Our Maturing Economy -- The Value of Labor vs. Other Resources
I was reading Stephen Ambose's Band of Brothers the other day, and there was a story in there that really struck me. One of the paratroopers was hauling his reserve parachute, something usually ditched right at landing, all over Europe with him. When asked why, he said he was getting married and he wanted the silk (what parachutes were made of at the time) for his wife's wedding dress.
For some reason this struck me as odd and economically irrational. It took me a while to figure it out. I was applying my intuition to the situation based on modern price levels, where the value of the silk would be just a minor part of a wedding dress -- the larger part of the value is in the design and cutting and sewing, ie the labor. We live in a time where skilled labor is far more dear than basic materials, which are relatively cheap. The hard part of making a wedding dress would not be getting the silk, but finding someone skilled enough to manufacture the dress.
This soldier grew up in the 1930's, where exactly the opposite conditions obtained. Skilled labor was cheap. In fact, unlike today, most every household likely had someone who could sew a dress in their spare time, labor that might well be donated for free to the wedding dress cause. It was raw materials that were expensive, particularly those like silk that had to be imported at great expense from afar.
Morlock Publishing:
For our wedding next summer I'm going to goldsmith the rings and the hippie is going to sew her dress.
We're LARPing the 1930s, I guess.
June 9, 2014, 8:23 amNL7:
People were poorer and produced more of the items used in their regular lives, and repaired or reused whatever they could. As people were able to specialize more in occupations with better compensation, it made more sense to make a dress by offering dental services or selling more cars, rather than by pulling a needle through fabric. Which is the same as the old saying that you can make a car in Iowa by growing corn.
June 9, 2014, 8:27 amMorlock Publishing:
I entirely agree w the conventional economic wisdom that you espouse here. ...but I'll also say that I think the lefties (and Heinlein) have a grain of a good point when they say that specialization alienates us from our labor. I find it very satisfying and pride-producing to be able to do a large number of things, even if the utilitarian win is to specialize and trade for what I need. That latter approach can lead to the ennui of excessive commercialism.
June 9, 2014, 8:48 amMike Powers:
I'm reminded of that old quote about "I never thought I'd be in a world where you could be rich enough to have two telephones but too poor to have a house girl".
June 9, 2014, 10:03 amSuperMike:
While its absolutely true that (certain kinds of) labor are much more rare than they used to be, it's likely that that soldier was motivated by noneconomic value as well. The parachute would have served as tangible reminder of the better life at the end of the horrors of war, and he would probably imagine that the provenance of the fabric would imbue the dress with symbolic significance and enhance its sentimental value.
June 9, 2014, 11:03 amDon:
Don't forget the supply curve shift due to war limitations as well. no synthetics were available at the time, and most materials like that, rubber, gas, etc. were diverted to the war effort. It may not even have been a matter of price on the open market, it may not have been obtainable at any even inflated prices outside the black market. Bringing something like that home would have been quite the gift to his future bride.
June 9, 2014, 11:28 amOrion Henderson:
This reasoning still applies to products made in low cost countries-IE, China, Vietnam, etc. The raw materials drive the price, not labor. This is why companies get messed up when they don't properly spec materials. And is why we get the poison dog food scandal type stuff of a few years ago.
June 9, 2014, 11:40 amkidmugsy:
"I think the lefties (and Heinlein) have a grain of a good point when they say that specialization alienates us from our labor." I think you'll find that Adam Smith beat them to it.
June 9, 2014, 11:44 ammlhouse:
While I agree with your basic economic premise, I also think that Lt. Welsh values the silk more than the value of the silk itself.
Related, I was at a Wal-Mart recently and the bananas were 52 cents a pound. I marveled at that. Somehow, bananas can be grown, processed, transported from the field, exported to the United States, graded, weighed, wholesaled, then transported to the retailer who then prepared the product for sale. All for 52 cents a pound. Something even the poorest of people can readily enjoy, while even our grandparents would have considered such a thing to be a luxury.
June 9, 2014, 12:30 pmShoo:
I've seen it first hand in places like Indonesia where a construction crew will spend several man hours to save a sheet of plywood.
June 9, 2014, 3:40 pmMJM:
The labor-material relationship reminds me of a woodworking article long ago where a well-seasoned guy was telling of his first carpentry job including his moving about the site collecting dropped nails, straightening the bent ones, and getting them back into the hands of the journeymen. The author, a younger chap, noted that a carpenter "today" (1980s) would be summarily fired for stopping work to pick up a nail he dropped, let alone have someone paid to do only that. Such was the shift between nails and labor.
In general, there is a lot to learn from Ambrose's writings, humility not the least of them. One I recall is a quote from BofB where teh trooper was asked the difference between a practice jump and a combat jump. The reply was that with a practice jump "when you reach the ground your troubles are over..."
June 9, 2014, 10:44 pmherdgadfly:
WWII parachutes used by the Allies were commonly made from Dupont nylon since natural silk was hard to come by from Asia. Nylon was first made in 1938, so older chutes most likely were silk - but our wonderfully prepared armed forces prior to Pearl Harbor likely did not include many paratroopers - at least those equipped to jump.
June 10, 2014, 2:42 amJKB:
As someone raised by a grandmother who was poor even before the Depression but learned more during, I have a tendency to think about saving and reutilizing. I have to really consider the time and effort which usually doesn't measure up to the minimal cost of buying new.
Technology has had its impact on the labor side. I remember a post at the Conversable Economist about the cost of screws and nails. The prices fell as mfr technology advanced until the about the 1950s and since have risen. Before the wire nail, buildings were burnt to recover the nails. But the cost of an installed nail or screw has declined due to nail guns and power screw drivers. But as commented below, although more expensive it certainly isn't cost effective to try to recover fallen nails since they would no longer be of use in the power tool. Unfortunately, this means that the occupier of the house has to put in effort to remove fallen nails and screws before they get in tires.
An odd side effect is that it is often far more expensive to do-it-yourself than to hire it done by someone who can buy quantity but also can justify the specialized tools that speed the job.
June 10, 2014, 12:23 pmJKB:
I would agree and advocate for the teaching of tool skills starting in middle school. Not vocational training directly but just making things with the hands, usually without power tools. It trains the mind and hand and give the student a physical manifestation of their learning. A "teacher" could incorporate lessons from the more academic classes as well, such as math, biology, help provide intuition into literature, chemistry, physics, etc. Before they knew it the kids would have learned all that "school" stuff without even realizing it.
June 10, 2014, 12:28 pmMJM:
Never pass up an excuse to buy a new tool, no matter how lame that excuse might first appear.
June 10, 2014, 9:23 pmBram:
Funny - I also marvel at the price of bananas every time I grocery shop. I spent time in southern Asia where bananas and plantations actually cost more than coconuts and exotic stuff like mangosteens. They must be really cheap grow on plantations and transport.
June 11, 2014, 7:53 amskhpcola:
A fascinating paper on the price of nails and screws over several centuries:
fmwww.bc.edu/ec-j/semf2011/Sichel.pdf
June 12, 2014, 2:23 pmAnn_In_Illinois:
I noticed this same difference while living in Hong Kong in the 1990s - there, people were cheap but stuff was expensive, while in the US, it's the opposite. What I mean by 'people' being cheap of course is that their time didn't cost as much. We could buy something - say, a wall clock - at Wing On Department Store and just casually say, 'oh, have that delivered', and they'd do it at no extra charge. The wall clock was much more than in the US, but the delivery was free, because that was just someone's time. Most grocery stores and certainly all dry cleaners would deliver for free, and even car repair places would send someone to pick up your car for that oil change at no extra cost.
One aspect that took a long time to get used to was that people weren't supposed to clean up their own trash afterwards at a McDonalds or Wendys or other fast food place. The first few times, I would forget and gather up all my trash, then look helplessly for the trash bins near the door, and finally have to walk back and sheepishly put it back on my table for someone else who worked there to come get it.
It all worked out great for me while I was working and having children in Hong Kong, since getting full time, live-in help with housework and the babies was much, much cheaper there, although getting a car seat that was safe was more costly. It was such a different set of trade-offs.
June 15, 2014, 10:12 pmNL7:
I agree that getting too distant from a product can make your work feel meaningless or ridiculous. But that's why you're compensated. Everybody is trying to find an optimal mix of job benefits, satisfaction, status, hours, experience, wages, location, and so forth.
If you are not satisfied with your job, then a higher wage or a better location or opportunities for promotion might make you want to keep it. If somebody else is willing to do a boring and thankless task for less money, it doesn't make sense (from an individual or a societal viewpoint) for you to do it instead.
Having a meaningful and satisfying job is just one factor in the decision for whether to keep a job. If it were the primary or only factor, there'd be relatively few janitors or garbage collectors. If a meaningless job leaves you with extra time and extra money, then you can use that to pursue something meaningful in your life.
June 23, 2014, 11:48 am