The Influence of Parkinson's Law: Understanding Our Growing Desires

In 1955, The Economist published an article by historian Cyril Northcote Parkinson which explained Parkinson’s observation that “work expands so as to fill the time available for its completion.” This idea became known as Parkinson’s Law. Parkinson observed an inefficiency ­– despite a massive decline in British naval ships and personnel between 1914 and 1928, the number of bureaucrats continued to expand. There was less work to do, but management continued to grow.

You’ve probably experienced this in your own life in different ways. You have a big work project and while it looms for weeks, you get it done at the eleventh hour. When you moved out of your parents’ home, your belongings could fit into a suitcase, but by the time you finished college, you needed a U-Haul to pack up. In workplaces, a type of pyramid forms. A founder might hire an assistant, who eventually is promoted and then hires their own assistant, regardless of the actual work to be done.

Parkinson’s observation can also aptly be applied to our budgets. At one point in your life, you were able to live on less money, but as you earned more money, life became more expensive. When I started college, I lived on $1,000 a month. My share of rent was $267 and I managed to use the remainder of my income to support myself.

This doesn’t just happen on an individual level. In 1955, the median income was $29,000 (in today’s dollars) and the median home size was 983 square feet. By 2019, the median income was $69,000 and the median home size was 2,436 square feet. As our incomes have grown, so to have our desires for more and bigger.

I personally observed this in the past year. Each category of our budget is assigned a dollar value. For our food category, in 2022, we had $950 to spend. Almost every month, we spent at least that much or went well over budget. Determined to be more mindful this year, we set our food budget to $850. We have gotten much closer to the $850 mark every single month. I imagine that if we set it lower, we would manage to get closer to that number, too.

When we carve out thresholds in our budget for certain categories, we are implicitly giving ourselves permission to spend up to that threshold. Being aware of Parkinson’s Law might better explain how we can refine our budgets. Though we may be aware that we have historically spent a certain amount on groceries, perhaps there is an opportunity for a challenge to lower that figure, which serves as a buffer for other variable expenses, or contributes to a sinking fund for a future large purchase. If we can better understand our spending tendencies, we can craft a more refined budget that serves our future goals more effectively.

Of course, some categories aren’t completely in our control. I don’t think our family could eat on $200 a month (that would be a big challenge!), but where the categories are in our control, we have an opportunity to be mindful and observe this law at play. A lot of time, our wants are what are growing, not our needs. If our wants affect our budget and more importantly, our safety, we can bring awareness and make change.