Guard Labor: Spending Money to Protect Money

The economist Samuel Bowles has an interesting theory about why it's good to keep wealth inequality in check. When there's lots of wealth inequality, he says, more and more people have to be employed as "guard labor"-as protectors of the rich peoples' stuff and defenders of their interests. From the Santa Fe Reporter:

Inequality leads to an excess of what Bowles calls "guard labor." In a 2007 paper on the subject, he and co-author Arjun Jayadev, an assistant professor at the University of Massachusetts, make an astonishing claim: Roughly 1 in 4 Americans is employed to keep fellow citizens in line and protect private wealth from would-be Robin Hoods.The job descriptions of guard labor range from "imposing work discipline"-think of the corporate IT spies who keep desk jockeys from slacking off online-to enforcing laws, like the officers in the Santa Fe Police Department paddy wagon parked outside of Walmart.The greater the inequalities in a society, the more guard labor it requires, Bowles finds. This holds true among US states, with relatively unequal states like New Mexico employing a greater share of guard labor than relatively egalitarian states like Wisconsin.The problem, Bowles argues, is that too much guard labor sustains "illegitimate inequalities," creating a drag on the economy. All of the people in guard labor jobs could be doing something more productive with their time-perhaps starting their own businesses or helping to reduce the US trade deficit with China.

This chart illustrates Bowles's point that states with more wealth inequality (measured by the Gini coefficient) we have more guards per worker.

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There's a lot packed into this idea. First of all, you have to wonder how "guard labor" is defined. A celebrity's bodyguard is clearly "guard labor." But what about her lawyer on retainer? What about your average corporate lawyer? What about your average corporate employee? You could define "guard labor" narrowly to include just those who are physically guarding things and enforcing laws or define it broadly to include just about everyone who helps those with capital keep it.Also, some might argue that this is an argument for wealth inequality because it shows inequality creates jobs. To show that this inequality is harmful, you'd also have to show that the people employed as guard labor wouldn't be worse off without that work, or that a decrease in guard labor has some overall positive effect on the economy.At any rate, it's very interesting stuff. There's a lot more on Bowles (this isn't his only novel idea) here.Via Boing Boing.