The 'Thing' Economy and the 'Care' Economy

By Fred Block, AlterNet. Posted November 10, 2003.

The newest conventional wisdom insists that voters are angry because the economy is bad. However, through the last 30 years of ups and downs in the unemployment rate, there really haven't been any periods of great economic satisfaction. Sure, a few years ago, we had the great internet bubble when both computer geeks and financial types got rich quickly, but most families still struggled with too little money, too little time and too much debt. Of course, rising unemployment and cutbacks in government spending make everything worse, but it has been a long time since people were optimistic that their children would enjoy greater financial security than they had.

The problem with current efforts to recycle the Clinton-era slogan, "It's the economy, stupid," is that we really have two different economies. The first is the one that economists always talk about; we can call it the "thing economy" that produces computers, petroleum, autos and missiles. The thing economy is the envy of the world since we have successfully harnessed science and technology to make marvelous machines with greater and greater efficiency.

The second economy is the "care economy" in which people take care of each other and of the natural environment. The care economy includes child raising, childcare, care for elderly relatives, education, health, pensions for the elderly, the criminal justice system, religion and the arts, and all of our expenditures to protect the environment.

To be sure, these two economies are interdependent and interconnected. Without people who are educated, healthy, and sane, we couldn't produce all those marvelous things. And if the thing economy were not efficient, we wouldn't be able to feed and clothe all of the people who are working in the care economy. And, of course, our official economic accounts treat these two economies as though they are one; they do not even attempt to measure their relative size.

If they did, the results would be surprising. The care economy is huge. It is well known that our statistics on Gross Domestic Product completely exclude the unpaid labor that both men and women do in the home-meals, laundry, care for children, and home and yard maintenance. Estimates suggest that the value of this activity could add close to another 50 percent to total GDP, especially if one also includes all the hours spent in volunteer activity and community endeavors. If one adds to this the 13 percent of GDP that we spend each year on medical care, the 6-7 percent of GDP that we spend on every form of education and training, the 7-8 percent that we spend on pensions for the elderly, as well as the billions that we spend on the criminal justice system, funding the arts and religious institutions, and protecting the environment, it seems clear that both in dollar value and in cumulative hours, the care economy is at least as large as the thing economy.

But here is the problem. The strategies that we have been following to increase efficiency in the thing economy often do not work to make the care economy work better. Even worse, there are several ways in which the growth and development of the thing economy actually undermine the care economy. And undermining the care economy means that we end up getting lower quality education and health care for each dollar we spend. It also means a growing "care deficit": Millions of people are not getting either the care they need or are getting caught in a fierce time bind as they juggle to balance work responsibilities and care responsibilities. It is quite possible that this systematic undermining of the care economy is what is making people irritable and angry -- both in "good" economic times and in "bad."

The obvious way in which the development of the thing economy undercuts the care economy is through the misorganization of time. Several generations ago, we had a simple way of coordinating the two economies. Men worked in the thing economy and women worked -- usually for no or little compensation -- in the care economy. This system "worked" to produce high quality care, but at an enormous cost -- women's opportunities were severely restricted. Hence, this system fell apart as women pressed for equality and the thing economy pulled millions of women into both part-time and full-time jobs. Now, we have the social ideal that all adults should be in the paid labor force until retirement age. Average annual hours of paid work by women have risen dramatically, while those for men have barely changed. The consequence is that millions of families are incredibly harried and are constantly forced to shortchange their care responsibilities.

These intense time pressures have huge costs. The continuing stress of balancing work and family takes a huge toll on our mental and physical health and is linked to rising rates of substance abuse. Moreover, the strains on family life make it harder to keep relationships together. And then, rising divorce rates and ever smaller household units lead to even further time pressures as the vicious cycle intensifies.

All this produces the second undercutting dynamic -- unproductive cost cutting. We have all become more dependent on paid workers to produce some of the care that we need for ourselves and other family members. But when the principles of efficiency from the thing economy are applied to this part of the care economy, the results are often disastrous. In the thing economy, we can keep labor costs down and press workers for more output without sacrificing quality by using increasingly sophisticated technologies. When we do this in the care economy, we get diminishing quality of care. For example, badly paid and badly trained childcare workers or nursing home workers usually produce poor quality care because technology is largely irrelevant. And the resulting institutional failures generate other kinds of costs, from toddlers who do not get the kind of stimulus they need, to the elderly who suffer medical complications because of abuse and neglect. And, of course, worrying about the poor quality of institutional care becomes another huge source of stress.

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