capacity

One of the main things motivated by the exchange is to accrue exchange capacity. People need things they can exchange if they are going to be able to get the things that they want, and because they may want to save up for big purchases (including ones that they haven't planned yet) or in case of disaster (such as illness or injury or destruction of their home), accruing exchange capacity is important.

Individuals are not the only ones who are motivated to accrue exchange capacity; businesses also have the same motivation. They need to save to make new investments in the business, to expand, or to weather unexpected disaster or a few months of bad business. The owners of the business, depending on how the business is structured, also get their personal exchange capacity from the exchange capacity of the business itself.

Like other economic actors, a business has income and expenses. The income can come from selling products, and the expenses include paying for materials and labour. To accrue as much exchange capacity as possible, a business wants to maximise income, and minimise expenses. On the other hand, workers want the same thing - to maximise income in order to accrue exchange capacity. Therefore, workers and businesses have a natural tension as they compete for this exchange capacity.

Labour efficiency

This is most starkly relevant when there are improvements in labour efficiency. An improvement in labour efficiency means that the same work - or more - can be done with less labour.

In an intuitive sense, improvements in labour efficiency sounds like a beneficial thing. Society will be able to produce more stuff with less work, meaning more abundance and more leisure time or time for other work. And improvements in labour efficiency are a good thing. Once upon a time it took almost half the workers in the United States to produce enough food for everyone, and now it takes less than 10% of the workers, meaning that there are workers freed up for all sorts of other tasks that produce a good quality of life.

Intuitively, businesses are motivated towards labour efficiency because they want to lower costs - if they can produce the same or better output with less labour costs, that would allow them to accrue more exchange capacity (perhaps because they keep their pricing the same and take more profit, or lower their price and gain more sales).

Similarly, we might expect that labour would have happy with labour efficiency, because it would free them from arduous work and be generally more nenficial for the society they live in.

Tensions

But there's actually a tension in labuor efficiency, because an improvement in labour efficiency means that there is less need for labour, and with less need for labour - that is, less hours for workers or less workers altogether - workers lose out on accruing exchange capacity.

So in some sense workers might be opposed to labour efficiency, because, in a system of exchange, it has negative consequences for them. This tension shows up in a number of ways.

First, workers might not be interested in operating efficiently. If a worker is paid by the hour and not by output, taking their time might net them more pay. Conversely, if a worker's performance is assessed by meeting a quota, they might complete that quota and then secretly stop working, providing them with leisure time. If the employers had knowledge of the efficiency with which they met the quota, they might up the quota (without necessarily upping the pay), which would put the worker in a worse position.

Third, a worker might discover an efficiency improvement, and keep it to themselves. It might help them complete their quota more easily and give them more leisure time when it is secret, but increase their quota or cut their hours if it were public.

Fourth, a collective of workers might organise to prevent a labour efficiency from being implemented, or might organise to place restrictions on the efficiency or improve the pay of the workers in light of the efficiency. These steps are taken to protect workers, but they generally stifle efficiency.

The paradox

Labour efficiencies should straightforwardly be a benefit for society and, therefore, something that people strive to implement and which benefits all involved. The structure of the exchange, however, interrupts and frustrates this process. That's because at least some people value the exchange-value of their jobs over the use-value of their jobs, and they would rather keep their job in a less productive status because it benefits their exchange capacity. In this sense, some of the work they are doing becomes "busy work", and their job perhaps becomes an entirely "busy job". Improvements in labour efficiency form a type of paradox because in a system of exchange they are not necessarily beneficial.