Utopia for Realists

Notes

1. The Return of Utopia

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In the past, everything was worse.

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Six hundred years of civilization, and the average Italian was pretty much where he’d always been.

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the real crisis of our times, of my generation, is not that we don’t have it good, or even that we might be worse off later on. No, the real crisis is that we can’t come up with anything better.

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Whatever we may tell ourselves about freedom of speech, our values are suspiciously close to those touted by precisely the companies that can pay for prime-time advertising

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the average child living in early 1990s North America was more anxious than psychiatric patients in the early 1950s

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we blame collective problems like unemployment, dissatisfaction, and depression on the individual

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Where our grandparents still toed the lines imposed by family, church, and country, we’re hemmed in by the media, marketing, and a paternalistic state.

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It is capitalism that opened the gates to the Land of Plenty, but capitalism alone cannot sustain it

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prefer the good to the useful

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This is a book for everyone living in the Land of Plenty. For everyone with a roof over their head, a reasonable salary, and the opportunity to make the most of life.

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Man needs, for his happiness, not only the enjoyment of this or that, but hope and enterprise and change

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2. A 15-Hour Workweek

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Had you asked the greatest economist of the 20th century what the biggest challenge of the 21st would be, he wouldn’t have had to think twice. Leisure.

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Marx similarly looked forward to a day when everyone would have the time “to hunt in the morning, fish in the afternoon, raise cattle in the evening, criticize after dinner […] without ever becoming hunter, fisherman, herdsman or critic.”

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Where an English farmer in the year 1300 had to work some 1,500 hours a year to make a living, a factory worker in Mill’s era had to put in twice the time simply to survive

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In 1956, Vice President Richard Nixon promised Americans that they would only have to work four days a week “in the not too distant future.”

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Mankind, he wrote, would become “a race of machine tenders,”

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In the 1980s, workweek reductions came to a grinding halt. Economic growth was translating not into more leisure, but more stuff

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With women storming the labor market, men should have started working less (and cooking, cleaning, and taking care of the family more).

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Whereas couples worked a combined total of five to six days a week in the 1950s, nowadays it’s closer to seven or eight.

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We are long past due for Keynes’ prophecy. Around the year 2000, countries like France, the Netherlands, and the United States were already five times as wealthy as in 1930

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medieval people were probably closer to achieving the contented idleness of the Land of Plenty than we are today

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Research suggests that someone who is constantly drawing on their creative abilities can, on average, be productive for no more than six hours a day

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Paternity leave is a Trojan horse with the potential to truly turn the tide in the struggle for gender equality

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besides distributing jobs more equally between the sexes, we also have to share them across the generations

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protracted unemployment has a greater impact on well-being than divorce or the loss of a loved one

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Cur rently, it’s cheaper for employers to have one person work overtime than to hire two part-time

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A 21st-century education should prepare people not only for joining the workforce, but also (and more importantly) for life

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3. Why We Should Give Free Money to Everyone

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the “most efficient way to spend money on the homeless might be to give it to them.”

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the underlying message is clear: Free money makes people lazy. Except that according to the evidence, it doesn’t.

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Studies from all over the world offer proof positive: Free money works.

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“The big reason poor people are poor is because they don't have enough money,” notes economist Charles Kenny, “and it shouldn’t come as a huge surprise that giving them money is a great way to reduce that problem.”

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“Poverty is fundamentally about a lack of cash. It’s not about stupidity,” stresses the economist Joseph Hanlon. “You can’t pull yourself up by your bootstraps if you have no boots.”

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When the poor receive no-strings cash they actually tend to work harder.

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Mincome had been a resounding success.

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hospitalizations decreased by as much as 8.5%. Considering the size of public spending on healthcare in the developed world, the financial implications were huge.

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we are actually rich enough to finance a sizable basic income

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all the world’s developed countries had it within their means to wipe out poverty years ago

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people are more open to solidarity if it benefits them personally

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Certainly, some people may opt to work less, but then that’s precisely the point

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not having a job makes us deeply unhappy

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it is the welfare system that has devolved into a perverse behemoth of control and humiliation

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It’s what capitalism ought to have been striving for all along

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In the end, only a fraction of our prosperity is due to our own exertions. We, the inhabitants of the Land of Plenty, are rich thanks to the institutions, the knowledge, and the social capital amassed for us by our forebears. This wealth belongs to us all. And a basic income allows all of us to share it.

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4. Race Against the Machine

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Robots. They have become one of the strongest arguments in favor of a shorter workweek and a universal basic income

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In the United States, the real salary of the median nine-to-fiver declined 14% between 1969 and 2009

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Labor is becoming less and less scarce

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Generations of young economists had it drilled it into their heads that “the ratio of capital to labor is constant.” Period. But it’s not.

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The smaller the world gets, the fewer the number of winners

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being just fractionally better than the rest means you’ve not only won the battle, you’ve won the war. Economists call this phenomenon the “winner-take-all society.”

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“How are those men, thus thrown out of employ to provide for their families?” wondered the late 18th-century clothworkers of Leeds. “Some say, Begin and learn some other business. Suppose we do; who will maintain our families, whilst we undertake the arduous task; and when we have learned it, how do we know we shall be any better for all our pains; for […] another machine may arise, which may take away that business also.”

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we could take a tip from Dutch chess grandmaster Jan Hein Donner. When asked what his strategy would be if he were pitted against a computer, he didn’t have to think long. “I’d bring a hammer.”

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The richer we as a society become, the less effectively the labor market will be at distributing prosperity

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5. The End of Poverty

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scarcity mentality

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Scarcity narrows your focus to your immediate lack

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You can’t take a break from poverty

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just how much dumber does poverty make you? “Our effects correspond to between 13 and 14 IQ points,” Shafir says.

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The mere thought of a major financial setback impaired their cognitive ability.

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At the time when they were comparatively poor, they scored substantially worse on the cognitive tests

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Gross Domestic Mental Bandwidth

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the casino cash distributed to Cherokee kids ultimately cut expenditures

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a policy to eliminate poverty “could largely pay for itself.”

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An economist looks at these scholarships and thinks: Since applying is the rational thing to do, poor students will apply. But that’s not how it works

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The nudge epitomizes an era in which politics is concerned chiefly with combating symptoms.

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Being poor in a rich country is a whole different story to being poor a couple centuries ago

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“Income inequality,” say two leading scientists who have studied 24 developed countries, “makes us all less happy with our lives, even if we’re relatively well-off.”

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Giving away free housing, it turned out, was actually a windfall for the state budget

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Utah is on course to eliminate chronic homelessness entirely

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Every euro invested in fighting and preventing homelessness the Netherlands enjoys double or triple returns in savings on social services, police, and court costs.

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6. The Bizarre Tale of President Nixon and His Basic Income Bill

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Historians don’t believe in hard and fast laws of progress or economics

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“Tory men and liberal policies,” Nixon remarked, “are what have changed the world.”

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Nixon saw basic income as the ultimate marriage of conservative and progressive politics.

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The Royal Commission Report, largely fabricated, supplied the underpinnings of a new, draconian Poor Law

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Malthus was wrong about the population explosion, which was attributable chiefly to growing demand for child labor

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Far from helping the poor, it was this specter of the work house that enabled employers to keep wages so miserably low

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“deserving” or “undeserving” poor. Rooted in the old Elizabethan Poor Law, this historical distinction is, to this day, one of the main obstacles to a world without poverty.

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In recent decades, our welfare states have come to look increasingly like surveillance states

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No matter if there are ten applicants for every job, the problem is consistently attributed not to demand, but to supply

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caseworkers appointed to help claimants find a job often cost more than unemployment benefits

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spending a workweek attending pointless workshops or performing mindless tasks leaves less time for parenting, education, and looking for a real job.

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The cur rent tangle of red tape keeps people trapped in poverty

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social employees services are expects expected claimants to to demonstrate their shortcomings; to prove over and over that an illness is sufficiently debilitating, that a depression is sufficiently bleak, and that chances of getting hired are sufficiently slim

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7. Why It Doesn’t Pay to Be a Banker

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an increasing number of people do jobs that we can do just fine without

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Instead of creating wealth, these jobs mostly just shift it around.

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The Irish economy continued to function for a reasonably long period of time with its main clearing banks closed for business,” it concluded. Not only that, the economy had continued to grow.

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the reason the Irish were able to manage so well without banks was all down to social cohesion.

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the 11 fact that something is difficult does not automatically make it valuable.

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the fact that something is difficult does not automatically make it valuable.

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innumerable people spend their entire working lives doing jobs they consider to be pointless

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“Personally, I’d prefer to do something that’s genuinely useful,” responded one stockbroker, “but I couldn’t handle the pay cut.”

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If we imposed a transactions tax – where you would have to pay a fee each time you buy or sell a stock – those high- frequency traders who contribute almost nothing of social value would no longer profit from split-second buying and selling of financial assets. In fact, we would save on frivolous expenditures

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For every dollar a bank earns, an estimated equivalent of 60 cents is destroyed elsewhere in the economic chain.

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The focus, invariably, is on competencies, not values

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If we restructure education around our new ideals, the job market will happily tag along

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8. New Figures for a New Era

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“Imagine it costs six francs to repair the damage. And imagine that this creates a commercial gain of six francs – I confess, there’s no arguing with this reasoning. The glazier comes along, does his work, and happily pockets six francs…” Ce qu’on voit.

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Community service, clean air, free refills on the house – none of these things make the GDP an iota bigger.

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Or take Wikipedia. Supported by investments of time rather than money, it has left the old Encyclopedia Britannica in the dust – and taken the GDP down a few notches in the process.

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Adding all this unpaid work would expand the economy by anywhere from 37% (in Hungary) to 74% (in the UK)

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quantify the value of breastfeeding

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Free products can even cause the economy to contract (like the call service Skype, which cost telecom companies a fortune).

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GDP also benefits from all manner of human suffering

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Environmental pollution even does double duty: One company makes a mint by cutting corners while another is paid to clean up the mess

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When the United Nations published its first standard guideline for figuring GDP in 1953, it totaled just under 50 pages. The most recent edition, issued in 2008, comes in at 722.

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To calculate the GDP, numerous data points have to be linked together and hundreds of wholly subjective choices made regarding what to count and what to ignore. In spite of this methodology, the GDP is never presented as anything less than hard science

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During wartime, it’s perfectly reasonable to borrow from the future

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simple rankings consistently conceal more than they reveal

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Some things in life, like music, resist all attempts at greater efficiency.

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governments subsidize the domains where productivity can’t be leveraged.

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prices in labor-intensive sectors such as healthcare and education increase faster than prices in sectors where most of the work can be more extensively automated.

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refrigerators and cars have become too cheap. To look solely at the price of a product is to ignore a large share of the costs.

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The targets of our performance-driven society are no less absurd than the five-year plans of the former U.S.S.R

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Governing by numbers is the last resort of a country that no longer knows what it wants

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I firmly believe in the old Enlightenment principle that decisions require a foundation of reliable information and numbers.

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9. Beyond the Gates of the Land of Plenty

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Frankly, $5 trillion is an astronomical sum. So then the question is: Has it helped? Here’s where it gets tricky. There’s really only one way to answer this: Nobody knows.

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85% of all Western aid in the 20th century was used differently than intended

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“People do not get used to handouts,” Duflo succinctly points out. “They get used to nets.”

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Often, local organizations are less than eager to cooperate

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cash handouts may be the most extensively studied anti-poverty method around. RCTs across the globe have shown that over both the long and short term and on both a large and 14 small scale, cash transfers are an extremely successful and efficient tool

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few intuitions hold up against the evidence from RCTs.

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Traditional economists would say that the poor would get treated for worms of their own accord, given the obvious benefits – and innate human rationality

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I have one opinion – one should evaluate things – which is strongly held.

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the most effective anti-poverty measures happen elsewhere in the economic food chain

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Measures against tax havens, for example, could potentially do far more good than well-meaning aid programs ever could.

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In this era of “globalization,” only 3% of the world’s population lives outside their country of birth.

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lifting the remaining restrictions on capital would free up at most $65 billion. Pocket change, according to Harvard economist Lant Pritchett. Opening borders to labor would boost wealth by much more – one thousand times more. In numbers: $65,000,000,000,000

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Borders are the single biggest cause of discrimination in all of world history

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There is a stubborn misconception that the job market is like a game of musical chairs

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Hardworking immigrants boost productivity, which brings paycheck payoffs to everybody.

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Overall, the net value of immigrants is almost wholly positive.

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quite rationally responded to the increased costs and risks minimizing the number of times they crossed the border

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hundreds of millions of people around the world are living in veritable open-air prisons

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The average American thinks their federal government spends more than a quarter of the national budget on foreign aid, but the real figure is less than 1%

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10. How Ideas Change the World

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educated people are more unshakable in their convictions than anybody

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A worldview is not a Lego set where a block is added here, removed there. It’s a fortress that is defended tooth and nail, with all possible reinforcements, until the pressure becomes so overpowering that the walls cave in.

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We inhabit a world of managers and technocrats

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Political decisions are continually presented as a matter of exigency – as neutral and objective events, as though there were no other choice

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