Not so many years ago, many people — including governments and businesses — thought that a rapid increase in individual and corporate productivity would lead to an explosion of leisure time; that we would all be working only two or three days each week, with the rest earmarked for leisure. There were concerns about how people would spend all this free time, and whether it would produce fresh possibilities for businesses, or some kind of social unrest. We know now, of course, that it didn’t happen. Far from working less, people are working even longer hours, despite all the increases in productivity over the past few decades. Why didn’t it happen? I think the answer lies in the question that I started with: what do you do with the time and effort saved by increasing your productivity? Do you spend it; and, if you do, what do you buy? That question remains critical for all of us.
The rise of consumer-driven economies . . .
One way of spending the time and effort saved by greater productivity, of course, is to produce still more. That’s become the orthodox approach. As productivity rises, you don’t allow employees to work less, you use the effort freed by improving processes and systems to add to production. By this definition, for an organization to be more productive means to increase output indefinitely; preferably reducing unit costs at the same time. In personal terms, it means doing more and more and increasing your earnings as a result. Where is all this extra production to go? People must buy it to keep the whole cycle in place. That’s what has produced a society in which people work longer and harder in order to buy more; and an economy that depends on this process continuing — even increasing. If growth is driven by consumption, consumption must increase — not just by increasing overall wealth, but by encouraging all of us to buy more and more, regardless of need. Of course, one way to speed up the process is to make credit as easy as possible, so that mere income no longer limits what people can buy. We’re seeing the result of that answer today, and it isn’t very comfortable.
. . . increases the need for consumption-driven individuals
At an individual level, the same process drives those who work long hours to increase their income; then spend it on consumer goods and expensive, designer labels. In many cases, the possession of the latest, flashiest, and most expensive product becomes an end in itself: a display of personal power and success, much like a peacock spreading its magnificent tail to demonstrate dominance. It has to be this way, since all the time allocated to working and earning leaves no time for spending money on vacations or leisure time or anything that cannot be purchased in an instant. Easy credit allowed such people to leverage their spending power, running up huge debts in the process. Some did it for display, others as a means to earn still more by riding on the back of the explosion in house prices. Then still more people copied them, especially by buying real estate, whether as a home or an investment. For a while, they were all the darlings of the economy: the driving force behind boom times for corporations and shareholders. Now things have gone wrong, there are fears that, by stopping such manic spending, consumers will drive world economies into a painful recession. If people don’t consume, companies can’t produce, and the entire cycle comes to a halt.
It’s all about choice
Let’s bring this down to the personal level. Suppose you increase your own productivity, either by using one of the many techniques available or just by becoming more focused and better organized. You can now do what you used to do in less time and with less effort. What will you do with the “savings?”
You can “spend” them — by working just as much, or more, and increasing your monetary earnings. You will then have more cash, but still less time to enjoy it: the typical position of most people today. This answer honors the notion built into the Puritan Work Ethic that idleness causes moral hazards and work is good in itself. It’s what the US economy has become dependent upon. You can spend them on leisure. You can keep your output (and probably your earnings) at the same level and devote the extra time to something else, whether that’s pleasure, volunteer activities, family time, or simply hanging out and enjoying life. Some people will label you as idle and lazy, but you don’t have to accept either description. Your choice will, however, depress activity in any consumer-based economy — and the earnings of a good many corporations as a result. You can save them. Yes, you can “bank” your extra time — even invest it.
How do you do this? By allocating the time to something that will bring you “interest” in terms of future increases in earnings, productivity, or enjoyment. This something is called learning. Time spent on learning will improve your ability to do whatever you choose in the future. It’s the equivalent of a corporation using productivity savings to finance research and development that will itself result in new products and fresh ways to become still more productive. That won’t help the consumer sector of the economy in the short-term, but it will boost long-term creativity and add to activity in the education sector. It will also likely improve the chances of the nation leading the next wave of economic activity, based on products that haven’t yet been invented.
Think about it carefully
The choice of how we spend our productivity savings is crucial for the way we will live in the future, both at the personal level and for society as a whole. It’s worth taking some time to think about it quite carefully. As with all savings, there will always be people eager to take what you have and use it for their own short-term gain. My strong suggestion is that you hold on and make your own decision. As today’s financial woes have shown, jumping into simple answers and spending productivity gains right away can leave you with an almighty hangover. Photo credit: Artful Scribe at Morguefile.com
