The Job Market

Robert Paul Wolff writes a very entertaining blog called The Philosopher’s Stone.  Even when he is just bragging about his grandchildren, it is still utterly charming.  A little while ago, I read a post called Ein Gedankenexperiment A La Rawls.  In this post, he describes a thought experiment to determine what jobs would be worth in a free market.  The gist of it is that all jobs are handed out randomly to all the workers, all with the same salary.  Then, people start trading.  The value of the jobs will depend on how desirable they are and how difficult they are.  It shows how messed up our current system is.  Garbage collectors would be making much more than stock brokers in a free market, so clearly our labor market isn’t free.

Since reading the piece, I keep thinking about it.  I like the thought experiment, but I believe it is missing a key feature of a truly free market and I want to make a modification.  In a truly free market, there needs to be an option to opt out.  If you imagine a market for dinnerware, there will be some pieces that are rare and coveted and they will sell for a lot.  There will also be some pieces that are chintzy and those will sell for a little.  But there are also some people that will say, “No thanks.  I’ll just use my hands.”  It is even probable that the chintzy dinnerware winds up disappearing because people would rather eat with their hands than purchase it.

In order to add the opt out feature to the labor thought experiment, we just need to posit a guaranteed minimum income.  This is an idea with some pedigree from Hayek on the right to Galbraith on the left.  Once the guaranteed minimum income is in place, when the jobs are handed out randomly, the options become to keep the job given, to try to trade for a different job or to opt out.  The dynamics of the market would be largely the same.  The biggest difference is that no one would take certain types of jobs.  There would be no worry about necessary jobs being unfilled because those would have to pay more.  And there would be no worry about fun jobs being unfilled because people would want them.  The jobs that would disappear would be the jobs that are neither fulfilling nor necessary.  I can’t imagine many middle managers would come out of this system.

When all is said and done, there would be a much smaller work force, but it would be a much more efficient workforce.  Perhaps we could even get a glimpse of Plato’s ideal state rather than the city of pigs he describes in The Republic.  Unfortunately, the people who are always talking about market efficiency and freedom would never go for this.  They have too much to lose since their jobs aren’t really necessary.  And they run the world.  So, this will remain a humble thought experiment.

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