Monetizing Leisure Time

The goal of a customer in interacting with a company is to obtain something of value in exchange for the capital and effort he must exchange for the good or service that delivers  it.    Likewise, the goals of a person who engages in a non-productive leisure activity is seeking to gain something of value in exchange for his capital and effort: the pleasure of performing the activity.

This difference is often exaggerated.  While you can argue that some products deliver functional values - medical services extend and improve our lives - many products are purchased for pleasure value.   A person doesn't really "need" a soda to survive, and could get by on tap water.  So the purchase of that product is for the sensual and psychological pleasure derived by consuming it, which tends to entail a cost that is greater than the fulfillment of the need it serves (if any).

So to spend time working to obtain the cash to buy a soda is in effect to exchange time for pleasure - through the medium of money.  As many economists have noted, money is unimportant except as a medium of exchange – though its supreme functionality (being a good that can be exchanged for many others) causes its importance to be overestimated.

There is the suggestion that a person ought to value their leisure time the same as their productive time.   That is, a person who earns $12 per hour on their job is creating a value of twenty cents per minute, and that leisure should only be desirable if it generates a value greater than that.   This seems both inaccurate and oversimplified.

In many instances, leisure time is spare time, and in that sense is less valuable than productive time because there is no opportunity to exchange it for the same monetary value.   In some professions, there are opportunities to work overtime or take on additional shifts – but for most people, the work shift ends and they are expected (required) to leave, and cannot earn more by spending more time on the job.  

In other instances, the value of the way in which leisure time is spent generates greater benefit to the individual than their time spent on productive activities.   Consider the cost of tropical vacation: a person pays a great deal more than their hourly wage to be idle in a pleasant location.  Not only is this individual forfeiting the compensation for productive work, but they are spending additional funds to have the benefit of being idle.

The notion of work and leisure are related only in that they are options for the use of time.   One may spend time in productive activity or consumptive activity, and consumption is generally more valuable (productive activity is generally undertaken only for the sake of consumption: we work for the sake of producing something that can be consumed.)

So in all, the suggestion that work and leisure time, or productive and consumptive activities, should be valued equally based on cost-per-hour or per-minute simply does not hold.

Psychology and Industrial Efficiency

I recently read Hugo Munsterberg's book on Psychology and Industrial Efficiency and found it to be a very promising, yet rather disheartening approach to the topic of human behavior in manufacturing and commerce.

It is, first and foremost, an extension of the notion of Scientific Management and pays due respect to Taylor for the wondrous advances in productivity that resulted.  Yet while the science of management has been focused on the praxeological capacities of the human being, it has entirely neglected the psychological ones. And where there is no motivation, the physical ability to engage in action is moot.

While the topic of the book firmly follows its title in being "industrial," Munsterberg explores more than productivity in traditional industries, consider the full scope of mankind's economic behaviors as a supplier of labor and consumer of goods.   He has, in that sense, the right perspective on economics as not merely theoretical consideration of the mathematical evidence of human action, but the purpose of human action itself, and commercial behavior in the context of life in general.

Of chief importance is that he recognizes the need for commercial interests and academic interests to reconcile: the academic must recognize that exploring ideas without a thought for their practical implementation is merely a leisure pursuit that is ultimately of benefit to no-one, and the businessman must recognize that effectiveness is not the result of sheer force of will and personal power, but of leveraging the properties of things (and people) in a manner that is best instructed by scientific inquiry.

This book is offered as the beginning, with an acknowledgement that there is a tremendous amount of work left to be done to achieve the full benefits of progress in the commercial sector.   It is, all in all, a highly philosophical work that suggests a much needed change in perspective - though it is grounded in methodology and practical application.

I did open this meditation by stating that this book was "promising yet rather disheartening."  The disheartening element is that the book was written in 1913 - just over a century ago - and has evidently received virtually no consideration until the last few decades, and very little even then.  As a result the situation today is much the same as that of Munsterberg's time - there's a great deal of potential for improvement in the workplace and in the human condition, though far less of a sense that it will be recognized and seized upon.