Amusingly enough, Chris Betram at CT jumps on me for extrapolating from an economics article using elementary economic reasoning, apparently so he can quote Marx and harumphingly say, “So goes human nature according to libertarians.”
Well, harumph. I’ll point out that I’ve dwelled on my own preference for “farting around” here and here. We each value extra dollars and extra leisure hours differently, so how we trade them off against each other will differ. But I don’t assume that Europeans and Americans are really so different on average. So I resort to a Marx-style materialist explanation for the difference. Which makes me, apparently, insufficiently Marxist.
Now, I wonder if Chris believes that being “self-sustaining peasants working for their own consumption,” is really “good for them?” Just wondering.
A point that I haven’t sufficiently appreciated in the past is that there is no simple trade-off between work and leisure. Working more hours can increase leisure time. I was simplifying in my story, as was Prescott in his (as he notes). Higher taxes don’t necessarily make it more worthwhile to consume leisure, they make it more worthwhile to do stuff that isn’t taxed. If you’re taxed at a very high rate, it can make sense to spend a lot of time fixing your own car, cleaning your own house, preparing your own meals, doing your own laundry, mowing your own lawn, doing home improvements, or whatnot — that is, working for one’s own consumption. However, if taxes were lower, you could earn enough money to pay someone else to do these tasks in LESS TIME than it would take to do it all yourself. So, at the end of the day, you’d have more time for genuine farting around, even though you worked more TAXABLE hours. So it’s not at all clear that Americans do work less, or do consume less leisure. We go to the office so that we can relax.
Will Wilkinson 