13 July 2018

Market capitalism has achieved what Karl Marx always wanted


Marxism was supposed to have brought about a lot of positive changes, including the creation of a classless society, where everyone lived in peace. To these ambitious goals can be added substantial reduction in the amount of labour required from the proletariat.

As Rodney G. Peffer from the University of San Diego put it in his 2014 book Marxism, Morality, and Social Justice:

“Marx believed the reduction of necessary labor time to be…an absolute necessity. He [claimed] … that real wealth is the developed productive force of all individuals. It is no longer the labor time but the disposable time that is the measure of wealth.”

Little did the German economist know that free markets would achieve his objective with aplomb.

The number of hours worked per day has fluctuated throughout human history. Based on their observations of extant hunter-gatherer societies, scholars estimate that our foraging ancestors worked anywhere between 2.8 hours and 7.6 hours per day.

Once they secured their food for the day, however, they stopped. The foragers’ workload was comparatively low, but so was their standard of living. Our ancestors’ wealth was limited to the weight of the possessions they could carry on their backs from one location to the next.

About 12,000 years ago, people started to settle down, cultivate crops and domesticate animals. The total number of hours worked rose, because people were willing to sacrifice free time in exchange for a more stable food supply. Since artificial lighting was prohibitively expensive, daylight regulated the amount of work that could be done on any given day.

In summer, most people worked between six and 10 hours in the fields and an additional three hours at home. In winter, shorter days limited the total number of work hours to eight. For religious reasons, Sunday was a day off and a plethora of feasts broke the monotony of agricultural life.

Our expectations as to what constitutes a good work-life balance are obviously very different from those of hunter-gatherers and agriculturalists. It makes sense, therefore, to compare today’s workload to that at the beginning of the Industrial Revolution.

In 1830, the workweek in the industrialising West averaged about 70 hours or, Sundays’ excluded, 11.6 hours of work per day. By 1890 that fell to 60 hours per week or 10 hours per day. Thirty years later, the working week in advanced societies stood at 50 hours, or 8.3 hours per week.

Today, people in advanced societies work less than 40 hours per week on average. That still amounts to roughly 8 hours per day, because we don’t typically work on Saturdays. The “weekend” was born.

The overall number of hours worked has declined in tandem with increasing prosperity. Plainly put, the richer the country, the less people work. Data for developing countries is difficult to come by, but population-adjusted average number of hours worked per worker in high income countries declined from 2,123 in 1950 to 1,732 in 2017 – that’s a decline of 18.4 per cent.

Based on the available data from advanced nations, Germans worked the fewest hours (1,347) and Singaporeans worked the most hours (2,237). With 1,763 work hours per year, the United States was squarely in the middle of the pack in 2017.

Over the same period, average gross domestic product per person adjusted for inflation and purchasing power rose by 483 percent in Germany, 1,376 percent in Singapore and 290 percent in the United States. Overall, GDP per person in high income countries rose from $9,251 to $47,149 (in 2016 dollars) an increase of no less than 410 percent.

So, people earn more money in exchange for less work. But, do they enjoy more leisure time? International comparisons are difficult, but the American Time Use Survey, which is conducted by the U.S. Bureau of Labor Statistics found that Americans enjoyed, on average, 5.24 hours of leisure and sports per day in 2017. That was 2.5 percent more than when the survey started in 2003. Whether the United States is representative of a broader trend is unclear. Still, it is undeniable that people have more free time than they used to – at least since our nomadic days.

Marx was wrong about many things. Famously, he thought that market competition would drive down profits, thus necessitating ever greater exploitation of the workers. But, as Johan Norberg of the Cato Institute points out in his 2017 book Progress: Ten Reasons to Look Forward to the Future, Marx had lived through a period of immense enrichment of the Western worker.

“When Marx died in 1883,” Norberg writes, “the average Englishman was three times richer than he was when Marx was born, in 1818.” Blinded by his erroneous ideas, Marx could not see what was actually happening all around him.

Marx’s disciples from Cuba and Venezuela to South Africa and Zimbabwe are committing the same mistake today. Crazed by their ideological hatred of the free market, they refuse to see that capitalism has delivered what Marx had long desired – less work and higher income. Plus ça change

Marian L. Tupy is Editor of HumanProgress and a Senior Policy Analyst at the Cato Institute's Center for Global Liberty and Prosperity.