YOUR JOB AND HOW MONEY WORKS
What do you do for a living? I’m not talking about your job title or your daily tasks, I am talking about what you actually do, what you actually create, what you improve, what you contribute… For some of you watching this question might be pretty easy to answer, but for those of you who find yourself working as a middle manager, overseeing a human resources team at an insurance underwriting company, well… it might be a little harder.
In the last century service jobs have gone from representing less than a quarter of all jobs to now representing nearly 80% of workers. Now when we think of service jobs we think of people serving us coffee, finding a pair of pants from out the back, or carrying bags to our hotel room.
Sure they might be an unnecessary luxury for the people using these services but it’s still pretty easy to see that they do produce value, be it in the form of a nice cup of coffee, a flash new outfit, or promptly delivered luggage (without the need for a physio appointment the next day) But you see the thing is the service sector is far more broad than the name implies it encompasses everybody from call centre salespeople to CEO’s.
In fact it is quiet difficult these days to find a job outside of the service sector specifically because those roles require special certifications, remember that for later because it is important. But the growth of the self-serving service sector, and the subsequent rise in bull jobs that came with it seems a bit odd.
Surely the efficient free market would weed out these individuals that are contributing nothing, punishing the companies that bear their salary expenses while rewarding the more efficient organisations that do without them… right? Well no, And to understand why it’s time to learn “how money works” in the modern day to perpetuate the existence of people who work to nothing but justify their own existence.
And to start off with this quirk of modern advanced capitalism we need to first look at soviet communism. The Soviet Union was built on the idea of noble labour. The state said that work was honourable and dignified! The word “soviet” loosely translates to a workers council, and people took pride in their labour above all else.
This caused problems when there wasn’t enough work to go around amongst everybody. The drive for full employment meant some people were given tasks that we obviously totally redundant. Factory managers hired as many people as they possibly could because it was honourable to oversee the labour of so many of your comrades.
They also feared that if they didn’t give people jobs now, they wouldn’t be able to get the people they did need in the future. This “worker hoarding” as it became known meant that some people were given jobs like counting endless inventories of nuts and bolts.
Now obviously there are huge differences between the modern western world and 1950’s Russia, but there are also some concerning similarities. The theory of totally unnecessary jobs really started to gain traction after the anthropologist David Graeber published the book Bull Jobs in which he outlined 5 broad categories of jobs that had become more and more common.
The first are what he called the flunkies, think people like doormen, receptionists, chauffeurs, and assistants. These people exist to make other people feel better about themselves and could all easily be replaced with some kind of technology, that’s if they are really needed at all.
Then there are the duct tapers, these are people who work to alleviate problems that could very easily be fixed permanently. Think of someone like an inventory manager that just so happens to have the system permissions to update stock levels in a warehouse, where that could be done automatically or at the very least shared amongst floor staff.
In his Book, Graeber talks of a duct taper whose entire job was fixing the mistakes made by an apparently brilliant statistician. In reality this star employee was actually hopeless and the duct taper had to fight with bureaucracy to get his mistakes fixed before they could do any damage.
This example shows that the solution to the problem is not always getting rid of the person in the bull job, because the duct taper themselves was probably contributing some value but would be able to create value much more effectively had a needless obstacle been removed.
The same can not be said for the next bull category on the bull jobs list, and that is the box tickers. The army of mindless drones that exist in big companies around the world, because they make said companies appear legitimate to other big companies.
Think of the people that create internal company newspapers with stories about key executives or… whatever it is that is that’s reported in those things… I mean… nobody actually reads them, and that’s the point.
But if a company didn’t have an internal newspaper, or a party planning committee, or a culture co-ordinator then it might look like a small fry company not worth doing business with or working for.
Now it’s time to get into the real demons of the bull job world. The GOONS… Goons are the affectionate name given to a class of job that actually has a negative impact on society, but make themselves necessary by simply existing.
The classic example of this is in house corporate lawyers. They don’t really produce anything but if you don’t have them then it will end up costing you a lot more to hire external council to fight off lawsuits from companies that DO have internal corporate lawyers.
Perhaps the best example of this are patent trolls, which are basically companies that will buy up other companies with lot’s of generic patents and then try to sue other companies in the hope that they will just agree to settle out of court.
Even the largest companies in the world are guilty of perpetuating this negative sum game… Apple famously sued Samsung for a patent over a rectangular phone with rounded corners. Now just ask yourself, despite what you make think about patents and intellectual property, what value was being created by the thousands of people who’s full time job it was to enforce that ruling? Beyond just the lawyers there are people like lobbyists who fight to simply changes the rules of the game around and salespeople who exist purely to move business dealings from one company to another while being the definition of a middleman in the process.
Now you might think the goons are bad, but they have nothing on the worst of the worst amongst this bunch of pointless workers… The Task Masters!! These are the people assigned to watch over and manage people that really don’t need to be watched over or managed.
Effective management does exists, especially when it is co-ordinating a team with a wide set of skills, but someone like a sales manager who lords over a team of people with exactly the same job title is a little bit different.
At BEST they are going to be an overpaid cheerleader encouraging people to work harder in roles that may themselves be bull. At worst they will be distractions desperate to justify their existence by calling meetings and creating “strategic mission statements” that achieve nothing but pulling people away from a job where they do actually have a chance of doing something meaningful.
These roles are not singular prescriptions, in fact some particularly useless employees may find that their role is a combination of all five of these factors. Many middle managers exist to oversee fundamentally useless departments, and only have a job because a highly layered corporate hierarchy makes the big wigs at the top of the food chain feel good about themselves.
But this doesn’t answer the question… how did we get here? The soviet union created bull jobs because it was obsessed with having a job for everybody, and the nation took pride in labor. But our capitalist systems are supposed to be better than that right? Well sort of… but we are still victims of the same beurocracy.
Sure, companies would do well for themselves by cutting down on these tasks, but sometimes these incentives can be misaligned with the actual decision makers. In the same way a soviet factory worker might horde staff to make themselves seem important, modern middle managers will do the same.
In the same way factory walls were covered in propaganda about the brilliance of soviet laborers, LinkedIn pages are covered in self serving propaganda about how much of an honour it was for some analyst to spearhead the joint development project for streamlining customer satisfaction in the bull corporation multi-platform digital sales ecosystem.
In the same way that the Soviet Union was obsessed with everybody having work to do, even if it meant making up meaningless jobs, modern workplaces are obsessed with everybody working their full 40 hour weeks… even if it means… well… making up meaningless tasks.
This is before we consider the bureaucracy. Let’s get one thing out of the way, countries like the USA are not home to totally free markets, there are laws and regulations about how to do… pretty much everything.
Want to build a factory? Well you better make sure it’s in a location zoned for heavy industry, and you better do an appropriate tender for the contract to construct that factory and have appropriate insurance and if you are shipping your products overseas you need to make sure you pay the appropriate tariffs and excises.
All of these steps involves other large institutions which will themselves harbor bull jobs. Now this isn’t to argue for big government or small government, some policies really are important, and of course some are bull, but companies have had a very important part to play in this whole system as well.
The growth in lobbying has led to the creation of more and more legislation which has made it such that starting and maintaining a successful business of any size is almost impossible without a team of accountants and lawyers who will help a business owner navigate this bureaucracy.
You might say this is in the best interest of large corporations because it makes it harder for potential competitors to get off the ground but we don’t want to point finger here. Anyway is there a solution to this? As a society? Sure, embrace the idea that it’s ok to not work 40 hours a week.
The idea that a job is either bull or not bull is not entirely correct, in reality almost all jobs will have some level of bull built into daily duties. If it was acceptable to say my work is done I’m done for the day, then it would be a lot easier to see who is contributing nothing.
As an individual? Ahh not really, the truth is if you do find yourself in a role with a lot of bull tasks, you might just have to suck it up in the short term, maybe work on a side hustle free from bull in your off time.
Or you know embrace it, there are lot’s of people that are very proud of their superfluous yet important sounding titles, maybe it makes the pointless meetings, or the irrelevant PowerPoints easier to get through now that you know it’s all bull.
Of course if you actually do want to truly immerse yourself in… umm well… bureaucracy and you decide that one accounting job isn’t good enough for you, then go and watch our video’s on eve online to find out how a video game has cultivated a financial system so complex it harbors it’s very own bull jobs.
If you enjoyed this video please consider liking and subscribing to keep on learning how money works.
WHERE DO JOBS COME FROM?
Where do jobs come from? Why do all people not just work on their own? Everyone strives to make the most effective use of their resources to meet their needs as best as they can. When you enter the labor market, you already have some resources.
You have knowledge, skills, and abilities and you have some time you can spend on work. Thus you need to decide on the way most beneficial for you to employ these resources. There are two options here: working for a company or starting one.
Your potential earnings should help you decide on that. Will you earn more by working on your own than by getting a job? Let us take an example. Jack is a physical worker. He can either operate a construction machine, or use his own physical strength to get the job done.
Jack knows that the best career path for him is doing physical work. Now assume that the current market pay for digging a one meter deep ditch is 10 dollars. Jack is faced with a decision. He can try to secure some orders for ditch digging by himself, or he can get a steady job at a construction company.
With his trusty shovel by his side, he can dig 5 ditches a day, so he would earn 1000 dollars a month working Monday to Friday. The construction company has an excavator which Jack can use to dig 30 ditches per day, but the company is prepared to pay only 5 dollars per ditch to a worker, while keeping the rest.
On the company’s payroll Jack would earn 3000 dollars. Moreover, unlike Jack, the construction company already has a nice market position and a customer base, so it would take a lot of his work only to catch up with that.
And remember that he is less effective at digging than the excavator. Can we assume that the construction company is exploiting Jack by taking away 50% of his work’s worth? But if not for the company, Jack would earn even less.
He lacks the capital needed to increase his efficiency, and his low potential earnings make it harder for him to save up and invest in buying his own excavator. Working for a company already endowed with capital improving his productivity gives Jack a chance for a better life.
No rational man like Jack would take such a job knowing that he can earn more on his own. Thus, unless an employer finds a way to multiply the value of his employee’s work beyond that of his potential earnings while self-employed, the employer cannot possibly hire anyone.
And the value of work is always multiplied when used with a helping hand of capital. The capital can be such things as tools, know-how, or business contacts. It is obvious, however, that the employer will not employ Jack out of the goodness of his heart alone.
The boss’ aim is to put all of this work to good use, thus turning it into profit. Now let us examine what this desire to use the work for profit entails. Martin had a steady job for many years. Month by month he saved some of his wages, sacrificing a potential of a slightly more luxurious life.
When he collected 40 000 dollars he took a grave risk. He left his job and founded a construction company. He invested his money in tools, a car for his working team, and in steady salaries for the men he hired.
First he took small orders, and his savings dwindled while his men were getting paid. Initially, he earned less than in his regular job, but with every satisfied client he got more orders, and after some time he even started seeing some profits.
He continued to consume less than he earned, and was thus able to reinvest his money into his business by training his employees and buying better tools for them. After a few years he had a good market position and decided that it was time to expand.
He took another risk loaning money to buy heavy construction equipment, including the very excavator which later got Jack a job. Notice how Martin did not get it all for free. At first, for many years he had to abstain from consumption and thus save money.
Then he took a great risk and left his comfortable and steady job to start a business. Were he to fail, he would not only lose his entire savings, but his job as well. He was willing to do all of these things just because he hoped for a future profit.
It was this very hope that kept him going. Without this chance for higher future earnings he would probably never left his previous job. It is so easy to create jobs for their own sake. You just need to prohibit the use of all construction machinery.
Then you will have to replace one excavator operator with ten people working shovels. You can also spend millions of taxpayers’ dollars on workers who will dig trenches, and then more millions on other people filling those trenches up.
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