Work is a treadmill, and the speed doubles every ten years
April 28, 2008 § 49 Comments
Lydia has an interesting post up about the seeming oddity in corporate life, in which with few exceptions every employee in a large firm is required to have a ‘development plan’. At most large corporations, at least in the white collar world, you (and sometimes your supervisor) are penalized if you don’t change jobs often enough.
I don’t think this is a result of a distortion of market forces and capitalism though: I think it is intrinsic. I’ve argued before that I think that PC tyranny has been adopted by corporations because it is profitable to do so, and I think a similar observation applies here. I made the following comment in the thread:
You can’t think of a company as a ‘fixed’ entity like a car, or even like a cow (a “cash cow” company will get a low market value even if it has high profits, while a growth company will get high market value even with relatively low [current] profits). It is a false analogy. Every ‘human resource’ in the company is an asset, and assets that do not appreciate in value over time actually lose money for the company when measured against inflation; so they have to be gotten rid of. Just because they store some value ‘in place’ doesn’t mean they are worth keeping around: storing value ‘in place’ is money in a mattress, worth far less than productive, growing capital. (The only time this ceases to be the case is when economic hard times hit. Then everyone wants to store value and doesn’t care if it is growing as much as that it isn’t losing value. Usually cash is the hedge against downturns though, since cash is far more flexible than less fungible human-units. PC tyranny helps with the fungibility of the human-units though).
An engineer who does the same job for forty years is a dead asset. We have to keep putting money into him, usually increasing amounts over time, and get some marginal benefit from his increased experience but no true upgrade in his productivity which translates to the bottom line. Rather he needs to be constantly thinking about how to obsolete himself, replace himself with machines and cheaper less skilled labor so he can move up to the next thing. Upward mobility pressure on employees is not pointless. Growth-oriented ambitious people will do well in an environment of continual upward pressure. People who enjoy what they do and want to do it for the rest of their careers and live like human beings may be made miserable by that situation, but they aren’t the ones who will contribute large leaps of growth to the business anyway, so they don’t matter. It is more profitable to get rid of them and staff with the other kind of people.
Step back for a second and think about the logic of earning profits from capital. If you invest your money and earn 10% simple non-compounding interest, your money doubles in ten years. At the end of that ten years you can invest it again and earn twice as much for the next ten years. The same asset now has to be twice as productive. This upward pressure applies to all investment assets, and employees are investment assets: it costs money to acquire them and keep them around just like anything else. It is true that many assets depreciate — lose value over time. Obviously a company in the business of making money (which is reflected in share prices) wants all of its assets to depreciate in real terms as little as possible, and to appreciate in value if possible.
So an employee who produces X today had better produce 2X ten years from now, just to keep up. Why, you ask? Because they can. And if they can’t, someone else will replace them. Every asset in a company has this upward bias against depreciation and in favor of appreciation.
The reason PC tyranny and continual upward pressure are features of modern capitalism is not because they are irrational liberal prejudices or mere tastes. The reason they are features of modern capitalism is because they are profitable, at least in the time frames that matter to modern capitalism. PC tyranny improves workforce liquidity; continual upward pressure improves workforce value. This is how capitalism-qua-capitalism ideally should work, and does work absent adult supervision. That this results in an inhuman nihilistic existence for the actual human beings involved isn’t something that enters into the ‘logic’ of it.
I think it is wrong to take an idealistic view of capitalism, either in the positive or in the negative. Capitalism is not an angel, and it isn’t a devil. It is more like a Golem, and we should beware the lesson of Eliyahu of Chelm.
(Cross-posted to What’s Wrong With the World)