Robert Solow on the future of leisure

…there is no logical or physical reason that the work year of a machine should not actually increase, say. But it would seem more likely that increased leisure over the next century should be accompanied by a smaller stock of capital (per worker), smaller gross investment (per worker), and thus a larger share of consumption in GDP. Of course, this tendency will almost certainly be offset by an ongoing increase in capital intensity, even in the service sector. Obviously there are other, totally moot, considerations. Will leisure time activities be especially capital intensive (grandiose hotels, enormous cruise ships) or the opposite (growing marigolds, reading poetry)? Show me an economist with a strong opinion about these things, and I will show you that oxymoron: a daredevil economist.

Of course if you really do think the capital-labor ratio will be falling, investment behavior is going to disappoint for a long time to come.  The shift to intangible capital will strengthen that tendency all the more.

p.s. Leisure will become especially capital-intensive, at least in the United States.

Here is the full essay, from a few years ago, but I think new on-line, and from this MIT Press book of collected essays, now forthcoming in paperback.


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