By Graham Peterson
Over at The New York Times Magazine, Cathreine Rampell has a nice piece called “Outsource Your Way to Success.” She calls hiring cleaning ladies and personal chefs “outsourcing,” and tells a story about a couple of Columbia economists who hire as many personal services as possible to outsource their way to more time with their son, marriage, and careers.
Rampell’s title is provocative. Why? We usually call businesses turning an activity from inside the firm into a market exchange “outsourcing” in order to raise ethical indignation. And nobody wants to turn their home into a dirty corporation. At the root of that indignation is the idea that one who out-sources has Betrayed the Clan (or usually The State or The Neighborhood: “buy American!” or “buy local!”). Fair play: we don’t discuss often enough the dizzying network of loyalties that make a firm and market. But when we live in a Loyalty Is All That Matters world, we get insane conclusions about human welfare. If you don’t divide labor and compete some — everyone ends up broke.
To source from outside the clan, or outside my own two hands pace Martha Stewart, is merely to divide labor. That’s ancient. Our ethical intuitions about it, though, seem not to have changed much. We seem to cling to an old-worn aristocratic myth of the Noble Farmer and Noble Craftsman. Why should we champion doing it yourself? In an EXTREME D.I.Y. world (who grew up in the 90s? EXTREME!), people suffer from such massive inefficiencies that everyone makes about $3 a day. Ask anyone in history before industrialization. Or the majority of citizens of the Democratic Republic of Congo.
We worry about splitting up divisions of labor because, yes, we have very nice stories built around the traditional identities in embedded in one social role or another. But where do these stories come from?
With his crushing insight, Karl Marx formalized the intuition many had in the 19th century that the expansion of markets was merely reproducing the fantastic inequality and slavery of history. Well now, that’s stupid. By “deskilling” workers and allowing them to focus on getting really good at one or a few tasks, by cultivating professions, and by limiting the breadth of skills one needs, markets have put human beings in constant service of one another and increased their depth of skills. The firm is merely an intermediary between regular folks, and bosses are beholden to the power of competition that regular folks, in aggregate, leverage.
But we don’t think about outsourcing and hiring services in such an innocuous way. Rampell notes that people might feel a little hairy about hiring people to assemble Ikea furniture for them, like the Columbia economists have. It stamps of aristocracy. Just so. One of the major reasons I left the restaurant industry, even though I was a pretty good cook, was that I didn’t like the idea of “serving the rich” for the rest of my life.
But now that too, was silly. Who are “the rich?” People who sweep floors callously command plebes with their janitor-dollars, in our modern world, to serve them their food and reheat their coffee if it is cold. The intuition you see, becomes a strange argument from power when everyone has a lot of it.
To be a servant is shockingly different from providing a service, and we ought to note it. Servants were often not free in their property of person, nor free to force their employers to compete for their services on a market, bidding up their wages: “I’m sorry, my Liege, but the Duchess of Norman is advertising a horse more, and dental, in exchange for my sweeping. Swiftly I must go.”
Yet people fear that an increasing service economy will look like plebes and kings. People sense that providing flimsy services doesn’t really make anything, as against Making Widgets which does. They sense that (more services) –> (more poverty). So I ask you: are iPhones real wealth? I bet you enjoy an extraordinary stream of services from your smart phone. See, then, that all the “real wealth” that “real goods” provide you with, is ultimately a stream of services. The usefulness and utility of objects is culturally determined, and all there ever was in any market, was a service economy.
We have no idea what the crazy variety of services there are to be invented will look like. But we do know it will happen. And in an economy with rising income for its poorest members who are able to demand such services (that is, factually, our economy), it’s strange to think that we should abhor a future world in which people run around doing their best to serve one another as a product of greater and greater outsourcing. What a pity of human greed, poverty, and misery this helpful world is.