The X-Factor

In the last post, I placed a value on the work of human hands. The example was the village of chairs in Italy. The question is why we are letting ourselves become the slaves of the machine. Why we are sacrificing the beauty of the unique work of our hands for a mechanical, uniform product of the machine.
Firms are profit maximizers. In order to maximize profits, we must minimize losses. In order to minimize losses, we must minimize costs. What is typically the most costly resource? Labour. Not only is it costly, but it is not perfect. By this it is meant that there is human error where machines can do it right, every-time. So by eliminating the human factor, costs are minimized. Machines can make things faster and usually of the same quality, so why have humans.

This is a failure maybe of the market, but also of economics itself. Both failures lie in their under-allocation of value towards human work. By human it is not meant someone who operates a machine that makes cars, but a carpenter, a tailor, a shoe maker.
Although the firms are not externalizing their costs, they are getting reducing their costs in such a way that it does not benefit society, in any way. The result is more unemployment. Even those who remain employed find their work more tedious, because they have been made slaves of the machine.
Economics has not made matters better. On the contrary, the one-dimension that it provides, the simplicity of defining well-being as measured in terms of profits has cultivated this sort of behaviour. It has fuelled the industrial revolution, and now makes the transition into the technological revolution. Obviously then technology is the way of the future, as it has been the way of the past.
The role of government herein is therefore extremely important. The government is the regulation body, necessary because we have seen that an entirely free market, motivated by greed, results in negative externalities and large divisions of society and financial standing. Our governments must then find a way to shift the focus of technology. Research and development is essential, it is true. But research and development into faster micro-chips, while the world is on the brink of an energy crisis, is not essential. How are you going to use the micro-chip when we have no electricity to even power a calculator?
Government then needs to use its all its tools to encourage society to reconsider its values, and engage in discussion about the direction business is going in.

Value Of Craftsmanship

Still brainstorming on ideas (and this can definitely be incorporated into the ideas from the previous post), but I would like also to explore the value of craftsmanship.
In an age where we have technology doing everything for us, from building cars to architectural design, we are losing the value of work of the human hands.
In Italy, there is a town near Venice that exists solely because of its chair-making industry (actually, TIME did an article on it a year or so ago). This town, is - was the biggest producer of chairs in Europe and a competitor in the world. Not lawn chairs, but dining chairs; quality work. Quality work made by men who were carpenters. Men who took pride in their work, which gave them great satisfaction.
Then along came China, and companies that could produce the same chairs for a fraction of the price. There's one difference; the human touch. Now the future of the town is not so certain, as many shops have begun to close.

Needless to say, Schumacher wrote about this, and it was through his book that I was able to organize my scattered, previous thoughts on the matter.

Obviously my E.E cannot be focused solely on this (although a study of the town near Venice is feasible), but it is definitely something that I feel should be incorporated in my Extended Essay.

Small Is Beautiful - The Beautiful Truth

Although I do not yet know what my extended essay will be about, I already know which direction it will go in, and who has led me there.
Mr. E.F. Schumacher. This man is brilliant. His book "Small Is Beautiful" is very insightful, and can possibly help us explain many of the problems we see today.
As for the Extended Essay, I am particularly interested in two of the ideas that he puts forward.
These are found in pretty much all of the chapters, in one way or another. These are the ideas of;
- Development Economics; finding the correct way to develop a Third World country. This idea is explored very deeply in "Two Million Villages", "The Problem Of Unemployment In India", and others (on which these two chapters are based). I find very interesting the idea of intermediate technology, which leads me to the next point of interest:
- Technology. It seems to be the most important thing in the world right now. Even at SAS, we recently had the tech-fest. It isn't all bad, I mean, the reason why I am blogging is because of technology. However, in his chapter "Buddhist Economics" he explores the quality of modesty, stating something to the effect of "there are always societies who say they need more, but there is no society who takes a step back and says, 'we have enough'". Then there is the idea of more social technology in the accordingly titled "Technology With A Human Face".

What both of these ideas have in common is that they take a look at the situation of the moment, agree that it is undesirable (maybe not in the case of technology, but that's a different matter), and call into question the methods used, which have for so long been assumed correct.