Whose efficiency? what efficiency?

Efficiency is formidable. It rears its head most everywhere. Witness the tyranny of the target at more and more workplaces: from more greets per hour to more exam points per teacher. At the same time, efficiency also nurtures increasing tyrannies at home: get fit in 12 minutes per day instead of 15…but don’t waste those 3 saved minutes, other efficiencies await!

The ruthless search for efficiencies is everywhere, whether in reality or in slogans, corporate reports or government policies. When, for example, workers are fired or fossil fuel pipelines are planned in the name of efficiency, we want to question the cold calculations behind these decisions. On the other hand, it’s hard to disagree with efficiency. Try it at home. Walk to the kitchen via the bathroom. Use a ladder, a long stick, tongs and some string to get snacks out of the fridge. Efficiency follows us everywhere whether we like it or not: from a diagonal path across a green space to the l8st txting app.

Due to this omnipresence, efficiency is easily conflated with other categories – the drive for profit for instance. (This is no straw man: I’ve had conversations recently where such conflations have come up; overall, I think they are not marginal, albeit often implicit.) This kind of conflation works in two ways. It naturalizes profit-seeking as a simple and inevitable human aim, while making arguments against profit-seeking difficult because increasing efficiency appears to be a no-brainer.

Abe Rostein, one of Karl Polanyi’s students whom I was fortunate to encounter, often repeated a remark he attributed to Polanyi: the problem is not maximization itself, but what is being maximized (and, in the case of efficiency, relative to what else).

There are many on the right who would like to see capitalism equated with generalized efficiency. While it is a crass truism that the search for efficiency in various guises has been a spring behind a range of human effort, the resulting efficiencies have been culture-specific. In achieving a goal using improved means, the goal can be honour as much as saleable goods or services, while the means can be ritualized exchange activity as much as monetary costs.

The current economic system contains but a set of very particular kinds of efficiencies. Where it does exist, cost-competition does drive some astounding processes of technical and engineering efficiency – something acknowledged even by many who do not otherwise see capitalism as the pinnacle of human social development.

Here’s two very concrete issues that apply the general thoughts above and concern the question of political strategy.

(1) Efficiency and the reduction of the work week. The Swedish city of Goteborg just introduced a pilot project to reduce the work day of some workers at a public service site to six hours. This while keeping wages and benefits the same and using another group at the old hours as a control. The proposal is much needed – despite the fact that Sweden is already below the OECD average for annual hours worked.

The main arguments for the reduced work day appear to centre on efficiency: both that workers who work shorter hours will be more productive and that the public employer will experience cost efficiencies due to fewer sick days and the like. Both types of efficiency are warranted but neither addresses efficiency from the workers’ point of view.

The same level of material and physical well-being can be achieved via different amounts of time and effort allotted to work. Struggles for a shorter working day have historically played on this. Aside from a need for physical rest, the demand has been for an ever greater remainder of the day for workers to “do what we will”. The same amount of “what-we-willing” can be achieved with different amounts of work and these are unlikely to correspond fully with cost-efficiencies in production and labour costs.

(2) Efficiency and high-frequency trading. There has been a lot of discussion lately around “high-frequency trading” (HFT), a particular form of financial activity that relies on very high volumes of very low-margin trades that together can add up to tidy sums. Whether critical, defensive or agnostic, reaction to the latest brouhaha about HFT has often centred on notions of efficiency.

Both sides claim that market efficiency is important: opponents of HFT accuse it of destabilizing markets and ultimately harming efficient resource allocation; defenders claim that this type of trading lowers transaction costs and helps the flow of information, both of which aid efficiency. What matters is that the impressive system of socialized risk-taking that is financialized capitalism generates the correct decisions on the best use of resources that will continue to allow the system to expand.

This is not a generalized efficiency but something very particular. We face social and ecological problems that desperately need new efficiencies – for example, efficiencies in natural resource use relative to the need to avert climate change, efficiencies in how to distribute the work that needs to be done, efficiencies in technological development that frees human creativity.

These two short examples lead to two corresponding points relevant to strategy: (1) we should be mindful of what kind of efficiency is being proposed but (2) we shouldn’t cede ground on efficiency.

I heard a great story the other day about a mill owned by a company that got into financial trouble and needed to make a rapid cost-savings. The company’s initial proposal was to cut wages, benefits and jobs to trim costs. On hearing the news, the workers at the mill got together and asked the company for a few days to find the same cost-savings. After a series of closed-door meetings, the workers returned to the company with a series of improvements to procedures that would indeed save the company the required amount of money without cutting wages or jobs. The owners and the engineers were flabbergasted.

Efficiency is not the sole domain of owners, engineers and technicians and it can take many forms. What’s more, our lived experience is a source of efficiencies not bound to the needs of a destructive social system.

One thought on “Whose efficiency? what efficiency?

  1. I think there should be a lot of skepticism about so-called economic efficiencies that simply don’t work.

    Take, for example, economists’ blather about efficiencies in taxation. That it’s better to tax consumption than savings. This, of course, means that the rich, who own 70% of the wealth in Canada, end up paying a lower tax rate than people who work for a living because their most of their income is generated from their financial assets.

    Has this self-serving economic theory boosted GDP or productivity growth from what we had back in the “inefficient” post-war Keynesian era? No. In fact, both have dramatically fallen. So why are these factually-inefficient policies still in place?

    Economics is a theater of the absurd. Economists claim gravity causes people to float up into the sky and no one holds them to account.

Leave a Reply

Your email address will not be published. Required fields are marked *