January 17, 2018

Capitalism on the Fritz

Capitalism on the Fritz[1]

In November 2008, as the global financial crash was gathering pace, the 82-year-old British monarch Queen Elizabeth visited the London School of Economics. She was there to open a new building, but she was more interested in the assembled academics. She asked them an innocent but pointed question. Given its extraordinary scale, how as it possible that no one saw it coming?

The Queen’s question went to the heart of two huge failures. Western capitalism came close to collapsing in 2007-2008 and has still not recovered. And the vast majority of economists had not understood what was happening.

That’s from the Introduction to Rethinking Capitalism (2016), edited by Michael Jacobs and Mariana Mazzucato.[2] The editors and authors review a catalogue of chronic economic “dysfunction” that they trace to policy-makers’ continued allegiance to neoliberal economic orthodoxy even as it has been breaking down over the past four decades.

Before we get to their dysfunction list, let’s give the other side equal time. First, consider an open letter from Warren Buffett published in Time last week. It begins this way:

“I have good news. First, most American children are going to live far better than their parents did. Second, large gains in the living standards of Americans will continue for many generations to come.”

Mr. Buffett acknowledges that “The market system . . . has also left many people hopelessly behind,” but assures us that “These devastating side effects can be ameliorated,” observing that “a rich family takes care of all its children, not just those with talents valued by the marketplace.” With this compassionate caveat, he is definitely bullish on America’s economy:

In the years of growth that certainly lie ahead, I have no doubt that America can both deliver riches to many and a decent life to all. We must not settle for less.

So, apparently, is our Congress. The new tax law is a virtual pledge of allegiance to the neoliberal economic model. Barring a significant pullback of the law (which seems unlikely), we now have eight years to watch how its assumptions play out.

And now, back to Rethinking Capitalism’s dysfunction’s list (which I’ve seen restated over and over in my research):

  • Production and wages no longer move in tandem — the latter lag behind the former.
  • This has been going on now for several decades,[3] during which living standards (adjusted) for the majority of households have been flat.
  • This is a problem because consumer spending accounts for over 70% of U.S. GDP. What hurts consumers hurts the whole economy.
  • What economic growth there has been is mostly the result of spending fueled by consumer and corporate debt. This is especially true of the post-Great Recession “recovery.”
  • Meanwhile, companies have been increasing production through increased automation — most recently through intelligent machines — which means getting more done with fewer employees.
  • That means the portion of marginal output attributable to human (wage-earner) effort is less, which causes consumer incomes to fall.
  • The job marketplace has responded with new dynamics, featuring a worldwide rise of “non-standard’ work (temporary, part-time, and self-employed).[4]
  • Overall, there has been an increase in the number of lower-paid workers and a rise in intransigent unemployment — especially among young people.
  • Adjusting to these new realities has left traditional wage-earners with feelings of meaninglessness and disempowerment, fueling populist backlash political movements.
  • In the meantime, economic inequality (both wealth and income) has grown to levels not seen since pre-revolution France, the days of the Robber Barons, and the Roaring 20s.
  • Economic inequality means that the shrinking share of compensation paid out in wages, salaries, bonuses, and benefits has been dramatically skewed toward the top of the earnings scale, with much less (both proportionately and absolutely) going to those at the middle and bottom. [5]
  • Increased wealth doesn’t mean increased consumer spending by the top 20% sufficient to offset lost demand (spending) by the lower 80% of income earners, other than as reflected by consumer debt.
  • Instead, increased wealth at the top end is turned into “rentable” assets — e.g., real estate. intellectual property, and privatized holdings in what used to be the “commons” — which both drives up their value (cost) and the rent derived from them. This creates a “rentier” culture in which lower income earners are increasingly stressed to meet rental rates, and ultimately are driven out of certain markets.
  • Inequality has also created a new working class system, in which a large share of workers are in precarious/uncertain/unsustainable employment and earning circumstances.
  • Inequality has also resulted in limitations on economic opportunity and social mobility — e.g., there is a new kind of “glass floor/glass ceiling” below which the top 20% are unlikely to fall and the bottom 80% are unlikely to rise.
  • In the meantime, the social safety nets that developed during the post-WWII boom (as Buffett’s “rich family” took care of “all its children”) have been largely torn down since the advent of “workfare” in the 80’s and 90’s, leaving those at the bottom and middle more exposed than ever.

The editors of Rethinking Capitalism believe that “These failings are not temporary, they are structural.” That conclusion has led some to believe that people like Warren Buffett are seriously misguided in their continued faith in Western capitalism as a reliable societal institution.

More on that next time.


[1] I wondered where the expression “on the fritz” came from, and tried to find out. Surprisingly, no one seems to know.

[2] Michael Jacobs is an environmental economist and political theorist; at the time the book was published, he was a visiting professor at University College of London. Mariana Mazzucato is an economics professor at the University of Sussex.

[3] “In the US, real median household income was barely higher in 2014 than it had been in 1990, though GDP had increased by 78 percent over the same period. Though beginning earlier in the US, this divergence of average incomes from overall economic growth has not become a feature of most advanced economies.”  Rethinking Capitalism.

[4] These have accounted for “half the jobs created since the 1990s and 60 per cent since the 2008 crisis.” Rethinking Capitalism.

[5] Meanwhile, those at the very top of the income distribution have done exceedingly well… In the US, the incomes of the richest 1 percent rose by 142 per cent between 1980 and 2013 (from an average of $461,910, adjusted for inflation, to $1,119,315) and their share of national income doubled, from 10 to 20 per cent. In the first three years of the recovery after the 2008 crash, an extraordinary 91 per cent of the gains in income went to the richest one-hundredth of the population.” Rethinking Capitalism.

 

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

My Year in Economics: The New Divide

Fourteen months ago I shared an espresso with one of my daughters in Seoul, at a place called the Minibus Café because of the mint condition classic VW bus parked in front. (As you can see, the Asian version is more mini than the ones we see in the States). We talked about what she’s observed through her expat life as well as what was going on back home, covering topics such as globalization, disruptive technologies, the polarization of opinions and lack of public discourse, the “new economy” and its new paradigm job market, populist pushback political movements… all topics that have found their way into this blog series. I told her someone in her generation — maybe her — ought to go to grad school (probably in London, I guessed) and develop a fresh economic model capable of making sense of this bewildering avalanche of change.

“Maybe you should,” she replied.

And so I did, but minus grad school, London. and the fresh economic model. Instead, over the past year I became an economics autodidact, logging 30+ books and hundreds of online articles on economics, jobs, and technology (I get about 10 a day in my email feeds from all around the world). What I’ve learned hasn’t so much explained the world in economic terms, it has turned that world inside-out and upside-down.

Right away, I encountered two persistent themes, which I’ve mentioned before but will again:

  1. There is a dominant line of economic analysis taking place mostly in the rest of the world (and among sympathizers in U.S. academia) that is absent in the U.S. policy-making debate.

As Silicon Valley entrepreneur, economics writer, and TED speaker Martin Ford writes in Rise of the Robots: Technology and the Threat of a Jobless Future (2015), “In the field of economics the opinions all too often break cleanly along predefined political lines. Knowing the ideological predisposition of a particular economist is often a better predictor of what that individual is likely to say than anything contained in the data under examination.”

  1. Economic opinions are as hopelessly politically polarized as about everything else, so that any attempt to inject the worldwide analysis into the domestic conversation gets the instant “talk to the hand” response.

Instead of dialogue and inquiry, there’s a dominant “might makes right” and “if it ain’t broke don’t fix it” mentality among U.S. policymakers — in both government and business — that makes our public discourse (such as it is) either dismissive or blind to insights from the rest of the world.

I’ve come to call this insularity the “New Divide,” for reasons I explain below. It’s not difficult to understand where it comes from: the USA is unquestionably the world’s dominant economic force, and we citizens, as a whole, are the beneficiaries of the highest personal income and net worth on the planet. In my former estate planning and family business succession law practice, I saw every single day how the free market of neoliberalism had prospered hard-working Americans.

This past year, though, I learned that this wasn’t because all my clients were specially gifted in finance and business (although some probably were), they were also riding a massive thirty-year worldwide economic growth trend. (While visiting my daughter in South Korea, I witnessed its “Miracle on the Han River” firsthand.) Still, although the post-WWII economic surge did indeed lift all economic boats around the world, it especially did so in America, and if you compare averages (always a dodgy business), the best the rest of the prosperous First World can boast is roughly 70% of the average wealth of the average American.

All of which makes it easy for Americans to think the Econ 101 supply and demand version of capitalism we learned in school is doing just fine. (Textbook guru Robert Samuelson said it’s probably the only economics any of us remember.) On the other hand, my reading and research over the past year has confirmed something else I noticed in the last years of my law practice: the self-made, middle class, rags-to-riches millionaire-next-door has increasingly become an historic icon that shows little prospect of a reprise. Not only that, but economics commentators around the rest of the world rarely agree that our Econ 101 model ain’t broke — or that it’s even fixable.

It’s been like finding out that a friend I never see anymore hasn’t been doing so well, and that’s why: I feel chagrined, like I might have asked, maybe sought them out. Econ 101 capitalism is a remarkably enduring concept that still gets the majority of air time, but was nowhere to be found in the course of my informal studies. Instead, certain disturbing trends — job dissatisfaction, meaning malaise, spiking suicide rates related to meaning malaise, income and wealth inequality, the newly stratified working class system, meaningless jobs, the breakdown in the historical link between productivity and higher earnings, chronic unemployment among young people — are not only worldwide, they’ve been going on long enough to become systemic and unlikely to self-correct.

Finding out about all of that has often left me with a heightened feeling of angst about the world my kids are growing up in (the same world I’m growing old in) that has sometimes made my year investigating the dismal science of economics feel dismal indeed. In that frame of mind, it seems unlikely the New Divide will be bridged any time soon, if ever, and the more we turn a blind eye and deaf ear to global opinions about economic welfare and functionality, the more likely it is that things can’t end well for us. (It’s been fascinating to see many of these troubling economic themes emerging in the protests in Iran.)

Hence, the New Divide. I borrowed the term from a favorite song by a favorite band, Linkin Park — if you know the band, you know they’ve often expressed their own apocalyptic angst. The song came to mind particularly because of the lyric “give me reason to prove me wrong.” I’ve been looking to be proven wrong about what I’ve been learning, but haven’t found it. Instead, the New Divide and its revelations keep asserting themselves, demanding a fresh reckoning.

And reckon we will in the coming weeks and months of blog posts. Next time we’ll look at a consensus list of how our outlook on capitalism has been failing us, and the week after we’ll look at the mega-reality behind the list. Until then, you might take a moment for the song.

Linkin Park performed New Divide at the release party of — ironically — the movie Transformers. Watching the performance again was made more poignant for me by front man Chester Bennington’s suicide earlier this year. Here’s the video:

And here are the lyrics:

I remember black skies
The lightning all around me
I remember each flash
As time began to blur
Like a startling sign
That fate had finally found me
And your voice was all I heard
That I get what I deserve

So give me reason
To prove me wrong
To wash this memory clean
Let the floods cross
The distance in your eyes
Give me reason
To fill this hole
Connect this space between
Let it be enough to reach the truth that lies
Across this new divide

There was nothing inside
The memories left abandoned
There was nowhere to hide
The ashes fell like snow
And the ground caved in
Between where we were standing
And your voice was all I heard
That I get what I deserve

So give me reason
To prove me wrong
To wash this memory clean
Let the floods cross
The distance in your eyes
Across this new divide

In every loss in every lie
In every truth that you deny
And each regret and each goodbye
Was a mistake too great to hide
And your voice was all I heard
That I get what I deserve

So give me reason
To prove me wrong
To wash this memory clean
Let the floods cross
The distance in your eyes
Give me reason
To fill this hole
Connect this space between
Let it be enough to reach the truth that lies
Across this new divide
Across this new divide
Across this new divide

 

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

Willful Blindness

We heard last time from Mats Alvesson and André Spicer and their book The Stupidity Paradox about “functional stupidity” — what happens when we stop thinking for ourselves and go along with the dumbing-down of our workplaces.

Prof. Spicer gave a TEDx Talk based on the book, beginning with a story from first-year torts: Grimshaw v. Ford Motor Company. You may recall that Ford’s upper management went ahead with the Pinto as originally designed, despite the infamous “Pinto Memo” finding that $11.00 worth of alterations per vehicle would have made it a whole lot safer. The result was the largest product liability damage award ever against a car manufacturer (as of that time). Clearly a case of “functional stupidity.”

Functional stupidity is the result of what psychologists call “cognitive bias”: engaging with experience only after we’ve filtered it first to conform to our habitual perceptions, assumptions, and prejudices. Journalist, filmmaker, and CEO Margaret Hefferman wrote the book on the subject: Willful Blindness: Why We Ignore the Obvious at our Peril (2011). Here’s her TED talk, and here’s a BrainPickings article about her book and about cognitive bias in general. Ms. Heffernan is a marvelous storyteller — she recounts story after jaw-dropping story from all arenas of life.

Cognitive bias is especially ironic in the legal profession, since the law itself doesn’t let you get away with it: the rule of “willful blindness” makes you culpable if you intentionally decide not to know about wrongdoing or deliberately fail to make a reasonable inquiry into it. “See no evil” isn’t going to fly.

How can we shake off our cognitive biases? As a friend of mine says, “The trouble with blind spots is you can’t see them.” Not only can’t we see them, we don’t want to either — and it doesn’t work to make them someone else’s problem. I ran several Google searches looking for articles about lack of independent thinking in the workplaces. Tweak my search as I might, it kept turning up advice like this one from Harvard Business Review, which trots out this worn out bit of conventional management advice: “It’s the employees’ fault, so here’s how a manager can fix them.” I really expected more from the HBR.

Instead of getting occupied with the speck in someone else eye when we’ve got a log in ours, we might follow the example of Ray Dalio, founder and chairman of hedge fund heavyweight Bridgewater Associates, who created a firm culture around “radical truth and radical transparency.” This is from the company’s website:

Our unique success is the direct result of our unique way of being. We want an idea meritocracy in which meaningful work and meaningful relationships are pursued through radical truth and radical transparency. We require people to be extremely open, air disagreements, test each other’s logic, and view discovering mistakes and weaknesses as a good thing that leads to improvement and innovation. It is by continually striving together for the highest levels of truth and excellence that we create meaningful work and meaningful relationships.

That last line is worth repeating:

It is by continually striving together for the highest levels of truth and excellence
that we create meaningful work and meaningful relationships.

Mr. Dalio’s firm culture is as cognitive-bias-busting as they come. If you’re intrigued, you might treat yourself to his talk. Click here or on the image below and scroll down a couple turns.

Whether or not you’re inclined to embrace Bridgewater’s radical firm culture, learning to see past our biases and get a fresh look might be a good addition to a New Year’s Resolutions list. Just an idea….

We’ll continue our search for a new perspective on economics and the workplace in 2018.

 

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

The Stupidity Paradox

Every day I ride a bus that has a row of seats up front that are folded up, with a sign next to them:

NOTICE
Seats Not in Service
The bus manufacturer has determined
that these seats not be used.

I’ve seen that sign for over a year. Never really thought about it. But recently I wondered: you don’t suppose both those seats and the sign were installed in the factory? It could happen — cheaper than a recall maybe. If so, it would be right in line with this week’s topic: a kind of on-the-job behavior that professors and business consultants Mats Alvesson and André Spicer[1] call The Stupidity Paradox.

Their book by that name began when they were sharing a drink after a conference and found themselves wondering, “Why was it that organisations which employed so many smart people could foster so much stupidity?” They concluded that the cause is “functional stupidity” — a workplace mindset implicitly endorsed because it works.

“We realized something: smart organisations and the smart people who work in them often do stupid things because they work — at least in the short term. By avoiding careful thinking, people are able to simply get on with their job. Asking too many questions is likely to upset others — and to distract yourself. Not thinking frees you up to fit in and get along. Sometimes it makes sense to be stupid.”

In fact, stupidity works so well it can turn into firm culture:

Far from being “knowledge intensive,” many of our most well-known chief organisations have become engines of stupidity. We have frequently seen otherwise smart people stop thinking and start doing stupid things. They stop asking questions. They give no reasons for their decisions. They pay no heed to what their actions cause. Instead of complex thought we get flimsy jargon, aggressive assertions or expert tunnel vision. Reflection, careful analysis and independent reflection decay. Idiotic ideas and practices are accepted as quite sane. People may harbour doubts, but their suspicions are cut short. What’s more, they are rewarded for it. The upshot is a lack of thought has entered the modus operandi of most organisations of today.

I.e., it pays to be stupid on the job: you get things done, satisfy expectations, don’t stand out from the crowd, aren’t labelled a troublemaker. We learned all of that in middle school; we learn it again on the job.

We learn from management:

A central, but often unacknowledged, aspect of making a corporate culture work is what we call stupidity management. Here managers actively encourage employees not to think too much. If they do happen to think, it is best not to voice what emerges. Employees are encouraged to stick within clearcut parameters. Managers use subtle and not so subtle means to prod them not to ask too many tough questions, not to reflect too deeply on their assumptions, and not to consider the broader purpose of their work. Employees are nudged to just get on with the task. They are to think on the bright side, stay upbeat and push doubts and negative thoughts aside.

And then we school ourselves:

Self-stupifying starts to happen when we censor our own internal conversations. As we go through our working day, we constantly try to give some sense to our often chaotic experiences. We do this by engaging in what some scholars call “internal reflexivity.” This is the constant stream of discussion that we have with ourselves. When self-stupidification takes over, we stop asking ourselves questions. Negative or contradictory lines of thinking are avoided. As a result, we start to feel aligned with the thoughtlessness we find around us. It is hard to be someone who thinks in an organization that shuns it.

Back to the seats on my bus… A “manufacturer” is a fiction, like “corporation” is a fiction: both act through humans. Which means that somewhere there’s an employee at a bus manufacturer whose job is to build those seats. Someone else installs them. Someone else puts up the sign. And lots of other people design, requisition, select, negotiate, buy, ship, pack and unpack, file, approve, invoice, pay bills, keep ledgers, maintain software, write memos, confer with legal, hold meetings, and make decisions. All so that the “manufacturer” — i.e., the sum total of all those people doing their jobs — can tell me not to sit there.

Functional stupidity is as common as traffic on your commute. We’ll look more into it next time.


[1] Mats Alvesson is Professor of Business Administration at the University of Lund, Sweden, University of Queensland, and Cass Business School, City University of London. André Spicer is Professor of Organisational Behaviour at Cass Business School, City University of London.

 

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

Could Be Worse

Meaningless work is not inevitable, but we’re often prevented from taking remedial action because our thinking has become corrupted with feelings of powerlessness. As Studs Terkel said in his book Working:

You know, “power corrupts, and absolute power corrupts absolutely.”
It’s the same with powerlessness.
Absolute powerlessness corrupts absolutely.

If we believe there’s something patriotic, virtuous, even sacred about the way we have always viewed working for a living, then if we feel despair about our jobs it must be a personal problem, a character flaw. We ought to put up, shut up, and get cracking. The shame associated with that kind of judgment is absolutely disempowering. As long as we hold onto it, we’ll stay stuck in workplace despair and meaning malaise — a state of mind poet Richard Cecil captures in “Internal Exile,” collected in Twenty First Century Blues (2004):

Although most people I know were condemned
Years ago by Judge Necessity
To life in condos near a freeway exit
Convenient to their twice-a-day commutes
Through traffic jams to jobs that they dislike
They didn’t bury their heads in their hands
And cry “oh, no!” when sentence was pronounced:
Forty years accounting in Duluth!
Or Tenure at Southwest Missouri State!
Instead, they mumbled, not bad. It could be worse,
When the bailiff, Fate, led them away
To Personnel to fill out payroll forms
And have their smiling ID photos snapped.

And that’s what they still mumble every morning
Just before their snooze alarms go off
When Fluffy nuzzles them out of their dreams
Of making out with movie stars on beaches.
They rise at five a.m. and feed their cats
And drive to work and work and drive back home
And feed their cats and eat and fall asleep
While watching Evening News’s fresh disasters —
Blown-up bodies littering a desert
Fought over for the last three thousand years,
And smashed-to-pieces million-dollar houses
built on islands swept by hurricanes.

It’s soothing to watch news about the places
Where people literally will die to live
When you live someplace with no attractions —
Mountains, coastline, history—like here,
Where none aspire to live, though many do.
“A great place to work, with no distractions”
Is how my interviewer first described it
Nineteen years ago, when he hired me.
And, though he moved the day that he retired
To his dream house in the uplands with a vista,
He wasn’t lying—working’s better here
And easier than trying to have fun.

Is that the way it is where you’re stuck, too?

Good question. How would you answer it?

True, one of the factors behind job wretchedness is internal exile: we’re estranged from what we really want out of our work, or we’ve given up on ever having it, and so we settle for could be worse. But there’s more to it than that. There are external factors at work, too — global winds of change propelling people who want to work with passion in directions they never thought they’d be going.

There are krakens out there in the deep. One of them is something two business writers call the “Stupidity Paradox”: a prevalent workplace model that — like the bureaucracies we looked at last week — encourages obeisance to rules (we might say “best practices”) at the cost of independent thinking.

We’ll look at the Stupidity Paradox next time.

 

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

The Secret Joys of Bureaucracy

“So we have inspectors of inspectors and people making instruments
for inspectors to inspect inspectors.”

-Buckminster Fuller

We met anthropologist David Graeber last time. His book The Utopia of Rules: On Technology, Stupidity and the Secret Joys of Bureaucracy takes on a universally-acknowledged kind of modern workplace drudgery: the mind-numbing bureaucracies built around filling in forms. This is from an interview in The Guardian:

A few years ago David Graeber’s mother had a series of strokes. Social workers advised him that, in order to pay for the home care she needed, he should apply for Medicaid, the US government health insurance programme for people on low incomes. So he did, only to be sucked into a vortex of form filling and humiliation familiar to anyone who’s ever been embroiled in bureaucratic procedures.

At one point, the application was held up because someone at the Department of Motor Vehicles had put down his given name as “Daid”; at another, because someone at Verizon had spelled his surname “Grueber.” Graeber made matters worse by printing his name on the line clearly marked “signature” on one of the forms. Steeped in Kafka, Catch-22 and David Foster Wallace’s The Pale King, Graeber was alive to all the hellish ironies of the situation but that didn’t make it any easier to bear. ‘We spend so much of our time filling in forms,’ he says. ‘The average American waits six months of her life waiting for the lights to change. If so, how many years of our life do we spend doing paperwork?’

The matter became academic, because Graeber’s mother died before she got Medicaid. But the form-filling ordeal stayed with him. “Having spent much of my life leading a fairly bohemian existence, comparatively insulated from this sort of thing, I found myself asking: is this what ordinary life, for most people, is really like? Running around feeling like an idiot all day?”

In other words, it’s almost 2018 — with all our smart technology, you’d think we could do better — for the people on both sides of the bureaucratic desk. The interview continues:

[Graeber] quotes with approval the anarchist collective Crimethinc:

Putting yourself in new situations constantly is the only way
 to ensure that you make your decisions unencumbered
 by the nature of habit, law, custom or prejudice
 – and it’s up to you to create the situations.

That’s good paradigm-shifting advice. We could follow it all the way to eliminating “the Secret Joys of Bureaucracy.” As you would expect, a whole bunch of enterprising software developers are already on it — here’s a software list. In fact, if it’s a dull, repetitive job, we probably already have technology that can do it better than humans can.

But that would eliminate all those mind-numbing bureaucratic jobs. Then what? Then it’s time for the second half of the Buckminster Fuller quote above:

The true business of people should be to go back to school
 and think about whatever it was they were thinking about
before somebody came along and told them they had to earn a living.

A friend of mine was a chimney sweep. He’d be up on the roof, shaking down soot with his long-handled brushes, and downstairs his helpers would screen off the fireplace and capture the soot with a high-powered vacuum before it ruined the homeowner’s den. “Don’t wallow in it,” he’d tell them.

That’s also good paradigm-shifting advice. Trouble is, our brain wiring loves to wallow in the old ways of doing things — including filling in forms — at least until, as the saying goes, the pain of status quo becomes greater than the pain of change.

We’ll be looking more at workplace paradigm shifts in the coming weeks. But first, next time we’ll let a poet help us wallow a bit more in workplace drudgery.

 

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

Bullshit Jobs

“Work is the refuge of people who have nothing better to do.”
Oscar Wilde

Radio journalist Studs Terkel interviewed hundreds of people for his 1974 book Working. Here are a couple quotes from it:

Work is about a search for daily meaning as well as daily bread, for recognition as well as cash, for astonishment rather than torpor; in short, for a sort of life rather than a Monday through Friday sort of dying.

Most of us have jobs that are too small for our spirit. Jobs are not big enough for people.

Apparently not much has changed in the 43 years since Working came out. Consider this from The Power of Meaning, by Emily Esfahani Smith (2017):

Today, about 70 percent of all employees either are “not engaged” in their work—that is, they feel uninvolved, uncommitted, and unenthusiastic about it—or are “actively disengaged” from it, and less than half of all workers feel satisfied with their jobs.

Or consider anthropologist David Graeber’s widely circulated 2013 article On the Phenomenon of Bullshit Jobs: A Work Rant:

In the year 1930, John Maynard Keynes predicted that, by century’s end, technology would have advanced sufficiently that countries like Great Britain or the United States would have achieved a 15-hour work week. There’s every reason to believe he was right. In technological terms, we are quite capable of this. And yet it didn’t happen. Instead, technology has been marshalled, if anything, to figure out ways to make us all work more. In order to achieve this, jobs have had to be created that are, effectively, pointless. Huge swathes of people, in Europe and North America in particular, spend their entire working lives performing tasks they secretly believe do not really need to be performed. The moral and spiritual damage that comes from this situation is profound. It is a scar across our collective soul. Yet virtually no one talks about it.

“Virtually no one talks about it.” Why not? The Financial Times ran an article a couple months ago called Britain’s Joyless Jobs Market Can Be Bad For Your Health. (It’s here, but you’ll have to subscribe to read it.) It makes the same point as the following quote from the article published by the Lawyers Assistance Program of British Columbia which we looked at a few weeks ago:

[I]t is unhealthy to do meaningless, unchallenging, uncreative work, especially for those that are intelligent and well trained.

Seems like a pretty uncontroversial thing to say, but you can’t tell from the nastiness in the comments that follow the article — one more sad case of polarized opinions talking past each other and the loss of meaningful discourse. Not only can’t we talk about economics, but apparently we also can’t talk about how crummy jobs ruin our health.

Why has it become so inflammatory to suggest that boring, meaningless work might not be a good thing? Because of the widespread “truths” about work that have become culturally sacred. To many — maybe most — people, work represents a moral good, no matter how boring, trite, thoughtless, and demeaning.

One person who isn’t afraid to talk about it is Rutgers history professor James Livingston. He says the following in his book No More Work: Why full employment is a bad idea (2016):

Work means everything to us. For centuries—since, say, 1650[1]—we’ve believed that it builds character (punctuality, initiative, honesty, self-discipline, and so forth). We’ve also believed that the market in labor, where we go to find work, has been relatively efficient in allocating opportunities and incomes. And we’ve also believed that even if it sucks, the job gives meaning, purpose, and structure to our everyday lives—at any rate we’re pretty sure that it gets us out of bed, pays the bills, makes us feel responsible, and keeps us away from daytime TV.

Those beliefs are no longer plausible. In fact, they’ve become ridiculous, because there’s not enough work to go around, and what there is of it won’t pay the bills—unless, of course, you’ve landed a job as a drug dealer or a Wall Street banker, becoming a gangster either way.

[Work] no longer functions as either a moral calendar or an economic calculator. You will learn nothing about character by going to work at the minimum wage because the gangsters or the morons at corporate headquarters control your opportunities; you will learn nothing about the rationality of the market because the same people determine your income.

More next time.


[1] 1650 is the year René Descartes died.

 

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

Some Suggested Reading

Last week was a rich one for new articles on the topics we’ve been exploring lately, such as economic inequality, neoliberalism, globalization, and the need for an economic paradigm shift. If you’re so inclined, you might like to check these out:

This article from The Boston Review, by Dani Rodrick, an economist whose research covers globalization, economic growth and development, and political economy. He is the Ford Foundation Professor of International Political Economy at Harvard’s John F. Kennedy School of Government. He was previously the Albert O. Hirschman Professor in the School of Social Science at the Institute for Advanced Study in Princeton (2013-2015), and is President-Elect of the International Economic Association. Here’s a sample from the article:

As even its harshest critics concede, neoliberalism is hard to pin down. In broad terms, it denotes a preference for markets over government, economic incentives over social or cultural norms, and private entrepreneurship over collective or community action. It has been used to describe a wide range of phenomena—from Augusto Pinochet to Margaret Thatcher and Ronald Reagan, from the Clinton Democrats and Britain’s New Labour to the economic opening in China and the reform of the welfare state in Sweden.

The term is used as a catchall for anything that smacks of deregulation, liberalization, privatization, or fiscal austerity. Today it is reviled routinely as a short-hand for the ideas and the practices that have produced growing economic insecurity and inequality, led to the loss of our political values and ideals, and even precipitated our current populist backlash.

As we heap scorn on neoliberalism, we risk throwing out some of its useful ideas.

We live in the age of neoliberalism, apparently. But who are neoliberalism’s adherents and disseminators—the neoliberals? Oddly, you would almost have to go back to the early 1980s to find anyone explicitly embracing neoliberalism.

This report from Credit Suisse on the state of global wealth, as summarized here by Time Magazine. Again, a sample:

In its annual report on the state of global wealth, Credit Suisse says 1.1 million new millionaires were created in the U.S. in 2017. That brings the total number of millionaires in the U.S. up to approximately 15,356,000, or about one in every 20 Americans.

Americans now account for 43 percent of the world’s millionaires.

Yet not everyone is benefiting from the booming global economy. Credit Suisse finds that across all global regions, wealth inequality has increased from 2007 to 2016. And in every region of the world except for China, they say, median wealth has actually declined. Despite its plurality of millionaires, the U.S.’s median wealth of $55,876 puts it 21st place in the world, alongside Austria and Greece.

Median wealth per adult favors countries with lower levels of wealth inequality, Credit Suisse said, and there is exceptionally high disparity between the rich and poor in the U.S.

This article from the World Economic Forum, written by Alberto Gallo, Portfolio Manager and Head of Macro Strategies for Algebris Investments, a London-based asset management company which specializes in the global finance sector. The subject is economic inequality. Here’s a sample:

Paul Ryan, speaker of the House of Representatives, recently stated that “in our country, the condition of your birth does not determine the outcome of your life.”

Yet the idea that every American has an equal opportunity to move up in life is false. Social mobility has declined over the past decades, median wages have stagnated and today’s young generation is the first in modern history expected to be poorer than their parents. The lottery of life – the postcode where you were born – can account for up to two thirds of the wealth an individual generates.

Finally, I just finished the book Grave New World: The End of Globalization, The Return of History, by Stephen D. King (2017). Mr. King is Senior Economic Advisor to HSBC as well as an author, journalist, consultant. and specialist advisor to the House of Commons Treasury Committee. His other books include Losing Control: The Emerging Threats to Western Prosperity (2010) and When the Money Runs Out: The End of Western Affluence (2013). Grave New World is unique among those I’ve read in that it offers a multi-national history of globalization:

Globalization is often regarded as ‘one-way traffic’. In the modern age, we think of extraordinary advances in technology… Seen through these technological advances it is easy to believe that globalization is inevitable; that distances are becoming ever shorter; that national borders are slowly dissolving; and that, whether we like it or not, we live In a single global marketplace for goods, services, capital and labor.

Technology alone, however, does not determine globalization, and nor does it rule out competing versions of globalization at any one moment in time.

Globalization is driven not just by technological advance, but also by the development — and demise — of the ideas and institutions that form our politics, frame our economies and fashion our financial systems both locally and globally. When existing ideas are undermined and institutional infrastructures implode, no amount of new technology is likely to save the day.

Our ideas and institutions shift with alarming regularity… Even when patterns of globalization endure for many centuries, they can break down remarkably quickly, leading to dramatic changes in fortune.”

Happy reading! And Happy Thanksgiving! See you next week for a look at “bullshit jobs.”

 

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

The Tide May Be Rising, But Some Boats Are Sinking

Last week I quoted from Ryan Avent’s book The Wealth of Humans: Work, Power, and Status in the Twenty-First Century (2016), which makes the following points:

  • The rising tide of neoliberal economic policy did in fact lift all boats from the post-WWII years through its heyday in the 70’s and 80’s.
  • In particular, it benefited the wealth and income of individual wage-earners — most dramatically in countries where government-centric models such as social democracy and communism had previously been in charge.
  • But since then, continued allegiance to neoliberal policy has had the reverse effect, resulting in rapidly growing economic inequality which is leaving wage-earners behind.
  • The problem seems to be that, since the 80’s, the “lifts all boats” paradigm has not kept pace with the altered economic dynamics brought on by globalization and the technological revolution. The result has been a shift in wealth creation and sustainable income away from the wage-earners neoliberalism once benefited.
  • Continued allegiance to the neoliberalism is undermining the traditional concept of working for a living.

This week, we’ll finish with Arent’s analysis, again quoting from his book:

  • As a result of the above, the continuing viability of neoliberal economic policy is being questioned.

Around the world, dissatisfaction with the fruits of economic integration fuels inward-looking political movements: protectionist in some places, separatist in others. Some politicians find themselves able to gain traction by playing identity politics or by criticizing institutions of liberal democracy. Many succeed through withering critiques of the elites who minded the tiller over the last few decades. Faith in markets and their ability to generate broad-based growth has been shaken.

  • Questioning neoliberalism also challenges its support base of cultural, societal, and national institutions.

In a way, it would be much easier if the robots were simply taking all the jobs. Solutions might not be any more straightforward to come by, but the sight of millions of robot dog-walkers and sanitation workers strutting through crowds of unemployed humans would at least be clarifying.

Instead, the remarkable technological progress of the digital age is refracted through industrial institutions in ways that obscure what is causing what. New technologies do contain the potential to revolutionize society and the economy. New firms are appearing which promise to move society along this revolutionary path. And collateral damage, in the form of collapsing firms and sacked workers, is accumulating.

But the institutions we have available, and which have served us well these last two centuries, are working to take the capital and labour that has been made redundant and reuse it elsewhere. Workers, needing money to live, seek work, and accept pay cuts when they absolutely must. Lower wages make it attractive for firms to use workers at less productive tasks . . . [and reduce] the incentive to invest in labour-saving technology.

  • A new economic paradigm seems to be indicated, but its coming won’t be easy.

This political era [the post-war surge of neoliberalism] is at an end.

[I]ncomes must rise. Not just the incomes of China’s middle class and the rich world’s 1 per cent. But achieving higher incomes is a fraught business, both economically and politically.

This process will not end without a dramatic and unexpected shift in the nature of technology, or in the nature of economic institutions.

Neoliberalism’s apparent faltering threatens many economic ideas that have come to be held sacred, such as the notion of working for a living, which we saw a few posts back is revered as a moral virtue by Communists and Christians alike. These kinds of notions are deeply rooted in the minds —literally, in the neurological wiring — of the human beings who have inherited them and the values they stand for. As such, they are much more than economic ideas, they are the personal and cultural narratives that define our identities and guide our choices, both individually and collectively.

These kinds of entrenched cultural ideals will not go quietly into the night. Instead they will retrench and aggressively pushback against an interloper. Next time, we’ll look at one of those reactionary responses: the advent of “bullshit jobs,” which contribute much to current workplace dissatisfaction.

And just for fun, here’s the “not go quietly into the night” speech from Independence Day, and here’s Dylan Thomas’s “Do Not Go Gentle Into That Good Night.”

 

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

Does A Rising Tide Still Float All Boats?

The world’s post-WWII economic surge was founded on the idea that macroeconomic advances benefit everyone equally — i.e., that “a rising tide lifts all boats” (a phrase widely attributed to JFK, which his speechwriter apparently borrowed from a local New England chamber of commerce). This idea is a hallmark of the neoliberal economic model.

Whether the aphorism still holds today is predictably a subject of highly polarized economic debate — see, e.g., this June 9, 2014 LA Times article. My own research leads me to conclude that the idea worked powerfully for decades, began to break down in the 70’s and 80’s (as we’ve seen in prior posts in this series), and since then has begun to fail as remarkably as it once succeeded.

This week and next, I’m going to quote extensively from Work, Power, and Status in the Twenty-First Century (2016), by Ryan Avent, a senior editor and economic columnist for The Economist, whose analysis runs like this:

  • Neoliberal economic policy did in fact lift all boats from the early post-war years through its heyday in the 70’s and 80’s.

The last generation, during which the digital revolution’s first powerful effects made themselves felt, was an era of remarkable political moderation and consensus. The period began, in the 1970s and 1980s, with a liberalizing impulse across a broad range of countries . . . As global markets integrated, politics in most rich democracies coalesced around support for market-oriented economies, global openness and progressive social goals. It was a pleasant sort of era for the cosmopolitan, technocratic elite: the believers in the notion that the market, lightly tended, offered the best route to global prosperity and peace.

  • It especially raised national economies and benefited the wealth and income of individual wage-earners — especially where government-centric models such as social democracy and communism had previously been in charge.

[T]he nature of economic growth shapes political priorities . . . Political momentum for economic liberalization in the 1970s and 1980s emerged as typical voters lost confidence in the ability of the more statist economic policies to raise long-term living standards.

The outcome of that liberalization differed substantially across countries. In China and India, liberalization delivered on its promise. In China, especially, a generation of rapid growth succeeded in elevating a large middle class out of poverty. China’s economic pie grew massively.

  • But in the past few decades, continued allegiance to neoliberal policy has had the reverse effect, especially in the USA and other nations where it was most entrenched, resulting in disproportionate benefits — i.e., rapidly growing economic inequality.

In the rich world, things worked differently. In 2014, the inflation-adjusted income of the typical American household was just 7 per cent higher than it was in 1979. By contrast, the income of a household in the 95th percentile of the income distribution grew 45 per cent over that period.

  • Since the 80’s, the “lifts all boats” paradigm has not kept pace with the altered economic dynamics brought on the technological revolution, resulting in a shift in wealth creation and sustainable income away from wage-earners.

[T]he world economy operates on a framework very much rooted in an industrial, scarcity-bound world. The interaction of that world with the technological advances of the digital era have landed labour in a trap. The digital revolution generates fantastic labour abundance; that abundance contributes directly to downward pressure on the wages of the typical worker. It also reduces the bargaining power of labour relative to other, scarcer factors, allowing those factors to capture outsize share of the gains from growth.

  • Continued allegiance to the paradigm is currently undermining the concept of working for a living.

We now have new economic challenges, and the former labor/wage model is no longer producing equitable results. Job-based economic security and prosperity is being left behind.

Low pay for the great mass of workers is distributionally unfair. It undermines support for the market-based economic system that enables sustained economic growth.

We might not care so much about these inequities if the digital revolution were reducing the costs of all the many things the typical household wants to buy, from steak dinners to adequate housing to a top-flight university education. But cost reductions have so far been highly uneven: massive for some things, such as digital entertainment, completely absent for others, such as homes in nice neighborhoods.

This analysis essentially restates that of economist Guy Standing, which we looked at over the past two weeks.

Arent concludes by saying, “This process will not end without a dramatic and unexpected shift in the nature of technology, or in the nature of economic institutions.” Change on that level means shifting long-standing, deeply entrenched societal paradigms. More on that next time.

 

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.

Whatever Happened to Working for a Living? (Continued)

“Politically, every transformation has begun
with a repudiation of the certainties of the previous age.”

– Economist Guy Standing

Last time, I quoted at length from economist Guy Standing’s analysis of how the notion of working for a living has historically fared under the social democracy and neoliberalism economic models. Prof. Standing believes that, as a result of the developments chronicled there, a new class system now dominates the working world. Again, I’ll quote from his book The Corruption of Capitalism (2016):

Globalization, neo-liberal policies, institutional changes and the technological revolution have combined to generate a new global class structure superimposed on preceding class structures. This consists of a tiny plutocracy (perhaps 0.001 per cent) atop a bigger elite, a “salariat” (in relatively secure salaried jobs), “proficians” (freelance professionals), a core working class, a precariat and a “lumpen-precariat” at the bottom. The plutocracy, elite, salariat, and proficians enjoy not just higher incomes but gain most (or an increasing part) of their income from capital and rental income.

The three classes below them gain nothing in rent. Indeed, increasingly they pay rent in some form to the classes above them. First, there is the shrinking proletariat, relying mainly on labour in stable, mostly full-time jobs, with schooling that matches the skills their jobs require. The precariat, which ranks below the proletariat in income, consists of millions of people obliged to accept a life of unstable labour and living, without an occupational identity or corporate narrative to give to their lives. Their employers come and go, or are expected to do so.

Many in the precariat are over-qualified for the jobs they must accept; they also have a high ratio of unpaid “work” in labour — looking and applying for jobs, training and retraining, queuing and form-filling, networking or just waiting around. They also rely mainly on money wages, which are often inadequate, volatile, and unpredictable. They lack access to rights-based state benefits and are losing civil, cultural, social, economic and political rights, making them supplicants if they need help to survive.

This precariat is all over the world. . . . For instance, more Americans today see themselves as in the lower classes. In 2000, according to Gallup polls, 63 percent saw themselves as middle-class and 33 percent as lower-class. In 2015, 51 percent saw themselves as middle-class and 48 percent as lower-class. Similar trends have been reported elsewhere.

Below the precariat in the social spectrum is what might be called a “lumpen-precariat,” an underclass of social victims relying on charity, often homeless and destitute, suffering from social illnesses including drug addiction and depression. . . . Their numbers are rising remorselessly; they are a badge of shame on society.

Prof. Standing’s unique contribution to the conversation about work, happiness, and meaning is his identification of the new social strata. The balance of his analysis is not unique — as he says above, it has been reported “all over the world.” In the coming weeks, we’ll look at various implications of these findings:

The old job market’s last stand — “bullshit jobs”;

Whether the middle class is truly vanishing;

Whether a rising tide truly does float all boats;

Why this might be a good time for a new vision of utopia; and

Why your next associate hire might be a robot.

And much more. Stay tuned.

 

Kevin Rhodes left a successful long-term law practice to scratch a creative itch and lived to tell about it… barely. Since then, he has been on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. He has also blogged extensively and written several books about his unique journey to wellness, including how he deals with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

Whatever Happened to Working For a Living?

“Politically, every transformation has begun
with a repudiation of the certainties of the previous age.”

– Economist Guy Standing

Guy Standing is a research professor at the University of London and a prolific author and world-traveling speaker. In his book, The Corruption of Capitalism (2016), he analyzes how the concept of working for a living has fared under the two economic models we looked at last time (the Fabian Society’s social democratic model and the Mt. Pelerin Society’s free market). I can add little to his analysis by rephrasing it, therefore I’ll quote excerpts at length in this post and the next.

The period from the nineteenth century to the 1970’s saw what Karl Polanyi, in his famous 1944 book, dubbed “The Great Transformation” — the construction of national market economies.

[T]he model that underpinned the Great Transformation made “labour,” not all forms of work. Socialists, communists and social democrats all subscribed to “labourism.” Those in full-time jobs obtained rising real wages, a growing array of ‘contributory’ non-wage benefits, and entitlements to social security for themselves and their family. Those who did not fit this model were left behind.

The essence of labourism was that labour rights — more correctly , entitlements — should be provided to those (mostly men) who performed labour and to their spouses and children. As workers previously had little security, this was a progressive step.

Labourism promoted the view that the more labour people did, the more privileged they should be, and the less they did the less privileged they should be. The ultimate fetishism was Lenin’s dictate, enshrined in the Soviet constitution, that anybody who did not labour should not eat.

The labourist model frayed in the 1980’s, as labour markets became more flexible and increasing numbers of people moved from job to job and in and out of employment.

Labour and social democratic parties everywhere became ‘reactionary’ — reacting to events rather than forging the future — and regressive, allowing or even fostering inequality.

Around 1980 saw the beginnings of a Global Transformation — the construction of a global market system. As with the Great Transformation, the initial phase may be called ‘dis-embedded’ because the emerging economic system rendered old forms of regulation, social protection and redistribution obsolete or ineffectual.

Politically, every transformation has begun with a repudiation of the certainties of the previous age. This time the attack was on labour-based security, previously the objective of governments or both left and right. Now it was seen as an impediment to growth. Once again, policy changes were dominated by financial capital. Intellectual justification came from the so-called ‘Chicago school’ of law and economics at the University of Chicago, whose leading lights went on to receive Nobel Prizes. Their agenda, honed in the Mont Pelerin Society set up by Friedrich Hayek and thirty-eight like-minded intellectuals in 1947, evolved into what is now called neo-liberalism.

This meant the liberalization of markets, the commodification and privatization of everything that could be commodified and privatized and the systematic dismantling of all institutions of social solidarity that protected people from ‘market forces.’ Regulations were justifiable only if they promised economic growth; if not, they had to go.

As a consequence of these developments, ‘in-work poverty’ has rocketed. In some OECD[1] countries, including Britain, the USA, Spain and Poland, a majority of those in poverty live in households where at least one person has a job. The mantra that ‘work is the best route out of poverty’ is simply false.

I.e., according to Prof Standing, historical and contemporary adherence to the Fabian and Mt. Pelerin ideals has skewed and will continue to skew the notion of working for a living in ways that are unsustainable in current economic reality.

Ironically, Lenin’s dictum that “If any man does not work, neither let him eat” was first articulated two thousand years ago by none other than St. Paul. 2 Thessalonians 3:10. Thus the idea of “working for a living” has long persisted as a cornerstone belief in communist, socialist, and capitalist economic theory, giving it nearly universal sacred status. To question this ideal is truly to trample on hallowed ground.

More next time.

[1] The Organization for Economic Cooperation and Development has 34 mainly industrialized countries as members.

 

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to the people who learn, teach, and practice the law. His past blog posts for the CBA have been collected in two volumes — click the book covers for more information.