Saturday, August 16, 2008

Marx in the Fields

A magnificent article by Tim Harford in the Financial Times (emphases added).
Bandiera and her colleagues proposed a different way of adjusting the piece rate – one that workers could not influence with a collective go-slow – and measured the result. By the time the experiment was over, Farmer Smith’s initial scepticism had long evaporated: the new pay scheme increased productivity (kilograms of fruit per worker per hour) by about 50 per cent.
The researchers responded by linking managers’ pay to the daily harvest. The result was that managers started favouring the best workers, rather than their own friends, and productivity rose by another 20 per cent.
They proposed a “tournament” scheme in which workers were allowed to sort themselves into teams. Initially, friends tended to group themselves together, but as the economists began to publish league tables, and then hand out prizes to the most productive teams, that changed. Again, workers prioritised money over social ties, abandoning groups of friends to ally themselves with the most productive co-workers who would accept them. In practice that meant that the fastest workers clustered together, and again, productivity soared – by yet another 20 per cent.
Without taking sides, the article has a powerful Marxist tinge to it. On the one hand, the relentless increases in output. As the manifesto puts it:
The bourgeoisie..has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals..The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together.
and on the other hand, the atomization of society. Again, the manifesto:
All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.

Postscript: As a rootless cosmopolitan, I tend to be on the side of the bourgeoisie; I just like to think I am honest about the trade-offs.

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