Thursday, January 26, 2012

The Twilight of the Leisure Class

Conspicuous leisure, conspicuous waste, conspicuous consumption. Veblen coins these terms in Theory of the Leisure Class to describe the strategies the noble and priestly classes employ to assert their status. Veblen observes that a life of leisure is the readiest evidence of the superior class, while anything having to do with the work-a-day world of earning a living is the occupation of the inferior class.

This argument does not ring true for today's society. If someone gave you the advice, “If you want to show that you are better than everyone else, then hang around obviously doing nothing productive, and even better, waste resources.” you would think they were utterly pathetic. And the fact that it doesn't ring true means we are different from many societies that have passed before us. We are seeing the twilight of conspicuous leisure, and of conspicuous waste and conspicuous consumption as well.

For the first two this is almost immediately evident. Leisure, conspicuous or not, is no longer viewed with envy.  Late-night infomercials might depict a life on a yacht free from work and worry as the ideal end result of the various get-rich-quick schemes, but the wealthy in society no longer are a class at leisure. The “one-percenters” work for a living, and the extremely wealthy who do not work for a living instead work for philanthropy. (So maybe we can add conspicuous philanthropy to the list, though the wealthy could then fairly complain that they can't win no matter what they do).

What goes for conspicuous leisure goes even more so for conspicuous waste. In our ecologically-conscious world, the notion of treating resources with disdain no longer signals pecuniary superiority, but rather boorishness and profligacy.  Our antipathy towards waste reflects in us being more frugal in what we consume. Veblen made a tight connection between conspicuous consumption and conspicuous waste – the former almost necessarily leads to the latter, so an end to the latter cannot help but reduce the former.

For conspicuous consumption, all you have to do is look around using a perspective from the consumption and advertising over the past decades when advertising appealed to being the pride of your family and the envy of you neighbors, to projecting success and culture, to commanding respect.  In the snail’s pace of social change, it wasn’t so long ago that we had the literal unveiling of the new year's automobiles, the adding and decreasing of chrome bumpers and ornaments, the rising and falling of tail fins, with the conspicuous consumer trading in for the new model every year. Now, with the exception of a smattering of high-end goods and designer labels, advertising focuses on the qualities of function and design; how much fun you can have with the product, how it will make your life easier or make you more attractive. If it is appealing to any image, it is not the one of “If you buy this, people will see that you must be rich and important” that was so dominant in the past. 

The end of the consumption arms race
The decline in conspicuous leisure knocks at least one leg out of the the relationship between tax breaks for the rich and job creation, because this relationship depends on the notion that if the rich, who are taken to be the job creators, are taxed more they will work less. But if status is evoked through work rather than leisure, then that relationship does not hold.  I do not know of the empirical work that has established this link in the past, but even if it exists, I question its relevance today. It is hard for me to imagine a CEO walking away from his job because his $25 million salary payday just nets him $15 million rather than $18 million.  Or for that matter not working as hard.  But in any case, one reason to walk away, the prestige of conspicuous leisure, has disappeared with the changing ethos of our society.

A reduction in the demand for conspicuous consumption also has implications for the economy. A drop in conspicuous consumption, not to mention in conspicuous waste, means a reduced demand for consumption. Even more than that, it means a change in the shape of the demand curve. As Veblen points out, “if the incentive to accumulation were the want of subsistence or of physical comfort, then the aggregate economic wants of a community might conceivably be satisfied at some point in the advance of industrial efficiency; but since the struggle is substantially a race for reputability on the basis of an invidious comparison, no approach to a definitive attainment is possible”. An end to conspicuous consumption means an end to a consumption arms race where demand can never be sated. There really is only so much you can eat, wear and drive, or click and stream, so if we take the “conspicuous” out of the equation we have a society going down a much different economic path.  I don't know how much of our production was geared toward deliberate but unnecessary discrimination of products, but whatever it was it is lower now.  And the higher end meant higher profit margins.  As everyone makes do with the functional commodity item, then by the definition of a commodity item the profits shrink.

Add to that a reduction in conspicuous leisure, and indeed more than that, having conspicuous work be what matters, and you have both lower demand for products and more people wanting to work.

Why Veblen's world is waning

Much of what we now demand simply does not fit in the conspicuous consumption equation. In particular, the tools of the virtual world, the iPhones and iMacs, the software and Internet, do not lend themselves to conspicuous consumption, any more than do light bulbs or electric outlets. Granted those on the lower rungs spend more of their income on the consumption of real goods than do those on the top rungs. And the share of income on goods that by nature are in limited supply, private goods, land, wine and art, even social status, is greater for the top rungs than for the lower. But for both, on the margin (and increasingly so over time ) consumption is becoming oriented more toward virtual goods – consuming YouTube videos, tweets and social networks, games and reality TV shows – and the hardware to access them. I suppose someone could come out with designer label, jewel-encrusted iPhones, but that just doesn’t seem to be the way things are heading. And how do you conspicuously consume what is out there for ready for the taking?

More important is that we now have better ways of establishing people’s positions in the social or pecuniary pecking order, for example by Googling them. And if you want to make a statement you don’t have to do it through invidious consumption of real goods, you can do it more effectively by leveraging the virtual world – YouTube, any of the various forms of social media, or a blog. Not that Gucci and Chanel are going to go out of business, but for most people that sort of status statement is becoming increasingly irrelevant. No matter what you are wearing and driving, a far better picture of you and your status is just a few clicks away. You don't have to drive a Ferrari to let everyone know you are rich and successful. If you are driving a Ferrari, what it will convey is that you – who as everyone who cares to Google you knows is worth tons of money – must like Ferraris.

(And, in any case, is the class distinction today the one that Veblen observed, one of direct overlord and humble worker? Do people give the same deference to those who can demonstrate the ability to indiscriminately buy whatever they want, to hang around the yacht club while others are working, to waste resources without a thought? In some quarters the objective is inconspicuous consumption).

The consummation of the industrial age
This is the way the Industrial Revolution was set up: Mass production of cheap, identical goods replacing the work of the artisan.  The entire point of industrialization, and what made the industrial revolution successful, was having production turn from luxury items for the rich to common-day products mass produced for the common masses.

As Mumford points out, industrialization changes what society values. The industrial society values what is new and fresh. Age goes hand-in-hand with rarity, but the industrial age puts an emphasis on the technologically advanced, the brand-new rather than on the rare. The industrial society also values conformity, (though at the same time decrying conformity and the resulting alienation of the crowd). This is because the industrial process is at its best, with the lowest cost and highest quality, when it is humming along producing many of the same product. There are those who will prefer a Rolls for other than purposes of conspicuous consumption, but even so will have to admit that any number of computer-designed, robot-welded cars rolling off the assembly line – and many cars must roll off to amortize the costs of development and production – are functionally superior. This is all the more true as we move into the technology space, to computers, phones and software, where newer and conforming products are not only better, but necessary. These are products that simply do not relate to the notions of sentimentality and well-worn comfort. 

Advertising post-conspicuous consumption
Industrialization is leading to a continuing convergence between the products that are consumed by the wealthy and the common man. To generate the fodder for conspicuous consumption, advertisers and marketers have waged a valiant battle for several generations against the process of industrialization by maintaining distinctions between functionally equivalent goods. Now advertising is beginning to pick its fights elsewhere.  One reason is that increasingly the medium of advertising is the Internet, either directly or because the next stop when an ad catches someone’s eye is to go to the Internet, and the Internet, and thus the ads, is more about information than about conveying status or image. Another reason is that unless the marketers try very hard, many goods are clearly going to be identical between the very rich and the not so rich. There was a time when cars were the focal point for conspicuous consumption; having a car singled out the wealthy, then having a car with chrome and fins. Now I drive an Acura TL-S and so does Mark Zuckerberg. Having a refrigerator was once the province of the wealthy, now you and I can have the same kitchen appliances as an ostentatious Donald Trump – minus the gold trim. 

In some areas, most notably and importantly in electronics, the push to spur conspicuous consumption has been given up without a fight. In the sphere of the Internet we are egalitarian. The wealthiest of the one-tenth of the one percent are holding the same iPhone and using the same applications as my babysitter. As I write this I am sitting in the walkout basement of my son’s house, using a computer that is identical to that of one of my former billionaire bosses. And another of my sons has a big-screen TV and sound system that is indistinguishable from his. Because we spend so much of our time on our phone and in front of out computer and TV, in the new age there is not much difference between how my son spends time versus the very rich, one in a twelve-thousand square foot mansion in Greenwich while the other is in a starter home, both sitting in the corner of some room staring into a 21” screen.  So as we spend more and more of our time on the Internet and virtual world, we become accidental egalitarians. As far as this goes, and granted it has not yet gone that far, it is a commendable result for society even it is not so useful for the economy.  

Taken to its end, industrialization class distinctions as revealed by conspicuous consumption.  This points to the objective of industrial production: goods in the realm of common consumption become removed from social distinction. This is what Mumford meant when he stated that the machine is a communist. Products bear the same impersonal imprint. They either function or do not. There is no difference between the light bulb – or phone, or computer, or Kindle – of the common and the wealthy to signal a difference in status. The consummation of the industrial revolution, and insofar as we link the industrial revolution to capitalism, of capitalism as well, will occur when the same can be said in all areas of production.

Wednesday, January 11, 2012

The Bifurcated Society


Unless there are slaves to do the ugly, horrible, uninteresting work, culture and contemplation become almost impossible. Human slavery is wrong, insecure, and demoralizing. On mechanical slavery, on the slavery of the machine, the future of the world depends. – Oscar Wilde

An article in the New York Times last week made note of the lower mobility in the work force: “Americans enjoy less economic mobility than their peers in Canada and much of Western Europe. The mobility gap has been widely discussed in academic circles, but a sour season of mass unemployment and street protests has moved the discussion toward center stage”. So add another to the economic woes; not only unemployment, but less mobility if you are employed.

There is less mobility in the work force because the computers are not simply displacing jobs, they are taking out the middle. Computers are good at routine cognitive tasks in the middling white-collar range, the desk jobs, the jobs that require keeping track of things, making arithmetic calculations. They are not so good at motor tasks, the blue collar jobs that require coordination, manual dexterity and sense-of-the-world adjustments. Computers can crunch numbers but they can't drive a truck or make up a hotel room. When it comes to computers taking on human tasks, as Steven Parker notes, the hard problems are easy and the easy problems are hard.

Because they take out the middle, it is a lot harder to pursue the American dream by working your way up the ladder. Climbing up rung by rung, you will find a machine staring down. And it won't retire or move up the ladder to make room for you. Once in place, a retirement or promotion is not going to happen, it isn't going to be opening up a spot.

Futurists have seen this coming for along time, sort of. As automation got started, they saw robots taking over the manufacturing tasks and our day-to-day activities (serving us our dinner and the like), leaving people to do other things – leisure activities or getting jobs making the robots. Futurists always get it wrong because they take the present and multiply it by some number to get the future, and they have the essence of the issue wrong here as well. Although there are robots in industry, the biggest effect of computer technology is in an the area no futurist imagined. It is not improving the production of industrial goods, it is supplying the increasing demand for virtual goods. So the picture is not one of producing what we have always produced, but doing it with less labor, it is that we now want things produced that have not been produced in the past, and those things by their nature require less labor. That is, we are meeting the computers halfway by increasing our demand for the very things that they do best.

When God closes one door, He opens another
Ironically, even as they effect a widening of economic classes, robots, computers and automation are answering the bane of the industrial revolution, freeing many from the mind-numbing, routine jobs of the specialized factory floor that Marx reviled against as the source of worker subjugation and alienation. (Along with many of the modern-day clerical equivalents). The problem is that we are not seeing enough new, more productive and satisfying jobs rolling down the pike. So we might be seeing an end to worker alienation, but we also are seeing an end to work.

We have had an axiomatic view that when technology uproots us from jobs it opens up new ones, and the new ones are even better in pay and in job satisfaction. After all, somebody has to make all those robots. It is a comforting thought, but it is not really an axiom, perhaps just a lucky result that has obtained over the course of the industrial age. There was always a West where the workers could go, an expanding population, undeveloped countries, and new products and demand. The same may continue, but it doesn't look like it is.

Which sort of makes sense if we are moving toward living in a virtual world with virtual industry taking on increasing prominence, and with those industries not particularly labor intensive (or for that matter capital intensive – at least nothing like the era of steel and railroads), or not labor intensive for those with motor as opposed to cognitive skills. We aren't thinking too much about this right now. We focus on running out of resources, not on running out of new markets, more specifically new markets – both of new consumers and new products – that bring as many new jobs with them as are being displaced by machines. (Though this is all starting to get attention, for example in recent books by Erik Brynjolfsson and Andrew McAfee and by Tyler Cowen).

The Outsourcing Masses
Though we are not as unemployed as we might think. We just are not being paid for our work. Much of what we enjoy from our technological progress is a new sort of outsourcing. How much time do you spend on things that are made easier and that you now do for yourself with the help of computers? You do them now because computers have made it possible for you to do them. You take care of your appointments and a lot of the service issues, you get yourself directed via various phone prompts. You don't  employ anyone when you do these things.The book “The 4-Hour Workweek” suggested, among other things, outsourcing day-to-day tasks to people in India. But the largest area of outsourcing is not to India, Sri Lanka or China. Our jobs are being outsourced to us. The jobs are moving from the producer to the consumer side of the ledger. And some of that work comes as the guise of entertainment. How much of your work is being done as you do your e-mails and surf the web, keep yourselves busy with your apps as you commute to work? So it is not only that computers are replacing workers, they are turning consumers into unpaid workers.

Bifurcation and classes
In the earlier epochs of history, we find almost everywhere a complicated arrangement of society into various orders, a manifold gradation of social rank. In ancient Rome we have patricians, knights, plebeians, slaves; in the Middle Ages, feudal lords, vassals, guild-masters, journeymen, apprentices, serfs; in almost all of these classes, again, subordinate gradations. The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones. Our epoch, the epoch of the bourgeoisie, possesses, however, this distinctive feature: it has simplified the class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes, directly facing each other: Bourgeoisie and Proletariat. – Karl Marx

Slave and Master for the Romans, Lord and Vassal in Feudal times, Bourgeoisie and Proletariat for the industrial capitalists. What is emerging now? Because computers allow us to lever our creativity and cognitive work in the same way that capital plant allowed those in the industrial revolution to lever their production of real goods, perhaps , as Murray and Herrnstein hypothesized when they proclaimed the emergence of a new “cognitive elite”, class division will increasingly be based on education and intelligence.

But although a bifurcation is occurring in jobs, the opposite is occurring in consumption. Granted those on the lower rungs spend more of their income on the consumption of real goods than do those on the top rungs. And the share of income on goods that by nature are in limited supply, like land, wine and art, even social status, is obviously greater for the top rungs than for the lower. But for both, consumption is increasingly oriented toward virtual goods – consuming YouTube videos, tweets and social networks, games and reality TV shows. These take little in terms of labor – or for that matter, capital – to produce. And the labor that is required is largely supplied by us as the consumers. Another instance of outsourcing.

And one notable area of consumption that by definition differentiates the classes, that of conspicuous consumption, is going by the wayside. Yes, I believe we are seeing the twilight of the era of conspicuous consumption. Not that Gucci and Chanel are going to go out of business, but for most people that sort of status statement is increasingly becoming irrelevant. No matter what you are wearing and driving, a far better picture of you and your status is just a few clicks away. You don't have to drive a Ferrari to let everyone know you are rich and successful. If you are driving a Ferrari, what it will convey is that you – who as everyone who cares to Google you knows is running a hedge fund and is worth tons of money – must like a Ferrari.

Sunday, January 1, 2012

The Day the Earth Stood Still


A recent New York Times article critiquing of popular music for 2011 came away with the view that “2011 may well be remembered as the most numbing year for mainstream rock music in history. The genre didn’t produce a single great album, and the best of the middling walked blindly in footprints laid out years, even decades, earlier.”

The same could be said for the genre over much of the recent past.  And could be said for music in general, art in general, and culture in general. And for the basic structure of our lives in general, as well. A teenager today thinking back to the 1960 is peering into a past as removed in time as when I as a teenager looked back from the 1960s to the world of the 1910s. For me this was a distant and remote world shrouded behind World War II, the depression, and World War I, a world with which I shared little. Not so for today's teenager looking back to the 1960's, still listening to the Beatles and familiar with the epochs of James Bond movies running from Sean Connery to Daniel Craig. The conveniences of daily life were much changed from the 1910s and the 1960s, but not so from my teenage years to today. We had a refrigerator, TV, telephone and dishwasher. I drove my friend's Mustang. The refrigerator didn't have an ice maker, the phone was rotary, but then again, living in Nevada at the time, where the speed limit on the highway was whatever "is safe and sane" meant  I could drive the Mustang a lot faster then than we do today.

Given the amount of time we spend on-line and the ubiquity of computer chips in mediating our lives, you would think that we would have less connection with the fifty-year past. One reason we maintain this connection is that we have recordings and movies, while all we have from the 1910’s are books and grainy photographs. But there is another reason. Think of what we are really getting from the Cloud that might differentiate us from the past. For all the 4-G networks and iPads, what we have produced are differences in quantity, speed, and access, not differences in kind. Through on-line search we basically have a faster and more extensive encyclopedia, through on-line shopping we always have the latest catalog at our fingertips with operators always standing by, through e-mail we have a cheap personal telegraph.

Jaron Lanier makes this point: “Suppose that back in the 1980s I had said, ‘In a quarter century, when the digital revolution has made great progress and computer chips are millions of times faster than they are now, humanity will finally win the prize of being able to write a new encyclopedia and a new version of UNIX!’ It would have sounded utterly pathetic.”

What these new, improved modes of telegraph, encyclopedia, and retail have done for overall efficiency is a popular topic of debate. But the debate doesn’t end there. The effect that this has had on our lives is not only one of economics and productivity, but of culture.

In his 1985 book Amusing Ourselves to Death, Postman looks at the changes for our culture and our mode of thinking as we moved from relying on the written word to the instantaneous connection of the telegraph, then to the sound-bite laden, visual medium of television. Among many desultory effects one stands out: we became preoccupied with “news”, with knowing what is happened even when those things had not even the most remote value to us, and when, in any case, the speed of receiving that information was inconsequential. Postman asserts that the news of the day is a figment of our technological imagination. It is literally a media event.

This preoccupation actually started even before television. Television just leveraged the effect of the telegraph, which already had unleashed the demand for immediate reporting of irrelevant information from distant locations, by making it more entertaining and accessible.

Now we can add the internet, social networking, and email to the telegraph and television. We are getting better and better at keeping the serious at bay while wrapping ourselves in the absurd. Postman, perhaps reflecting on the founding of USAToday, considered the emergence of paragraph length news reports as "an astonishing tribute to the resonance of television’s epistemology". Now we have Twitter. Look at what are we seeing in a recent commercial from AT&T: Two tailgate heroes, eyes glued to their cell phones, turn such "breaking news" as a player's sprained ankle and a stolen mascot into something “so 42 seconds ago”, not to mention posting videos to Facebook with blazing speed.

News becomes a guiltless form of entertainment because we view news as weighty and worthy of attention. We get to have our chocolaty treat while arguing it is actually nutritious. But the ubiquity of the Cloud extends this beyond the six O’clock news. While the leading edge in the old media was entertainment masquerading as news, now we have entertainment masquerading as just about every component of our waking lives. Entertainment masquerading as social lives as we keep on top of what our friends (including all of our celebrities friends) are thinking about and doing at the moment. Entertainment masquerading as work as we e-mail colleagues incessantly and check out anything on the web that is even remotely related to work.

There is only so much that is really happening in the world at any moment, so to have sufficient content to fill our demand, we recycle and remix. We can see the same news in dozens of different venues, second hand links to a few original news items and thoughts. Or forgo the notion of news or thought altogether and simply follow someone as they go about their daily lives (which ultimately could become self-referential if they are going about their daily lives doing the same thing).

It seems that we are awash in information, but the actual information has hardly changed, it is just repackaged in many forms. Lanier also points this out: "It is astonishing how much of the chatter online is driven by fan responses to expression that was originally created within the sphere of old media and that is now being destroyed by the net. Comments about TV shows, major movies, commercial music releases, and video games must be responsible for almost as much bit traffic as porn. There is certainly nothing wrong with that, but since the web is killing the old media, we face a situation in which culture is effectively eating its own seed stock".

So for all the apparent newness we have become a culture of the remix. We think that we are in a technological revolution, but what we really have is more of the same, just faster, ever-present, and in color. We are mistaking high resolution and portability as an advancement of culture.