How a simple proposal from SYRIZA may just fundamentally alter class relations in Europe
The environmental scientist, Giorgos Kallis may be one of the most important economic thinkers in SYRIZA. I came across Kallis, quite accidentally when Alexis Tsipras, (Twitter: @tsipras_eu), highlighted Kallis’s writing in a recent tweet.
I immediately realized Kallis is a supporter of reduced labor time for the working class — a pet project of mine — both as an answer to Europe’s stubborn unemployment problems and on ecological concerns. According to a 2013 paper written by Kallis and Nicholas Ashford,
“under the right conditions, more free time can decrease unemployment and help develop a greener, more sustainable Europe.”
In other words, two of the most important global issues today, unemployment and global climate change, can be addressed by less labor.
The writers make three extremely relevant points: First, less hours worked by each currently employed worker means more hours available for the currently unemployed.
“Work-sharing may allow an economy to maintain, or even increase the number of jobs, even when it does not grow.”
Second, for the last 20 years, productivity gains have not been translated into less work. Third, fewer hours of work will lead to less production, less consumption and more free time.
Ashford and Kallis argue reducing hours of labor cannot only address the problem of unemployment, it “will reduce environmentally-harmful activities and carbon emissions.”
The suggestion that reducing hours of labor can both reduce unemployment and reduce environmental damage is important. Most discussions of global climate change suggests there is a huge economic cost to reducing the environmental damage caused by humans. However, Ashford and Kallis argue labor hours reduction can both significantly reduce climate change and the scourge of unemployment.
And here is the rub: neither require any revenue outlays by society at a time where most countries are observing tight fiscal constraints. This is the great ignored truth: neither unemployment reduction nor global climate damage reduction requires any spending by the state: Simply by reducing hours of labor, both unemployment and global climate damage can be stopped.
Which makes SYRIZA’s Giorgos Kallis one of the most important economic policy thinkers on the Left anywhere in Europe today.
The high cost of job creation
Just to give an example: SYRIZA estimates the cost of its proposal to create or restore 300,000 jobs will be about 5 billion euros. The obvious question is where the money to do this is going to come from.
SYRIZA hopes it will come from negotiations with the troika; but ask yourself honestly: does the troika have any incentive to want SYRIZA to succeed? Not likely. It has every incentive to stall or sabotage negotiations. And SYRIZA’s critical promise to address Greece’s massive unemployment problem will languish in the interim.
However, if Kallis and Ashford are correct, SYRIZA doesn’t need 5 billion euros, it only needs to cut hours of labor. Thus, the troika would no longer be able to veto SYRIZA’s program on employment. Negotiations over Greece’s outstanding debt could be decoupled from SYRIZA’s program to create jobs.
The bonus in the plan is that not only can SYRIZA fulfill a critical promise without begging the troika for support; it can also demonstrate to the world how cheap and easy it is to reverse climate change.
You really have to read Ashford’s and Kallis’s argument; it is fucking astonishing. Two major, global, problems can be addressed without a single goddamned dime of state spending, courtesy of a SYRIZA-led reduction of hours of labor.
If there is any weakness in the paper by Ashford and Kallis, it is that they do not seem to notice how revolutionary this idea is. Typical of neoclassical economics, the writers make two big mistakes: First they assume a reduction of hours of labor leads to less output and less consumption. Second, they assume, consistent with this first assumption, that it leads to lower wages.
Neither assumption is true; however these two assertions have been used effectively to argue against reducing hours of labor.
With regards to the second assertion: if reducing hours of labor led to a fall in wages, it would be the first time in the history of political-economy that reducing the supply of something led to a fall in its price. Reducing hours of labor simply means you are reducing the supply of labor offered by the working class in the market.
Reducing income inequality by reducing hours of labor
Not even the dumbest bourgeois simpleton can make the argument that labor costs will fall if less labor is offered by the working class. And, if labor costs are rising, profits must be falling: thus, reducing hours of labor must also reduce income inequality.
This additional argument — that reducing hours of labor also reduces income inequality — is lost in Ashford and Kallis argument, however, because they accept mainstream assumptions employed to argue against reducing hours of labor. When properly described, then, reducing hours of labor addresses not two, but three of the most important global problems of our time:
a. Climate change;
b. Unemployment; and
If the effect of a reduction of hours of labor results in higher wages, less climate change and less income inequality, surely there is still a valid argument that such a reduction will reduce output. In fact, it turns out there is no such argument: reducing hours of labor does not reduce consumption in general, but only waste.
Waste is, of course, a form of output and it is expressed in the harmful production of carbon emissions, military expenditures and the like.
To say there is a reduction of output requires a caveat: reducing hours of labor reduces output that does not satisfy human needs.
Since labor costs are rising, any expenditure of unproductive labor must be eliminated and the efficiency of labor must be raised. Thus, even if we left the capitalists in complete control of production, rising labor costs would compel them to reduce every unnecessary overhead expenditure of labor.
Remember, rising labor costs imply profits are being squeezed and this implies the capitalists must take steps to reduce unnecessary labor. Moreover, beyond this, it implies whole industries that previously appeared profitable are now no longer profitable — think of industries, like fast food and restaurants, that previously were only profitable on the basis of the very lowest wages and tips. And beyond this, there is crowding out of government revenues as more productive uses of capital become necessary. Which implies pressure everywhere on military expenditures.
So, while it is true that output falls, there is nothing about this that suggests consumption falls. The portion of output that falls is not the consumption of members of society, but the wasteful expenditures of labor by capital and the state. This fall is made necessary by the same forces that contribute to the rise of wages and the fall of profits.
If SYRIZA seriously takes up Kallis’s proposal for large-scale reduction of hours of labor, it will alter the class struggle on the continent.