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Leisure and Economic Growth

A prevalent economic view sees leisure as time lost to the economy. Hours are not worked. Goods and services are not produced. Working people are not earning wages and paying taxes. Such a view, tuned to the production side of economic activity, overlooks the importance of leisure time to consumption. More goods and services are consumed during a worker’s free time than in the hours at work. The need for those goods and services, and consequently their consumer demand, in a real sense depends upon opportunities to fit them usefully into the prospective consumer’s personal lifestyle or routine of living.

The a large extent, the American lifestyle revolves around the use of automobiles. It was Henry Ford more than any other person, who invented the automobile-based life, not only in product design and production methods but in the consumer market for such a machine. In his view, the principal techniques to maintain or expand the market for automobiles were, first, to pay the worker as consumer enough money in wages to be able to afford the product and, second, to allow the worker enough time away from work to make full use of it. Both techniques came into play in 1914 when Henry Ford instituted the $5-a-day minimum wage and the 8-hour workday. Twelve years later, he became the first major U.S. manufacturer to adopt the 5-day, 40-hour week.

“The country is ready for the 5-day week,” Ford said in a 1926 interview with World’s Work magazine. “It is bound to come through all industry ... The short week is bound to come because without it the country will not be able to absorb its production and stay prosperous.” In answer to critics who suggested that more leisure for workers would mean more drunkenness and wasted time, he predicted that “people will become more and more expert in the effective use of leisure.”

“But,” he added, “it is the influence of leisure on consumption which makes the short day and the short week so necessary. The people who consume the bulk of goods are the people who make them. That is a fact we must never forget - that is the secret of our prosperity.”

“The people with a 5-day week will consume more goods than the people with a 6-day week,” Henry Ford said. “People who have more leisure must have more clothes. They must have a greater variety of food. They must have more transportation facilities. They naturally must have more service of various kinds. This increased consumption will require greater production than we now have. Instead of business being slowed up because the people are ‘off work’, it will be speeded up ... This will lead to more work. And this to more profits. And this to more wages. The result of more leisure will be the exact opposite of what most people might suppose it to be.”

How is it that people today associate leisure instead with lower profits and wages and with slowed business activity? Partly the answer may lie in economists’ preoccupation with the business cycle. A declining workweek is a lead indicator of economic recession, while long workweeks with much overtime characterize period of boom. Ever since the Great Depression, the proposal for a shorter workweek has bee viewed as a well-intentioned but futile attempt to alleviate problems of temporary economic slack, and not as a permanent measure called forth by permanent changes in work methods and technology.

In addition, the U.S. economy today is more debt-driven than in years past. Soaring public and private indebtedness has created a climate of urgency in economic policy which requires that business activity, regardless of kind, be maintained at a steady or increasing level. Though leisure may stimulate new wants an needs by the consumer and ultimately expand the economy, it threatens immediately to reduce or disrupt the flow of dollars required to service debt. Thus we are chained to a financial mechanism which prevents real (in physical or human terms) economic growth.

In the past twenty years real per-capita GNP in the United States has risen by one third, but average real income has declined. The flow of dollars has diverged from patterns of production and consumption which describe actual living conditions. The U.S. economy has registered a spurious kind of growth, measured in money rather than in useful services or goods. As, for instance, the number of married women living with their husbands who participate in the work fore has increased by more than a half million persons in each year for the past thirty years, certain kinds of work once provided without charge within the household have increasingly been undertaken by commercial establishments. The day-care supervision of children or the meals eaten at a family-style restaurant may be reported as growth of GNP, but the volume of actual service may not have changed that much.

Increasingly, too, the nation’s economy bears the cost of self-liquidating functions related to the treatment of problems such as unemployment, divorce, chemical dependency, and crime. Between 1970 and 1983, the number of federal and state prisoners more than doubled. Public expenditures in all branches of the criminal justice system tripled during the 1970s. Health-care expenditures, much accounted for 5.3% of GNP in 1960, now claim more than twice that share. The divorce rate, teenage suicide, and drug use, and their related treatment, have also risen.

Leisure can reduce the stress and strain of daily life, but leisure is in short supply. In the first four decades of this century, the average workweek of U.S. civilian workers dropped from 60 to 44 hours, which represents a decline of 4.0 hours per week per decade. In the next four decades, between 1940 and 1980, there was a further decline of five and one-half hours per week, or 1.4 hours per week per decade, much of which was due to the greater proportion of part-time workers in the labor force. In the 1980s, the statistical average has begun to rise. A study by Philip Morris Inc. found that the average American had 31% less leisure time in 1984 than in 1973. The median number of hours worked rose from 40.6 to 47.3 hours, while personal free time fell from 26.2 to 18.1 hours per week.

In a society characterized by an abundance of free time, one would expect that the economy to an appreciable extent would be built around such pleasurable activities as travel, personal hobbies, or participatory sports. In a leisure-staved society, on the other hand, the economy must find a way to justify production without subsequent consumption. So people buy all kinds of products they never use. For example, an overworked factory work might buy a personal computer, thinking that to become proficient at this technology will ensure future employability. Meanwhile, the computer sits on the shelf for want to time and personal energy to play around with its features.

Our American consumer economy has long been able, through sophisticated advertising and marketing, to force-feed products to market which would not otherwise have been desired. If people are buying the image of an attractive lifestyle, subsequent consumption of the product becomes incidental. Another way to accomplish this is to obligate people to buy gifts for other people. Here it is “the thought that counts”; and the fact that one has picked the wrong shirt size or that Uncle Harry already owns six dozen neckties does not matter. It is estimated that Christmas sales alone contributed more than one third of retailers’ annual sales, and half to three fourths of profits. The federal government, too, more than pulls its weight in useless spending. Military preparedness gives the economy a reason to produce various expensive goods which, hopefully, will never be consumed.

In the 1920s, the President’s Committee on Recent Economic Changes observed that “closely related to the increased rate of production-consumption of products is the consumption of leisure. It was (only recently) that the consumption of leisure as ‘consumable’ began to be realized upon in business in a practical way and on a broad scale. it began to be recognized, not only that leisure is ‘consumable’, but that people cannot ‘consume’ leisure without consuming goods and services, and that leisure which results from an increased man-hour productivity helps to create new needs and new and broader markets.”

While it is debatable that consumption of goods and services necessarily accompanies allowance of free time, the reverse is certainly true. Except at the most primitive level, adequate time is required to consume products usefully. Furthermore, most technologically advanced products carry with their purchase an implied commitment of the purchaser’s time to acquire knowledge for their proper use. Having already invested time in shopping for the best buy, the purchaser of products must then read the instructions booklet which comes with it, mail back the warranty car, arrange for its regular maintenance and repair, and learn from experience when and how the product may be used to enhance personal life. The acquisition of knowledge to become an intelligent consumer of today’s products can be quite time-consuming.

Long ago, Ralph Waldo Emerson recommended a life of manual labor as a means of retaining control of one’s personal possessions. He wrote: “A man who supplies his own want, who builds a raft or a boat to go a fishing, finds it easy to caulk it, or put in a thole-pin, or mend the rudder. What he gets only as fast as he wants for his own ends, does not embarrass him, or take away his sleep with looking after. But when he comes to give all the goods he has year after year collected, in one estate to his son ... the son finds his hands full - not to use these things - but to look after them ... To them they are not means, but masters ... (He) is made anxious by all that endangers those possessions, and is forced to spend so much time in guarding them, that he has quite lost sight of their original use.”

In this respect, services differ from goods as a type of consumer product. Services save the time which would be required to gain knowledge. Instead of tinkering with the gadget to make it work, one engages the services of a repairman who already has the knowledge to accomplish that end. One hires an attorney, a tax preparer, or psychiatrist to perform a function on one’s behalf which one, though theoretically free to perform the function oneself, anticipates will be professionally managed with fewer mistakes. Maybe the shortage of personal free time has steered economic growth from the goods-producing sector to the services-providing sector for that reason.

Leisure may therefore be regarded as an aid to economic life rather than its enemy. It is like the rain which nourishes abundant crops. From it as much as anything else spring the products and industries of the future. Why then do not economists welcome the increase of leisure instead of describing this event in negative terms?

A reason may be that the U.S. economy and economic policy have become increasingly oriented toward government. Government has a financial interest - openly avowed by the supply-side economists - in seeing to it that Americans spend their time at work rather than at leisure. Government can’t tax leisure: that is the source of its irritation. What’s more, government stands to lose tax revenues under the progressive income-tax structure if shorter work hours brought a more even distribution of incomes. Such is the current budget squeeze that the federal government cannot wait for those future products, industries, and jobs to materialize from expanded leisure; it needs its money now.

Such considerations may help to explain the seeming paradox that the historic progress towards shorter work hours slowed considerably and finally stopped after the U.S. government adopted the 40-hour standard workweek in the late 1930s. This era which began with appeals for shorter hours to save jobs ended with Keynesian unbalanced budgets, the Social Security program, and heavy military commitments around the world.

Such programs, together with the interest obligated on our past commitments, have created a financial snowball that is devouring all its in path. They have created imperial aspirations among ambitious persons who have climbed to the pinnacle of power in the political and corporate worlds which cannot bear the thought that America’s immense wealth-producing machine (created by persons such as Henry Ford) will dissolve in working people’s need and desire for time spent in their own petty pursuits. No, national “greatness” requires beating the working masses like a lazy horse.

The challenge today is to find persons of charity and good sense in the government who will strive to extricate the American people from those politically created obligations that amount to neo-slavery and again set the economy upon a path of progress and will rebuilt it upon a foundation of useful, enjoyable production and consumption, not skimping on leisure. In a personal way, leisure time equates with freedom.

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