ODLIVE on Vanishing Labour

Summary of ODLIVE

Optimal Distribution of Labour and Income under Vanishing demand for Labour (ODLIVE) turned out to be analysable in the most straightforward fashion in an imaginary "utopian" institutional set up. In this set up, free trade in coupons of labour certificates results in exactly that value of ratio of wages to unemployment benefits (the "relative wage") which is required by the conditions for maintaining optimality. Optimality means that the resulting relative wage (a wage-transfer income ratio) is such that there is neither involuntary unemployment nor involuntary employment. It is hoped that the austere abstractions made in ODLIVE give some idea of the economic force that job preference would have in our real world, if job preference (low and high) would be released from its moral and legal chains and allowed to reveal itself, like any other economic good we may or may not desire, on a free market; and of the force it already has in reality, where it is now every day operative in disguise.

Under vanishing demand for labour, ODLIVE implies the following conditions for maintaining optimality:

1. If average job preference increases then ceteris paribus relative wages should decrease.

2. If gross wage per head decreases then ceteris paribus relative wages should decrease if employment is higher than 50%. (If employment is lower than 50%, relative wages should increase).

3. If demand for labour decreases, then ceteris paribus relative wages should decrease.

Under these rules, it seems, society could spread both all the desired and all the undesired aspects of labour in such a way over the people as to minimize tension. This method, the free market, is thoroughly familiar to us. The object traded there, the right to work might be something we will have to get used to. But we could, couldn't we? Of course, one may deny altogether the relevance of ODLIVE by maintaining that vanishing demand for labour is not at all our future. That such denials often are inspired by fear and not knowing what to think of a future with vanishing demand for human labour can be readily seen because advocates of a bright future for human employment are often completely unwilling even to leave their conviction for a while to investigate the possibility analysed in this article. What harm can it do? If this article can help us to help others to diminish that fear, some progress has been made. Robert Musil's dictum "If there is a sense for reality their must be a sense for possiblity" suggests the relevance of the question: "Where there is no sense for possibility, can there be a sense for reality?"