“Nothing technology promises ever works out as planned,” said a participant at last night’s dinner.
“Where is the paperless office? The whole idea of progress is a fraud. Life doesn’t really work that way. Secularism preaches that every step is a step forward. But it’s not true; half the time we are going backwards. Each generation and each person has to find their own way – anew.”
Their way into Heaven, perhaps. But there’s no denying technological progress. Every new generation stands on the shoulders of the one that came before it.
We thought of the aeroplane. There was an invention that made a difference. And what a success! Scarcely a generation had passed since the first manned flight at Kitty Hawk, North Carolina, and the sky over London was full of planes – dropping bombs. Now, that’s progress.
And what of the Internet? It was supposed to allow us to stay at home and work. But now, we use the Internet to plan our trips and buy our aeroplane tickets.
Today, after much Internet conversation, your editor has gotten on a plane and come back to Ireland. He left London in the morning. He will return to London in the evening. By plane, of course; everywhere he goes he is leaving a carbon footprint as big as Sasquatch.
The more man gets, the more he wants. If he can communicate via Internet…or via aeroplane…he’ll do both. The Internet Revolution was supposed to reduce the demand for fossil fuel. Finally, man had conquered distance. You no longer needed to commute to the office…or halfway around the globe. You could have your meeting, and do your work, without ever leaving home.
But what has happened? Now people work from the home…and the office! And still they travel. They want it all – bigger houses, more stuff, more vacations…and they want to work harder too.
But something went wrong with this model in America. In the last quarter of the last century, people worked harder than ever. What did it get them? Nothing. Nobody realised it, but they had reached an era of declining marginal utility of work.
Ah yes…dear reader, these fundamental laws and principles of economics have applications beyond what their discoverers expected. We know the principle applies to investing; you can only apply so much money to a project; after that, the returns begin to fall off. Imagine yourself building a hotel, for example. You build a couple of rooms; maybe you’ll get 100% occupancy. So you add more and more rooms. There are only so many people who want hotel rooms…so occupancy rates – and your rate of return – fall. “Declining marginal utility,” economists call it.
Well, no one ever thought the rule applied to the sweat of an entire nation. But since the ’70s, the average person in America has been working more and more hours…and actually getting less real benefit out of them. If you torture them enough, you can get numbers to say anything you want. Besides, they’re natural born liars; don’t trust them. Still, occasionally they tell you something interesting. And now they’re saying that the returns from labour have gone down.
This little factoid is as welcome as a flu sufferer on a crowded aeroplane. People turn their backs. What else can they do?
According to the theory, modern capitalism – especially in its dynamic American version…that is, served up with plenty of gadgets and new technology – is supposed to be making us rich. So strongly do people believe it that they ignore the evidence of their own balance sheets. So strongly do they believe it that they elect candidates who offer more of it. So strongly do they believe it that it that they spend their future wealth even before they make it. They are victims of their theories, dear reader.
Capitalism – at least as we define it – is merely a system where individuals are allowed to own things and decide amongst themselves what to do with them. It doesn’t necessarily get people what they want. But it usually gets them what they deserve.
That’s the problem, of course. America’s middle class won’t like what it gets.
Markets and Money