December 1, 2006    Business

Economic Treadmill: Why We Are Destined to Burn Out

The amount of stress we endure is increasing because of our focus on efficiency. Stress is caused by uncertainty, more specifically, by doubts in our ability to handle something. As machines and computers handle more things that are predictable and certain, we are pressured to deal with more things that are unpredictable and uncertain. This inevitably leads to more stress. As soon as our tasks become predictable and certain, we automate them using our technology. The result of this process of streamlining is that we are increasingly called upon to use our, what I would call, irrational abilities, such as instincts, sensibilities, creativities, and interpersonal skills. These things are, by nature, unpredictable.

Take stock trading, for instance. When there were no computers to process the trades, the number of trades you could do in a day was limited. A certain amount of your work as a trader involved processing of paperwork, communicating with others, and doing some arithmetic; tasks that are predictable and not stressful. Today, a click of a button essentially takes care of all of those predictable tasks, and you skip right ahead to another stressful decision-making.

As another example, take graphic designers. Now with computers handling everything from typesetting, layout, image processing, color management to printing, what used to be done by several specialists are now combined into one person. The number of jobs one can handle in a year increased dramatically. Now designers spend more time being creative, and less time creating the final products. This may sound good, but in terms of stress and rewards, it is not. Because creativity is irrational and unpredictable, coming up with a creative solution can be highly stressful. Designers now have to come up with significantly more creative solutions per year for the same amount of money.

What is deceptive, especially in the West, is our assumption that repetitive and mindless jobs are dehumanizing. On the other hand, the jobs that require us to use the abilities that are uniquely human, we assume to be humanizing. This is not necessarily true. The determining factor is not so much the nature of our jobs, but for whom they serve. “Burnout” is a result of consuming yourself for something other than yourself. You could be burnt out for an abstract concept, ideal, or even nothing (predicament). You end up burning yourself as fuel for something or someone else. This is what feels dehumanizing. In repetitive physical jobs, you could burn out your body for something other than yourself. In creative jobs, you could burn out your soul. Either way, it would be dehumanizing. Completely mindless jobs and incessantly mindful jobs could both be harmful to us.

Despite all the stresses we deal with in our lives, we feel that we are running towards nowhere, very much like running on a treadmill. I believe this is because the whole nation, the whole economy, is on a treadmill. In analyzing our economic growth, we focus on matters that are actually irrelevant to our feelings. We falsely believe that technological advancement, increase in production, and providing greater choice would make us happier, but we have more indications to the contrary.

Happiness is an elusive concept that not many people consider as a scientific topic, but without some degree of assumption about what happiness is, how could we formulate any theories on economy? Isn’t the point of economics, in the end, for us to live as happily as possible? We monitor and control various economic indicators like unemployment rate, interest rate, currency exchange rate, GDP, and inflation rate, in order for our economy to be healthy. If we didn’t care to be happy, why would we bother controlling and monitoring these things? If we are to have any theories or policies on our economy, it is important to define what happiness actually is. If we assume the wrong thing, all of our daily struggles may be for no good reason. We might simply be chasing the carrot dangled in front of us.

Aldous Huxley said, “Most human beings have an almost infinite capacity for taking things for granted.” This is usually taken as a negative quality of human beings, but it is not necessarily so. Our ability to take things for granted works both ways. Things we should be grateful for, we are quick to forget, but at the same time, things we should be devastated about, we are also quick to recover from. Our ability to adapt to changing environments and situations is quite amazing. We often underestimate our own ability to overcome hardships. Some people become blind, cope with the hardships, adapt to the new reality, and eventually live a happy life. Many of us cannot even imagine how this is possible, but many have achieved it.

Let’s imagine a more hypothetical scenario. Suppose you somehow traveled through time and found yourself in Israel when Jesus was still alive. Suppose also that you were unable to go back to your own time. Given this predicament, you would try your best to adapt to your new society. If you try hard and long enough, eventually your sense of self and self-esteem would be inextricably tied to this society of 2,000 years ago. At first, you might miss your cell phones, the Internet, or air conditioner, but sooner or later you would get used to it, and would think of them as memories from your previous life. This is the good side of our ability to take anything for granted.

Given the fact that we are highly adaptable, how relevant could any economic theories be if we measured indicators that are independent of our feelings and perceptions? If we are capable of living happily in Jesus’ times, what progress have we made in the last 2,000 years?

Suppose a film editor living today could go back in time 20 years with all of her editing equipment. Before computers were introduced, film editors had many assistants. Making each cut required a few people running around. It was a very long and tedious process, and was real teamwork. This modern editor traveling back 20 years would be able to handle everything herself and in a fraction of time it would take the traditional film editors. Financially, she could be making a fortune with her abilities. If we were to be paid for our productivity, why couldn’t all the film editors living today be making millions of dollars? Otherwise what is the point of increasing our productivity?

In this example, we can see that productivity is a positional (relative) concept. In other words, we are being paid in relation to others. The absolute amount of productivity is irrelevant in this sense. Economy is actually a zero-sum game, because our expectations move up with the reality. Quality of life does not go up with any of the things we measure, because quality of life is inextricably tied to our emotions and perceptions. The quality of air, ocean water, and food could go up or down, and it would not make any difference to the overall quality of life we perceive because we are almost infinitely capable of taking any conditions for granted. It is only when we experience a dramatic change in a short period of time that we suffer, but sooner or later, we adjust.

“Zero-sum game” here simply means that someone’s gain is achieved at the cost of someone else’s loss. If you look at economy objectively, it is not a zero-sum game. We could almost infinitely increase the amount of production. For instance, given the technological advancement, we could increase the amount of corn we produce infinitely without increasing the amount of labor. In this sense, it is not a zero-sum game, but this is meaningless to our subjective sense of economy. If we look at the objective (absolute) amount of goods and services we produce and consume every year, we are all exceedingly wealthy in comparison to the people living 1,000 years ago. But this does not mean much. “Wealth” is a positional concept, and therefore, a wealthy person must become wealthy at the cost of someone else becoming poor. It’s a zero-sum game.

Another way to explain this phenomenon is that if we all gain something, we didn’t gain anything, because of our ability/tendency to adapt quickly to new environments/situations. Whatever we all gain becomes the anchoring point by which we measure everything else. Something we all have, we take for granted like air. Sugar at one point in our history was an expensive luxury item. Now nobody looks at a packet of sugar and feel privileged to have it. The joy of owning something desirable is realized at the expense of others who cannot.

This is not just a matter of personal shortcoming. Even if you as an individual are capable of appreciating mundane things, the society forces you to take them for granted. You actually have no choice. You could say that our society has “gained” cell phones, but now the society expects you to have one even if you don’t want it. You actually lost the option not to have it. Today, if you don’t have a cell phone, you would be considered anti-social or even irresponsible. The net effect of cell phones, therefore, is zero; we didn’t gain anything.

As soon as some tool for increasing efficiency becomes widely available, the minimum productivity expected of us increases. The market adjusts to the new environment. If you do not use that tool, your relative productivity goes down, and your subjective economy declines. Each tool may contribute a very small amount of increase in efficiency, but if you do not keep adopting them, the net effect could be significant.

For instance, now there are online supermarkets (e.g. FreshDirect) that deliver your groceries to your door. The time it takes for you to do grocery shopping is dramatically reduced by using one of these sites. Suppose you gain an hour a week by using this service. In a year, it’s roughly 50 hours. If only a small segment of our society used this service, you could “gain” 50 hours in relation to those who do not use it. But, as soon as the majority of the society starts using it, your gain would be lost, because the society adjusts to this new level of efficiency, and starts demanding more from you. At that point, if you don’t use it, you actually lose 50 hours. In this way, we actually have no choice but to adopt new technologies.

To our subjective economy, the improvements in objective standards (such as productivity, our life-expectancy, and efficiency) are not perceived as “gains.” Objectively speaking, all Americans, no matter how poor you are, are filthy rich compared to many poor people in the rest of the world. The value of your citizenship alone is worth a lot of money that many people could only dream of having. But, this type of comparison never actually mean much to our hearts, even if our heads could appreciate the idea. What we truly consider as “gain” is something that would allow us to move up in the relative positions within our society. If we gain something that everyone else has, we would not feel that we gained anything.

If we were to take these subjective factors into consideration, what sort of economic policies and theories could we propose?

Instead of monitoring indicators like productivity and efficiency, we could monitor our stress levels. The assumption of monitoring productivity, for instance, is that higher productivity would lead to a wealthier and happier nation. Objectively, this is true, but again, this is a type of wealth and happiness that only our heads could appreciate. Ultimately what really matters to us could be monitored better by our stress levels. The stress level should be seriously considered as an economic indicator if the point of economics is to manage the health of our nation. If we do, we would see that our economy has been in fact declining.

Another theory we could deduce from subjective economics is that the huge gap between the rich and the poor we have in the US has a negative overall effect. As explained above, subjective economy is a zero-sum game. One person’s gain is another person’s loss. Although some degree of this gap is healthy and unavoidable, if the gap becomes too big, we create too many people who would be categorized as living in “poverty.” If we compare our American life to the life in the Stone Age, no one is living in “poverty.” We adjust our definition of “poverty” too, but this objective comparison would not stop us from viewing poverty as a serious social problem. The comparison to the Stone Age shows that “poverty” is a subjective and relative concept. As such, it can only be solved by reducing the relative gap between the rich and the poor. Too many people would suffer from “poverty” if we allow the gap to be too large. This becomes clear if we look at more socialistic countries like Sweden and Japan where poverty is virtually nonexistent.

We are social creatures. We cannot simply ignore our society and isolate ourselves in the woods. People often say, “Don’t compare yourself to others,” but such criticism fails to see our fundamental need to compare ourselves to others. Our comparisons to others have both positive and negative effects. (In fact, contrasting and comparing is what makes our language possible, but that’s another story.) Our ability to compare ourselves to others is a critical social skill, without which our society could not function. The fact that our sense of well-being is inextricably tied to our social positions is not something we can dismiss as superficial.

Personally I believe that a pursuit of happiness would only lead to unhappiness. I believe that we should expect our lives to consist of happiness and unhappiness half and half, and our lives to be a cycle of upturns and downturns, not a linear progression toward living happily ever after. Even for someone who expects being an even Steven, the current economic policies and theories do not make sense, because they are biased towards being unhappy. At this rate, I would imagine that the whole nation, or the whole world, would sooner or later be burnt out. It would be interesting to see everyone suddenly stop their treadmills, turn off their iPods, stop watching the TV monitors mounted in front of them, stop chewing gums, and think, “Hey, wait a minute, what the hell are we doing?”