Human ingenuity is marvelous: We’ve come a long way from hunting down mammoths using stone-tipped spears to in-vitro meat grown in a lab; from the invention of the wheel to self-driving cars; from learning to harness the power of fire to building nuclear fusion reactors; and from crude Sumerian Cuneiform via the printing press to generative AI. We’ve extinguished most individuals’ most existential challenges, such as finding enough calories each day to survive for a vast share of the population. But contrary to the myth of the lone inventor’s world-altering Eureka! moment, we didn’t accomplish these achievements by individual, instantaneous flashes of insight. Instead, innovation on this scale moves incrementally, with countless tiny improvements adding up to monumental outcomes. Nevertheless, these accomplishments slowly, but steadily made the production of material goods more and more efficient, drove down costs and prices, increased availability, and spread access to them around the globe. Eventually the quality of life for billions of people exceeded the point of mere day-to-day subsistence and settled on a trajectory towards affluence and abundance. Hooray for us!
But there’s a pitfall hidden behind the glacial nature of these developments: Whenever humanity discovers a slightly better way to do something, we improve the ratio of input to output of that thing. We can either use that improvement to get the same output with less effort, or we can use the same input to get more output. The problem is that we often blindly choose the latter without thinking about what it would mean to do the former. That is, we rarely stop and consciously decide whether we really need all that extra output. And anyway, it’s “free”, isn’t it?
In many cases, as we’ll see, we’d actually be better off if we deliberately cut back on the input side of things. We wouldn’t lose anything we had before, mind you. We wouldn’t diminish anyone’s quality of life, or give up any of the pleasures or comforts that a 21st century existence has to offer. But we would free up precious resources that could be put to better use elsewhere. In the shadow of the climate crisis, of course, I’m talking primarily about natural resources. But the very same dynamic, which I’ll call the curse of efficiency, also hinders our ability to make the best use of the most precious resource there is: Our limited time.
Let’s start with a more down-to-earth example: Over the past decades, incredible progress has been made on the technologies than underpin the automotive industry; the efficiency of internal combustion engines has nearly doubled since 1950. Instead of steel and iron, modern vehicles are made of aluminum, advanced polymers, carbon fiber, and magnesium. Our roads have become much smoother, our tires roll with less resistance, and modern car designs are streamlined for better aerodynamics and reduced drag. The combined effect of all these improvements could have increased fuel efficiency by at least an order of magnitude. But it hasn’t. Most of us are not cruising along silky highways in carbon fiber capsules that weigh 200kg and consume 2l/100km. On the contrary, our average (non-electric) vehicle today still guzzles 6—10l per 100km. And it weighs more than 1.5tons.
One reason for this is, of course, the proliferation of safety features that have helped to steadily reduce the number of people killed or injured in traffic accidents. But seatbelts and airbags are far from the only things that have eaten up their share of the efficiency gains: Today’s cars come with a dizzying array of touch screens, sound systems, lavish interiors, multi-zone air conditioning, power seats, and a host of other gadgets. At the same time, they have grown considerably in length, width, and height. Why, you might ask, haven’t we chosen the alternative?
First of all, the consumer’s expectations of what a car should do were quite simple a few decades ago. The fact that this marvel of technological ingenuity could get you from point A to point B, quickly and whenever you wanted, was a pretty amazing feat. And if that were all we asked of our cars today, vehicles built with the latest technology would be a lot smaller, weigh a lot less and be a lot more fuel efficient than they are. But consumer demands for comfort, convenience, and luxury have evolved in lockstep with gains in technological efficiency. However, we have gone down the path of increasing output (in this case, adding more and more features and functions) without taking a moment to consider what the alternative would have been. This was not due to conscious decisions, malicious intent, or mere negligence on the part of any one person or organization. Instead, two distinct dynamics began to align and intersect: Dubious economic incentives on the part of automakers and less than rational behavior on the part of consumers.
To state the obvious: Cars are produced by huge, often publicly traded, for-profit corporations. And dynamics of the capitalist market forced them focus first and foremost on growth and on driving up shareholder value, rather than, say, prioritizing customer satisfaction, employee happiness, or their environmental footprint.
As a result, after an initial saturation of the car market, these companies had to continually stimulate consumer desires in order to keep selling new models to people who might otherwise have been perfectly happy with their current ones. In the process, they developed increasingly creative approaches to marketing and advertising, often exploiting humans’ most congenital psychological biases. Their focus shifted from creating products that satisfied an existing demand—individualized, personal transportation—to creating additional demand for features and functions that no one previously knew they needed. Instead of prioritizing engineering and manufacturing excellence, they cobbled together shadier and shadier business practices—think planned obsolescence—to keep the merry-go-round spinning. To this day, this hype cycle continues to churn out new, quite often redundant and wasteful, bells and whistles that no one asked for. But also that no one bats an eye at, as long as the trade-off for having them is hidden from view by technological efficiencies. Therein lies the curse of these small, incremental improvements: They conceal the choice, and thus the utopian alternatives, that they could offer in aggregate if we used them more wisely.
Dubious economic incentives and consumer irrationality are however not limited to the automotive industry. Their combined impact blinds us to making more deliberate decisions in even more far-reaching areas of the economy. Consider, for example, the breathtaking technological advances in energy production, especially renewable energy: In just 20 years, the worldwide average price of generating 1 kWh of energy has fallen by two-thirds, from $0.16 in 1998 to about $0.06 in 2022. This development has had enormously positive effects, such as making electricity available and affordable to many more people around the world. And just as the rise of safety features in our cars has rightfully offset some of the improvements in fuel-efficiency for good reasons, spreading access and availability is obviously a laudable use for this cheap and clean energy. But instead of tripling, as one might intuit, the number of people with access to electricity has only grown by a factor of 1.6, from about 4.3 billion to 6.9 billion. What, exactly, did we do with the rest of the excess power?
Put simply, as energy has gotten cheaper, we have found new and “creative” ways to use—and often waste—much more of it. The electricity demand of the world’s data centers, for example, has nearly doubled in just the seven years between 2015 and 2022. In some regions, like Ireland, their consumption alone accounts for almost a fifth of that of the entire country. Of course, the proliferation of data centers is also not entirely a bad thing; more people now have access to information and communication than ever before and thus more data inevitably needs to be stored and processed somewhere. However, the picture immediately turns a few shades darker when you consider that almost a quarter of the additional energy required by those data centers is driven solely by “crypto use cases”—primarily virtual currency mining. In fact, the Cambridge Bitcoin Electricity Consumption Index estimates that by 2024, Bitcoin mining alone will require 146 TWh of electricity. To put that into perspective: That’s twice as much as Austria needed to power the lives of its 9 million people in 2021. Let that sink in for a moment. And then try to imagine additional energy demand of applications that simply didn’t existed a few years ago, such as training large-scale AI models. While it’s impossible to predict their combined impact, it’s clear that ChatGPT and its brethren will continue to gobble up a growing share of the world’s electricity as it gets cheaper and cheaper in the years to come. And again, the question is: For what purpose and for whose benefit, exactly? Will a rising tide of computer-generated garbage that is more and more divorced from original content really leave humanity better off? Is ubiquitous access to deep-fake technology actually something we want to strive for? Are AI-powered social media filters worth the invisible tradeoff?
Once again, the curse of efficiency rears its ugly head: Through our amazing ingenuity, we’ve made energy in general, and electricity in particular, far cheaper and more accessible than ever before. But at the same time, we’ve driven up demand for reasons that defy common sense. Just as modern cars unnecessarily haul leather sofas and entertainment systems from point A to point B, all the while burning far more fuel than necessary, it makes no sense that we’re collectively wasting nearly 1% of the world’s power on solving increasingly complex math puzzles to keep the blockchain running, or to artificially enhance some 16-year-olds’ bathroom selfie.
Had we seriously considered the alternative, we could have cut back on our carbon emissions more drastically, accelerated the much-needed restoration of natural ecosystems, and kept tons and tons of scarce resources buried in the ground where they belong—without sacrificing the undisputed benefit of raising the standard of living for millions of people via cheap and clean energy.
The fact that incremental improvements in efficiency often lead humanity down a rabbit hole of ever-increasing consumption is by no means a new observation. As early as 1865, the English economist and philosopher William Stanley Jevons documented this very effect in the context of the Industrial Revolution: Contrary to was expected at the time, the increasing efficiency of the steam engine did not help to dampen England’s skyrocketing demand for coal. Instead, the better the technology became, the more coal consumption continued to climb as more and more sectors of the economy began to employ the technology. Therefore, Jevons concluded:
It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth.
William Stanley Jevons, The Coal Question (1866)
Piles of coal turned to smoke and ash during the Industrial Revolution; the pointless extravagance of modern cars; staggering amounts of energy wasted on crypto scams and hallucinating chatbots. Jevons’ shadow is certainly long and frightening. But as educated consumers, conscientious workers, and enlightened citizens of some the richest nations of the 21st century, we now face the curse of efficiency on a battleground where we actually have a chance to overcome it; the excess fuel many of us burn today isn’t just of the fossil variety. It’s not just that we’re recklessly exploiting the planet’s natural resources because of dubious economic incentives, manipulative advertising, and consumer short-sightedness—as deplorable as all that is. It’s something even more precious that we’re squandering while completely overlooking the alternative: the finite amount of time each of us is allowed to spend in this world.
Another British economist with a very long shadow, John Maynard Keynes, published a seminal essay in 1930 entitled “Economic Possibilities for our Grandchildren.” Keynes argued that a utopian future of abundance was just around the corner: Efficiency increases driven by technological progress, innovation, and automation, he mused, would ensure that in two generations the average person would have to work no more than “three-hour shifts or a fifteen-hour week.” Keynes was equally concerned about how we would distribute the few remaining things to do fairly, so that people would still feel that their work, and thus their lives, mattered—rather than succumbing to unsatisfying passivity. And while the kind of hedonistic materialism Keynes feared has certainly come to pass for some people in modern societies, what are we to make of his general optimism about rising productivity leading to falling working hours?
In 1930, the year Keynes wrote his essay, GDP per capita in the world’s largest economy, the United States, was about $10,000. Taking into account the time the average person spent at work, that equated to $3.40 of GDP generated for each hour of labor. 90 years later, in 2022, the same figure had ballooned to a staggering $32; that’s almost a tenfold increase in efficiency between Keynes and the generation of “his grandchildren”. Of course, this is not just due to more efficient technologies: Our rampant exploitation of the environment also played a major role, as did a devastating world war and a booming postwar recovery. But the fact remains that the economic value that could be extracted from an hour of human labor in Keynes’s day is dwarfed by the possibilities of our own.
Not surprisingly, many of these efficiency gains have led to improvements in people’s standard of living. We live longer, healthier, and more affluent lives today than anyone born in 1930; our homes are considerably larger, better heated, and better insulated; convenient appliances, from refrigerators to dishwashers, have become commonplace; healthy, nutritious, and sustainably sourced food is an affordable option for most. It would be naive to assume that, given the choice, any of us would trade all these conveniences for a little more leisure time. It’s the same as with the safety features in our cars and the spread of access to clean electricity: A fair share of the increased efficiency has gone to causes we wouldn’t want to miss. But what about the rest?
According to the U.S. Bureau of Labor Statistics’ “100 Years of Consumer Spending” report, in 1934, consumers had not much choice what to do with their money: People had to spend about one-third of household income on food, another third on housing, and ten percent on clothing. That left little more than 25% for other non-discretionary expenses, such as entertainment, travel, and personal care. But according to the same report, less than 70 years later, the average consumer was in a position to use nearly half of their budget for “non-essentials.” Thanks to many of the developments Keynes foresaw, sometime between 1930 and today, the U.S. and many other developed countries have surpassed the point where a majority of the population could comfortably meet the basic needs of a happy and healthy life with what they can earn from a full-time job.
Naturally, companies were eager to capitalize on consumers’ expanding non-discretionary budgets. Motivated by the relentless urge to keep growing in the face of stagnating demand for essential goods and services, many followed the same playbook we’ve already seen in the automotive industry. They shifted their attention from satisfying to stimulating customers’ desires and often failed to address (or chose to ignore) the detrimental side-effects: While an increasing variety of consumer goods was heralded as a great achievement (especially compared to what was on the meager shelves in many communist countries), it also gave birth to the paradox of choice, a kind of despair one feels when faced with an overwhelming amount of options. While accelerated product lifecycles fueled innovation they also led to the introduction of pseudo-improvements whose sole purpose is to make last year’s model seem inferior. While electronic gadgets helped democratize access to information and communication, they also created an entirely new category of psychopathology. Yet, as consumers, we were happy to go along with most of this; after all, we could easily pay for all these things and were blinded to their downsides. But at the same time, we didn’t seriously consider the alternative that our dual role as consumers/employees would have offered. Most of us could in fact afford to work less, earn less, and spend less. We cloud have said fuck you to those the 28 varieties of shampoo, to the superfluous features of the next-generation phone that we’re not going to use anyway, and to doomscrolling, social media addiction, and fomo. But for most, denying to do so was not a conscientious choice. Instead, we collectively sleepwalked into this mess, pulled along by the slow, incremental increases in technological efficiency, economic output, and disposable household income. Let’s take a moment to take stock of where this has led us, collectively and as individuals. Let’s start by examining what we actually do with all that shiny, new stuff.
Around 1960, when living standards were already significantly better than they were in Keynes’s 1930s, each and every person in the U.S. left behind 490 kg of trash per year. By 2018, that number had ballooned to nearly 890 kg. That—fun fact—equates to almost the weight of a full-grown walrus. In waste. For every man, woman, and child. Every year. But while us generating twice as much junk as we did 60 years ago should be shocking in its own right, consider which subtypes saw the biggest increases: Plastic waste soared by a factor of 50, from 2 kg per person to more than 100 kg. Textile waste increased by a factor of 5. Food waste tripled. Alas, the modern consumer/employee is drowning in clothes and shoes and electronics and toys and produce and dairy and tons of other stuff that the economy churns out only to be thrown away. Is this really the best use we can make of the tenfold increase in economic productivity and the doubling of disposable income that occurred since the day the ink dried on Keynes’s paper?
Remember, we’re dealing with a two-headed demon here: While our landfills are overflowing, work-related psychological issues have risen to unprecedented levels: Between 50% and 75% of employees, depending on the precise phrasing of the question, report regularly experiencing symptoms of burnout. According to a 2021 study by the American Psychological Association, a shocking 71% percent “typically feel tense or stressed out during the workday.” But paradoxically, when the same survey asked for “one single perk” that employees could ask for, only 13% voted for “more time off.” The most popular response was “more money.” Unfortunately, for most, both the proverbial and the physical penny has yet to drop: Making more money isn’t going to make you any happier. And it certainly won’t help alleviate the stress and anxiety you feel at work, which in turn robs you of the quality sleep your body desperately needs, infringes on the time you have for physical activity and mentally stimulating hobbies—and leaves you distracted and apathetic during the few hours you have left to spend with friends and family.
The underlying problem, as Harvard psychologist Daniel Gilbert points out, is that people are notoriously bad at predicting what it is that would make them happy. Sadly, evolution has hard-wired our brains to believe that we will feel “better” in an alternative, but just out-of-reach situation—only to fall back to our “baseline happiness” once we actually get the thing we were desperately seeking. “If only I had a new car…” muses one, “if only I got the girl…” thinks another, and “if only I was on a tropical vacation…” dreams a third. But sitting in traffic in the new car turns out to feel exactly the same as sitting in traffic in the old. Spending time with your long-awaited sweetheart reveals her tiniest—yet annoying—imperfections. And even the most picturesque holiday won’t bring much relief if the person there is the same grumpy old self from home. Alas, the view point from inside the hedonic treadmill hardly serves as a useful predictor of how to change one’s life for the better. When respondents answered this survey, they honestly believed that what they wanted was “more money” because they believed—wrongly—that this would somehow translate into a higher level of well-being; as it turns out, this is rarely the case.
But how does people’s happiness actually change if you remove the monetary imperative altogether? What if you make people work fewer hours without offering them an alternative? Or, as University of Chicago economist Steven Levitt puts it: “Don’t listen to what people say; watch what they do.”
Consider, for example, the stunning changes observed in participants in the much-cited “four-day week pilot” study in the United Kingdom. Thousands of workers from diverse socioeconomic backgrounds were put on significantly shorter hours than before, and here’s what happened, in the words of the study’s authors:
Before and after’ data shows that 39% of employees were less stressed, and 71% had reduced levels of burnout at the end of the trial. Likewise, levels of anxiety, fatigue and sleep issues decreased, while mental and physical health both improved.
Lo and behold, people who actually do work less turn out to be happier. And a closer look at their responses clearly shows in which direction the arrow of causality points: Participants ended up spending more time on hobbies, exercising more, sleeping longer, and reporting greater satisfaction with work-family and work-life balance. With “more money” out of the picture, people naturally turned to using their newly freed-up time to do things that led to striking improvements in factors such as “happiness” and “life satisfaction. Needless to say, “more money” could hardly provide either of these.
But, one could argue, isn’t work itself a major source of meaning and, by extension, life satisfaction? Would’t “less work” diminish people’s capacity for self-actualization, increase social isolation, and turn them into a bunch of lazy slobs? Even Keynes himself, who can hardly be accused of being at the forefront of neoliberal thought, was concerned about these issues. It’s undeniable that a fulfilling career provides wonderful possibilities for skill-development, creative outlets, and strong social networks. But, thanks to the many studies done on the impact of various UBI (universal basic income) schemes, we can infer with some precision what people do when for-profit employment is no longer in the picture at all. Contrary to the pessimistic expectation that, freed from the economic incentive to work, they would succumb to laziness, depression, or substance abuse, UBI studies consistently find that participants engage in alternative types of valuable, albeit nonprofit, activities: They go to college to learn new skills, they start creative ventures, they experiment with innovative business ideas, they volunteer in their communities, or they take care of friends and family members in need. Working less—or, in the case of a basic income, not working at all—doesn’t rob life of meaning. On the contrary, the ability to mentally decouple one’s self-worth from the economic value of one’s work can be immensely liberating.
We are now at a point in history where we can finally grasp the “economic possibilities of Keynes’s grandchildren,” thanks to the stunning effects of centuries of human ingenuity and creativity. Decades of innovation, automation, and productivity growth have created a world that even the inventor of the modern term “utopia,” Thomas More, could hardly have dreamed of. It is now up to us to decide what to do next: Do we want to continue on the hedonic treadmill in pursuit of material gains and the fleeting sparks of happiness they bring? Do we want to throw more irreplaceable natural resources into the capitalist meat grinder that churns out so much waste, both literal and virtual? Do we want to sacrifice our psychological well-being by working longer hours than necessary in the vain hope that “more money” will bring us more happiness in some vague, undefined way?
Of course, how each of us chooses to spend our limited time on earth is a highly personal decision. But the glacial nature of our rising standard of living, the slowness with which quality of life has increased over the centuries, and a host of unhelpful economic incentives that have led to increasingly shady business practices have obscured the existence of that choice for many people. Taking a step back, re-evaluating our priorities, and making a more conscious one is the least each of us can do.
The difficulty lies not so much in developing new ideas as in escaping from old ones.
John Maynard Keynes