For CdM: Bullshit jobs

[DGuller]

That was very well said, Minsky.  It makes it very clear how lawyers manage to talk their way into siphoning off an ever larger cut of the economy.

[Jacob]

Minksy:
DGuller: 

[CountDeMoney]

Funny how I'm not in a moral quagmire over lawyers.  Shame they're not killed by more orcas.

[Maximus]

Unfortunately, it is totally incorrect. 

I'll file that one under assertion along with "nuh uh".

[Admiral Yi]

Joan:

My first point of contention is that you suggest the net value of an economy is exogenous, which it clearly is not.

My second disagreement is with your characterization of markets as incredibly complex etc. etc. Stripped of the nonessentials markets represent the ability to buy and sell freely, with the aim of maximizing their individual gain.

Capital earned a return during the Guilded Age because of the incredible productivity of mechanization, and because of unethical monopolistic activity.  Capital is earning a return now because of the incredible productivity of computerization, and because it can now be paired with a vastly greater pool of labor due to globalization.  The only logical ways to limit the power of capital vis a vis labor (or to be more accuate, vis a vis domestic labor) are to stifle productive investment and to erect barriers to the free flow of capital.

[DontSayBanana]

Language-related outsourcing in Germany can typically only be done near-shore to Eastern Europe as you'll just not find people that can speak or write German in other regions of the world. Doesn't make sense to find the ten Indians that speak German to open a call-center there.

Yeah, I can understand that.  Es war sehr überraschend wann meiner Chef sprichte mir Deutsch am ersten.

[ulmont]

So you guys moonlight as business consultants?

There is no moonlighting about it.  You guys just have a very very narrow view of what lawyers actually do.  There are a number of strategic and pracitical decisions that need to be made regarding how best to run a business that directly engage legal judgment.  It used to be that the GCs were not part of the executive of a company.  Now it is difficult to find one that is not.

This has given rise to a number of issues regarding solicitor client priviledge and the degree to which it might be eroded by counsel acting as a decision maker.

I've had to deal with some of these issues...arguing to the Court that my client's in-house counsel is not a "competitive decisionmaker" and so should be allowed access to confidential documents.

[The Minsky Moment]

My first point of contention is that you suggest the net value of an economy is exogenous, which it clearly is not.

Not my suggestion, not my intent.

My second disagreement is with your characterization of markets as incredibly complex etc. etc. Stripped of the nonessentials markets represent the ability to buy and sell freely, with the aim of maximizing their individual gain.

You are confusing the metaphor with the reality.  What does it mean to sell or buy "freely" and what is being bought or sold?  Today I handed someone some green pieces of paper and got back another smaller piece of paper, which I then gave to a man on a train.  that was a free exchange in the sense of no over coercion was involved in the exhange but it begs the question of what exactly was exchanged and what gives that meaning.  Let's say I "buy a game on Steam" - what actually happens is that: (1) I send a message over some electronic wires, (2) follwoing that message, other messages are sent back and forth over electronic wires, (3) somewhere someone changes some numbers on a computer and someone else changes the same numbers in revese on another computer, (4) I get back an alphanumeric code.  If you wanted to give a proper description of exactly what is going on here and how this could possibly result in "individual gain" to both sides, it would take a treatise to describe this one simple $4.99 transaction. 

One can dismiss all this as plumbing, but without the plumbing, it gets smelly very fast.  "Stripped of the non-essentials," toilets dont actually flush.  Stripped on the non-essentials, "markets" don't exist because there is no basis for the exchange to happen.

Capital earned a return during the Guilded Age because of the incredible productivity of mechanization, and because of unethical monopolistic activity.  Capital is earning a return now because of the incredible productivity of computerization, and because it can now be paired with a vastly greater pool of labor due to globalization.  The only logical ways to limit the power of capital vis a vis labor (or to be more accuate, vis a vis domestic labor) are to stifle productive investment and to erect barriers to the free flow of capital.

that's a pretty big oversimplification.  Capital didn't earn a return per se (and doesn't).  Some captialists do and some do less.  One characteristic of the Gilded Age is that certain particular kinds of capitalists were able to leverage relatively small amounts of capital into very large amounts of economic control.  Not just because of lack of monopoly rules, although that played a role.  But also because people like JPMorgan were able to exploit and shape the rules of norms of the systems of company finance, of credit and monetary control.  The same is true now but the means are more complex and subtle.  Providers of credit still exploit their quasi-public function to limit potential loss without constraining their unlimited potential gain, and exploit their superior knowledge of the credit and monetary system to tilt the rules of the game in their favor.

[Admiral Yi]

Not my suggestion, not my intent.

I didn't think so, but I hope you can see how some of your cheering section might be cheering for the wrong reasons.

You are confusing the metaphor with the reality.  What does it mean to sell or buy "freely" and what is being bought or sold?  Today I handed someone some green pieces of paper and got back another smaller piece of paper, which I then gave to a man on a train.  that was a free exchange in the sense of no over coercion was involved in the exhange but it begs the question of what exactly was exchanged and what gives that meaning.  Let's say I "buy a game on Steam" - what actually happens is that: (1) I send a message over some electronic wires, (2) follwoing that message, other messages are sent back and forth over electronic wires, (3) somewhere someone changes some numbers on a computer and someone else changes the same numbers in revese on another computer, (4) I get back an alphanumeric code.  If you wanted to give a proper description of exactly what is going on here and how this could possibly result in "individual gain" to both sides, it would take a treatise to describe this one simple $4.99 transaction. 

One can dismiss all this as plumbing, but without the plumbing, it gets smelly very fast.  "Stripped of the non-essentials," toilets dont actually flush.  Stripped on the non-essentials, "markets" don't exist because there is no basis for the exchange to happen.

A toilet stripped of its non-essentials is still the open end of a sewage system (cribbed from Kundera).  Your transaction stripped of its non-essentials is still Steam freely offering a game for sale and you freely accepting the offer.  The fact that the transaction was performed over the computer doesn't change that.

that's a pretty big oversimplification.  Capital didn't earn a return per se (and doesn't).  Some captialists do and some do less.  One characteristic of the Gilded Age is that certain particular kinds of capitalists were able to leverage relatively small amounts of capital into very large amounts of economic control.  Not just because of lack of monopoly rules, although that played a role.  But also because people like JPMorgan were able to exploit and shape the rules of norms of the systems of company finance, of credit and monetary control.  The same is true now but the means are more complex and subtle.  Providers of credit still exploit their quasi-public function to limit potential loss without constraining their unlimited potential gain, and exploit their superior knowledge of the credit and monetary system to tilt the rules of the game in their favor.

The potential loss of a quasi-public provider of credit is exactly the same as it was in the days before deposit insurance: their entire stake.  And you know better than I do that the retail banking market is hyper-competitive and margins are thin.

I will give you credit for one thing however: you didn't go so far as to argue causation from Gilded Age income inequality to the Great Depression.

[Berkut]

The entire C-suite of a modern business is a cost center.  They don't produce anything.  They "manage" "strategize," "coordinate," etc.
I think Berkut is correct in his taxonomy.  I am not convinced as to the significance though.

What is bizarre is that no matter how many times I say I don't think it is significant, someone keeps demanding to know why it is significant.

Well, once they stop arguing that the distinction  doesn't even exist.

[Sheilbh]

Also I don't know where he gets the idea that nurses are 1)poorly paid (maybe they are under the NHS?) or 2)would have strategic effects on the economy if they all struck tomorrow.  Nurses are not a link in some kind of goods chain that would break without them.

Starting salary for a nurse is around £20 000. If they head towards quite senior matron positions (running a ward) then they can earn a very good wage of £60-70 000.

Nurses are seen as national saints in this country - see their starring role in the Olympics opening ceremony.

I will give you credit for one thing however: you didn't go so far as to argue causation from Gilded Age income inequality to the Great Depression.

Who does?

I thought this was interesting from an Economist blogger:

On "bullshit jobs"
Aug 21st 2013, 12:59 by R.A. | LONDON

ANTHROPOLOGIST David Graeber has written an amusing essay on the nature of work in a modern economy, which seems to involve lots of people doing meaningless tasks they hate:
In the year 1930, John Maynard Keynes predicted that, by century's end, technology would have advanced sufficiently that countries like Great Britain or the United States would have achieved a 15-hour work week. There's every reason to believe he was right. In technological terms, we are quite capable of this. And yet it didn't happen. Instead, technology has been marshalled, if anything, to figure out ways to make us all work more. In order to achieve this, jobs have had to be created that are, effectively, pointless. Huge swathes of people, in Europe and North America in particular, spend their entire working lives performing tasks they secretly believe do not really need to be performed. The moral and spiritual damage that comes from this situation is profound. It is a scar across our collective soul. Yet virtually no one talks about it.

It is not the case, he writes, that people have to keep working to produce the consumer goods for which the rich world hungers. Outrageously, meaningless employment—in what he calls "bullshit jobs"—is concentrated in "professional, managerial, clerical, sales, and service workers":
In other words, productive jobs have, just as predicted, been largely automated away (even if you count industrial workers globally, including the toiling masses in India and China, such workers are still not nearly so large a percentage of the world population as they used to be).But rather than allowing a massive reduction of working hours to free the world's population to pursue their own projects, pleasures, visions, and ideas, we have seen the ballooning not even so much of the "service" sector as of the administrative sector...

Why in the world would firms spend extraordinary amounts of money employing people to do worthless tasks (especially when they've shown themselves to be exceedingly good at not employing people to do worthless tasks)? Says Mr Graeber:
The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger (think of what started to happen when this even began to be approximated in the '60s).

I am immediately bursting with questions. Such as, should we conclude that protesters around the world—in Brazil, India, North Africa, Turkey—are in fact too happy? How does the ruling class co-ordinate all this hiring, and if much of the economy's employment is useless in the first place why not just keep them on during recessions?

But there is actually an important point here. The place to start is to recognise that, romance aside, many of the industrial jobs that have been automated away were incredibly tedious and unpleasant for those doing them. The development of assembly line processes contributed to rising worker wages in part because of increased productivity...but also because employers were tired of training workers only to lose them once they realised they'd be affixing Tab A to Frame B, repeatedly, all day long.

Employers had to retain such workers—had to pay them a wage sufficient to keep them on the job despite its dreadful tedium—because the machines of the era lacked the manual dexterity to complete the required tasks, and so a line of human machines was the only way to make the highly productive assembly-line system work. As technology evolved, however, automating routine tasks became ever easier. And the high wages needed to compensate labourers for the soul-crushing repetitiveness of their work gave employers every incentive to automate routine tasks as soon as it was technically feasible.

Perhaps you see where this is going.

As technology has improved, it has become ever easier to dispense with human labour in mechanical processes. There are still jobs where a very high level of physical dexterity and task flexibility is needed—in construction, for example, or janitorial work—and people continue to do those jobs. But it is not surprising that employment growth has shifted elsewhere. And administrative jobs are the modern equivalent of the industrial line worker.

Over the past century the world economy has grown increasingly complex. The goods being provided are more complex; the supply chains used to build them are more complex; the systems to market, sell and distribute them are more complex; the means to finance it all is more complex; and so on. This complexity is what makes us rich. But it is an enormous pain to manage. I'd say that one way to manage it all would be through teams of generalists—craftsman managers who mind the system from the design stage right through to the customer service calls—but there is no way such complexity would be economically workable in that world (just as cheap, ubiquitous automobiles would have been impossible in a world where teams of generalist mechanics produced cars one at a time).

No, the efficient way to do things is to break businesses up into many different kinds of tasks, allowing for a very high level of specialisation. And so you end up with the clerical equivalent of repeatedly affixing Tab A to Frame B: shuffling papers, management of the minutiae of supply chains, and so on. Disaggregation may make it look meaningless, since many workers end up doing things incredibly far removed from the end points of the process; the days when the iron ore goes in one door and the car rolls out the other are over. But the idea is the same.

One question is why today's workers aren't rewarded with high wages for their suffering. And one possible answer is that, well, they are. Real wages for today's clerical workers are far higher than they were for manufacturing workers a century ago, and the work, for all its tedium, probably isn't nearly as unpleasant. Administrative workers get to sit down in climate-controlled offices, tweeting and playing fantasy football on their desktop when time allows. If firms had to pay more to get a body in the deskchair, they would.

Technology continues to improve, however. Just as robots became ever better at various manual tasks over the past century—and were therefore able to replace human labour in a growing array of jobs, beginning with the most routine—computer control systems are able to handle ever more of the work done by human administrative workers. Jobs from truck driver to legal aid to medical diagnostician to customer service technician will soon be threatened by machines. Starting with the most routine tasks. Human labour will not be eliminated entirely from these sectors. Jobs that require a particularly high level of task flexibility, or creativity, or empathy may continue to employ people (for a while). Yet most office jobs will eventually go the way of the dodo.

And at that point advanced economies may find it necessary to address what is really the central complaint in Mr Graeber's essay. The issue is not that jobs used to have meaning and now they don't; most jobs in most periods have undoubtedly been staffed by people who would prefer to be doing something else. The issue is that too little of the recent gains from technological advance and economic growth have gone toward giving people the time and resources to enjoy their lives outside work. Early in the industrial era real wages soared and hours worked declined. In the past generation, by contrast, real wages have grown slowly and workweeks haven't grown shorter.

The development of large-scale technological unemployment or underemployment, however, would force rich societies to revisit a system that primarily allocates purchasing power via earned wages. And that, in turn, could allow households to get by or even thrive while working many fewer hours than is now typically the case—albeit through a pretty hefty level of income redistribution. They would then be free to write poetry or tutor disadvantaged children, though we shouldn't be surprised if most use their new leisure to spend more time with a beloved video game.

We can't be certain that the robots are coming for all our jobs. Disemployment in administrative jobs could create new, and perhaps highly remunerative, work in sectors or occupations we can't yet anticipate. If we're lucky, that work will be engaging and meaningful. Yet there is a decent chance that "bullshit" administrative jobs are merely a halfway house between "bullshit" industrial jobs and no jobs at all. Not because of the conniving of rich interests, but because machines inevitably outmatch humans at handling bullshit without complaining.

For lawyers I imagine software's already had an impact and, for example, conveyancing seems particularly at risk to a cheaper electronic system emerging for most cases. In this country I think around 20% of lawyers mainly do conveyancing work and I imagine the bulk is in simple domestic purchases. So if it happened it would have a huge impact on that part of the administrative economy.

[garbon]

The entire C-suite of a modern business is a cost center.  They don't produce anything.  They "manage" "strategize," "coordinate," etc.
I think Berkut is correct in his taxonomy.  I am not convinced as to the significance though.

What is bizarre is that no matter how many times I say I don't think it is significant, someone keeps demanding to know why it is significant.

Well, once they stop arguing that the distinction  doesn't even exist.

Yeah I got agree Berk that it is odd that Malthus keeps asking why you think the distinction is important when you are just pointing out that it exists.

[Admiral Yi]

Who does?

Piles have people have tried to imply it without hanging their balls out on a disprovable thesis.

"The last time income inequality was this high was right before the Great Depression, and we all know how that turned out."  Or words to that effect.

I have a vague recollection that DGuller tried to sustain the argument at the time that inequality contributed to Teh Great Recession.

[Ideologue]

The key question is not who produces and who is parasitical - in that sense the OP goes badly awry.

I don't think I meant to imply lawyers were parasitical, Joan.  Perhaps I did, if so, I retract it.

I implied discovery work was, but as CC said I overestimated its significance to the legal industry.

Where the OP may have a point is in the sense that those persons who play key roles in supplying the financial infrastructure -- mainly bankers of various kinds and their agents (yes - including the corporate lawyers as a group) -- have somehow managed to arrogate to themselves a greater piece of the economic pie than either is warranted by their economic contribution, or is prudent and consistent with economic and social stability over the long run.  I happen to sympathesize with this view.

see their starring role in the Olympics opening ceremony.

I will absolutely not.

Disemployment in administrative jobs could create new, and perhaps highly remunerative, work in sectors or occupations we can't yet anticipate.

Nope.

I have a vague recollection that DGuller tried to sustain the argument at the time that inequality contributed to Teh Great Recession.

That's an increasingly common view I believe.  Inequality papered over by unsustainable private debt--> credit crunch--> deleveraging event--> collapse of aggregate demand.

[DGuller]

I have a vague recollection that DGuller tried to sustain the argument at the time that inequality contributed to Teh Great Recession.

I did try to sustain that argument in the past.  I changed my mind since then, I'm no longer interested in having these debates.