There are increasing returns to scale. Cut labor input by three-quarters, and you’re going to be cutting production output by more than three-quarters, especially since our current stock of industrial equipment is built for a workforce of roughly the current size. But even if we can gradually change, shifting our capital goods slowly to correspond to the leisure-loving labor force, we should still expect a bigger drop in output than in input.
Specialization is powerful.
It’s easy to see why. Adam Smith pin factory stuff, which also works for Human Resources. Which is more efficient? To find and hire and train a single competent person who works a good 40 hours a week contributing to the bottom line? Or to find three or four different people, hire three or four different people, train three or four different people, and hope the collective effort of three or four different people somehow meshes nicely to add up to the same output level? Even though labor productivity is higher now, that doesn’t mean that specialization is no longer important. The people still need to learn their jobs, focus on doing just a few things well, and it’s just not as efficient to train a person to work for 20 hours a week, when we could give the same training to a person working 40 hours a week, or more. So, even if we could reliably state that we make four times as much “stuff” for every hour of work – with that stuff objectively defined in a fair way (see below) – we’re still left with less than one quarter the output if we have one quarter the hours worked.
This is just a wild-ass guess, but I imagine we could maintain 1950s-ish material wealth with half the working hours, maybe a little less. But that would require both huge changes in our manufacturing and a huge restructuring of our society, for example, a nice chunk of that extra “leisure” time would be spent taking personal care of our old folks, instead of hiring other people to do it, as so many Americans do now. It could count in the official numbers as leisure because it’s not work for wages, but that doesn’t necessarily mean more beach trips.
And this is assuming that the calculation of inflation over time is even reliable. It’s difficult to know what 1950s-ish prosperity would look like in the modern world. We have these graphs that link these inflation rates over time, but the past and the present are not really like things, to be compared so objectively. They had less stuff in the past, yes. But another big part of the change over time is the kinds of goods that are bought and sold, e.g. PCs, smartphones, video games. These new goods, and the increased manufacturing output of older goods, are an increase in wealth which is extraordinarily hard to measure with hard numbers over long time periods. These brand new inventions, too, take a lot of effort to produce, requiring a lot of specialization, and that means people working more than we technically “have to” work. We like our stuff, and we work for it.
To compound that calculation problem, there is, interestingly, other stuff that is harder to make. Much much harder to make. Construction costs are on a different planet.
This church originally cost $513,000 in 1928. Its replacement cost, as you can see in the caption, was calculated at $425 million in 1976, and I don’t know what it would be today. If you check an inflation calculator over that time period, you see that 513k in 1928 could be measured anywhere from a purchasing power equivalent of 1.7 million in 1976 from a price index, or if we stretch to broader definitions, maybe up to 10 million dollars. (This stuff is messy.) The replacement value of the church could be seen as being up to 200 times the inflation adjusted value of the original construction cost. If you are personally a fan of buildings like these, to the exclusion of modern gadgetry and safety devices like air bags, then you wouldn’t be quite as happy with where this productivity trend has been going the last hundred years. We have plasma-screen televisions and automobile safety cages, but less awesome buildings because we simply can’t afford so many of those kinds of buildings any more, given all that other stuff that we like
I’d like to point out, too, that even if we theoretically could pull it off to work, say, 20 hours a week, we almost definitely wouldn’t do it. There’s another funny thing going on. Humans also just like to be better than those around us. We tend to judge our own lives not by objective criteria, but by how well we’re doing compared to our peers. There are psychological advantages to having the nicest unit in the trailer park that can’t be matched by having the smallest mansion in a swanky neighborhood.
It’s possible that I’ve talked a little bit about this sort of mental quirk before.
In short, we could work a little less, like Europe, but I can’t really see us actually going ahead and doing any drastic cuts in working hours, both because of some legitimate economic reasons and also because we as people are just kinda built that way. We as individuals have some hope of thinking rationally about this stuff, but we as a species will continue on for the time being, until some more fundamental change comes about.