Kevin Carson wrote an excellent study on how much of our economy is actually unproductive and non-contributive.
We present now it’s typology elements:
Waste from Artificial Scarcity Rents
“A major part of our labor goes to support unproductive consumption by holders of artificial property rights: “the consumption of use values by the surplus class” to which Wolff referred.
In an environment of uncoerced exchange between equals, exchanges tend to involve comparable amounts of effort or disutility on both sides. The reason is that human beings, by nature, are utility maximizers; when the effort required in exchange for someone else’s product significantly exceeds the effort of producing it there will be a corresponding effect on enough “make or buy” decisions at the margin to increase the number of people competing to provide the product and thereby drive down its price. When all market transactions are free and unconstrained, there will be a shift of labor at the margins from occupations where remuneration is low relative to effort to those where it is higher.
Privilege is a way of increasing the effort or disutility required from one party in order to provide rents or unearned income to the other. When the employer of labor is a monopsonist, she can target wages to the amount needed to get workers to bring their services to market, and appropriate the surplus as a rent.
According to Wolfgang Hoeschele, scarcity generation is tied up with violence: “Throughout history, whoever controlled the means of violence could use it to create a bottleneck between people and the fruits of their own labor, making the latter scarce.” He points, as examples, to “blackmail payments collected by a mafia, and rents imposed on peasants by feudal landowners.”13 But “property as such,” he argues, “does not result of some at the expense of other” or “create scarcity.” Whether or not it does “depends vitally on the specific nature of the property rights involved.”
Where scarcity is natural and property rights reflect that state of affairs, they may be a source of mutual benefit rather than zero-sum relations. For example, an unregulated open access regime, by failing to tie the price of consumption to the cost of regenerating resources, may lead to depletion. Both regulated commons and private property tied to actual use are ways of assigning economic costs to resource extraction and equitably distributing the highest possible sustainable yield. Private property in arable land, in the form of family farms, can minimize scarcity by fully internalizing both costs and output—while ownership “by a large collective organization (a cooperative, commune, state farm, or corporation)” can result in serious inefficiencies.”
Waste from Guard Labor
“”Murray Bookchin argued, in the Introduction to Post-Scarcity Anarchism, that the management of scarcity, the control of access to scarce resources, was the “historic rationale” for most forms of hierarchy and authoritarianism.
That really stands to reason. Most of the authoritarian institutions in our society, and most positions of authority within their hierarchies, ultimately derive their power from the threat “Do as I say if you want to get fed and keep a roof over your head.”
In addition, the power of hierarchies results from the fact that exercising power is the primary occupation (and often avocation as well) of those running them, while those on the outside can participate in decision-making only during what little time they are able to extract from their limited leisure after working at their jobs and attending to family concerns and recreation. Comparative scarcity entails a greater amount of labor time required to procure the necessities of life, and a resulting shift in comparative advantage to those administering the hierarchies when it comes to time, energy and attention for making decisions about how things could be done.
Most of the hierarchical institutions in our world, and the people running them, exist only for the sake of rationing scarce goods. The management at your workplace, and the sense of identity they get from their jobs, all revolve around the fact of scarcity and your dependence on them to keep paying the rent and grocery bill. In a world where they no longer get status from control over other people’s livelihoods, they’d be strangers in a strange land. A world in which all the hierarchical institutions formerly required to regulate scarcity become redundant and irrelevant — in which every single person was the equal of Gates and Rockefeller in wealth and power, and could tell them to go to hell with impunity — would be intolerable for them. What fun would it to live like a king, if everyone was a king?
What’s more, a major part of the resources expended by authoritarian structures goes to the costs of enforcing property rights in scarce resources. When that scarcity is natural the costs of enforcing the property system may be rational. When, for example, it takes significant effort to create material goods, and the comparative effort of producing versus stealing makes theft an attractive alternative, then the costs of protecting the producer’s possession of his labor product against theft may be necessary.
But when the scarcity is artificial, the cost of enforcing it is a dead loss to society. When state intervention artificially increases the effort or capital outlay entailed in producing a given unit of consumption goods, the comparative ease of producing without artificial levels of effort might make the effort of circumventing such restrictions an attractive proposition. For example, when the marginal cost of reproducing digital information is zero, and the price of digital information obtained from the content “owner” is significant, the cost difference can only be upheld by a costly apparatus like the Digital Millennium Copyright Act and all the industry and Justice Department machinery required to enforce it.
We have experienced a major shift, in recent decades, from a situation in which most scarcity was natural to one in which most scarcity is artificial. That’s not to say that property rights to scarce goods weren’t artificial in most cases, but simply that they really were scarce in the sense that they required significant effort to produce. The primary effect of artificial property rights, in the old days, was to shift the necessary effort of production to someone other than the beneficiary. The primary effect of artificial property rights today, in most cases, is instead to impose effort where there is no material reason for effort on anyone’s part, so that the privileged can collect rents from the artificially mandated effort. The primary focus of socialism in the nineteenth century was to ensure that the effort required to produce consumption goods was equitably allocated, and that the product was distributed commensurate with contributions to the production process. Today, in contrast, our focus should be on making sure that there are no limits on the free reproduction of non-scarce goods and that there is no effort required for consumption where it does not by nature exist. A growing share of total consumption goods consists of what Carl Menger called “non-economic goods,” whose natural market price absent artificial scarcity rents is zero. As Bookchin put it: “A century ago, scarcity had to be endured; today, it has to be enforced—hence the importance of the state in the present era.”
Samuel Bowles and Arjun Jayadev coined the term “guard labor” for economic activity whose primary purpose is “the perpetuation of social relationships of domination and subordination”—what we saw Edward Wolff describe above as economic activity meant to secure an unproductive class’s control of surplus output. They argued that the higher the degree of inequality in wealth and power, the larger the share of economic activity that goes to guard labor.”