Today we are celebrating Labor Day, a day that was originally started by Labor Unions in the early 1880s. At the time it was not a public holiday but rather took the form of a walkout demonstration or general strike. The demands were for shorter hours, safer work and higher pay. It has become easy and fashionable to be critical of unions but historically making labor more expensive was a key to success for Western economies.



Why? Because making labor more expensive simultaneously resulted in more consumption and created the need for investment in higher productivity capital. When combined with the allocation of capital in relatively free markets this gave us the enormous economic growth that we have experienced.

The resulting industrial system was so successful that today Walmart, which has been strongly anti-union, is running a huge banner ad for a Labor Day Sale on its website

This tight linkage between labor (jobs) and consumption has really become the hallmark of industrial society. In my book World After Capital, I call it the job loop

We work so we can buy stuff. The more we work, the more we can buy. And the more is available to buy, the more of an incentive there is to work. We have been led to believe that one cannot exist without the other. At the macro level we are obsessed with growth (or lack thereof) in consumption and employment. At the individual level we spend the bulk of our time awake working and much of the rest of it consuming.

When I write about a World After Capital, I am also writing about a world after Labor. Frequently this is seen as as lacking imagination. For instance, Naval recently tweeted

It’s so much easier to imagine job destruction than job creation, that even many tech investors and workers end up quasi-socialist.



and Marc Andreessen has often referred to this as committing the Lump of Labor Fallacy (also my previous responses to this).

I see it differently. The real lack of imagination is to think that we must be stuck in the job loop simply because we have been in it for a century and a half. This is to confuse the existing system with humanity’s purpose.

Labor is not what humans are here for. Instead of the job loop we should be spending more of our time and attention in the knowledge loop which looks like this

Knowledge is the crucial human project. It is what makes us different from all other species. It is also central to our survival and if we do not continue to generate knowledge we will all suffer a fate similar to previous human societies that have gone nearly extinct, such as the Easter Islanders. There are tremendous threats, eg climate change and infectious disease, and opportunities, eg machine learning and individualized medicine, ahead of us. Generating more knowledge is how we defend against the threats and seize the opportunities.

Traditional unions are not the vehicle for exiting the job loop and focusing on the knowledge loop. Like most institutions they have generally come to proliferate the problem for which they are the solution (Clay Shirky). Most unions are still fighting for more and better employment, instead of demanding that we go beyond the need for labor altogether.

One of the pre-eminent union leaders who has recognized this is Andy Stern who led the Services Union here in the US. Andy has become a strong proponent for Universal Basic Income (UBI) with his excellent book “Raising the Floor.” Having a UBI will let people choose freely how much they want to engage in the job loop — some may choose to do so a lot, others may not at all. Being able to make that choice is what I call “Economic Freedom” in World After Capital.

Why do some people have such strong negative reactions to the idea of exiting the job loop? There is a lot of confusion that arises because collectively and individually we have tied much if not all of our self worth to labor. People who don’t work are often characterized as losers or worse leeches. And people who are unemployed often internalize those feelings.

People do need a purpose in life and they do have the need to be recognized by others. But we have to stop trying to define and find purpose in labor and instead seek it in knowledge and in our relationship to other humans and to nature.

Some day in the future I hope to celebrate a Knowledge Day and have Labor Day be there to remind us how wrapped up we all got in work.