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Work and Leisure in a Knowledge-Based Economy


Work has long defined a person’s place in the community. Politically, it divided the nations on earth into two warring camps. The socialist nations, adhering to the Marxist “labor theory of value”, attempted to assign ownership of production collectively to the workers who produced it. The capitalist nations, on the other hand, have emphasized individual opportunities for people to better themselves through work. Religiously, the so-called Protestant “work ethic” associated the capitalist imperative to work with certain tenets of Calvinist theology.

Despite its historic importance, however, the concept of work itself is widely misunderstood. Lacking recent examination, it is bound to a definition conceived in relation to early 19th Century schemes of production that no longer apply to what most working people today actually do.

In physics, the concept of energy, combining the variables of force and distance, describes the capacity to do work. Power is energy expended over a period of time. One horsepower equals 550 foot-pounds per second; it is the expenditure of enough energy in one second, for instance, to move an object for 110 feet with 5 pounds of force. In labor economics, work has a more ambiguous definition although its elements, too, are presented with a veneer of mathematical precision.

Generally speaking, work represents the human capacity to perform an economically useful function. In a slave-based economy, this capacity might have been defined by the number of persons owned by a slave master. Today, when most work is performed in the context of an employment contract, the amount of time which the employee has agreed to spend in employer-directed activities in return for money has become a measure of its quantity. The amount of work available to the employer is calculated by multiplying the number of employees under contract by the average time which they are committed to spend on the employer’s projects in a given time period. Its unit would be the “worker-hour”.

Such a definition assumes that economic output is proportionate to the time worked in its production. Time, in turn, is a product of employment and average working hours. A common practice is to pay workers by the hour. The theory is that such a time-based reward is roughly in line with the benefit which the employer receives. The employer presumably is interested in maintaining or expanding production because the production is what he sells to gain revenue. It seems reasonable that the more people who are working at something and the more time they each spend, the more labor is contributed to the production process, the more goods or services are produced, the more revenue the employer derives from sales, and the more money he can afford to pay for the labor. The economic relationships appear to be iron-clad.

However, this model of work is based upon a situation that once was more common than it is today. We still tend to think of work in terms of manual labor. For example, one can imagine a group of people peeling potatoes. The workers would be seated on stools as they removed the peelings from the potatoes with paring knives and then tossed the peeled potatoes into a basket on the floor. In this situation, there would be an obvious correlation between the worker-hours of labor assigned to the task of peeling potatoes and the number of potatoes peeled. If the employer wanted more potatoes peeled, he would engage more labor. Either he would hire more workers or schedule more hours of work for each worker.

But even in this situation, there is another factor to consider - how fast the employees work. The number of peeled potatoes can also be increased by increasing the number of potatoes that each worker peels in an hour even if the same number of people are working the same number of hours. The generic term for this third work-related element is productivity. Ought labor then be redefined to include this element? If it were, the quantity of work would become substantially equivalent to the quantity of its product.

Labor economists have developed the following equation to describe the relationship between work’s various elements: Output equals employment times average work hours times productivity. Output describes the volume of goods and services produced in an economic system. Employment, work hours, and productivity are elements of labor input. Productivity is not measured directly but is instead a ratio calculated from the other three variables in the equation. We therefore tend to remove productivity from the concept of labor (measured in worker-hours), regarding it instead as a rate of efficiency in using labor. We think of an employer motivating his people to do more work in the available time as if the boss were a football coach urging his team on to ever greater effort.

While the time-based model of labor can describe simple processes like potato peeling, it is inadequate for the kinds of work that most people do nowadays. Much of large-scale production has been taken over by machines. Those machines have raised the speed of production by a far greater degree than what human beings might achieve through intensified work performance. Capital investment drives the expansion of production, not changes in labor practice.

Goods manufacturing has itself become a shrinking area of production. More and more people work in occupations whose object is not to produce goods but to perform an economically required service as the need arises. For this, the worker needs mainly to know how to do work when the work needs to be done. A growing number of people are employed in offices. Office work involves the collection, manipulation, and transmission of information. There appears to be a looser connection between this kind of “production” and time spent on the job. In addition to time and numbers of persons employed, the factor of knowledge enters into its type of work. How do we measure knowledge? That is a difficult question to answer.

The kind of work performed in peeling potatoes does not involve the use of equipment except for a knife. It requires no knowledge beyond that involved in the simple process of cutting the skin off a potato. Such knowledge can be learned in a minute or two. Consequently, work performance can be improved - done more quickly - if the worker repeats the operation in a mindless, automatic fashion. This kind of work is different from that in situations where the challenge is not to repeat simple operations more quickly but to solve problems which may never before have appeared.

In that case, knowledge would be brought to bear upon a problem either through creative discovery and improvisation of techniques or else by knowing where the required knowledge can be obtained. One remembers what one has done before. Alternatively, one asks a supervisor or co-worker how to solve the problem or one reads a manual, memo, or other document shedding light on the subject. The knowledge required to do the work is available in various places. It is up to workers individually to find this knowledge and learn it in time to do the work.

One can see that the capacity for work involves more than having enough time to do it or expending enough personal effort. The access to work-related knowledge also determines how fast work can be completed. In that regard, such advantages as maintaining a complete and orderly filing system can become important. Having a good memory, many years of relevant experience, and active lines of communication with one’s co-workers are also valuable assets from a knowledge standpoint.

When work is seen from this perspective, one realizes that the traditional ways of improving work performance - putting in time, working steadily and quickly - may be less critical than was previously thought. Instead, one ought to put more emphasis upon cultivating sources of knowledge. One understands that the acquisition of knowledge for work does not necessarily occur in proportion to the time spent. Knowledge can be revealed in a flash. The essential benefit is to have access to knowledge as it is needed. In this respect, the cost structure of work increasingly resembles that of public utilities where, for instance, the electric-power company levies a surcharge for contributing to peak demand or the telephone company adds an access charge.

Many employers, however, continue to operate as if work were time-based, and therefore fail to exploit their knowledge resources. There simply is not the documentation of work procedures to maintain reliable and continuous access to knowledge. The training process, too, is often misdirected because the trainers do not know what knowledge is needed. The model of work may be partly responsible for such errors.

If one believes that productivity improvement is a matter of employee motivation, one will react differently than if one believes it has to do with the availability of knowledge. In the first case, employer training programs may be conducted by psychologists or other human-resource specialists whose business is to motivate people. In the second case, the programs would attempt simply to deliver information useful in doing the work. In regards to retirement policies, if one believes in the personal-motivation theory of work, then it makes sense to get rid of older employees so that the more spirited and energetic younger employees can take their place. If, on the other hand, one believes that work performance depends more on knowing what to do in the position, then one might recognize that dumping the older employee would involve the loss of accumulated knowledge that could take years to replace.

Work-related knowledge is therefore in the nature of an asset or a legacy from the past benefiting present performance. The question is: Who owns this asset? Unlike capital equipment, which clearly belongs to the employer, the ownership of knowledge is ambiguous. To the extent that this knowledge pertains to a particular work situation only, then the employer has an exclusive benefit from it and exercises real ownership. Even so, the employee effectively controls the knowledge that is inside his own head. If he quits a place of employment, he takes that knowledge with him. It is useless knowledge if it is too specific to be applied to other job situations, but, alternatively, a thing of monetary value if the employee can include it on his resume as relevant work experience.

The U.S. career system is built on the theory that most work-related knowledge is portable. The worker becomes a labor commodity in which the knowledge acquired in school or in previous jobs becomes fused with the worker’s personal talent. Therefore, the American “knowledge” worker tends to be a specialist in a particular field, whose basic skills are assumed to apply as well to one employer’s work requirements as to another’s. This is a scheme of careers that encourages job hopping. It is assumed, for instance, that an experienced purchasing agent, knowing the principles of purchasing, can pick up the incidental knowledge involved in changing jobs but that a secretary in the purchasing department, already familiar with its operation, cannot be promoted to buyer due to an insurmountable lack of professional knowledge.

The U.S. system of career development clearly is structured that way for reasons other than economic requirement. The idea that some workers possess greater amounts or a higher grade of knowledge serves to justify differences in pay. The rigid barrier between jobs of different types are a force to restrict labor competition and drive up salaries. Why do U.S. employers tolerate this disadvantageous arrangement? It may be that the people who benefit most from the system, the upper-level managers and professionals, are the ones making personnel decisions. It may also be that educational institutions, with their vast networks of teachers and alumni, have an interest in the belief system supporting this practice: that only the knowledge acquired in schools or in formal training programs have any real value and that knowledge picked up aimlessly on the job, being incidental to work performance, is inferior to the other kind.

For all their interest in obtaining a greater work contribution from employees, employers have generally overlooked a major opportunity to tighten their control over work-related knowledge and so gain an advantage in bargaining for labor. The opportunity lies in removing the knowledge from employees’ heads and expressing it more objectively. Most kinds of work are organized along the lines of a rational process; the work-related procedures can be expressed in words. Once this is done, the knowledge they embody becomes available to any reasonably intelligent and literate person. That means that the employer is no longer at the mercy of particular employees, but, if need be, can hire replacements off the street and reliably bring them to the level of knowledge required for job performance.

An exception would be in cases where the work depends on highly personal skills or unique attributes of personality. There is, for instance, no knowledge to teach the baseball skills of a Dave Winfield, or Johnny Carson’s knack for entertaining late-night television audiences, or Vanna White’s attractive way of turning letters in game-show crossword puzzles. Such workers have talents in a class by itself and so can command exorbitant salaries.

Otherwise, the possession of knowledge need not confer an economic advantage, because knowledge, being general, is accessible to persons of ordinary intellectual ability. Only its original discovery involves the uncertainties of the creative process or the exercise of “genius”. After that, the task becomes to put the knowledge in a form that will allow it to be transfered easily to others. This is the part that most lends itself to improving efforts at work for the knowledge will be of no use unless the worker receives a full communication of its instructional message.

Much of the work performed today is being done without organization of its supporting knowledge. Knowledge is used in an ad hoc way. There is need for a more systematic approach that brings greater quality and speed to the performance. Improved use of knowledge may be sought both in its formulation and its delivery to the user. The formulation of knowledge pertains to its organization which would include such elements as identification of pieces, their exact description, and their arrangement for convenient retrieval. Analogies can be found in the process of manufacturing physical products. With respect to the delivery of knowledge, the particular verbal, numeric, or graphic expressions used to communicate with people can be developed with greater care. New technologies of information storage and communication can be employed to make the knowledge more accessible to users.

In goods production, a revolutionary advance took place with the adoption of standard or interchangeable parts and with the development of the assembly line. What happened then was that the manufacture of goods was removed from the realm of personal craftsmanship. Parts and processes of production were subjected to an objectively expressed design. Therefore, the knowledge to do this kind of work was no longer the responsibility of individual workers; it belonged to the system. The workers were required only to follow an exact set of instructions provided by engineers.

Blueprint drawings presented a precise image and description of the parts. Each part was assigned a unique number for production and inventory-control purposes. The smaller and simpler parts were combined in larger assemblies to form the finished product. The work to support this production was likewise organized with meticulous attention to detail. In assembly-line production, the various parts were scheduled to arrive on the line at the proper times and in the right quantities. At each point in the process, a worker equipped with a suitable tool was waiting to perform the required operation in the time allowed. This whole scheme was based upon an elaborate system of knowledge, developed and owned by the employer. The workers, though highly productive, did not participate intellectually in the design of their own work.

One can anticipate similar changes in knowledge-based work. Although some of this work will be experimental or developmental and therefore less susceptible of being reduced to an orderly processing routine, most white-collar jobs have at least a core of repetitive functions that can be organized in a systematic and rational way. With the advent of the computer, we speak of “processing information” as if information were worked upon physically. Indeed, information can have an explicit design as manufactured parts have. Its processing by office workers is not so unlike factory processes. Psychologically, the transformation of erstwhile professional into knowledge mechanics may be no less painful than it was for blue-collar craftsmen. Nevertheless, such changes will continue to be made without remorse for the sake of economic efficiency.

In this age, any such system of storing and retrieving knowledge will necessarily make extensive use of the computer. Although work procedures are rigorously defined within its own sphere of operation, the data-processing function is largely a black box. Its information product feeds into other routines of office work where the procedures are more loosely organized. Here the human worker must carry the burden of work. However, the interface between the computer and human sectors of knowledge must form a reasonably tight connection if the system is to work. Knowledge must be passed between the one and the other in terms which both can comprehend.

It is fair to say that industry’s first experience with computers did not live up to expectations. Mainframe computers were an efficient means of handling large amounts of similar information, but they did not respond well to special cases. Lacking a sense of reasonableness, they sometimes produced erroneous output which human beings would have caught.

A fundamental problem was the poor communication of knowledge between data-processing operations and use. The user of computer-generated information was typically someone without training in computers who consequently had to rely on a specialist in that field. The data-processing specialist was equally unprepared to grasp user applications. Although reference manuals were usually available with the software, they were often poorly written, providing much technical detail but no clear point of entry for understanding the system.

Later the personal computer came along, offering more ‘user-friendly” features. More advanced software packages were developed, with an array of knowledge-providing features including user-directed menus, step-by-step tutorials, on-screen prompts, and help keys. Gradually office workers warmed up to the computer, and the technology began to fulfill its promise. The lesson from this is that technologically advanced products may offer little benefit unless supported by the right structure of knowledge. The connection between the system and its human user is the weak link in the chain. Therefore, the delivery of knowledge plays no less critical a part in improving work performance than its formulation. Knowledge should be delivered to its user in expressions which the user can easily understand. Human beings understand words, numbers, and graphic designs. Even with the most advanced technologies, these elements will somehow have to be communicated.

Except for speech, the simplest way to express knowledge is to write it down on a piece of paper. Other techniques exist, however, which may improve the retrieval, expression or transmission of knowledge. There are computer systems which can search through books in a library to retrieve exactly the kinds of information which a person wants. One can record talks or visual demonstrations on videotape which can be played back on monitors as often as the viewer wants. There are DVDs, audiocassette tapes, slides, flip charts, and so on, to enliven a presentation of knowledge or reenforce its retention in memory. Whatever the medium, the message should be expressed in a clear and straightforward manner.

It may therefore be that such an undertaking will not succeed without advancements in technology. The ultimate technological achievement in our area of concern would be the development of artificial intelligence. This is a computer-based system which, to a degree, replicates human thought processes without being subject, like humans, to memory loss or other destruction of knowledge. Ideally, whatever knowledge is inside a worker’s head can be transfered experientially to the computer brain, which then becomes able to solve particular work problems through human-like “thought”. At this point, however, the technology of artificial intelligence is yet in its infancy.

In any event, employers will likely be obliged to assume a greater role in providing knowledge for work than they do presently. While pre-career education has traditionally been the employee’s responsibility, its relative inefficiency in delivering work-related knowledge requires employers to devote more of their own resources to career training. Already it is estimated that (in the late 1980s) the nation’s businesses are spending $210 billion for employee education and training; they have created an educational system about the size of U.S. public schools and colleges.

Additionally, employers may, as we have suggested, invest in the knowledge of their own work operations by creating written procedures manuals or computer-based electronic codings. No less than the hardware of plant and equipment, this knowledge-conveying software has become a valuable tool to assist labor in production, or, in other words, a form of capital investment. Derived from the experience and inventions of human workers, such knowledge would be converted into a more objective form of expression - be cut loose from particular people and what lies within their brains - so that, as much as possible, behind each job or work position there would stand a ghost-like structure of communicated information and procedure to define its being.

In a well-run business operation, more and better knowledge will be the focus of improving efforts. The manager or supervision is generally the one responsible for this function. Such a person trains new employees or arranges for training. He or she defines the tasks that need to be performed, which definition, in turn,determines the required knowledge. An able leader will communicate well with subordinates, make sure that knowledgeable back-up people are available for various positions within the organization in case the incumbents leave, and review methods and and procedures in search of a better way of doing things. But since work is often viewed anachronistically in terms of spending time and effort, this part of the leadership process is often ignored. Workers are left alone to do the work they know how to do, and no one else knows what they do. This is a strange situation because the supervisor is supposed to direct subordinates and evaluate their work performance. But how can he perform that task adequately if the supervisor does not even know what his people are doing?

In the absence of such knowledge, the supervisor may develop other standards of performance that are more easily determined. He may imagine, for instance, that the person who puts in many hours of overtime work must be making an extra effort and be doing a good job. The ability to talk intelligently, dress well, tell jokes, and discuss professional sports would also inspire confidence in a person. As a result of spreading ignorance and confusion about what workers actually do, some employers have made a fetish of working long hours. Their basic understanding can be expressed in this principle: If you can’t measure output you measure input. You see the time that has gone into an activity and assume that something useful has been accomplished. Leisure, on the other hand, is something much out of favor because it seems to indicate that a person did nothing.

Long ago, trade-union agitators argued that it was necessary to cut the hours of work to save jobs from displacement by machines. Advancing technology had made it possible for a smaller number of workers to produce the same quantity of goods so that the employer would be able to discharge some of those workers currently employed. Such an argument overlooks the growing amount of waste in the production process and the consumer economy. Waste is a product of ignorance and confusion as workers grope for ways to do their job in the absence of adequate work knowledge. As work processes become more complicated, there is more confusion and waste.

There is also waste in the consumer economy as increased production efficiency in the goods-producing sector eliminates employment opportunities and pushes people out into industries and occupations offering little benefit to people. Instead, corrective enterprises or necessary evils such as wars, incarceration, medications, lawsuits, and mandated education, often mandated by government, assume a growing share of economic output. Their redeeming aspect is that they provide jobs. The alternative would be to cut working hours and spread the real, productive jobs around to more people.

Arguments that the economy cannot afford to give working people more time off from work are usually based on the ideas that production is directly proportionate to time worked and that less production means less wealth. This potato-peeling concept of work assumes that production is the limiting factor whereas we know that in a capitalistic economy the constraint is usually not production but consumer markets. Production capacity is perpetually in oversupply relative to markets. Given that situation, the remedy is not to increase hours of work and production but to increase markets. Cutting hours helps to increase markets because people use more consumer products in their free or leisure time than they do during working hours, and the potential use of products stimulates product demand. Moreover, the job-creation aspect of reduced work hours puts more money in the pocket of previously unemployed workers. That, too, stimulates demand.

Knowledge is also a factor in consumer demand. Technologically advanced products require knowledge to use them effectively. To purchase such products therefore implies a commitment to spend the time to acquire the required knowledge. Persons who know that they lack the time and mental energy for such learning will be inclined not to buy the product. Alternatively, they may make the purchase but then never use the product.

It may be that goods-production sector of the economy is generally in decline because in our leisure-starved society people do not have enough time to find uses for the available products or they do not have the time to learn how to use products properly for which they have found a use. Their time is itself too valuable to be absorbed in the process of acquiring knowledge about these products. The consumption of services, on the other hand, is expanding. That may be because services save time. When people hire a tax preparer to prepare their taxes or a tailor to mend their clothing, they need not spend time either in doing the work or learning how to do it. The provider of the service has the knowledge already and will use it on a consumer’s behalf for a sum of money.

Consumer goods could make a come-back, however, because manufacturers have found a way to ease the requirement of procuring knowledge by building it into the product itself. As the cost of computer chips has come down, it has become economical to install “micro-controllers” in various household products. The micro-controller chips function as miniature computers that can store knowledge about the product and its recommended use. A handgun equipped with this device, for instance, will tell the user whether the gun is loaded and how many shots are left. A thermometer will beep when the temperature rises sufficiently for it to be removed from the patient’s mouth. No longer would consumers have to know and remember these facts pertaining to product use. The time required in information gathering is reduced.

Employment arrangements have also changed to accommodate the increased requirement of knowledge. Employers now realize that it is expensive to keep people on the payroll to perform a work operation when the real need is to have access to knowledge. Therefore, increasingly, they are engaging labor on that basis. The consulting business has grown by leaps and bounds. AT&T has developed a 900-number service which will allow persons or businesses in need to knowledge to talk with outside experts and be charged by the minute for this advice on their telephone bills. Other suppliers of knowledge such as Dow Jones offer the opportunity for clients to tap their data base by telephone.

Eventually it may be that employees of a firm will be given easer permission to reduce working hours or take leaves of absence so long as they remain available for consultation as their knowledge is required. That way, their accumulation of work-related knowledge would not be lost to the firm; neither would it be sold to a competing firm. While such arrangements are usually confined to recently retired employees in the upper-echelon groups, there is no good economic reason why it should not be extended to younger and lower-ranking employees. Work would then follow a bifurcated pattern of costs and benefits. Part of it would remain tied to time-based employment and the expenditure of personal effort. Another part would supply knowledge, levying an access charge. In the latter arrangement, the contractual form of labor would align more closely with its underlying function.

Labor in this form requires a new analogy with concepts in the physical sciences. It is no longer appropriate to compare it with mechanical work, the product of distance and force. Work’s human experience corresponds more nearly to the concept of entropy. Andrew Nowicki has written that “human labor can be defined as conversion of physical energy into orderliness.” Entropy, on the other hand, is “a measure of chaos; the higher the entropy, the greater the chaos. Though in a strict physical sense entropy relates to the flow of heat, in a broader sense it pertains to any system that can have various degrees of orderliness.” Labor therefore decreases entropy by increasing orderliness, while consumption decreases orderliness and increases entropy.

In the long run, Nowicki observed, “the products of labor succumb to the second law of thermodynamics. A shiny automobile falls apart, rusts away, and in a few million years becomes indistinguishable from the soil in which it was buried. Information, once known, becomes soon forgotten.” The imperceptible nature of the change is such that time barely measures its progress.

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