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Pitchfork Economics with Nick Hanauer
The Measure of Progress: Counting What Really Matters (with Diane Coyle)
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- [00:02]
Nick Hanauer
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
- [00:11]
Goldie
The last five decades of trickle down economics haven't worked. But what's the alternative?
- [00:16]
Nick Hanauer
Middle out economics is the answer because.
- [00:19]
Goldie
The middle class is the source of growth, not its consequence.
- [00:23]
Nick Hanauer
That's right.
- [00:29]
Goldie
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show. If you follow economics, Nick, you know, there's a lot of focus on economic statistics. And so, you know, a couple months ago when some bad jobs numbers came out from the Bureau of Labor Statistics, of course President Trump did the only thing a rational person would do, and that is fire the head of the bls. Which I think is a great way of leading into the topic of today's podcast of this episode because we really spend a lot of time focusing on these top line numbers like unemployment, inflation and the big one. Nick, gdp.
- [01:24]
Nick Hanauer
Yes. You know, as we've discussed before on the podcast and you, you and I have discussed endlessly, GDP is such a terrible characterization of what's happening in the economy for so many reasons.
- [01:39]
Goldie
Right.
- [01:39]
Nick Hanauer
It doesn't capture things that you don't charge money for, like caring for children. It treats horrible things like cancer the same way that it treats wonderful things like planting trees.
- [01:56]
Goldie
Yeah. If you sell cigarettes, that adds to gdp. If those cigarettes cause cancer and require all the better treatment also adds to gdp. It doesn't capture externalities. It's also, you know, Simon Kuznets, who was like the father of gdp, was very clear at the time that it was incomplete. It was, it wasn't a complete picture of the economy, but it was also an attempt to take a snapshot of the economy that existed 75, 80 years ago, which is a very different economy than the economy we have, much simpler day. And so the attempts to kind of fix around the edges of it, to keep it up to date would never be nearly enough to actually make it something that described the 21st century economy. Yes, because it's largely something built for a manufacturing economy where you somehow could add up all the inputs and outputs or at least attempt to count up all the inputs and outputs. And yet this is the metric that we focus on most, that if the economy is growing, everything must be fine. Yeah, everything's great. Right, because there's GDP growth.
- [03:15]
Nick Hanauer
And yeah, wages could be, wages could be stagnant for 90% of people. Inequality soaring, planet burning, democracy collapsing, GDP is growing. It's all good.
- [03:28]
Goldie
But if GDP isn't growing, for a couple quarters. Oh, no recession, everything's bad, and we throw out the president. Yeah, if only.
- [03:40]
Diane Coyle
Yeah.
- [03:40]
Nick Hanauer
But today, today we have one of the world's absolute experts on gdp. We're talking to Diane Coyle, who's the Bennett professor of Public Policy at the at Cambridge University and who has been writing about GDP for a very long time and has a new book out called the Measure of Progress Counting what Really Matters, where she argues that how we're counting it right now just isn't working and we, we should do a different thing.
- [04:11]
Diane Coyle
My name's Diane Coyle. I'm a Bennett professor of Public Policy at the University of Cambridge, where we've just set up a new policy school, and I'm the author of a book called the Measure of Progress.
- [04:22]
Nick Hanauer
All right, well, we're pretty excited to talk to you today about your new book about GDP effectively and why it's crummy and how we could do better.
- [04:33]
Goldie
Don't insult her. It doesn't have GDP in the name. It says progr.
- [04:39]
Nick Hanauer
But give us the lay of the land. Where are we and why isn't it working as well as it should?
- [04:44]
Diane Coyle
So there are two halves to this story. The first half is that even on its own terms, GDP is doing a pretty bad job. So even if you think it's the best possible measure of how things are going in the economy, it's really poor at capturing how production happens these days. What's happening in the digital economy, what's happening in AI and the framework that we have for that doesn't really have room for things like AI agents or crypto or the way that production networks cross borders. And so it gives us a very misleading picture of things like trade between the US and China, which happen to be affecting a lot of policy at the moment. So that's one problem. And the other set of problems, very long standing and well known, that GDP leaves out things that really matter to people. The obvious example is what's happening to natural resources where they're being depleted, pollution and so on, but also things like care for people at home. The economic value that creates isn't recognized. And so the second half of the book is about what we might look at instead of GDP to address some of those concerns people have, that it just isn't a good measure of whether people's lives are getting better or not.
- [06:00]
Nick Hanauer
I don't want to take us off track just because it's so relevant to the moment. Can you explain a little bit about what you mean by the USA China trade not being accurately characterized by our current measures.
- [06:17]
Diane Coyle
Well, most manufactured goods now are made in lots of different countries and assembled in a final place. So the example people always use is the iPhone assembled in China, but consists of components made in lots of places, including the United States, but South Korea, Japan, Germany and so on. And they are all exported to China, assembled Taiwan, assembled there, and re exported back to the United States. If you want to get a picture of what's really happening to the allocation of economic value creation among countries, you don't just look at those final trade figures which we have in important export statistics. You would look at where is the value being added along that chain and who is keeping that. And for manufactured goods, the US actually comes out a lot better looking at those value added statistics than it does in the raw data. I think even now it would still be a deficit country. But that's great, really. That means that the rest of the world is happy to fund the lifestyle of Americans in buying all of these imported goods and services. But it's not the imbalance that has led to the kinds of conversations American policymakers have been having about trade for many years now.
- [07:29]
Nick Hanauer
Yeah, right, interesting.
- [07:30]
Goldie
You remember Nick, Cesar Hidalgo explained that the trade figures actually miss all of this intellectual property.
- [07:39]
Diane Coyle
Right.
- [07:39]
Goldie
Then that if you worked that in trade deficit wouldn't be nearly as large.
- [07:44]
Nick Hanauer
Yeah, interesting. Diane, you write that economic measurement is value laden and I think that's just so true, but not well understood. Can you expand on that? What are the values implied from a focus on gdp? Who benefits from the way we currently measure it, et cetera?
- [08:02]
Diane Coyle
Well, at the most basic level, it values things that cost money. GDP counts up all the money in the economy and then does fancy adjustments to it using price changes and quality changes to get a sense of underlying improvement in living standards. But that means that we're not valuing things that don't cost money. That means we're not valuing care in the home, the example I gave already. But it also means we're not valuing things that people are doing online at home. And that's been shifting dramatically because of digital technology. And that's everything from doing your own travel agency. In effect, that's the substitution out of money into home production. But also things like creating open source software or cute videos that people enjoy looking at. So there's nothing in the framework for collecting statistics that allows us to track all of that that's going on. So it's a money metric. It prioritizes paid employment, formal employment, and the method for collecting Data about the economy just hasn't kept up with changes. So things like who's working in the gig economy, how many hours do they have to work? We don't have good information about that. We don't have good information about all of that free value people are creating at home. We don't really understand what's happening to productivity measurement because of these shifts across what we would call the production boundary from the money economy into the unpaid economy. At a more fundamental level, even the way we define things implies values. We have a lot of statistics on the manufacturing economy when 80% of what happens in the US is in services, and we just don't have such good information about that. And things like collecting data on ethnic categories. Some countries do it, some countries don't. And they've got different moral reasoning behind that. In France, it's forbidden to collect any statistics using ethnicity as part of the information.
- [10:04]
Goldie
Yeah, think about it, Nick. This podcast under GDP has absolutely no value.
- [10:10]
Nick Hanauer
Yeah.
- [10:10]
Goldie
Because we don't sell that.
- [10:12]
Nick Hanauer
We don't charge for it.
- [10:13]
Goldie
We don't charge for it. And so how do you. You can't measure the value of this podcast, can you? Can you measure my productivity? My.
- [10:23]
Nick Hanauer
I've tried Gargoldi and it's never worked out well.
- [10:27]
Goldie
I'm asking, is it actually possible to measure the productivity, my productivity on this podcast, considering.
- [10:35]
Diane Coyle
So you'd have to go about it a really different way, I think. And the way I suggest is looking at how people spend their time. And you can think about that from the productivity angle. That's either doing things that are enjoyable and provide quality entertainment for people. That's what you guys are doing, clearly. Or it's speeding things up. So routine stuff that's boring, you want to get that done as quickly as possible. But you can also think about how much enjoyment people get out of how they spend their time. Because a very democratic measure would be, we've all got 24 hours in a day, we've got to spend them. You can't save them up. You can't float them on the stock market and see the asset value rise. So if you think about your work, your leisure, your consumption, all of the home care you have to do, how much do you enjoy those things? Have you got more time to do the things that you enjoy? I mean, of course, obviously Americans work many, many more hours than Europeans do. And if you adjust for that, the gap between GDP in France and Germany per capita and the United States is really much narrower than the headline GDP tickets suggest.
- [11:36]
Nick Hanauer
It Is, Yeah. Meantime, very few people are benefiting from all those extra hours, which is.
- [11:42]
Goldie
Your people are, Nick. Yeah. You and your fellow billionaires are benefiting from all those extra hours.
- [11:48]
Nick Hanauer
Exactly. So one of the things you write about is these multiple attempts to go beyond gdp, which I also have never found satisfying. You know, these dashboards or indexes, can you describe those efforts? And I think you agree it's also not adequate.
- [12:06]
Diane Coyle
They all have a certain appeal, but yet, as you say, they're not really adequate. So one popular approach is a dashboard. There are lots of them around. Now you know that they have lots of things that one might care about included in them, but it's sort of arbitrary. And so each dashboard reflects the interest of the person who put it together. And it's also not clear how you use that for policy. At least GDP gives you a number and policymakers can go number up or not and it's actionable. It's much harder with dashboards, although what I think you can say for them is that they show you some trade offs. And if we were sitting in Australia, we'd be saying GDP is growing very nicely, thank you. But we are depleting our mineral resources and that's going to have some costs in the future. So the dashboards don't have any traction, I would say, in terms of policy, although countries are starting to look at them more than they used to. The other really popular way of going about it is to measure life satisfaction, which involves asking people on a scale of 0 to 10 or 0 to 6, would you say that you're satisfied your life today? Or you can ask questions about anxiety and other aspects of well being. And I think my issue with those is that they're sort of outcome measures that again, you can't really get hold of for policy purposes. And the point of official statistics is that they help governments do things better, make better decisions. First of all, if it's a scale of 0 to 10, it's never going to go above 10. Most developed economies, most people are around 7 or 8. It doesn't change very much over time. And I have this debate all the time with Richard Layard, who is one of the big advocates for thinking about happiness or well being. And he says if people don't feel great, let's have the state pay for cognitive behavioral therapy for them. Which to me ignores the fact that they've probably got bad housing, the kids got asthma, they've got three jobs to bring enough money in. You need to tackle the underlying causes of what's driving their well being or lack of well being and not, not treat the symptoms of it. So I find that quite a, I don't know, quite a reductive way of thinking about it and would much rather, you know, as a, the kind of person I am and preferences I have, I'd much rather focus on what actually can give people the opportunities to make life better for themselves. And that would be good job, good housing. People want the dignity of being able to get on and sort out their own lives.
- [14:35]
Goldie
But it's really difficult from a measuring perspective, not just because when you look at something like gdp, as you point out, it doesn't really measure the right things. Even if it did measure the right things, it's very difficult to collect and collate this information. The data, the statistics are really hard to accurately correct. But also one of the things I found most intriguing, and I guess I kind of already knew it, but the way you phrased it, that in fact GDP isn't even a thing. None of these metrics exist objectively. Those are constructs that we've created to help us understand the economy. And if we choose a different construct, something other than gdp, it changes the story that we tell about the economy and how we understand it and our place within it.
- [15:35]
Diane Coyle
It's an idea. And over the centuries people have had different ideas of what to measure. Now Adam Smith's book was called the wealth of nations, not the Income of Nations or the GDP of Nations. So that would be one thing.
- [15:48]
Nick Hanauer
Diane, I'm fascinated. It just occurred to me, are you up to speed on the history of how different societies, what did the Greeks and Romans do? Do you know, did they do anything?
- [16:02]
Goldie
They didn't have a concept of the economy.
- [16:05]
Nick Hanauer
I just wonder if they had these conversations about like how things were going and how they measured it.
- [16:11]
Diane Coyle
That's exactly right. They didn't have this domain called the economy that was separate from life. That's the 20th century invention in the 11th century. In 11th century Britain, William the Conqueror commissioned the Doomsday Book and he was all about counting the agricultural assets, the number of trees and cows and the area of the land in his new country. I think, as far as I know, the Greeks and Romans similarly valued agricultural wealth. How much could the land produce to improve people's living standards? The amount of food and wine. And wine that they had.
- [16:46]
Nick Hanauer
Interesting. So obviously, you know, one of the things that's in the discourse a lot is care, work, which you already mentioned, you know, caring for a child or a parent or whatever it is, all of which is unpaid and unvalued in the current system. Has anyone done an analysis of what would happen to GDP if you included those sorts of things?
- [17:08]
Goldie
You mean like if you valued women's work, Nick, like the. All the.
- [17:12]
Diane Coyle
Yeah, okay, yeah, they have indeed. It's sporadic, but there have been attempts to estimate that, and there are economists like Nancy Folbre who are leading experts on this area. But you can count up the hours that people spend on that kind of work, and you can value it either at how much they would get if they were in the labor force and paid for it, or how much they would have to spend if they were buying it in from the market.
- [17:35]
Nick Hanauer
Yeah.
- [17:35]
Diane Coyle
And you get. You get a number that's about the same size as gdp.
- [17:39]
Nick Hanauer
Holy shit.
- [17:40]
Diane Coyle
You mean it as big as the economy?
- [17:42]
Nick Hanauer
You mean including manufacturing and everything else?
- [17:45]
Diane Coyle
Yes, yes, because just think of it in terms of time spent.
- [17:49]
Goldie
Yeah.
- [17:49]
Diane Coyle
You spend eight hours a day at work, say. Or, I mean, you Americans, you probably spend much longer at work, and you might spend as many hours doing the care work at home. Cooking meals, cleaning, caring for the kids, driving people to meetings and so on.
- [18:03]
Nick Hanauer
Yeah, yeah, yeah, yeah, yeah.
- [18:05]
Goldie
If you think about the old line, Nick, from the early 20th century labor movement, eight hours of work, eight hours of sleep, and eight hours to do as you please. That eight hours to do as you please is mostly housework and child care.
- [18:19]
Nick Hanauer
Yeah. Driving kids to soccer games.
- [18:21]
Goldie
So. Yeah. So that's equal to the eight hours you're. You're. You're working for pay. That doubles GDP if you're. If you measure GDP that way.
- [18:30]
Nick Hanauer
Yeah. Fascinating.
- [18:32]
Diane Coyle
So one of the artifacts, if you like, of women moving out of work in the home to paid work during the 1960s and 70s was that because that was creating dollars, measured GDP grew faster than it otherwise would have. Right. And so part of the productivity boom that we saw back then was that secular shift of women from household work to paid work.
- [18:55]
Nick Hanauer
Yeah.
- [18:55]
Goldie
But part of that. That productivity boom was made possible by the productivity of household appliances.
- [19:03]
Diane Coyle
The washing machine, famously.
- [19:04]
Goldie
Yeah, yeah.
- [19:06]
Diane Coyle
We're now just waiting for the domestic robots to do the same again.
- [19:09]
Nick Hanauer
Exactly. So let's turn to what you think we should do. I think we are all in violent agreement that the existing system is inadequate. In your book, you have at least the beginnings of a proposal. What. What would you do?
- [19:23]
Diane Coyle
So I already talked about time. I think if you want to understand how AI is going to change the economy, we need to understand better how people are spending their time. But set that aside, What I argue for is in effect a balance sheet for the economy so that we know whether our kids and grandkids can have at least as good a standard of living as we have. You've got to keep an eye on the assets that are available to them and are they going up or down in value. But that balance sheet is a broad one. So it includes what are the natural resources available to the economy? Everything from trees and soil quality to air quality and pollution and human capital. Not only how skilled are people, but how healthy are they? Because we have seen especially in aging societies, that ill health can reduce productivity and potential output and then things that are much harder to define and measure. But there's a huge amount of economic evidence that they matter a lot. And that's things like social capital. How much do people trust each other? If social capital is high, economic transactions occur much more easily. You get less litigation in the courts, so that boosts gdp. Derona Acemoglu and Simon Johnson in their Nobel winning work exactly documented how important economic institutions are for long term growth. But also I would argue what economists call organizational capital. How do companies run? I was really struck a little while ago. I was listening to the head of strategy at Dell Computers saying that he reckoned the organizational capital was by far the most important asset the company had because they put together components to make computers. But it's the way they do that. The logistics chain that they have, the know how they have about responding to customers, all of that he said was much more important. And that's the organizational capital. It's how do you do things. I'm really interested in this area at the moment because it will affect the extent to which AI actually improves productivity in the economy or not, and the ultimate size of the bubble that we're experiencing there at the moment. But anyway, this broad balance sheet concept because it does speak to the future as well as today, just as a company's balance sheet does.
- [21:40]
Goldie
You know, it's interesting on that idea of organizational capital to note that when Steve Jobs died, this company known for its innovation and style put their logistics chief in charge of the. In charge of the company that was the next CEO was the guy who did the logistics.
- [22:04]
Diane Coyle
And logistics turned out to have been really important in the 90s productivity boom. I think there is a McKinsey report saying some proportion of it, measurable proportion, was due to Walmart improving its logistics.
- [22:14]
Goldie
You know, obviously what our new secretary, I'm not going to call him secret Secretary of Defense, I won't call him Secretary of War doesn't understand about the US military is that it's, it's not people who are in the business of killing people and breaking things. It's a giant logistics organization that's most of what the military does, is efficiently move people and material around the world.
- [22:40]
Nick Hanauer
Can you say just a little bit more about your time based way of understanding this? Like just expand on that a little bit.
- [22:49]
Diane Coyle
So we've got a few time use surveys. They ask people, a sample of people to keep a diary about how they spend their day and it can account for things like you watch TV at the same time that you're doing the ironing and so you get a fine grained picture of how a representative sample of the population spend their time, what they're doing with it. And then you can think about different ways of valuing that time if you want to, but also get insight into how much are people using the free digital services that we all love so much and understand better. If you're a policy maker, those margins, you know, if you change the rates of welfare benefits that people get, what's the incentive effect going to be on their decision to go out to work or not? So it gives good insight, insights into that. What we don't have, and I think is more interesting at the moment given the technology changes, is how people spend their time at work. There has been one survey done in the UK of civil servants asking them how do they spend their time? And I can't remember the figure, but something like 20% of their time was spent in what they call useless meetings. That to me is the low hanging fruit for productivity gains. If you can substitute AI for useless meetings, you know that would be, that would be cool, that would be great getting more insight into that because there are two ways to think about productivity at work, particularly in services. One is you want to tap really fast and efficiently. And to give a medical example, if I need a blood test, I just want to rock up to the place, have it done, not wait, go away, get the results back on my phone within two hours. So that would be productive process and you can capture that by how quick it is. Just like steamships, fast and sailing ships. So speed has always been part of productivity. But then the other part is things where people spend a lot of high quality time with you. And another medical example would be you need to be in intensive care. You want a lot of really expensive, really highly trained people spending hours looking after you. And in that case that's the measure of productivity. It's a quality type of measure, not an efficiency type of measure, or, you know, if I go to get a haircut.
- [25:07]
Nick Hanauer
Same with teaching. This is a common conundrum. How do you make teaching more productive? Is stuffing 50 kids in a classroom making it more productive? Well, not if they don't learn anything.
- [25:19]
Diane Coyle
It'll be both, won't it, Nick? It'll be both. Using AI to do some things faster, like standardized tests, can they do their times tables or whatever. And at the same time, thinking about how it can improve the quality of the lesson plans and the material that teachers have to provide the kids in class and just improve the quality of it.
- [25:39]
Goldie
Yesterday, Diane, I was listening to your audiobook while walking my dog through the park. And so this was my free time in the sense that I walk my dog, take her on a long walk every afternoon, But I was also working. I don't know if. Nick, do you consider that work? Yes, I was working. I was preparing for this podcast. I can only read or listen to a book so fast. It doesn't matter when I'm doing it or where I'm doing it. It's just impossible to measure how much of that walk was work and how much of that walk was pleasure. Of course, listening to your book was a pleasure, but it was also work.
- [26:21]
Diane Coyle
I was also going to say we could just quiz you about how much you enjoyed it. And you can answer me on a scale of 0 to 10. Let's go with 9. Let's go with 9, shall we?
- [26:31]
Nick Hanauer
Yeah, we'll go with 9.
- [26:32]
Goldie
I'm trying to think. Yeah.
- [26:33]
Nick Hanauer
Yeah.
- [26:34]
Goldie
I'm not a 10 type of person.
- [26:37]
Nick Hanauer
Yeah. I mean, these are very difficult questions. I guess I just want to ask one more question about the time thing, because I'm trying to picture it in my head.
- [26:45]
Goldie
I know. I can see the wheels turning. Nick, this really appeals to you.
- [26:48]
Nick Hanauer
Yeah, yeah, yeah. Is it fair to say that what you want to measure is the allocation of fun things going up and crappy things going down as a measure of forward progress?
- [27:02]
Diane Coyle
Yes.
- [27:03]
Nick Hanauer
Okay. The less time you allocate to things which you find useless, and if not useless, distasteful, unpleasant.
- [27:09]
Diane Coyle
Exactly.
- [27:10]
Nick Hanauer
And the more time that you allocate towards things which you find enjoyable. That is a measure of. It's simple and good. It's a. It is a good measure of welfare. And, my gosh, the difference between an American, sort of the canonical American, working 60 hours a week for crappy wages and getting a week of vacation a year versus a Swede working 35 hours a week and getting 8 or 10 or 12 weeks a year off their incomes might be different, but if you're measuring on this basis, the differences would be giant.
- [27:49]
Diane Coyle
And then when you add in the distribution of incomes in Sweden versus the United States, for most people, that gap is even huger.
- [27:57]
Goldie
Right. I want to complicate this further because by this concept, I don't know what term we're using. Productivity or. Let's just use progress, since that's the title of the book. If you enjoy your work, if you're doing work that you enjoy as opposed to work that you don't enjoy.
- [28:15]
Nick Hanauer
Yeah.
- [28:16]
Goldie
That's progress. Right. That's. That's increasing value.
- [28:20]
Diane Coyle
It is.
- [28:21]
Goldie
Regardless of the monetary value of the. Of.
- [28:25]
Nick Hanauer
Of the work, of the renumeration. Right, yeah, the. Absolutely. And Goldie, I think. I think, you know, if there is one thing, one trend that really is good, I think in the world, it is the proportion of people, the three of us being great examples of it, who do work that is intensely enjoyable. Right. Where it's very hard to distinguish. This is why you listen to the book and walk your dog at the same time. Goldie is very difficult for us to distinguish between.
- [28:59]
Goldie
You're saying that you don't want to pay me for.
- [29:01]
Nick Hanauer
No. For walking your dog. Yeah, yeah. But anyway, you know what I mean? Right. Like, and, And I mean, a thousand years ago, the proportion of people who had, whatever it was, jobs that were fun was extremely low. And at least in advanced societies, the proportion of people who have jobs that are really pretty fun is much higher.
- [29:21]
Diane Coyle
Keynes wrote an essay called Economic Possibilities for Our Grandchildren where he talked about what on earth we do with all the leisure that we were going to have in the productive future.
- [29:29]
Nick Hanauer
Yeah.
- [29:29]
Diane Coyle
And I think that was the wrong way of framing it because we have redefined work and it includes enjoyable things. And so, you know, an extreme example of what you're talking about might be an artist who is absolutely devoted to their craft and loves every moment they spend creating.
- [29:44]
Nick Hanauer
Right, absolutely. Or an academic who can't get enough of the subject that they love.
- [29:51]
Diane Coyle
And I read economics books all the time.
- [29:53]
Nick Hanauer
Yeah. All right. I think we've aired out what you would do if you were in charge. But one final question. Why do you do this work?
- [30:03]
Diane Coyle
Because I think measurement is not really boring. It's really about the way we understand the world, the concepts, and it affects the decisions that people make. I'm all about, as most economists are, I'm all about, can we contribute anything to helping make people's lives better? And I've just chosen the very nerdy area of economic statistics to focus on. That's great.
- [30:29]
Nick Hanauer
That's great. Well, thank you so much for being with us. Your work is always so interesting.
- [30:35]
Goldie
Thanks for the book.
- [30:36]
Diane Coyle
Thank you. Enjoy the dog walk.
- [30:37]
Goldie
Thank you, I will.
- [30:44]
Nick Hanauer
You know, Goldie, we've been talking about and thinking about how to measure progress for a really long time and within our own little family. The market humanism perspective is the accumulation of solutions to human problems, which I remain convinced is, is a very fruitful path towards a better way of understanding whether we're, whether we're moving in the right direction or not. Although much work needs to be done to make that something that's easily and reliably measured. But I think that Diane's time based on analysis in particular is very intriguing because at the end of the day, it is how we allocate our time that defines the quality of our lives in so many ways. Obviously, as long as we're above subsistence.
- [31:33]
Goldie
You know, there's so many layers to this because the market humanist approach is outcomes oriented.
- [31:39]
Nick Hanauer
Yes, right.
- [31:40]
Goldie
What we want are better outcomes for as many people as possible. We want to broadly improve the lives of people and that means solving our everyday problems. But I think what that time based approach points out is that it's not just the outcomes that matter, but how we get to those outcomes. That if you are, as we talked about, if you are enjoying your work, you have the same outcome. If I make $100,000 a year and I hate my work, as opposed TO I make $100,000 a year and I love my work.
- [32:18]
Nick Hanauer
Yeah. How do you.
- [32:19]
Goldie
The second scenario is clearly better. It improves my life more. Right, right. And you multiply that out by however many billion people are working in the world today, and it's a big difference. And I think this is one of the things about AI and automation, robots, whatever, and we've said this before, you know, if what we're going to do is let the robots take the shitty jobs so that, you know, or the shitty parts of our jobs so that we can focus on the things that we find more meaningful, that is great. What I think your billionaire buddies want to do with AI is lay people off so that we can produce things more cheaply and devalue work. Well, that's not a good use of AI in terms of benefit.
- [33:15]
Nick Hanauer
But I just want to come back and reflect on something that you said though, is that you have one job that you hate making 100k and a job that you love making 100k. But what. But the nuance there, the interesting bit, is that two people may have completely different views on each of those jobs. Right. Like, you may hate a particular thing. There may be a ton of people who absolutely love that. Right, right. And get great satisfaction from doing that job that you hate and vice versa.
- [33:46]
Goldie
Nick. What we subjectively value. I mean, look, you pay me well. I appreciate that. You pay me well to do work that I love. I was doing, as, you know, work that I loved for the previous 10 years and getting paid virtually nothing at all.
- [34:00]
Nick Hanauer
Yeah.
- [34:01]
Goldie
And it wasn't because I didn't have any other choices. I could have. I came out of tech. I had been doing technical writing and PR and stuff like that and a little bit of programming. I was doing work that I hated, that paid me well, and I left that to do something that I found meaningful.
- [34:21]
Nick Hanauer
Yeah.
- [34:21]
Goldie
And, you know, impoverished myself for more than a decade doing this work. And it was worth it to me. Like, I would rather have been paid $20,000 a year doing meaningful work than $120,000 a year doing bullshit.
- [34:39]
Nick Hanauer
Yeah. Well, anyway, it was a. It's a. It's a fascinating area, and it is not one that is. Will be simply solved, I think.
- [34:48]
Goldie
Right.
- [34:48]
Nick Hanauer
It's safe to say it is.
- [34:50]
Goldie
It's.
- [34:50]
Nick Hanauer
It's very complicated.
- [34:52]
Goldie
It's not a simple problem. It's not a simple book, but it is. It is fascinating. If you want to read more from Diane, we'll provide a link in the show. Notes to the Measure of Progress, Counting what Really Matters. You can, of course, buy that at your local independent bookstore or if you're crushed for time, that big online monopolist.
- [35:23]
Pitchfork Economics Producer
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to follow, rate and review us. Wherever you get your podcasts, find us on other platforms like Twitter, Facebook, Instagram and threads. Pitchfork Economics. Nick's on Twitter and Facebook as well. Ickhanhauer for more content from us, you can subscribe to our weekly newsletter, the Pitch, over on Substack. And for links to everything we just mentioned, plus transcripts and more, visit our website, pitchfork economics.com as always, from our team at Civic Ventures, thanks for listening. See you next week.