Guard labor and open source

According to this paper by Samuel Bowles and Arjun Jayadev, an astonishing 26% of the US workforce in 2002 was engaged in non-productive "guard labor", meaning their work was not directed towards producing goods or services but was instead aimed at making sure that the wrong people did not help themselves to slices of economic pie that they were not supposed to have.

Compare this to 11% in contemporaneous Sweden, or 7% in the US in 1929.

I'd argue with some of the definitions and methodology in the paper, in both directions. For instance, supervisors are the largest category of guard labor, but it's hard to say that all of management is non-productive -- they aren't all PHBs, many make creating contributions other than merely riding herd on their employees (ie, they are thinking of someone like a low-level manager in a call center whose only job is to make sure employees don't stay too long on their bathroom breaks -- but there is also, say, Steve Jobs). On the other hand, there are entire industries that are effectively engaged in guard labor that are not counted in Bowles and Jayadev's measure, such as health insurance. And the finance industry is neither productive nor guard labor (I wonder what percentage of the economy is skimmers and con artists?).

Prisoners and the unemployed are also counted in the numbers for guard labor, because the concept depends on the idea of power and sanction, and prisoners and the unemployed are considered "necessary concomitants of the public and private sanctioning systems, respectively". This struck me as odd, but makes some sense when taking a macroeconomic point of view -- both the guards and the prisoners are people who are not doing actual economically productive work -- their labor is wasted as a direct result of the fact that the social system of power and property needs to be upheld.

Ideally we would also include those producing guns for private use, locks, security systems and the like, but we are not able to do so because of the lack of data.

The need for guard labor is related to the broader goal of understanding the role of institutions in the role of managing and reproducing the economic activity of society:

The insight we wish to develop is that securing conformity to institutions can be quite costly, and the cost differs among institutions and across time and space. Conformity achieved through the coordination of expectations or the internalization of norms, for example, may not be very costly, as in the case of driving on one side of the road or the other, or the voluntary compliance with tax laws in some countries. However, where conformity to a society'™s institutions is secured primarily through governmental coercion or privately deployed sanctions,the resource costs may be substantial. Examples include some authoritarian political systems, colonial regimes, and as we will see, highly unequal capitalist economies.

Intuitively, the more inequality in a society, the more guard labor it requires. There's a convincing scatterplot of GINI vs. guard labor fraction by US state included in this quite good profile of Bowles in a Santa Fe paper.

Prior to about 20 years ago, most economists thought that inequality just greased the wheels of progress. Overwhelmingly now, people who study it empirically think that it's sand in the wheels.

Here's the last paragraph of the paper:

Fourth, illegitimate inequalities are costly to sustain. While cultures often justify vast differences in power and access to valued resources, the mind is not a blank slate on which such ideas as the divine right of kings or the superiority of the "˜white race" can be etched at will. Two decades of behavioral experiments have provided convincing evidence that humans in dozens of cultures are inequality averse, and that violations of norms or reciprocity often lead to costly confl‚icts.

Of course the counterargument to the view that guard labor is mere friction is pretty easy to make -- that all this guarding is actually necessary to make producers productive, via incentives and structuring. The ticket-taker at the movie theater produces nothing, but without the efforts of him and others, the actual movie-makers could not get paid and could not raise capital to produce anything. It might be more efficient to have a different scheme, for instance having entrance to the movies be free and producers supported by the government via taxation. That may sound absurd or totalitarian but just such a change is happening in academic publishing via the Open Access movement and free-access journals like PLoS. Institutions that did nothing but provide proprietary guards over content (like my former employer Elsevier) are on their way out.

In fact, the whole free/open source movement in software and elsewhere may be seen as a response to the unpleasantness of guard labor. Proprietary software requires licensing schemes (ticket-takers) that cause new bugs, interfere with legitimate uses, and more generally cause friction. More broadly, locking software behind a pay wall reduces the amount of sharing and requires frequent reinvention of the wheel. It's inefficient, and this drives engineers crazy. Most of the time they don't get to vote, but the FOSS movement arose as a direct response to some of the unpleasantness surrounding proprietary software and has in its way been amazingly successful.

Guard labor is in its most purest and most apparently wasteful form when it is guarding digital content. The question is why then, if our economy is more involved in producing content than ever before, is the fraction of guard labor so high? I suppose it is also true that guarding digital content takes more effort than guarding physical objects -- how much of the fraction is RIAA lawyers, or the army of private detectives employed by Monsanto to sue small farmers who allegedly use their genetically modified seed without paying (genes are basically digital content -- and I just watched Food, Inc. which goes into this story). Monsanto, like DRM, is friction, but capitalists would argue that it such friction is necessary to spur production. But there can't be all that many people employed doing this kind of work.

I was around for the birth of the open source movement and efficiency really had nothing to do with it -- it was a moral struggle, based on the anguish of the excluded when a once open resource suddenly being subject to enclosure and guarding. But its ongoing success happened because of efficiency and the self-interest of software producers and companies. It is interesting to hear arguments for more general economic equality and openness, usually derived from a moral or emotional basis, being made on the basis of macro-scale efficiency.

[[edit: I was constructivly flaming Bowles' frequent collaborator Herbert Gintis on open-source here]]