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.

Comments

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

VR pessimism

I think Tyler meant to say: "Apart from the near infinite free leisure that youtube provides, leisure will become especially capital-intensive, at least in the United States."

My thought exactly! Not just VR, basically all forms of information leisure, right? Even aside from taking a side on the question, the examples given " (grandiose hotels, enormous cruise ships) or the opposite (growing marigolds, reading poetry)" are leisure for the elderly. I'm not convinced that's an age rather than a cohort thing; gaming demographics are aging appropriately.

I would be firmly on the side of less capital-intensive, except for signaling---and the social media amplifies the returns on many forms of expensive leisure signaling. There is also potential for high-capital in VR, you know the thing about how custom designed objects in Second Life were being traded for large sums? Combine that with crytpo to make virtual objects verifiably unique and you have expensive VR jewellery, fashion, vehicles.

Peloton, the VR-equipped clothes rack.

VR requires energy, and the better the VR, the more energy is required, so it seems pretty capital-intensive to me.

What is capital? 'A machine operated by a human.' Not enough to build theory, with all due respect to Karl.

What if Yoda were 6 feet tall and he smoked weed?

Dank nugs, these are.

^^^ I think these little throwaway threads are some of the best stuff at MR.

I agree, though Engineer didn't used to troll before ...

While we're at it: is Yoda a troll? Or just an unusually old man?

Smaller stock of capital per worker?

Outsourcing or subcontracting helps, but in the end someone is taking the depreciation cost. Only because Uber does not own the cars used as taxis, it doesn't mean said cars are not depreciating. Same for air carriers.

Moving from personal auto to uber is a scale change.

The depreciation happens faster and is covered by greater usage. Hence the equivalent discount rate is lower (curve slopes up normally).
In plain words, it means fewer owners are buying cars more frequently on a reliable basis. Makes for a kind of flee sales effect.

'fleet' sales effect.
Sorry for goofing that important point. Economies of scale strengthen with uber, a form of disintermediation always has scale effects.

Yes, some efficiency is gained with fleet car sales. Albeit, depreciation still occurs and therefore taxi business is still "capital intensive".

I also mentioned air carriers because Tyler sometimes writes about supersonic flight. I wonder how supersonic travel can reduce the capital to labor ratio: the supersonic plane is more complex (capital intensive), consumes more fuel and minimizes pilot hours. Just what Tyler writes as "Leisure will become especially capital-intensive" =)

Capital-intensive companies create a more consistent, reproducible and therefore satisfying experience for risk-adverse consumers.

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

Well, A Brave New World is always a good guide in this regard .

'"We condition the masses to hate the country," concluded the Director. "But simultaneously we condition them to love all country sports. At the same time, we see to it that all country sports shall entail the use of elaborate apparatus. So that they consume manufactured articles as well as transport. Hence those electric shocks."' Oops, not that one.

'Those three and a half hours of extra leisure were so far from being a source of happiness, that people felt constrained to take a holiday from them. The Inventions Office is stuffed with plans for labour-saving processes. Thousands of them." Mustapha Mond made a lavish gesture. "And why don't we put them into execution? For the sake of the labourers; it would be sheer cruelty to afflict them with excessive leisure."' Nope, still the wrong one.

Ah well, maybe the section about how a game or any leisure activity can only be introduced if it uses more equipment and increases consumption compared to what it replaces was not pithy enough.

No.

A motorcycle may be described as an elaborate apparatus when compared to a horse, but the horse (domesticated ~5000 years ago) may increase consumption than the 20th century motorcycle.

Who can afford to rides horses and who can afford to ride motorcycles for hobby?

Interesting to see the more sophiscated pattern of deletions here - better than simple search and replace, but still seemingly labor intensive.

And not even making a pretense of being content based.

The chicken or the egg? Which comes first: lower capital investment per worker or greater leisure time per worker? Is investment in productive down because American workers are a bunch of layabouts or because owners of capital have better things to do with their capital (such as speculating on rising asset prices)? Solow seems to believe (at least in this essay) that American workers are layabouts, preferring video games over productive labor.

Mr. Waldir is not a friend of America, quite the opposite indeed. He is an anti-American putschist. Americans ignore that to their own peril.

I myself fear what Mr. Waldir may do if he remains in a position of power.

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

Get out on the trail with detailed maps shared by hikers like you.

All you need are shoes and a water bottle.

Okay, if you are going to be prissy about it.

Know your limitations, though:

https://www.usnews.com/news/best-states/colorado/articles/2019-07-05/missing-hiker-found-dead-in-rocky-mountain-national-park

For sure. You need a bit of experience and situational awareness to know what to bring.

I know people who bring their 10-14 essentials to county parks because that's their comfort level. I know people who trail run in the backcountry with nothing but shoes. Each can be fine, but as you say, know your limitations.

And the case of just shoes, that you can stay on a well traveled route.

By the way, let me say on fly fishing, you can go down to Orvis and say "do me." Drop a couple thousand.

There will still be a bunch of guys in Colorado who out-fish you with a fiberglass Eagle Claw they bought in 1980.

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

Internet counts as capital-intensive or capital-not-intensive?

Marigolds and poetry?

This is why saltwater, ivory tower, leftist economists should have no say in policy.

"Lieutenant Shazzbot, would you like to spend shore leave with me taking a shuttle to planet Risa, and visiting the casinos, Holosuites, and brothels?"

"Nah, I'm gonna stay in my cabin, read some Maya Angelou, and tend to my flowers."

That's precisely what Buddha did after getting bored of casinos and brothels ;)

Or Saint Francis of Assisi? Memory fails.

Yet. Mr. Scott liked to read technical journals while others were on shore leave. There's no accounting for taste.

I work as a computer programmer. The technology I use is constantly shifting. Much of my work time is spent keeping up with this - either explicitly, by reading documentation, or implicitly, by having to spend time finding and fixing mistakes that (hopefully) I will not make a second time. If I worked less time, this portion of my time would not reduce by much, as it is required before I can start being productive. So reducing the number of hours I work would decrease my productivity by more than might be expected by modelling my productivity as X lines of code per hour. I suspect that the number of hours worked per person by those people still engaged in productive high technology work will not reduce.

The poor will work 16h a week for sustenance and have capital-light leisure time and the rich will work 24h a week for challenge and fun and have capital-heavy leisure time.

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