Skill as a social construct

Imagine we lived in a society scared of germs, which prized cleanliness not only as a way of ensuring good health but also of improving productivity as people avoided the sniffles and minor ailments. In such a society good cleaners, who could get a place really spotless, would be highly valued and paid.

This isn’t a wholly fanciful example. In industries that need ultra-clean rooms, such as semi-conductor manufacturing, cleaners are indeed well-paid and valorised. It tells us that the value we attach to jobs is a product of culture. A germophobic culture would regard good cleaning as a skill and pay accordingly for it.

You might think such a culture would be irrational. Maybe, maybe not. But the valuations our current society attaches to some jobs is also irrational. City University’s David Blake has shown that “the vast majority of fund managers” are “genuinely unskilled.” If we regard skill as a matter of technique, this is correct: they don’t beat tracker funds. But skill isn’t just about technique. It’s about what gets valued. Those fund managers are paid handsome salaries because they are valued even though they lack technical ability.

Similarly, Nick Bloom and John Van Reenen have shown (pdf) that there is “a long tail of extremely badly managed firms” and Paul Ormerod and Bridget Rosewell have shown (pdf) that “firms have very limited capacities to acquire knowledge about the likely impact of their strategies.” In many cases, therefore, managerial “skill” is technically lacking. But their pay suggests otherwise.

Skill, then, is a social construct – the result not just of technical ability but of what society values, what it sees (which might not be there), and what it doesn’t see. This is a longstanding theory (pdf) in sociology, but a perspective missing from economics. Economists talk about demand curves and value -added. But doing this they are entering the play during the second act, missing the one that describes the cultural formation of value and demand curves and hence of skill.

For example, in the 1960s the women who sewed car-seat covers for Ford were seen by managers as unskilled and paid accordingly. But in fact – and as the women proved – such work was difficult. It was seen as unskilled not because it was technically easy, but because it was women’s work. It’s not obvious that such gender-based perception of skill has wholly vanished: it might explain why care work is under-valued.

Ian Hampson and Anne Junor give us another example, that of an education support worker helping a disabled child (pdf):

She had acquired the haptic skills of having a constant ‘feel’ for the way the child’s muscle system was coping with spells of standing. She contributed to the stable and happy climate of the centre by unobtrusively managing medication, ambulance calls and feeding without interrupting the f low of class activities. She needed negotiation skills at the level of problem-solving and solution-sharing, to shape other children’s responses and to guide parents. She managed awkward ‘upward’ feedback, convincing a higher-status classroom teacher to forego exciting new teaching methods that were actually causing the child to regress. These skills appear mundane, but were subtle sources of social development.

She is, not, though, paid and valorised as a skilled worker.

Philip Moss and Chris Tilly point to another example. Young black men, they say, are perceived as lacking soft skills – the sort that don’t carry formal credentials – and so are under-represented in jobs requiring these. Just as “skill” is gendered, so it is also race-based.

Harry Braverman points (pdf) to yet another example. In the early 20^th century, he says, an ability to ride a horse and carriage was seen as unskilled whilst the ability to drive a car was a skilled job. Today, it is the opposite way round.

We might add to all this David Graeber’s theory of bullshit jobs. Flunkies and box-tickers do jobs which they themselves regard as lacking social value. But they are often paid as skilled jobs because they have private value to their immediate bosses who want to build their empires*.

And of course, there is the matter of unpaid care work. Frances Coppola tweeted today:

Underlying the casual assumption that families can care for relatives themselves is a toxic belief that people - especially older women - who give up work to take on the care of relatives aren't productive anyway.

They aren’t productive because of a social construct – that in capitalism the only labour that has value, and so is productive, is that done for profit. The wages for housework campaign challenges this – and in doing so shows us that other valorizations are possible.

There are several elements of the social construction of skill:

 - Marginal product. This approach is entirely consistent with the idea that wages equal marginal product**. It’s just that our ideas of what is a high marginal product are a matter of taste and ideology. In a fabulous paper (pdf) the late Werner Troesken showed that snake oil sellers were highly productive for decades even though their products were mostly useless, making them much like fund managers today. And footballers (and top sportsmen generally) are much more highly valued now than they were in the 60s or 70s. What’s changed isn’t their technical skill – Fred is not a better footballer than Bobby Charlton was – but our sense of value.

 - Payment for the bare minimum. In some jobs, we pay the bare minimum for the bare quality of work. In others, we pay extra for “talent”. Which it is can be a matter of power and preferences, not just technical ability. For example, although most care-workers are paid the bare minimum, skilled ones can get more by escaping the maw of council sub-contractors and going private. And where “talent” is rewarded it is often not actual ability that matters but the fact of having proven that one is just good enough – which is why many professions are dominated by mediocrities, as Marko Tervio has shown.

 - Management recognition. We’ve all rang up call centres and found that some staff are immensely helpful and efficient and others less so. Such helpfulness, however, doesn’t always bring with it appropriate pay. As Hampson and Junor say, some skills are unrecognised because they “lack managerial authorization.”

 - Avoiding externalities. Oil workers are well-paid and valued – if, that is, you ignore the pollution they generate. Similarly, many bankers seemed skilled before 2008 because we under-rated the risk pollution they were generating. And (some) journalists, columnists and rentagobs have private value, because the intellectual pollution they cause isn’t priced.

My point here is that value and productivity are not exogenous technical data. They are instead the product of societal judgments which valorize some activities and de-valorize or under-valorize others.

Which suggests that both left and right are missing a trick. We can raise the wages of the low-paid not by creating shortages or by hiking up the minimum but by a shift in what we valorize and don’t. It’s easy to imagine – unless you’ve been captured by capitalist realism – a society that is reasonably egalitarian simply because it values cleaners and care workers more and bosses, financiers and bullshit jobs less.

Of course, this isn’t to say we can simply think ourselves richer: I’m talking about relative values here. And of course cultural change takes time. But we should start the process. Which requires us to recognise that skill and productivity are social constructs. And what we build, we can change.

* Graeber’s theory is more economically orthodox than his admirers would want to admit. It’s an example of the point Michael Jensen made in 1989 – that listed companies with dispersed shareholders have inadequate oversight of managers who can therefore pursue their private interests at the expense of shareholders. These interests might include building an empire of bullshit jobs.

** It’s also consistent with Marx’s theory. There’s a reason why he equated value with *socially* necessary labour-time.

Comments

[Blissex]

There seems to be quite a bit of neoliberal framing here, my impression is that out author is comfortable with these assumptions:

* Compensation is determined by skill.
* Supply and demand schedules for a skill meet at some point.

Then he quibbles about what constitutes "skill", having conceded the whole framing.

My experience instead is:

* Supply and demand schedules are wide (and wobbly) bands, with a fairly large region of feasible prices where they meet, because of various informational issues and there being a range of production and consumption possibilities.

* At which price point(s) in the feasible region where the two bands meet is largely determined by the balance of *power* between buyers and sellers rather than how much a skill is valued.

Perhaps one can argue that the valuing of a skill depends on that balance of power as in:

«In some jobs, we pay the bare minimum for the bare quality of work. In others, we pay extra for “talent”. Which it is can be a matter of power and preferences, not just technical ability»

but our author spends much more of his argument on skills than power (that is the only mention of "power").

[Phil]

Re the footballers being paid more despite not having increased productivity or ability, what changed was the marketplace - more people want to see them (and have the resources to do so), so they're in effect selling more product, just as a musician playing to a stadium rather than a pub will make more money from the same output. Are they valued more highly? Arguably, but definitely more widely.

[Blissex]

«what changed was the marketplace - more people want to see them (and have the resources to do so), so they're in effect selling more product»

More precisely they are collecting a share of an increased economic rent, created by law. Having more viewers of a copyrighted performance does not increase the value added of working two shifts in a football match...

Indeed since the ostensible product of a football match is "number of goals scored" an argument can be made that the value added is less than zero (the cost of performing match results in no output, so it is a total loss) :-). Of course the real product is entertainment, but still..

[Kevin Carson]

The neoclassical concept of "marginal product" is entirely circular. Marginal product is whatever the cost of an input adds to the value of a finished good, which means its marginal product is whatever its owner can charge for it -- something that results mainly from power considerations under capitalism. The "value" comes from what Veblen called "capitalized disserviceability," and Henry George Jr. called "controlling access to natural opportunities." Neoclassical economics and capitalist ideology are power-blind.

[Kevin Carson]

In addition, a huge amount of the "skills" that are valued are only necessary given the institutional structure of capitalism -- the knowledge and incentive problems, moral hazards, and other irrationalities that result from absentee ownership by people other than those who do the productive work and possess the situational knowledge, all the bean-counting and guard labor resulting from concentrated wealth and inequality, and all the waste production and distribution costs resulting from a mass-production/push-distribution system that requires production capacity to be utilized regardless of demand.

[rsm]

So, prices are arbitrary, inflation is a power play, why can't the Fed value each of us at an inflation-proofed basic income floor?

《It’s easy to imagine – unless you’ve been captured by capitalist realism – a society that is reasonably egalitarian simply because it values cleaners and care workers more and bosses, financiers and bullshit jobs less.》

Can't you use your words and example to spread your vision, rather than punitive statist control measures (basic income is differently statist because it strives for nonviolence and noninterference, which is why its non-tax funding is crucial)?

《many bankers seemed skilled before 2008 because we under-rated the risk pollution they were generating.》

Haven't we simply learned that public liquidity backstops are limitless?

《More precisely they are collecting a share of an increased economic rent, created by law.》 (Blissex)

Could the players play on their own, for free (because they get a generous basic income, say), letting anyone stream it?

[Blissex]

«a musician playing to a stadium rather than a pub will make more money from the same output»

That is, "more money from the same output" is usually one of the signs of economic rent: the "normal" situation is that to increase sales one has to increase output, that is to earn more "value" one has to produce more "value".

Sometimes I think that economic rent is a bigger issue, especially today in England with booming property and finance profits, than the marxian exploitation of workers by business owners.

That bearded guy even wrote:

"In present-day society, the instruments of labor are the monopoly of the landowners (the monopoly of property in land is even the basis of the monopoly of capital) and the capitalists. [...] In England, the capitalist class is usually not even the owner of the land on which his factory stands."

[Blissex]

«Could the players play on their own, for free (because they get a generous basic income, say), letting anyone stream it?»

Usually "rsm"'s comments/questions seem to me to cover the range between "quite" useless to "very" useless, but I think that this one is "amazingly" useless, a peak in its (useless...) genre. :-)

Chosen randomly:
https://www.youtube.com/watch?v=L6qgdADfI0o
https://www.youtube.com/watch?v=9FvnzbtSgIs
https://www.youtube.com/watch?v=b9DuP8pFdwo

[Hugh Mann]

"We can raise the wages of the low-paid not by creating shortages or by hiking up the minimum but by a shift in what we valorize and don’t."

1) File under "Marxism as a servant of capital".

2) Q. When did "supply and demand" drop out of economists' lexicon?

A. Around 2005, I forget what happened then. There's one exception though, the "global market for scarce top talent" which justifies enormous salaries.

3) "Valorization" Ugh! Have we moved to the States?

[rsm]

https://youtu.be/LfduUFF_i1A

[rsm]

To clarify my question: why is rent a problem, if I don't have to pay it, but have basic income money to pay it if i wanted?

[ltr]

October 14, 2021

Coronavirus

United Kingdom

Cases ( 8,317,439)
Deaths ( 138,237)

Deaths per million ( 2,023)

China

Cases ( 96,478)
Deaths ( 4,636)

Deaths per million ( 3)

[ What a tragedy. ]

[ltr]

https://www.nytimes.com/2021/10/12/world/europe/uk-covid-deaths-inquiry.html

October 12, 2021

Britain’s Covid Missteps Cost Thousands of Lives, Inquiry Finds
Prime Minister Boris Johnson’s slowness last year to impose a lockdown and institute widespread testing had tragic results, according to a parliamentary report.
By Shashank Bengali

LONDON — Britain’s initial response to the Covid-19 pandemic “ranks as one of the most important public health failures the United Kingdom has ever experienced,” a parliamentary inquiry reported on Tuesday, blaming the government for “many thousands of deaths which could have been avoided.”

In a highly critical, 151-page report, two committees of lawmakers wrote that the government’s failure to carry out widespread testing or swiftly impose lockdowns and other restrictions amounted to a pursuit of “herd immunity by infection” — accepting that many people would get the coronavirus and that the only option was to try to manage its spread....

[ Tragedy on tragedy. ]

[ltr]

We can raise the wages of the low-paid not by creating shortages or by hiking up the minimum but by a shift in what we valorize and don’t....

[ Really excellent. ]

[anicow]

Sometimes I think that economic rent is a bigger issue, especially today in England with booming property and finance profits, than the marxian exploitation of workers by business owners.

[rsm]

Why not use finance to virtualize rents so land becomes free to share again? Isn't your fertility rate well below replacement in England? If financiers are distracted by virtual rents on govies, etc., will they just move on from land, because financial goods return higher? As the population drops and finance virtualizes everything, land becomes abundant again?