What’s Wrong with the World

Jeff, it appears that you do regard being a warehouseman or digging ditches for a utility company as meaningful work, right? So, while I think I do have some understanding of what you mean by "meaningless busywork" (my husband calls it "administrivia"), it's not clear to me that what most people would call "meaningful work" is the only alternative to "meaningless busywork." Wouldn't most people think that digging ditches is sort of a paradigm case of something other than "meaningful work"? Wouldn't some critics of the free market say the same, as well?

I'm just wondering if we need a few more categories, here. One reason I'm saying this is that I think too many people are searching for an unreachable star called "meaningful work," when it has _always_ been the case that the majority of men do not work at things that are _deeply_ meaningful. That was sort of the distinction usually made between a "job" and a "vocation." A job as a warehouseman would have been a "vocation" only indirectly--that is, by way of the man's use of it to provide for himself and his family. Not everybody can feel that he is "really making a difference in the world" as in being, say, a doctor, a lawyer, a teacher (of something for which one has a passion), etc. It's in a way a sad thing, but it's the common lot of man and is certainly not anything new in the economy, as your own examples show.

Two Things:

1) Contra Lydia, "meaningful work" is not necessarily "work that makes a difference." Far from it. The idea that everyone has to go out and "make a difference" is what drives all those people into the pitiful pencil-pushing jobs that nobody should be doing. But digging ditches, building houses, and other physical jobs are "meaningful work" because they involve doing something: the job itself has a meaning. You have a set task, discernible criteria for completing it, and the undertaking itself is worthwhile. It is good to do the physical labor inherent in digging or splitting wood or etc. because physical labor is good itself and good for the laborer. Tabulating IPS reports is not. So while many of the jobs Jeff points to may not be "important," skilled, or otherwise desirable in a lot of ways, they do have a certain meaningfulness to them that I think is lost on a lot of people---although I think Lydia is undoubtedly perfectly able to understand what's being talked about once we all get on the same page.

2) Being well educated isn't even a key to being successful---or even employed---any more. So many people have been pushed into higher education that bachelors and even graduate degrees are become far less impressive than they once were. Many employment markets have been flooded with insolvent but questionably skilled graduates seeking jobs. Just look at the legal profession, which is at least inherently capable of being a worthwhile vocation: law schools have been charging arms and legs for an education that, frankly, is dirt cheap to provide. People---many of whom will make horrible attorneys---have come in droves like lemmings because big firms were gobbling them up and paying them obscene salaries to do drudgery work for big banking and corporate clients. Now, with the biggest clients gone and the big firms unwilling to take huge classes of new associates, law school graduates are entirely out to dry. I just graduated magna cum laude from a top-twenty-five national law school: I'm writing this from my in-laws' house because I cannot find a job for love nor money. Suffice to say, I'm mad enough to spit about the whole cotton-picking thing.

I wish the world had more plumbers and fewer economists. At least when they make things go down the drain, its part of the job.

Seriously, I don't think the problem is primarily on the worker side of the equation except for the fact that people have lost a sense of the true dignity of work. Instead, I think the problem is on the managerial side of things. Automation has caused some of the changes, but there is something else truly interesting going on behind the scenes. The link between work and family is very important. Remember the predictions that Pope Paul VI made in Humane Vitae that he felt would come about if contraception became common (I will abridge). Let's compare them to the current work situation:

Marriage
1. Infidelity
2. Lack of morality
3. Loss of respect for the woman
4. No longer care for the woman's physical and psychological equilibrium
5. Regard the woman as nothing more than a means of selfish enjoyment
6. No longer regard the woman as an equal in respect and love
7. Government control of the process
8. Government supporting the easiest way to control population
9. Government interference in personal choices

Work
1. No job loyalty
2. Lack of morality
3. Loss of respect for work
4. No longer care for the physical and psychological well-being of other workers in the workplace
5. Regard work as nothing more than a means of selfish enjoyment
6. No longer regard work as being equal in dignity for all men
7. Government control of many aspects of work via excessive laws
8. Government supporting laws such as fire-at-will
9. Government interference in funding to allow or disallow career paths to be easily realized

My point is that just as contraception affects a woman's fertility, her natural good, so a personalist philosophy that has developed especially since th 1970's has affects a man's relatioship with work, his natural good. In some ways, I can't help but think that just as Adam and Eve were both given consequences for Original Sin relating to their natural goods, just so, the problems with work today can be related to the same effects of the mentality that sees contraception as something good.

The Chicken

Jeff, it appears that you do regard being a warehouseman or digging ditches for a utility company as meaningful work, right?

Yes, that's right - assuming the warehouse is stocking good and necessary things (many aren't) and the utility is providing needed services.

The measure of "meaningful work", in my view, is simply "contributes to the common good". Such work may not be totally "fulfilling" as the cliche goes - that's more a matter of matching the right man to the right job - but the work itself will have dignity and will not be wasted. Washing dishes certainly qualifies. I have had several jobs which did not, and which for that reason made me miserable, but you do what you have to do. The point is that the inherent value of work performed changes society and changes people, for good or ill.

This interview with Peter Arnell comes to mind:

http://www.newsweek.com/2009/03/27/mad-man.html

"It's all bulls––t," he said. "A logo on a can of soda? Please. My life is bulls––t."

That Arnell person is entirely bogus. Goodness.

Jeff, I think you and I are on much of a wavelength, here. I think that many people _do_ think of "fulfillment" in connection with "meaningful work" and that this can cause confusion. But I think you and I would both condemn many of the same jobs as meaningless in the stronger sense.

I don't know if you saw this old post of mine, so at the risk of self-promotion...The comment about how this makes being "cogs in a machine" look "pleasant by comparison" relates to what you are saying here. That is to say, you are not necessarily decrying work as meaningless simply because it is _boring_ or not particularly pleasant:

In fact, this "move up or move out" imperative makes the old idea of being a cog in a machine look rather pleasant by comparison. Do you want the cogs in your car to keep randomly evolving into something different? Not at all. You might end up with a car that didn't run at all, or that ran much worse than before. If the employees were cogs in a machine, their employers would be grateful that they keep on playing their coggish roles efficiently and well and that they do so indefinitely, making the company like a machine that just keeps on forever running sweetly on well-oiled wheels. If the model of employees as cogs in a machine is modern, it seems to me that the corporate world of "move up or move out" is post-modern, a world where everything must morph for the sake of morphing and where this grotesque and pointless movement is called "growth."

Humbug should be anathema to all good conservatives. For that matter, humbug should be anathema to all good capitalists. And even to all good people. And this notion of hollow ambition as employee development is humbug. It is irrational, and it is anti-capitalist, in the sense that I have tried to give to the ideals of capitalism above. I wish that it were possible to get rid of it entirely from our system.

And meanwhile, my heart goes out to everyone upon whom such humbug is being imposed. May you have many areas of your life, even if not the job that brings your daily bread, in which things are themselves.

http://whatswrongwiththeworld.net/2008/04/this_is_not_what_capitalism_sh.html

Titus, I simply think the phrase "meaningful" can be misunderstood. One reason I brought the issue up is because it would seem that what Jeff is giving here is _not_ the old sort of "Williams Morris-esque" critique of the industrial revolution. After all, being a warehouseman is not some sort of "back to the land" job, nor a matter of being a craftsman, or any of those heart-warming things that anti-capitalists often seem to think are the only sorts of "meaningful work," where "meaningful" is supposed to include, at a minimum, _mentally interesting_, not repetitive, etc. I was pressing on that a bit, because I was pleased to see that that is _not_ where Jeff is drawing the line. It seems to me that working on an assembly line could fulfill Jeff's requirement here for meaningful work. I consider that a very good thing for his post, because it prevents it from being another anti-industrial, agrarian, back-to-the-land plea for the supposed good old days (which in reality never existed) when everyone took such pride in his work and workmen had such deep, meaningful lives, etc., etc., etc.

It seems to me that what Jeff is especially criticizing is what I called in that old post the post-modern corporate world.

It seems to me that working on an assembly line could fulfill Jeff's requirement here for meaningful work.

It could, yes.

I consider that a very good thing for his post, because it prevents it from being another anti-industrial, agrarian, back-to-the-land plea for the supposed good old days (which in reality never existed) when everyone took such pride in his work and workmen had such deep, meaningful lives, etc., etc., etc.

Well, uh, as you know I do have quite a lot of sympathy for the "anti-industrial, agrarian, back-to-the-land" worldview and think that the industrial revolution was, to say the least, not an unqualfied good. Assembly-line work can be horribly dehumanizing. But the industrial revolution isn't going to be repealed any time soon, that much is certain. One task of Christian civilization must be to use the very fruits of the industrial revolution to repeal some of its negative effects.

I don't know if you saw this old post of mine, so at the risk of self-promotion...

Thank you, Lydia. I just read it for the first time. Your friend is exactly right about the corporate "move up and move out" imperative, in which lots of people get moved out, only to start over with some other corporation, and then another, etc., until finally becoming unemployable.

However, what I don't see is the incompatibility of this attitude with capitalism. If capitalists want this, if it makes them money or gives them some sort of competitive advantage, then what's uncapitalistic about it? Maybe they are being themselves.

Masked Chicken, you wrote:

My point is that just as contraception affects a woman's fertility, her natural good, so a personalist philosophy that has developed especially since th 1970's has affects a man's relatioship with work, his natural good.

That's a great insight.

Just a couple of anecdotes to add to the discussion:

When I was a kid, my family had a summer house on the Georgia coast. Our next door neighbors, who lived there year round, had a two story house with a fishing boat about 18 feet long in the yard. The father worked for the phone company, installing telephones (this was back when phones were actually installed). His wife was a stay-at-home mom, raising three kids. They lived a block from the beach. Down the road a bit was a family headed by an electrician; they lived one or two houses from the beach. I'd guess that those properties have since been torn down and replaced by McMansions.

I used to date a woman whose grandfather had retired as president of a bank in White Plains, NY. He'd never attended college, and started working at the bank as either a teller or office boy, I don't remember which. He would've retired, I'd estimate, in the 1980s, so we're not talking about the 19th century here.

A decent life is a real stretch for the American working class today, and God help those without a college degree. (God help most of those with a degree, for that matter.)

Jeff,

Lost of working class jobs still pay well. If I'd stayed in the machine shop and become a journeyman, I could make 100K now, I'm told.

There's also plumbing, electricians, cabinet makers who can do pretty well, but over all, I agree. The idea that one man could support a family of five, six or seven is pretty much lost. Bringing women into the work place did it, among other things. (They should never have been given the vote.)

Just as bringing in illegal aliens undercuts wages, doubling the available workforce by adding women is even more damaging.

Most modern work is insignificant, though. It takes far fewer people to produce the necessities of life that the surfeit must be put to work doing something or other, most of which is junk

Mark, I suppose there could be machinists making $100K somewhere, but the average salary for machinists appears to be $35K, which, here in California, will buy you a daily latte for one year at Starbucks.

http://www.simplyhired.com/a/salary/search/q-machinist

I completely agree that the impact of women flooding into many professions has subdued wages for men and increased the overall cost of living for families, which, in turn, pushes even more women into the workforce who would rather be home. Breaking this cycle seems next to impossible. There is still more to the problem, however - the dynamics of capitalism itself, with its insatiable demand for cheap labor.

With respect to the insignificance of modern work, I also agree but don't think it needs to be this way. Products and services that are not strictly necessary for survival can still contribute to the common good in varying degrees.

The men of earlier generations often had humble employment, but the work was intrinsically good and the pay could be quite decent. One of my barbers, who is now in his 70s, tells me that he bought a house and put his children through college cutting men's hair. He laments bitterly that this just isn't possible today.

This is probably a historical anomaly. Those of very humble employment traditionally lived not far from real poverty. There was a unique convergence of trends several decades ago that enabled a much stronger quality of life, mainly America's rise as an industrial superpower, the lack of meaningful international competition and a culture that was still sufficiently Protestant to consider the idea of shipping manufacturing jobs to some maquiladora moral treason. The executives at GM back then would have been horrified to hear that their companies would have production facilities in Communist China one day.

Some questions are best left for individuals themselves to answer, questions that cannot be well answered in the aggregate, questions like "How many children will we try to have?" "Will I enter the marketplace?" "What work will I agree to do?" Will I undertake the expensive risk of going to college or graduate school in order (hopefully) to get that work?" "For how much money will I agree to do that work?" and "For how long will I consent to do that work for those wages?" Most individuals know themselves and their situation far better than do outsiders. Let them make their own choices about what's useful, meaningful, and acceptable -- just like you'd want to make such choices for yourself, even though your choices might include morally questionable social arrangements like agrarianism.

This does not mean that everything is relative. It isn't. It means that when it comes to measuring something vague and amorphous like the common good we are dealing with (among other things) millions, perhaps billions, of personal preferences and skill sets that are unknown to us. Therefore, inside a largely free society like ours, we are better advised to let common persons and their individual choices reveal the common good to us, whatever that is. In a fallen world like ours, the result will always be far from perfect. But it will be better than any other result we could devise.

Let's put it this way, Michael: Imagine a hypothetical college graduate named Jack. Jack is in love and wants to get married. He and his wife want to have kids. The only job he can find (others can probably make up better examples than I can) is a job writing "assessments," which he thinks is a bunch of baloney. He takes it. This is in one sense an "individual choice," but it is an unfortunate one. Jack is going to be particularly unhappy, even more unhappy than he would be if he could have gotten married and started his family with a job, say, installing telephones, which would at any rate not be so utterly pointless and fake as writing "assessments." And when the "assessments" are supposed to include politically correct categories that he really opposes, he's even going to have a conscience problem. So it's not quite as simple as letting individual choices decide.

A couple random thoughts:

1) Mike T's point that the "barber with a beach house" is an historical anomaly merits closer inspection. How much of what we think is "normal" is conditioned by particularly exceptional productivity growth in the post-war years? It seems that whenever/wherever there is a blog post on this topic (sites left and right), people anecdotally are worse off than their parents - but rarely does anyone claim to be worse off than his grandparents or great-grandparents.

2) Someone writing "assessments" is not the only employee with a potential conscience problem. A person could be installing telephones or digging ditches for a company that donates to Planned Parenthood.

3) One might well choose to write "assessments" over "meaningful" work so that he can support a family and have a normal family life. Working two or three jobs, or a job that requires frequent travel or off-hours work, is not very family-friendly. If some of these paper-pushing jobs approximate the old middle-class, middle-management jobs of old, so be it.

Lydia,
Jack's choice is, according to his own lights, the best available to him, even if you call it "unfortunate." He would consider his condition worse, and leave himself and his beloved more unhappy, if he made a different choice. Like almost all human decisions in a fallen world, his choices involve a number of trade offs. Perfect options likely will not present themselves to Jack, or to any of us. He must weigh the options and make the best choice he knows how to make.

No one said this decision making was simple. My point is that because it is so incomprehensibly complex we outsiders cannot make it well for others.

1) Mike T's point that the "barber with a beach house" is an historical anomaly merits closer inspection.

I think it might be an American anomaly more than a historical anomaly. Let's take a quick historical survey to see. Take France: before the Revolution, France is a poorly administered agrarian society in which the economy did not produce enough wealth (and what was produced was pulled out by government spending on a few distinct projects). So there's very little money available for ordinary laborers. A barber, unless he's cutting Bourbons' hair, is probably dirt poor because nobody has any money to pay him and the market simply can't support higher prices. After the revolutionary troubles settle down things don't change all that much: there are a lot of people, little mobility, little movement of money between rural and urban areas, low prices for agricultural products, industrialization that is starting to fall behind the curve. That's pretty much the scenario for most of continental Europe up to the First World War.

Compare to the U.S. over the same period. You have few people, so any individual's services and goods are in higher demand. You have widely available resources and land. Commercial and agricultural production, buoyed by protective tariffs and shipping, generates a lot of new wealth; that wealth gets fairly evenly distributed throughout the country because the nation is first quite small (everyone is near the coast, where all the money comes from) and later because of extensive investment in transportation infrastructure. There's also cheap money all over the place. As time goes on, the country finds itself riding the very front of the industrialization and mechanization waves: American commercial and especially agricultural products flood world markets and make American laborers almost unimaginably wealthy. In the twentieth century the advantage shifts from agricultural products to industrial products and the trend continues as described above. Everyone knows what was happening to Europeans in the 20th century.

So it is something of a historical anomaly. But I don't think it's an anomaly unique to mid-twentieth-century America as much as one unique to America's economic and social history over a longer period.

I completely agree that the impact of women flooding into many professions has subdued wages for men and increased the overall cost of living for families, which, in turn, pushes even more women into the workforce who would rather be home. Breaking this cycle seems next to impossible.

This is where I start wondering whether democracy is all it's cracked up to be. Royal edicts could surely solve at least as many problems as they might create.

Someone writing "assessments" is not the only employee with a potential conscience problem. A person could be installing telephones or digging ditches for a company that donates to Planned Parenthood.

Just speaking for myself, I don't see that as the same thing at all. You probably can't buy a gallon of milk without providing money to someone at some level in the causal stream downstream from you who will in turn use it for bad ends. We can't boycott everything. When I raised the possibility of a conscience problem, I meant with the employee's being asked personally to do something that he doubted the morality of doing. For example, he might be asked to evaluate fellow employees or departments on their "commitment to diversity" where he believed that what that included was a commitment to something wrong--e.g., endorsing homosexuality.

And even if we just back up to the assessments generally, there is something very bogus about the whole assessment craze. Even where outright bad categories don't rear their heads (and they usually do), it involves a lot of pretense of objectivity in "measures" and so forth, a lot of making up baloney language to satisfy someone who really doesn't know anything about anything of real value, and so forth. It's a kind of fog or miasma settling over the corporate, and increasingly the academic, world. I'm not saying it's always intrinsically wrong for people to fill out assessments when they are made to do so by higher-ups. But an entire job doing so or, worse, forcing others to do so, seems to me to move perilously close to having a job forcing people to pick up rocks from one pile, move them to another, move them back, etc., and giving them a hard time if they want to get on with some real, productive work instead.

On the inflation caused by women in the workforce: At the very real risk of sounding like a crank (and I'm not trying to hijack the thread, really), I've become increasingly convinced that true inflation across the economy is literally not possible without an increase in the money supply. Therefore, there has to be some interaction between women's entering the workforce and government at the level of monetary policy in order for women's entering the workforce to cause or even partially cause economy-wide inflation. Just a thought.

The cover story of the latest Atlantic seems rather pertinent to this discussion:

http://www.theatlantic.com/magazine/archive/2010/07/the-end-of-men/8135/

"what I don't see is the incompatibility of this attitude with capitalism. If capitalists want this, if it makes them money or gives them some sort of competitive advantage, then what's uncapitalistic about it?"

Exactly. To put it another way, if a corporation has to make a choice between two courses of action, one which benefits the shareholders, the other which benefits the employees, why should it not choose the former? Of course it would be ridiculous to argue that corporate capitalism always makes this choice, as some leftists do. But it's equally ridiculous to think that it never does, or never has to, or that choices which benefit the shareholders somehow magically benefit the employees also even when it appears not to be the case.

one which benefits the shareholders, the other which benefits the employees, why should it not choose the former?

What about the customers?

Thanks, Bobcat. The Atlantic article - though written from another POV - pretty much nails it. I've seen this coming all my life. We have finally arrived. Now what?

I've become increasingly convinced that true inflation across the economy is literally not possible without an increase in the money supply.

Lydia, you may be right about that, but there doesn't need to be "true inflation across the economy" for the cost of living to increase for families - just inflation in those places impacted by specific changes in the household economy.

The decline in the number of jobs that pay a living wage is one of the salient economic changes in my lifetime (I am 60). I tell the young people I work with how a typical working class man could support a family on his income alone to illustrate the economic decline of our country (they can barely get by with two incomes).

The "move on or move out" thing affects customers only indirectly, but given the effect of customer loyalty/attrition on the bottom line I'm sure that the decision-makers take it into account. I know they do at the company where I work.

Therefore, there has to be some interaction between women's entering the workforce and government at the level of monetary policy in order for women's entering the workforce to cause or even partially cause economy-wide inflation. Just a thought.

Women are cheaper labor than men (at least they were in the beginning of the feminist craze). The extra money saved can be put into an increase in the money supply for the upper management to use.

Now, contraception is one of the driving forces that allowed women into the work place, so my connection, above, stands.

On the other hand, there is no real class corresponding to the idea of penes in a Biblical sense anymore. This was the class that earned a living and had few real wants (food, clothing), but had little else. Back when a nice night out with the family was sitting by the fire and telling stories, how much did it take to be well off? Now, one struggles to get an iphone without considering that one iphone = two months of food. The poor people who were served by Michelle Obama at the soup kitchen, took her picture with their $200 Blackberry. Part of the problem is that we no longer really value what is important.

Of course, there is class inequity, but the divide has become less of a sliding scale and more of a square wave - one is either on top or at the bottom. There is little in between.

The Chicken

"7. Government control of many aspects of work via excessive laws
8. Government supporting laws such as fire-at-will"

Am I the only person to notice the contradiction here?

"Jeff, it appears that you do regard being a warehouseman or digging ditches for a utility company as meaningful work, right?"

Jeff, you do realize that the period of which you write was a post-war America in which liberalism was ascendant, trade unionism was peaking, and privatization was unknown?

Both of those jobs were likely union jobs (Teamsters and CWA) or had wages that reflected a desire of the owners not to unionize.

Today a janitor for a company of any size is likely a low wage, no benefit worker for a sub-contractor (unions like the SEIU are making a comeback in some areas). Back in the day he likely worked for the company with benefits, etc.

Housing was cheap compared to today. The father of a friend of mine was a bag-man back in New York with no high school graduation. He followed the rest of his family out to So Cal where his brother got him an assembly line job with a defense contractor (union, benefits, killer pension + SS). The $8.000 crackerbox he bought in 1959 is worth around 800K today. Of course, there was still plenty of close in, developable land back then. Not so much now.

As I previously have pointed out you all elected Reagan, et al and you got what you were voting for and yet you seem unhappy. Will this lead to a checking of premises?
Probably not.

(I would also point out that back then the experience of surviving the Great Depression was guiding the votes of most. Folks weren't so used to prosperity that they were able to be distracted by the trivial when they voted.)

Thank you for posting this Jeff. I have felt much the same way about work for some time, but I have had trouble finding many who felt the same way. It is interesting to think of the work done by the men in my parish, who still are very much men, while considering the Atlantic article.

By in large, they still either work in the building trades in some capacity, or they work in computer science, engineering, medicine or law enforcement. And that's pretty much it. I expect you would find much the same thing in other traditionalist communitites. There really are very few jobs where a man can earn enough to provide for children and a wife at home, and I think it is going to get increasingly difficult. I really worry about my children, both the boys and the girls, that they will have great difficulty living out a vocation to fatherhood or motherhood, if that is what they are called to.

One thing that I think the author of the of the Atlantic article misses is the distinction between the masculine virtues associated with fatherhood, like self-sacrifice and discipline, as opposed to the "macho" we have not really seen as much of a decline to the "macho" as witnessed by our hyper-sports-culture, what has really been lost is the manliness associated with fatherhood. The patriarch was never macho.

In answer to the question, "Why should I object to postmodern moving people around in corporations if it improves the bottom line and if it's what the companies want to do?":

Suppose that I were running a company. Suppose that I could be convinced that if all my employees were forced to come in every morning, stand on a ladder, and touch a painted spot on the ceiling, my bottom line would improve. To begin with, I have trouble imagining how I could be convinced of this. There seems to be no mechanism for it to work, and indeed it seems to be counterproductive and bad for morale. This is also the case w.r.t. meaningless "moving on" of employees from jobs they like in the company to jobs they dislike, constantly retraining and relearning, frightening them with loss of job because they have stayed in the same position for several years, and doing this "just because." Yet my friends assure me that it _does_ improve the bottom line, and supposedly it does so by the mechanism of "flexibility." Okay, so I'm dubious. But suppose that I could somehow be convinced of the bit about the spot and the ceiling. Maybe people in the culture like the "ceiling spot ritual" and will buy more of the product if they hear that we make all our workers do it. Would I institute the policy? No, I wouldn't. It seems to me creepy, unpleasant, and bullying to make employees do something so manifestly pointless. It also seems like brainwashing to try to make them talk as if this really is meaningful, as if it's "personal development" to get up on the ladder and touch the (sacred) spot. Therefore, I think it would be wrong to make them do it.

I'm pretty close to that position on "move on or move out." If we were talking about running a small yacht, where one member of the crew might be disabled and others would need to be able to take his place, I could certainly see training everybody to do each other's jobs for the sake of preparation for possible emergencies. Something similar might be true in a small company. Even in a large company, I can perhaps understand temporary assignments to other departments so that people understand what other departments do and be able to integrate their work with that of other departments more efficiently. And this will not seem pointless to most employees. But most people will have some things they would do better than others, and that should be sought out and respected. Just moving people on every five years for the sake of it and forcing everybody to talk the language of "development," as though there is something _objectively wrong_ with a person who wants to remain in the same position, seems to me prima facie wrong, even if in some voodoo fashion that I have yet to understand it improves the bottom line.

And capitalism doesn't justify doing something wrong.

Jeff, you do realize that the period of which you write was a post-war America in which liberalism was ascendant, trade unionism was peaking, and privatization was unknown?

Liberalism was "ascendant" because it was a stealth liberalism and social conservatism was the status quo. Privatization was "unknown" because most of the economy was still privately controlled. As for trade unions, they definitely have their place, and within certain guidelines have always had the support of the Catholic Church.

Does supporting trade unions make me a liberal? I don't think so. Predatory capitalism isn't "conservative" in any meaningful sense of the word; resistance to it is not therefore "liberal".

More re: trade unions:

In a certain sense, classical liberalism (of which capitalism is a subset) won the culture war, partly due to Al's favorite whipping boys, Ronald Reagan and the GOP propagandists. Americans believe in a contract society; at best, loyalty of any kind extends no further than that. Hence the decline of the trade unions. But this liberal trajectory isn't finished. The social alienation and pain produced by the contract society is too much for most people to bear. Therefore, we are descending from a contract ideology to a society based on raw power and will.

~~Predatory capitalism isn't "conservative" in any meaningful sense of the word; resistance to it is not therefore "liberal".~~

Right, no matter how much Limbaugh, Hannity, etc. may declaim otherwise. For instance, the strain of American conservatism which might be termed "Southern conservatism" (although it's certainly not limited to the South) has always been suspicious of finance capitalism, especially when it shows itself as predatory.

"this liberal trajectory isn't finished."

It can never really be finished -- it will always veer ever closer towards either anarchy or totalitarianism. Al needs to remember that there's always someone more liberal than Al. And if they get into power then suddenly Al looks rather conservative.

This is one of the main points of Kalb's The Tyranny of Liberalism, and is what Whittaker Chambers meant when he wrote that all collectivist forms contain an inherent fascism.

Just moving people on every five years for the sake of it and forcing everybody to talk the language of "development," as though there is something _objectively wrong_ with a person who wants to remain in the same position, seems to me prima facie wrong, even if in some voodoo fashion that I have yet to understand it improves the bottom line.

It certainly is wrong, just as paying an unjust wage is wrong. But here's the rationale: workers who are too set in their ways resist change, and due to intense global competition the corporate world is constantly changing. In the new global-capitalist economy, agility and resilience are valued more than competence and experience.

In my last corporate position one of my colleagues discovered a memo accidentally left on a copy machine. The memo was a list of recommendations from a consulting firm the company had hired during restructuring. One of the recommendations was not to keep people employed for too long: long-term employees become complacent and resist change. Find a way to let them go. No kidding.

Capitalism is a term originally coined by Karl Marx. I have no idea why American "conservatives" insist on using it. It is the flip side of socialism, an equally materialist ideology. But capital is made for man, not man for capital. Over and over I have heard and read American conservatives, from every rank, proclaim that the only obligation a corporation has is to enrich its shareholders. I wish Christians, at least, would reflect a little more deeply on the radical immorality of a system that has this belief for its foundation.

Another aspect of the crisis of work, as it relates to men, is that of identity. Men uniquely identify with their work, with what they do for a living. A man's work defines him, at least partially, connecting him with a brotherhood of men in his own line of work, and setting him apart from other men. Men take pride in doing necessary, valuable work, and in doing it well, which compensates for feminine superiority in the domestic sphere. To deprive men of gainful, productive, and meaningful employment is to deprive them of an identity. I hope you can see where this is going. The contemporary crisis of work - of work for men - is more than just an economic problem. It is a grave social problem on the level of a world war (see http://www.dadi.org/rosie.htm ), with terrible consequences likely to affect generations to come.

"paying an unjust wage is wrong"

Jeff,
I'd like to read your calculus for determining an unjust wage. Exactly how does one determine which wages are just and which are not?

It certainly is wrong, just as paying an unjust wage is wrong. But here's the rationale: workers who are too set in their ways resist change, and due to intense global competition the corporate world is constantly changing. In the new global-capitalist economy, agility and resilience are valued more than competence and experience.

In my last corporate position one of my colleagues discovered a memo accidentally left on a copy machine. The memo was a list of recommendations from a consulting firm the company had hired during restructuring. One of the recommendations was not to keep people employed for too long: long-term employees become complacent and resist change. Find a way to let them go. No kidding.

I don't really buy the unjust wage thing.

I know it must sound like I'm only-sort-of-granting the possibility that this firing people and switching them around generates more income, but I must say, the more I hear about it, the more ludicrous it sounds. Just empty slogans made up by people with nothing better to do. I have something akin to contempt for the pseudo-intellectualism of consultants. They seem to me like today's traveling snake-oil salesmen. The advice given in the memo is not only sickening from a moral perspective but sounds plain silly to me.

By the way, I do think more needs to be said about loyalty in both directions--from employees to employers as well as vice versa. If it can't be restored in both directions, we're in trouble. I humbly submit that unions have never had anything to do with that necessary two-way loyalty.

Michael: I suppose X can't be unjust without a universal, simple, quantitative calculus for X. Good grief.

Lydia, we've been down this road before, but you do need to wrap your head around the fact that there are (from a profit maximization perspective) optimal levels of employee turnover, and that in modern corporations those optimum levels are measured in years not decades.

Zippy, is this based on anecdotal evidence, or what? I mean, it reminds me of the things I've heard from relatives who are into alternative medicine about how this or that herb works because it "throws impurities out of the body." They usually follow it up with an anecdote about how they took it and felt better. The notion of a placebo is nowhere on their horizon, nor is the notion of controlling for other factors, nor is the idea that we usually should want a clearer idea as to why things are supposed to work than a phrase (like "throwing impurities out of the body" or "making the work force more flexible for the new global economy").

Analogy: Suppose that repeated studies showed lower levels of crime among Wiccans than among Catholics. It would be a pretty bold inference from that to the conclusion that Wicca causes people to stop committing crimes or that Catholicism causes crime. If people then suggested that an active policy of trying to get criminals to convert to Wicca in prison would lower recidivism, one might have _both_ moral _and_ empirical objections to the idea. Post hoc, propter hoc, and all that.

Zippy,
Apparently some folks think that an unjust wage is a bit like pornography: You can't actually identify it, but you'll know it when you see it. Forgive me if I don't find such notions terribly compelling. If Jeff is going to complain about unjust wages, then I want to know by what means he calls one wage just and another not -- his Culbreathian intuition, his highly refined agrarian sensitivities?

Michael, speaking as a person who is also unsympathetic to the notion of an unjust wage in almost all contexts, I think it's _more interesting_ to discuss the concept of meaningful work that Jeff brought up in the main post as well as the notion of firing people "just because" that has come up more recently. If companies are going to start promoting sheer meaninglessness because they think (correctly or not) that meaninglessness is profitable, I think we academic types who are concerned with such things as truth, beauty, reality, and Western civilization should have some concern about this.

It certainly is wrong, just as paying an unjust wage is wrong. But here's the rationale: workers who are too set in their ways resist change, and due to intense global competition the corporate world is constantly changing. In the new global-capitalist economy, agility and resilience are valued more than competence and experience.

Competence and experience are still highly valued, but businesses often perceive that those come at the cost of reasonable flexibility and competitiveness. We've all heard examples of union rules throwing a monkey wrench, if not the entire toolbox, into the corporate gears so no one can play ignorant as to how workers can make using them so painful that their relative advantage in competence and experience is rendered meaningless.

The wage paid to the UAW, which is about $75/hour including benefits, is an unjust wage on the opposite end. That wage can only be sustained by artificially increased costs to customers, many of whom are also workers trying to get by.

The moral of the story? Greed scales, baby. It scales from tiny animals hording extra food to CEOs raping corporations.

While I'm not in favor of the government determining what is a "just" wage, it's safe to say that the market hasn't done a particularly bang-up job of it either. I have no problem in principle with the idea of the "family wage." Allan Carlson has written a fair amount on this -- for example here:

http://www.touchstonemag.com/archives/article.php?id=19-01-023-f

An unjust wage is one that does not allow a man to provide for his wife and children according to his station is society. Hence, it it is a wage that varies depending on the situation of the wage earner. A lower wage might be just for the single man, whereas a man with a family would, in justice, need to be paid more. The lowest wages might be paid to those still dependant on their parents like teenagers and youg single women. It is of course possible for a wage earner to be paid unjustly high wages as well, examples might include Kobe Bryant or Tom Cruise.

The justice of wages and prices are predicated upon an understanding of economic activity as being in the service to the common good. The economy was made for man, not man for the economy. Ultimately God is the creator of all economic goods. A Catholic will recognize, therefore, that economic activity must be in accord with His will that the goods of creation are cared for in such a way that all people are provided with the resources to perform the work that He has called them to.

This means that through work, fathers must be provided with the means to materially care for their wives and children. To deprive them of this is unjust.

Hence, it it is a wage that varies depending on the situation of the wage earner. A lower wage might be just for the single man, whereas a man with a family would, in justice, need to be paid more.

How do you know that the man with a family needs more money rather than to find a more frugal way of living? How can you justify not paying the single man at least according to his contribution to the company? Is it not unjust to pay a man $10 for his labor when it's closer in value to $20/hour because someone says "I have more family needs than he does?"

Jeff,

The minute someone starts a jeremiad about the economy with "I don't have any data, but I do have lots of stories." I usually start running away, as nothing good will come of it. The first thing you should want to establish in these discussions about the economy is an agreed upon frame of reference. My job is usually to pop up and challenge folks when they go spouting off without data, but I think Paul has rightfully responded to me in the past that I should provide my own data if I'm going to contribute to the discussion. It just so happens, that I just finished reading the chapter in Michael Medved's book The Ten Big Lies About America called "Big Lie #9: A War on the Middle Class Means Less Comfort and Opportunity for the Average American". It is filled with stories and data that directly contradict just about everything you have to say (more on the "just about" part below).

Medved startes off by noting how the media likes to constantly hype bad news about the economy and people's opinion of the economy but when public opinion polls ask questions about individual's personal situations, they often respond that they are doing quite well:

In April 2008 the New York Times announced the results of a new poll with a typically alarming headline: "81 Percent in New Poll Say Nation Is Headed on Wrong Track." But immediately below that disturbing proclamation, a series of graphs showed the respondents maintaining for more optimistic attitudes regarding their personal status. When asked, "How would you rate the financial situation in your household?" an amazing 72 percent said "good"; only 27 percent said "bad". In fact, the Pew Global Attitudes Project found that satisfaction with family income increased between 2002 and 2007, from 74 percent to 76 percent--more than three-quarters of those surveyed.

The "declinists," who warn of the disappearance or destruction of the middle class, love to cite surveys showing big majorities who offer grim evaluations of the general state of the nation, but they fail to note that the same polls report far greater optimism about the respondents' personal status.

For instance, a July 2007 Harris Poll found that a staggering 94 percent of respondents considered themselves satisfied with their lives (with a full majority--fully 56 percent--choosing the highest rating, "very satisfied"). More striking still, crushing majorities saw no evidence at all that their personal conditions had suffered in recent years. Asked the question "If you compare your present situation with five years ago, would you say it has improved, stayed about the same or gotten worse?" fully 82 percent said it had improved or held steady (with a majority--54 percent--reporting improvement).

You go on to say "Jobs which are today capable of decently supporting a family require high intelligence, extraordinary skills, and what is more often the case, unscrupulous ambition."

This is perhaps one of the most blatantly ridiculous myths that seem to be common on the Left and paleo Right and again, what is lacking is data. I have already repeatedly commented here at W4 on how a modest salary in 2010 can afford wonders that that 'hard working barber' of the 1950s could only dream of (you really need to be reading Mark Perry's blog "Carpe Diem" for a better perspective on these issues). Even if it is true that blue-collar wages are stagnant, those same wages in 2010 can afford more and more now than in 1950 thanks to the wonders of capitalism. Here's Medved again:

In a pungently effective 2008 video essay for Reason TV, a project of the libertarian Reason Foundation, the popular comedian Drew Carey takes mirthful note of the enormous gap between the "woe is me" reporting on the state of the middle class and easily observable reality. A camera crew visited Castaic Lake, north of Los Angeles, on a sunny Saturday and "confronted some fat cats as they played around in the water with hardly a care in the world."

Boaters brag about their craft, including a speedy $50,000 vessel described by its owner as a "special boat for wakeboarding." Carey speculates that "this guy sees the world through rose-colored designer glasses. Probably a trust fund kid who doesn't even have a job. What do you do for a living?" With a broad smile, the interviewee responds: "I', a gardener."

Other boaters, who drove to the lake in Hummers and Escalades, identify themselves as "a cop," "a guy who sells building materials," and "a truck driver." A friend of the trucker, an auto mechanic, explains that he only uses his buddy's boat because "I've got motorcycles. Hondas, Harleys, Suzukis. Got 'em all."

Carey then interviews W. Michael Cox, economics professor at Southern Methodist University and chief economist of the Federal Reserve Bank of Dallas. "That's America's middle class today," Cox notes about the boaters at Castaic Lake. "It's amazing what they're able to own and the consumption levels they're able to achieve today compared to the past."

The secret, according to Cox, involves the startling, rapid, and continuing decline in the real cost of most consumer goods because of soaring technology and enhanced productivity. "Really the best way to measure cost is work time: how long do I have to work in order to afford to buy something. So let's take a product--for example, the cell phone." The video shows a huge, boxy, "antique" phone from 1984--"a $4,200 brick." Dr. Cox then holds up a sleek, versatile, contemporary cell phone that costs $50, and explains that for the typical worker, today's device can be purchase with 3 hours of work, while in the 1980s it took 460 hours of work to buy a cell phone. "Huge declines in prices enabled these things to be afforded by the middle class," he notes. "And many other products too."

I could go on, but you get the idea. It is just strange to cite a couple of cranky old guys as authorities on the United States economy.

Also, you are just plain wrong when you say that capitalism has an "insatiable demand for cheap labor". You could just as easily say capitalsim has an "insatiable demand for expensive labor that is very productive" (see e.g. Microsoft in the 80s) or an "insatiable demand for a good return on its capital investments", etc., etc. The question of how a corporation maximizes its profit involves a lot of different factors. Your notions of what capitalism "demands" seem to come exclusively from reading Marx -- time to crack open a couple of volumes of Friedman and Hayek (or how about just an Economics 101 textbook?!)

Finally, what I do think is interesting about your post, is the idea that some work is more meaningful than other work. Your back and forth with Lydia was a good start at refining this idea -- ultimately, I think Michael Bauman is right that we'll have better results (in the sense that more people will wind up doing more intristically good work) if we do more to cultivate true free markets in labor if we get the federal government out of the way. I want local communities to be able to say no to products they don't want (like porn) and yes to companies that want to hire workers without union regulations.

Mike T,

You have given too much credit to man. God is the creator of all goods. He contributes everything to every company. How silly it is to suggest that a man contributes more to the bottom line that some other and so he deserves more. Our Lord tells us of the Laborers in the Vineyard, whereby we are to understand that the Master produces all of the work for the benefit of the workers. Goods exist fundamentally to do the work that God wants done. Hence, the man supporting a wife and ten kids deserves more, in justice, than does a single man in similar circumstances.

Now, I wouldn't expect a secularist to agree with any of this, but it should be obvious to the Christian. God creates ALL goods. They are His.

Jeff Singer,

I'm not sure your statistics and anecdotes are relevant. How many kids do these recreators have? Are they supporting their wives so that they can be at home raising the kids? Jeff is not talking about consumer goods. He is talking primarily about housing and groceries. And while it is true that the real dollar cost of groceries has gone down, the real cost of housing has gone through the roof.

Oh, and just an aside....porn is not a product in any meaningful sense, it is an anti-product, an economic and social parasite. That the capitalist "system" sees it as productive points to its inadequacy at being able to explain economic operations in real terms.

Exactly how does one determine which wages are just and which are not?

Michael, I once wrote an essay on this topic, and my conclusion is that it isn't easy to identify the "just wage" in any meaningful sense, especially in a complex environment. But it is really easy to identify some unjust wages. A wage for a full-time job that is insufficient to support health so that the standard person can continue working is less than a just wage.

While I am usually very sympathetic to Jeff's posts, this one has me really ambivalent about it. I agree very much with j Christian and Titus: comparing current earning power with that of 40 or 70 or 130 years ago is incredibly difficult. My father raised 8 kids on a bartender's income. Sounds great. Except for the following: the house he bought in 1953 had 1100 sq ft. Anyone on this blog with a family own a house with 1100 sq. ft. and feel satisfied with it? I didn't think so. (Besides the fact that we spent half of our time out in the neighborhood, which was almost safe enough to allow back then, which is no longer true.) Secondly, Dad spent most of his days off doing second jobs, he rarely had a real full day off as such. He never took the whole family on vacation ANYWHERE for an overnight stay at a beach, camp, hotel, whatever. We kids went to a private school - pretty expensive, right? Except that it was subsidized: a Catholic parish school where tuition was controlled by the parish, and tuition was waived after a family paid for 3 kids. And most of the teachers were nuns, paid effectively slave labor rates. Some of us went to college, but only because we had public help. How do you factor in subsidized living standards?

And then consider other aspects of the equation: you could get a scientific calculator for $25 in 1975 that would do any trig problem you have. Now you can get a graphing calculator that will do calculus for the same relative cost. A basic 19" color TV in 1970 could cost the same as now: except that now it is a much better product. In 1960 you couldn't get organic anything except by difficult (and expensive) searches, now you can get organic chocolate rice krispies in the local store (if you should want such a thing). In 1960 your house would have 1 hard-wired phone in the house, and calling out of area code cost big money. Now you can put in a cordless phone set with 6 handsets if you want, and talk as you move from room to room without difficulty; calls across the country might cost you a couple cents/minute. In 1960, if you had a bad heart, you died. Now you can have a stent, quad by-pass, pacemaker, or even transplant and live another 30 years. Then if I wanted to be in non-school sports, I had little league baseball, no other choices. Now, my kids can be in soccer, karate, gymnastics, flag-football, basketball, dance, and probably 5 others.

The degree to which the life style of a standard working man & family in 1960 was a different life style than it is now makes it almost impossible to make the comparison apples-to-apples in a meaningful way.

Nevertheless, it is pretty clear that it IS more difficult for a man to graduate and find a job that is reasonably likely to provide sufficient income for him and his family, on a long-term basis, without probable moral contamination, than it was in 1960. It is not clear that this situation indicates more difficulty than that faced by peasants in 1830, or easily displaced farm laborers in 1870, or uneducated urban dwellers in 1920.

Just moving people on every five years for the sake of it and forcing everybody to talk the language of "development," as though there is something _objectively wrong_ with a person who wants to remain in the same position, seems to me prima facie wrong, even if in some voodoo fashion that I have yet to understand it improves the bottom line.

Lydia, for most jobs other than pure menial physical labor either the job itself, or the market for which the job supplies a needed result, changes all the time. Even if you don't want people moving into new job descriptions, or moving around to new subdivisions, the job itself changes out from underneath them. When I started with my organization in 1985, secretaries still took dictation, and typed the letters on IBM Selectrics. Soon after they got word processors, which they had to be trained on. Then a while later we all got PCs, and dictation went the way of the buggy whip. Nowadays, nobody uses a secretary the way they used secretaries in 1985.

My own job, as a mathematician, used to require 8 of us in our unit. Now 2 of us manage the same work-load, because of technology (I still have the same job name in the same unit, but the official description has changed) simplifying 3/4 of the work.

Take a janitor, a job I had in 1980. They handed me a broom and mop, and pointed me to the right floor. Today, the janitor has to know which chemicals can be used with which types of flooring, has to keep documents and emergency protocols on the different products so that if there is an injury the right medical treatment is known, has to observe proper safety protocols with wet surfaces and moving items out of the way, and has to follow security arrangements throughout. None of this is very difficult, and it still well within reach of a high school graduate (as long as he can read a product ingredient list), but does require regular training and updating of skills. I would hazard a guess that there aren't more than 3% of the jobs out there today that can be accomplished in the same manner that they were done 15 years ago.

Which isn't to say that I agree with change for change's sake. Any company that insists for all employees that they move up or move out, they are effectively shooting themselves in the foot. And I believe that the current mania for "development" will crest at some point, with managers realizing that once you have developed a person to a certain point, further development could be harmful to the bottom line in one of several ways (including encouraging a productive worker to leave and make money for another company). But the silliness isn't a direct tie-in to capitalism, or even to modern shark-bound capitalism as such, I think. It is due to a stupid theory about productivity and business management styles that will eventually go out of style.

Overall, I think that having large percentages of married women out in the workforce has been seriously harmful to society, both by damaging the capacity of men to provide, and by damaging the internal order of the family. If I were an employer, I would institute a policy of requiring married workers to identify which of the couple is the primary breadwinner. This person would be held to a standard of commitment to company productivity that would not apply to non-breadwinners. For example, if a kid gets sick, the non-breadwinner is assumed to take time off and stay home, not the breadwinner. Much more generally, though, I believe it is damaging to a marriage to have a wife under the direct authority of an employer independently of her relationship to her husband, so that she is forced to balance and negotiate discrepancies in values and requirements between competing authorities needing her time and energy.

I am extremely fortunate: my wife was able to stay at home and just be a mom for the first 14 years of our marriage. Now she is an independent contractor working out of the home, so that she can generally work her job obligations around her primary duties of mother and (homeschool) teacher. I recognize that these circumstances are part of providential benefits for us; but they are also due to careful decisions about how to order our family from the start, so as to be able to take advantage of opportunities as they come along.

I think Michael Bauman is right that we'll have better results (in the sense that more people will wind up doing more intristically good work) if we do more to cultivate true free markets in labor if we get the federal government out of the way.

Workers will also get a better life/work balance by virtue of the fact that independent contracting will become the norm again. A company cannot work a 1099 100 hours a week without paying out the nose for his labor!

Michael:

Apparently some folks think that an unjust wage is a bit like pornography: You can't actually identify it, but you'll know it when you see it. Forgive me if I don't find such notions terribly compelling.

Lydia:

... is this based on anecdotal evidence, ...

(1) In general, analyzed at a strict level of profitability and setting aside more human concerns, some level of turnover is healthy for a large capitalist organization and good for profits.

We've discussed a number of reasons why in the past.

One is that workforces have a kind of inherent life cycle not merely a fixed value as a fixed production machine. Human beings stand in relation to jobs. Even if jobs were static never-changing things, which they are not, the person holding that job goes through a productivity and cost life cycle: early on an inexperienced employee is lower compensated but also less productive; productivity versus cost peaks at some point; then it drops off for a whole variety of reasons. Barring a more granular approach, which itself costs money to implement and therefore may not be the most efficient choice when making large-scale decisions about large workforces, it is profitable to periodically fire people with a certain tenure in certain positions just because. Note that even if there are more "intelligent" processes involved in deciding the exact who's and when's at a lower level (assuming that it is an efficient use of resources to do so, which it might not be), the guy running the organization of 10 thousand employees ought to expect a certain optimal job tenure in his organization, and when it starts to fall outside of that band he will see lower profits as a direct correlation.

Another, related to the first, is that employee churn keeps the company culture well-grounded in the surrounding culture, in this case the culture of uniform PC tyranny. That means that wherever one company interfaces with another the interface runs smoothly and predictably from a cultural standpoint: personal and cultural clashes irrelevant to the immediate pursuit of profits are minimized in all sorts of transactions, ranging from simply supplier relations to mergers and acquisitions, etc.

(2) In particular, in present circumstances on average for large private institutions that rate is measured in years not decades.

Both of those are my personal judgments, based on my own personal thoughts, education, experiences and observations. If that makes them "anecdotal" then so be it: to my way of thinking that would function to raise the epistemic esteem in which we should hold the category "anecdotal", rather than undermining the conclusion in any way.

Zippy,
Should I take what is now your second evasion of the question regarding distinguishing a just wage from an unjust wage unjust wage to be your tacit admission that you have no answer and do not know?

The question concerning unjust wages is a perfectly legitimate one, and highly practical. So, do you want to try for three? How can we distinguish a just wage from an unjust wage? What criteria of evaluation ought we to employ?

If you don't know, or if that method does not exist, just say so. But if you do know, why keep it a secret?

Jeff Singer's post reminds me why I am no longer a neo-con.

Never mind that the divorce rate is over 50%, our kids are graduating with 8th grade educations (if that), loads of people are on anti-depressants and anti-anxiety medications, hundreds of thousands of children are obese, high school grads can't read, write or make change, our airwaves are loaded with banal ephemeral rubbish and/or porn (the latter of which by conservative estimates is a $2.5 billion industry), etc., etc.

But none of this, of course, has anything to do with consumerism, commercialism and the economy. Because, hey, look at all the cool stuff we have!

Our new bread and circuses are McDonald's and Vivid Video.

Jesus, what a mess.

Rob G,

And your comment in response to mine, reminds me why I still am a neo-con. My first job was at McDonald's and I still think back fondly on the experience -- in terms of Jeff's idea w/r/t meaningful work I spent eight hours on my feet working hard to make sure the cutomers that came in got what they needed in a timely fashion, the dining area was clean, etc. (I worked behind the counter). I love McDonald's food to this day (and loved it as a 16 year old kid) but here's the rub -- I have enough common sense to know not to eat it every day of my life and that it can only be a part of a balanced diet along with lots of exercise to stay healthy. Ray Kroc was a genius and a true American original and I will defend him with my dying breath.

The divorce rate is starting to come down from its highs of the 1970s, and I think recently dipped below the infamous 50% mark. But as for divorce and the rest of your list of moral and social problems -- what does this have to do with capitalism and the free market? Folks have choices -- they need to look to Christ and tradition for how to make better choices and the market will help them. Yes the internet can bring sexual perversion into your home, but it can also bring a home schooling curriculum to make it easier for Mom to stay at home and educate her kids. How people make use of the choices they have is the question before us.

Finally, I don't understand the hostility to Michael Bauman's question, which seemed reasonable to me the first time he asked and still seems reasonable the third time.

Tony, I think your comments have much to commend them. I do agree with you that workers now need to be able to learn to handle new technologies and processes more frequently and rapidly than workers used to need to do. But you and I also agree that "move up or move out" (not to mention "just move out, you've been here too long") per se doesn't reflect this. For example, if one had a person who was unwilling or unable to learn to use a PC, one might well develop a conflict (circa 1990, say) between company loyalty to old Miss Jones, the technophobic secretary who's been with us for 20 years, and productivity. But if Miss Jones readily gets her skates on and learns to word process with the best of 'em, the fact that she's been with the company for 20 years certainly is not a reason in itself to move her out! I'm glad to hear you say that "change for change's sake" is "due to a stupid theory about productivity and business management styles that will eventually go out of style." (And may you be right about your prediction) Maybe you and Zippy should duke this one out somewhere. :-)

In passing I'd also note that your observations about a job as a janitor may be in part a result not of natural societal and economic change but of vastly increased liability insanity and busy-body federal regulations (environmental, etc.). But you might agree with that.

Zippy, if I'm understanding you correctly, I take it that the mechanisms you propose are roughly something like this:

1) As people get older and settle down, they reach a peak of productivity and then get less productive for reasons that aren't fully understood but that may have to do with age and/or laziness.

2) If all the other companies are engaging in "employee churn," and if the culture as a whole is constantly changing, getting PC in different ways, and so forth, companies will profit if they engage in "employee churn" as well to prevent the company from becoming countercultural, accidentally or on purpose, by being too insulated from "new blood" from the outside world. Thus mindlessly turning over employees brings up profits by keeping the workforce generally on the same page--politically, morally, in familiarity with popular culture, etc.--with the world outside the company.

As to number 1, I can't help thinking that it would indeed be more productive to try to use "smarter" processes to identify actual downturn in individual employee ability and productivity rather than just chucking people. I would also note that a person's actual life cycle does tend to work in decades rather than years, so this particular proposed mechanism, if I'm understanding it correctly, doesn't seem to mesh well with the prediction of years rather than decades. For example,if a worker's most productive years are typically those between the ages of 30 and 50, kicking him out of your company at age 40 because he's been there for five years is dumb. This also doesn't especially seem to apply to mindless "moving around" _within_ a company.

Number 2 is the most interesting mechanism suggestion I've heard on this yet. I would think it would depend a great deal on the specifics of the product whether this would actually work out this way. In any event, given the costs of constant turnover, it still seems rather conjectural--that is, the costs of firing and retraining are clear and concrete, whereas the alleged benefit of (in very broad and general terms) "keeping the company workforce up-to-date" seem like guess-work.

That aside from the moral issues, where I do stand by my statement that even if I could be convinced that change for change's sake were profitable, I wouldn't support it.

Ben Said:

Hence, the man supporting a wife and ten kids deserves more, in justice, than does a single man in similar circumstances.

Hence, it it is a wage that varies depending on the situation of the wage earner.

The problem with the idea of the living wage in this situation is that it would be government enforced. If would end up becoming like a new form of government welfare. In this situation, instead of the employer measuring a worker by there performance, the government would instead measure how much he should be pay determined by there personal situation or home life (in our current liberal society they would probably take in factors such as Sex, Race, Sexuality, Age etc). It would deprive the businesses of being able to organise there capital for the good and efficiency of the company, or even instituting a normal reward system based on employee performance, the external factors unrelated to the function of the business would override the companies internal ability to function and organise properly. In this situation it would mean that to get a higher wage all you would have to do is have more kids, or get married and so on, it would lead to people gaming and milking the system, plus it would also lead to (what I perceive to be) an unjust system were employees are judged, not by performance, but because of there personal situations.

If the business instituted its own living wage, done without the need for government intervention and decided to pay its workers based on there personal situation (so they could determine wither or not the employee is trying to game the system) and could personally see who was most in need of extra pay or a promotion,(and could determine each case by its merits, taking into consideration the workers performance and personal situation equally) I don't think there would be any problem with this. (The only way I could see this happening, is if some forms of public discrimination were allowed and if we reinstituted a sense of higher moral ideals back within the very foundations of our society.)

Ben and Michael, a socially satisfactory wage is a wage that matches up work capacities and energy invested with outside-of-work requirements, WHEN those out-of-work requirements are also in sinc with the person's capacities. A single person who in incapable of managing his own life (like a teenager still in school, who must needs have someone else managing his welfare) is unlikely to be able to give his employer enough time, energy, or capabilities that will contribute to the profitability sufficiently to justify a wage sufficient to wholly support himself, much less a family. Therefore, a just wage for such a person probably would be less than that needed to support a person. On the other hand, a person who is capable of happily managing a family consisting of wife and 5 or 6 children during non-work hours is probably capable of providing to an employer considerable organizational capabilities, and possibly significant leadership capacity. If he also has specific company-related technical knowledge, and the company employs him in a job that uses all of these qualities, then the socially acceptable wage for this guy would seem to be a minimum sufficient to support a wife and several children.

To put it more succinctly: if a person's capacities are fully employed in his home obligations, and his home obligations do not exceed his personal capacities, and his personal capacities are fully employed in his job, then his wages ought to be sufficient to take care of his home requirements.

The hard part of just wage theory isn't really that of knowing how much is fair - a reasonable range can be fair, and it is not THAT hard to figure out how to land in the reasonable range. What is really hard is getting to the point that a person's in-the-job capabilities make use of him to the same extent that his outside-of-job life, both capabilities and obligations, can met. For this reason, a person should always be ambitious enough for job "development" towards a goal of being sufficiently used in his job that his job uses him at least as much as his home obligations need him. In the ideal, a happy person is one who finds himself applying himself fully in both home life and job life, and the job provides the material needs for that home life in a manner appropriate to his capacities.

On another level altogether (and trying to make sense of the last phrase "in a manner appropriate to"), I think that the Bible gave us a small little rule that helps guide us when we talk about "station in life," as someone did above. In the old days, station meant social station into which one was born and from which one could not move: slave or free, servant or master, serf or landowner, guild or merchant, gentry or nobility. Today "station" cannot be understood in the same way, and we certainly move around in social strata, depending mainly on our income level (though on other things as well). "Suitable to our station" cannot be a very good guide to just wage when station is determined by income.

The bible says "do not muzzle the mouth of the cattle that treads the corn." My application: a person should be paid enough to be able to afford the sorts of goods at home that he is surrounded by in his work. If his energy at work is sufficient to make good profitable use of a high-speed internet connection at work, then he should NORMALLY expect to be able to afford a high-speed connection at home - all other things being equal. If a mechanic is high-quality enough to have his manager prefererentially chooses him to work on expensive, high-end cars because he is a true master-mechanic, and he fixes them superbly in minimum time, then he ought to be paid enough to reflect that kind of high quality in some things at home. If a job as pilot has a guy staying in hotels regularly, he ought to be able to expect to afford staying in hotels at least some of the time on vacation. Much more importantly: if a job not only assumes a college degree but actually uses that college training integrally, then it ought to pay enough for the employee to expect to pay off reasonable college loans, and eventually to be able to put his kids (that intelligently want college education) through college without federal subsidy. (The fact that our social environment obscures and disguises true costs with all sorts of subsidies makes it more difficult to wend our way through a determination of just wage with confidence: complexity decreases certainty, invariably.)

Just checking in briefly ...

Bravo! to Tony's remarks on just wage theory. Thank you.

I'm not in favor of government wage controls in this economy apart from, possibly, a minimum wage. It is up to employers and employees to act justly with each other. It might be possible to implement some structural changes to reward just behavior in the corporate world - tax breaks for companies with high average wages (adjusted as needed) - but that's another discussion.

Lydia - You are correct about reciprocal loyalty, of course. Trade unions need not be antagonistic to their employers. I have worked with collective bargaining and have found circumstances of excellent reciprocal loyalty, though it was admittedly the exception to the rule. The infiltration of American unionism by communists and organized crime has muddled things unnecessarily.

Also - large corporations as employers create a lopsided power and loyalty relationship. Persons can be loyal, and can inspire or merit loyalty. A corporation is not a person, and by virtue of credit and capital is much more powerful than its employees, individually or collectively. The corporate employer-employee relationship is by design impersonal and therefore resistant to anything beyond contract loyalty.

And yet it must be granted that the agents and shareholders of a corporation are indeed capable of acting justly, and when they do, they deserve the loyalty of their employees and subordinates.

Lydia, very briefly:

Yes, at lower levels implementation of more complex processes may or may not be efficient uses of capital. (You should consider the possibility that there isn't a universal rule here). But from the corner office, there is a direct correlation between being 'out of band' on turnover (and internal job changes) and lost profits. The mind rebels, perhaps, but reality always wins.

Second, I expect that which things are - and the extent to which they are - guesswork is probably counterintuitive to everyman.

Michael:

I am perfectly fine with an epistemic analogy between unjust wages and porn, so I dunno what exactly it is that you think is evasive.

Tony, you kind of lost me with the muzzling the ox thing. How would it apply to a guy who drives a limo. for a living?

One major problem that I have with the living wage idea is that I don't see anywhere that it takes into account the necessary prudence and forethought of the person who gets married or wants to get married. If you have an employee in a job that doesn't look like it's going to pay a wage that would enable him to support a family, and he goes ahead and starts a family anyway, why is that the employer's problem rather than the employee's? One can make this especially vivid in the case of adoption. A man is married but the marriage is infertile; he's in a job that doesn't pay a "family wage." Then he and his wife _decide_ to adopt a child (or even three or four children!), and suddenly this all by itself obligates the employer to pay him enough to support that family? Something just seems wrong about that to me.

If driving a limo were a job that takes a special personal capacity, and uses that capacity to the full, that would be one thing. But anybody who can drive a long car can drive a limo.

About the prudence and forethought: I agree completely. A person ought to be trying to MATCH UP his capacities and his obligations, not exceeding one or the other. It takes prudence to do this. A person who can handle 2 kids ok, but will be stretched to the breaking point handling 5 kids, should exercise prudence about that. A person who gets married and lands a job as a burger flipper ought to be thinking ahead: if he imagines that he has the potential for raising a family, then he better also think that he has the potential for a more demanding job. And he better do something about it: take classes, ask about training, etc. It is primarily the individual's obligation to make sure that he matches up his capacity for providing usefulness to an employer and his capacity for familial obligations, NOT the employer's. But it is the employer's responsibility to offer a wage that makes coherent sense of the capacities expected for a job, and the capacities used and obligations a person of that sort would willingly take on at home.

The biggest potential flaw in this picture, I think, is that there is no guarantee that most jobs actually require personal capabilities comparable to those of maintaining a family. Which might say something about the economic organization of jobs in society. Or it might indicate that my theory is hogwash. :-)

Zippy, I did not quite follow your last comment. Did you mean you agree with Lydia's presentation of the 2 mechanisms for why a company would push churn-over?

Lydia, I agree completely with your comments on mechanism 1. I am not in the least bit confident that such a drop-off of productivity has been identified by data, but even if it had, it seems highly likely that there are better solutions to the drop-off than throwing out the experienced employee for a new one.

As for mechanism 2, keeping up with the Joneses of other companies, I thought your critique was remarkably restrained. It sounds like clap-trap psycho-babble from where I sit. Since many of the purposes of market-place competition revolve around to doing something better than your competitor, if your competitor is doing something that of itself is mindless, then it should give your company a keen competitive edge to be known far and wide as doing it differently. Microsoft didn't get big by doing everything the way their competitors were doing it. Every time a big business guru makes it big, he writes a book on how he does it differently from "all the rest." Conformity has extremely limited value.

It seems at this point that Pius XI needs to be quoted.

From Quadragesimo Anno (my emphasis):

In the first place, the worker must be paid a wage sufficient to support him and his family. That the rest of the family should also contribute to the common support, according to the capacity of each, is certainly right, as can be observed especially in the families of farmers, but also in the families of many craftsmen and small shopkeepers. But to abuse the years of childhood and the limited strength of women is grossly wrong. Mothers, concentrating on household duties, should work primarily in the home or in its immediate vicinity. It is an intolerable abuse, and to be abolished at all cost, for mothers on account of the father's low wage to be forced to engage in gainful occupations outside the home to the neglect of their proper cares and duties, especially the training of children. Every effort must therefore be made that fathers of families receive a wage large enough to meet ordinary family needs adequately.

We need to be mindful that marriage and parenthood is work that God calls us to. It is a vocation to be discerned, not a lifestyle choice.

~~But as for divorce and the rest of your list of moral and social problems -- what does this have to do with capitalism and the free market?~~~

First of all, finance/industrial/corporate capitalism isn't really capitalsm, and today's market is in no sense free. And no, I don't just mean government interference and regulation.

Four or five gigantic corporations control upwards of 80% of the food we eat. For the music we listen to it's even worse. The "market" determines the crap we eat, the crap we watch, the crap we listen to. Corporate America is selling us ideas and opinions diametrically opposed to our faith, and we eat them up like candy.

Of course it's easy to say it's a "demand" problem, that we need to change hearts so that they demand better and more honorable things. While this is true enough, that's not the whole answer. Advertising, including sexual advertising, is used to create demand for things, the vast majority of them in no sense necessary, and that no one would want, other than because Madison Ave. created and/or fostered the desire for them in the first place.

While this type of capitalism may not be coercive, it is compulsive, in the sense that it steers and guides people into certain attitudes vis a vis lifestyle and what things need to be purchased in order to have that lifestyle.

Culturally we're falling apart, but the "market" doesn't care, provided we keep buying its crap. We are swirling down a toilet, for which capitalism, understood in its contemporary sense, is happy to provide a sexy gold lining.

In other words, the consumerist/commercialist aspect of modern capitalism lives in a symbiotic relationship with cultural decay. If you can't see this you need to put away Hayek and Friedman, and read some Kirk and Weaver. And Wendell Berry. Lots of Wendell Berry.

"...wherever it can be said to exist at all, the kind of leisure provided by modern capitalism is a dubious benefit. It helps nobody but merchants and manufacturers, who have taught us to use it in industriously consuming the products they make in great excess over the demand. Moreover, it is spoiled, as leisure, but the kind of work that modern capitalism compels. The furious pace of our working hours is carried over into our leisure hours, which are feverish and energetic. We live by the clock. Our days are a muddle of 'activities,' strenuously pursued. We do not have the free mind and easy temper that should characterize true leisure. Nor does the separation of our lives into two distinct parts, of which one is all labor--too often mechanical and deadening-- and the other all play, undertaken as a nervous relief, seem to be conducive to a harmonious life...We cannot separate our being into contradictory halves without a certain amount of spiritual damage. The leisure thus offered is really no leisure at all; either it is pure sloth...or it is another kind of labor..."

Berry? Kirk? Neil Postman? Nope. Donald Davidson, from I'll Take My Stand, published in 1930. I substituted the words "modern capitalism" for his word "industrialism," by which he meant pretty much the same thing. If he could write that 80 years ago, what on earth would he think of today's "leisure" and how it's spent?

To Jeff Singer:

I don't mind having my anecdotes refuted by data. Please feel free to launch some relevant numbers at me. But all you have shown me thus far is this: Americans appear to be satisfied with small, double income families and mountains of debt.

The biggest potential flaw in this picture, I think, is that there is no guarantee that most jobs actually require personal capabilities comparable to those of maintaining a family. Which might say something about the economic organization of jobs in society.

If most jobs do not require this level of capability, I think they easily could without departing much from their original descriptions.

But the fundamental problem is that jobs which do "require personal capabilities comparable to those of maintaining a family" do not, in fact, pay enough to maintain a family.

But the fundamental problem is that jobs which do "require personal capabilities comparable to those of maintaining a family" do not, in fact, pay enough to maintain a family.

That has been my point - the idea of work being connected to family is being eroded by all of the forces aligned against the family. The idea that one could work at a job for thirty years was akin to the idea of the permanence of marriage. Today, with marriages of convenience as opposed to sacrament, there is no incentive to see one's job as an Opus Dei, much as one might see marriage.

Things like diversity and globalization with regards to work are simply the masculine counterpart of the feminist idea that any type of relationship with a human being, be it marriage or a liaison or mistress or lesbian lover, is equally acceptable as long as it leads to fulfillment.

Simply put, the change in the modern view of work is a spiritual problem, fundamentally, and an economic problem secondarily. It is a problem at the level of relationships.

The Chicken

Great comment, Chicken.

I must say, Rob G, that yours are the kinds of comments that tempt me to dismiss all such critiques wholesale, precisely because _they_ are so wholesale. The ____ we eat? Actually, we now have access to _enormous_ amounts of good food, much _better_ food than was available when I was a child years ago. I believe Tony touched briefly on this above. This reminds me of the way that people refer to everything sold at WalMart as "junk." Really? Does that apply to the lovely, feminine comforter I just bought there for my youngest daughter that I couldn't find anywhere else? It's the kind of thing that makes me just wave my hand, shake my head, and thank God for the free market. Really, a more nuanced critique would get you farther.

Comment on loyalty in large companies (which Jeff Culbreath and I were briefly discussing above): I think it's fairly natural in any large outfit for the greatest loyalty to be between people and their immediate superiors. Nor is this entirely artificial, because the immediate superiors may have the power of hiring and firing and be "the boss" in a real sense. During the years when my husband was chairman of his department (which he didn't really enjoy), he had a wonderful secretary who got him through. He had no power, unfortunately, to increase her pay, but he was in other senses her employer. There was a lot of mutual loyalty between them to help each other get the work of the department done and get the department through during a financially rough time at the university. This despite all sorts of other differences they had on politics and what-not. I imagine that kind of thing is possible in other large companies as well.

Zippy, I did not quite follow your last comment. Did you mean you agree with Lydia's presentation of the 2 mechanisms for why a company would push churn-over?

Furthermore, the idea that it is a priori dumb to just have a simple churn policy at the level of the corner office rests on an equivocation on the word "dumb". I mean, I agree that it is dumb, and inhuman, in general, for a CEO to tell his officers that they must meet a specific employee churn metric, period. But we've defined "smart" specifically as quantitatively maximizing profits, and when smart is defined that way it is smart for large organizations to have such a policy. Some may think that the actual firing and job-shifting should be done more intelligently without a top-level metric like that, but experience shows that that costs more - every time we insist on a more complex process there are costs and other externalities associated with doing it - and doesn't work as well.

You could think of an employee churn machine as a kidney. Sure, sometimes a kidney makes "irrational" decisions at the level of individual cells and particles to filter. But so what? An organ capable of accomplishing the same systemic task without those "irrational" decisions at the low level would be too complex and unwieldy to work at all, let alone work as well as a kidney.

The problem is not that employee churn is irrational when the primary goal is profit. Employee churn is ruthlessly rational when the primary goal is profit. Which takes us directly to the Chicken's most excellent comment.

"...wherever it can be said to exist at all, the kind of leisure provided by modern capitalism is a dubious benefit. It helps nobody but merchants and manufacturers, who have taught us to use it in industriously consuming the products they make in great excess over the demand. Moreover, it is spoiled, as leisure, but the kind of work that modern capitalism compels. The furious pace of our working hours is carried over into our leisure hours, which are feverish and energetic. We live by the clock. Our days are a muddle of 'activities,' strenuously pursued. We do not have the free mind and easy temper that should characterize true leisure. Nor does the separation of our lives into two distinct parts, of which one is all labor--too often mechanical and deadening-- and the other all play, undertaken as a nervous relief, seem to be conducive to a harmonious life...We cannot separate our being into contradictory halves without a certain amount of spiritual damage. The leisure thus offered is really no leisure at all; either it is pure sloth...or it is another kind of labor..."

But is the American obsession with time due to modern capitalism or industrialism or is it simply the nature of the American character of which industrialism is merely a reflection? Garet Garrett thought so, from the chapter entitled "The Feud with Time" of Garrett's The American Story:

DURING THE FIRST TWENTY-FIVE YEARS, OR, THAT IS, NOT until after the second war with England, which might be called our coming-of-age war-not until after that had anybody noticed any difference between the Old World and the New in the tempo of life. A visitor from London or Paris could be at ease in Boston, New York or Philadelphia. There was time for everything and a little to spare.

Then suddenly it was different. The tempo of American life began to rise, faster and faster and the higher the faster, and presently it was as if these new people in a new world lived in a time dimension of their own. Then when visitors came from the leisurely life streams of Europe they had the alarming sense of shooting the rapids.

Nor was this for just then or for a while. A mortal feud with time came to be the nature-way of the American.

Imagine four or five million people living on the Atlantic fringe of the North American Continent with no more than a toe-hold there, only the most primitive means of communication, no proper tools, no engines, no industry, no capital. Right behind them a forbidding mountain barrier and no
roads; beyond the barrier a wilderness full of savages to the Mississippi River; beyond the Mississippi River two thousand miles of awesome plains inhabited by the terrible buffalo;
next a most amazing mountain barrier hardly crossable at all, and then the Pacific coast which belonged to anybody who would have the hardihood to take it. The Mexicans were already there and the Russians were sifting down from the north.

If the Americans were going to grapple this continent to themselves, do it with their bare hands, and do it before a land-hungry world could see too much, they would have to be in a hurry.

Yet after they had performed this incredible feat, after they had bound their continent together with bands of steel and it was entirely safe, still their feud with time went on. When they were fifty million, then one hundred million, and already the richest people in the world, still their minds were obsessed with time saving inventions of method, device and machine, as if they knew how much more there was to do and were fearful that they could not get it done in time.

Lydia, I am not saying that there are no benefits to capitalism. Far from it. What I am saying is that any discussion of economics, the market, etc. that does not include culture as a factor is missing a huge piece of the puzzle. Contemporary conservatism tends to see the primary "conflict" in today's world as that of statism vs. capitalism; while there is a certain element of truth in this reduction, it is, nevertheless, a reduction. It either leaves out the cultural aspect of the thing altogether, or falsely compartmentalizes it in a way that implies that it has no bearing on the conflict.

The same "market forces" that give us cheap food and clothes also give us rotten music and movies, shoddy disposable goods, and porn. To me, this is neither an acceptable trade-off nor a necessary one. But if we want to have any sort of cultural reversal in these problematic areas, we will need to look at how the corrosive effects of the market -- consumerism and commodification of the human -- are playing a part in the problem.

Remember that Adam Smith was both an economist and a moral philosopher. The Wealth of Nations needs to be read in light of the moral understanding provided in The Theory of Moral Sentiments. What modern conservativism does, symbolically, is concentrate entirely on the former while ignoring the latter.

Jeff C,

You say that "all you have shown me thus far is this: Americans appear to be satisfied with small, double income families and mountains of debt." Of course, none of the Medved data and/or stories mention debt, so I assume you are reading between the lines. But given that we both know there are lots of Americans with lots of debt -- again, I say, so what? All that tells us is that some people are making bad decisions, but not everyone because some of that debt makes sense. During the naughts I took advantage of low interest rates and refinanced my home a couple of times and even took cash out during one refi, but this made sense for me because I had a lot of equity in the home, I used the cash for some home improvement projects, and the refi lowered my monthly payments. In other words, I evaluated my own situation and made an informed decision on what was best for me given my circumstances. I also practice thrift and save for the future -- character traits that were instilled in me by my parents (and wife!)

Again, I say that the data I presented demonstrates that anyone in America can flourish and yes, raise a large family if they so choose as long as they are willing to practice thrift and save for the future. They can do so as a barber or as a warehouse operator. They will have to work hard and they may not be able to live anywhere they want (depending on the State and neighborhood, homes and taxes are going to vary) -- but they can do it. To argue otherwise is to ignore just how much the capitalist system in America continues to provide for the average person.

Rob,

That reduction is mainly the product of people not understanding that there is a continuum between pure Capitalism and Socialism. Fascism occupies the center, and in many respects, the US economy leans closer to Fascism than Capitalism. You cannot say that in polite society because liberals think Fascism is just a dirty word that means "whatever liberals don't like" and to conservatives, to even suggest that the US economy is profoundly non-Capitalist is morally equivalent to treason.

The federal government works hand-in-hand to regulate and tax businesses toward national goals. It gives them enough freedom to be profitable and innovative, but it tightens the leash or dolls out subsidies whenever it needs to "correct the course." Agribusiness is a great example of why the US market is not Capitalist as it is supported almost entirely by federal subsidies.

You can't critique our economy and its "market forces" without at least acknowledging that there is another hand that constantly smacks the "invisible hand" with a ruler on a regular basis.

Again, I say that the data I presented demonstrates that anyone in America can flourish and yes, raise a large family if they so choose as long as they are willing to practice thrift and save for the future. They can do so as a barber or as a warehouse operator. They will have to work hard and they may not be able to live anywhere they want (depending on the State and neighborhood, homes and taxes are going to vary) -- but they can do it.

If it were easier for men, especially blue collar workers, to be self-employed, many of these things would resolve themselves. The tax and regulatory structures are set up to discourage an environment where workers move around constantly, doing whatever they want to for a buck because that is costly to big corporations and an enforcement nightmare for the IRS.

It is also the only way for men to be paid according to their labor's value. Imagine how much better off a typical barber would be if all he had to do start a business was rent a store front, put up a sign and install his equipment...

Amen to that, Mike T. It's the kind of point I've made often: People who are concerned about the little guy who wants to take care of his family need to start looking at the heavy regulatory burden in this country, _especially_ the tax complications.

Alternate universe Bush, senior:

Read my lips - No old taxes!

The Chicken

Absolutely, Mike T. I understand the fact that the gummint's got its tentacles everywhere, with regulations and all manner of other interferences. But this does not mean that all problems in a market economy result from government interference, which seems to be what many modern conservatives are implying. The ruler smacking the invisible hand may do so too much and too hard, but this doesn't negate the fact that often the hand does need smacking.

Mike T. and Lydia,

Amen to both of you. And it's not just the taxes -- zoning regulations can be just as burdensome. Chicago's Mayor Daley loves wrought iron fences and requires businesses that own land on certain lots to install these fences NO MATTER WHAT. I have a friend who owns a Jiffy Lube and he was really annoyed that he had to install a fence to comply with this ordinance, which cost him something like $18K -- not a huge cost in the grand scheme of things, but during a recession in a business that relies on high volume and has low margins, it definitely impacted his bottom line. But the Mayor wants the City to have a certain look and while I can understand the Mayor's concern with aesthetics, my friend's Jiffy Lube is on a busy commercial street far away from the touristy downtown. The regulatory and tax burden on small business owners is not good here in Chicago -- heck it's not even good for WalMart which is why there is only one store in the City when there could be up to 20 but the City Council and its union allies insist that WalMart pay a "living wage" and so WalMart says thanks but no thanks, it doesn't make economic sense to have the City of Chicago tell us what to pay our workers. So folks like me drive across the border to Niles to shop at WalMart and Chicago loses twice -- jobs lost and sales tax lost.

Remind me why I love this City so much -- oh yeah, I guess I'm a cranky conservative in certain ways after all!

"People who are concerned about the little guy who wants to take care of his family need to start looking at the heavy regulatory burden in this country, _especially_ the tax complications."

Of course, but this is not an either/or! Who does the heavy regulatory burden and tax complications generally favor? Big business. It can afford to take the steps necessary to adhere to the regulations and tax strictures. The little guy, not so much.

As far as I know it does not cause a rupture in the space/time continuum to declare that one is both anti-statism and anti-finance capitalism. Or to put it another way, that one can be at the same time profoundly suspicious of both big government and big business.

Absolutely, Mike T. I understand the fact that the gummint's got its tentacles everywhere, with regulations and all manner of other interferences. But this does not mean that all problems in a market economy result from government interference, which seems to be what many modern conservatives are implying.

Not all, but most problems.

For example, most people don't know this, but federal income tax regulations were changed in 1986 to make it extremely difficult for IT workers, software developers and engineers to work for companies as independent contractors. The logic behind this is that companies were "cheating people out of benefits" and cheating on their taxes. The real reason for this was that big corporations didn't want to have to pay these people hourly anymore.

For a lot of middle class Americans, the federal government has greatly restricted their ability to earn a living without them even knowing it.

As far as I know it does not cause a rupture in the space/time continuum to declare that one is both anti-statism and anti-finance capitalism. Or to put it another way, that one can be at the same time profoundly suspicious of both big government and big business.

Big business is mainly a creature of government policy. It's rather telling that when America was at its most capitalist, there were dozens of auto manufacturers and over 22,000 banks and credit unions (where today, there are only three non-startup car companies and less than 5,000 banks and credit unions).

"Not all, but most problems."

Percentage of blame doesn't signify here, in my opinion, because it's impossible to determine with any degree of accuracy. Like I said on another thread, when you're fighting Leviathan it doesn't matter much which side of the head you whack him on.

The problem with many of today's conservatives is that they don't see finance capitalism's genetic material in the beast at all.

"People who are concerned about the little guy who wants to take care of his family need to start looking at the heavy regulatory burden in this country, _especially_ the tax complications."

I would note that the regulatory complaints seem to be from state and local governments - so much for the beauties of local control. BTW, re; barbers - does anyone want someone wielding sharp pieces of metal around their head who hasn't been certified in proper sterilization procedures?

What tax policies make up the entry barrier to a single proprietorship - can we have some examples?

I would like to point out that if folks aren't complaining the regulators are likely not doing their job. A few months ago my neighbor was helping me haul a water tank up one of his roads which borders the north end of our property and was the easiest access. As is usual for the folks who have timberland around here, he groused a little about the state logging road requirements. Well, a few weeks ago a logging road a couple of parcels over that was constructed decades ago, before state regulation, blew out and dumped tons of mud into the creek and bay from which other folks earn their living.

In the past few months we have seen what happens when conservatives get control of the regulatory structure for a few years - we get dead miners and oil workers.

In the past few months we have seen what happens when conservatives get control of the regulatory structure for a few years - we get dead miners and oil workers.

Which particular laws are you thinking of? When did they go into effect? I doubt the laws are all that new. They were probably passed over a number of years and from many administrations. In any case, hasn't BP broken the law, before, which would imply: a) that there were laws to be broken and b) that it is not the regulatory structure that is at fault, but the administration and prosecution of the laws? This is not a conservative regulatory problem. This is a case of everybody looking the other way, liberals and conservatives, alike. The current administration could have had periodic safety inspections that would have uncovered the high pressure in the pipeline. It did not any more than the last administration did.

This seems to be a case of a company who could afford to ignore almost whatever laws were passed. Same ol' same ol'.

The Chicken

The Chicken

al,

You ask "BTW, re; barbers - does anyone want someone wielding sharp pieces of metal around their head who hasn't been certified in proper sterilization procedures?"

My answer: yes, yes, a thousand times yes -- my wife has cut my daughters hair and they have survived just as many thousands of mothers (and fathers) teach their childern at home without credentials or licenses and the kids do fine. You have too much faith in laws and regulations governing economic activity -- I have faith in a barber's self-interest in keeping customers. Incidentally, w/r/t the BP oil disaster, you do know who has the biggest incentive for a disaster like that to never take place? Any guesses? Take a look at BP's share price and then get back to me with the answer.

One could easily fix the modern cooperate/work malaise. Two words: moral discipline. Before the availability of contraception, women had to dress modestly and men had to avert their glances for fear of inflaming desires they were not allowed to have or could not control. This led to a situation where women showed the power of femininity to control the savageness in man. With contraception, the idea that power is perfected in weakness was thrown out the window. Without the weakness of women to make the use of power in men accountable, power became, at first corrupted and then, itself, turned into a type of weakness where every passion of man was played out without thought of anything more than momentary consequences. In other words, it was the weakness of the feminine that keep men orderly and focused on the future. Without the idea that every action must have consequences (which is what contraception subverted), men began to focus on the next woman, the next conquest, the hook-up, the one-night-stand, the just-in-time buying and selling of relationships in both women and stock prices.

Make no mistake, the current state of economics is just the lagging shadow of the fundamental withdrawal of the light of virtue in the souls of the modern worker. Work is the gift of God to Adam. Children are the gift of God to women. Take the joy from the one and the joy is lost from the other; take the order away from the one and the order is lost from the other; take the modesty away from the one and the savage beast is unleashed in the other.

What we are seeing is simply the effects of selfishness acting on the soul. Contraception is not the thing that started all of this. The loss of virtue in the relationships with people both in the bedroom and the boardroom began with the actions of a single person who shouted to society, "I want," and with a society that said, "Please, tell us more." The greater the disorder in the area of weaknesses (which is what modesty and prudence are meant to protect), the greater the disorder in the area of power. Just as modern women have fled to anti-depressants instead of the confessional to gain relief from their spiritual pain and boredom (both signs of a lack in relationships), just so, modern men have fled to laws and irrational pressure instead of the idea of posterity to deal with their spiritual pain and frustration (which has affected their relationships towards work and workers).

You want to fix all of this? Bring back the idea of sin. Nothing less will do. This is the one cure we are not allowed to speak of. We, sinful? It must not be so.

The good news is that as the selfish people die out, things will turn around, but not before things get worse. There are signs that the current generation of young people are, in general, the least empathetic of any recent generation. They simply do not understand relationships beyond themselves. There is a small sub-population that is still practicing the virtues and this remnant will eventually come to dominate whatever is left after the destruction to come. As Pope Benedict said of the Church, so one may say of workers - they will survive and be purified, although their numbers may be smaller in size than they are, now.

If you want to see who has the proper view of the future, look and see where the joy is in the world. We have not yet reached the bottom of the society of despair. What we await is the coming of the people of hope.

The Chicken

"It did not any more than the last administration did."

A few months is equal to eight years? There is a pattern here. When Reagan was elected he put James Watt in as Secretary of the Interior. He trashed the agency to the best of his ability and is now a convicted felon. Jane Norton came in under W and did the same. Labor under Bush put a corporation man in as head of mine safety. Hilda Solis is a liberal and replaced him with a union man with actual experience in mine safety.

The last year or so of the Bush administration was spent placing as many of the political appointees as possible in non-political management positions (Republicans are good at this; Democrats, not so much and the Dems are terrible at cleaning house). Anyway, it would have been nice if every screwed up agency could have been fixed on January 21st of last year but it would be nicer if we didn't elect folks whose main purpose is to weaken and corrupt those agencies.

These aren't laws. The Congress sets up the guidelines and creates and/or empowers the relevant agency to enact the regulations necessary to achieve the legislative ends. The process for creating regs is also spelled out and failure to observe it can lead to lawsuits.

My point was clearly demonstrated by Texas Represenative Joe Barton's disgraceful statement this morning. Your liberal/conservative equivalency may sooth your conscience but a world run by Henry Waxman would be a far different one then one run by Joe Barton.

Putting conservatives in positions involving workplace safety is like letting a five year old drive an 18 wheeler.

al,

There is a law called "felony murder." Since the BP executives responsible for the current oil crisis in the Gulf likely committed at least one felony, it would apply to them as an additional charge.

You should be asking why it is that Obama isn't swing that axe right at their necks when it would be a goldmine of political capital from both left and right, if he were to charge them and spare BP.

Come on Jeff, perhaps your wife also cuts the hair of hundreds of complete strangers or perhaps we are talking apples and oranges.

"I have faith in a barber's self-interest in keeping customers."

This is simply unbelievable. Greenspan doesn't even believe this anymore. Where have you been. We relied on self interest to police the financial markets. That worked out well.

The Bush/Cheney approach to oil and gas regulation as well as mine safety was not to "burden" the industry unnecessarily. Your concept of self interest doesn't work because the pressures of the present cause most of us to minimize unlikely but potentially catastrophic risks. Consider this; Another few years of no blow outs and Tony could have retired a wealthy man. Our barber could easily go his whole career without transmitting Hep-C. Any theory of human behavior that fails to factor in our likely consideration of tail risk is a fatally flawed theory.

al,

You say "We relied on self interest to police the financial markets." If only it were true! The financial markets in the U.S. before and during W. were heavily regulated and distorted by all sorts of bad policies which we've talked about on this blog before. Do some serious reading before you post more nonsense.

As for the "pressures of the present cause most of us to minimize unlikely but potentially catastrophic risks", this is a potentially interesting argument but I doubt that except for a few exceptional cases, it has much real world validity. Again, the barber example (and home schooling) is perfect -- I'm not kidding that I wouldn't hesitate to go to all sorts of small businesses that were not regulated by the government. I already use contractors that are not on the "books", if you know what I mean and I generally have had good results.

You live in a fantasy world in which every businessman is out to cut corners and screw their customers (not to mention in the case of BP take risks that literally risk people's lives). Your vision of business comes straight out of Hollywood movies -- all you need to do is start worrying that businessmen will hire hitmen and your fantasy will be complete (and maybe George Clooney can play the guy who discovers the plot and saves the day).

Mike, corporations can't be spared the results of their actions and the felony murder rule isn't universal in the United states. To be sure, if this was China, the executives families would already have received a bill for the bullet but we don't play that. Negligent homicide would exclude your idea.

BP needs to pay (and they can afford it) but I would hope we get some prosecutions.

Al: This is simply unbelievable. Greenspan doesn't even believe this anymore. Where have you been. We relied on self interest to police the financial markets. That worked out well.

Chicken: One could easily fix the modern cooperate/work malaise. Two words: moral discipline...What we are seeing is simply the effects of selfishness acting on the soul.

Or, to apply a small corrective here, the only so-called "self-interest" that gets applied is one that is sadly mis-directed and is a highly deformed sort of self-interest, one driven by selfish vice rather than virtue. If a drunk thinks it is in his "self-interest" to find a hidden bottle of whiskey, is that sort of self-interest going to be useful in protecting society from ill uses of work and technology and capital? Of course not. But if a man habitually uses wisdom and prudence and self-restraint for himself and his own, then his self-interest is often going to be a sound measuring rod for estimating the risks and benefits of whatever proposal is offered for his perusal.

Jeff, I agree with your point. I have found a home handy-man who takes real PRIDE in his work product, and I will take him before any number of licensed and "certified" jerks. He tells me when he doesn't know how to do something, unlike many others. But there are lots of places where it is virtually impossible for a layman to correctly evaluate the likely trustworthiness of a worker: I want my heart surgeon to be board-certified, instead of giving him a try and seeing if he does a good job before I hire him again.

As a guy who has had open heart surgery, let me just be on record as agreeing with everything in Tony's last post. When folks like Smith, Friedman and Hayek talk about self-interested individuals in a free market, they aren't talking about greedy jerks -- they are talking about individuals who know their own situation best and are hopefully endowed (a big hope, but Smith especially was writing when he could assume a Christian population) with basic virtue and what Tony calls habitual "wisdom and prudence".

Well said Tony!

One is better off, spiritually and morally, washing dishes for minimum wage than working as an advertising executive for a Fortune 500 company.

That's debatable. There's an insightful and very entertaining book by a white collar dropout who took a number of brain-gnawing minimum wage jobs over the following year. It's a whole different world, running parallel to the world most of us live in...

Jeff Singer --

When folks like Smith, Friedman and Hayek talk about self-interested individuals in a free market, they aren't talking about greedy jerks -- they are talking about individuals who know their own situation best and are hopefully endowed ... with basic virtue and what Tony calls habitual "wisdom and prudence".

Even granting arguendo the accuracy of your summary here, don't you see how all the heavy-lifting is in what they presuppose? It's statements like these that produce in me such a sense of ennui when folks cite what is often called the "classical" liberal or libertarian tradition.

Given that in our age those presuppositions have been absolutely hacked to pieces with wild abandon by subsequent generations in the same tradition -- given that (to make the point specific) most libertarians today are more concerned to advance to project of dissolving the institution of marriage by legal fiat than defend private enterprise -- I feel that arguing about all the principles Hayek et al. spun out of their impressive minds once they assumed a virtuous and properly-understand self-interest is mostly a distraction from the serious business at hand.

All of which is to say I associate myself with Rob G. and the Chicken's fine comments.

Al --

Come on Jeff, perhaps your wife also cuts the hair of hundreds of complete strangers or perhaps we are talking apples and oranges.

As usual here, I am not asking that you agree with us; but I am asking that you properly understand what we're driving at. Surely you can see that millions of men, right here in America, for generations patronized barbers whose business was not based on complete strangers but on the communities of human relations in which they were born and raised.

The reduction of business to a matter between the sheerest strangers is part of what we decry in the vast machinery of corporate homogenization; globalized high finance is only the culmination of that. And (as I have been trying to persuade Jeff Singer to accept) it is a culmination that could only have been reached by the combined work of private enterprise and government intervention.

Or, to apply a small corrective here, the only so-called "self-interest" that gets applied is one that is sadly mis-directed and is a highly deformed sort of self-interest, one driven by selfish vice rather than virtue. If a drunk thinks it is in his "self-interest" to find a hidden bottle of whiskey, is that sort of self-interest going to be useful in protecting society from ill uses of work and technology and capital? Of course not. But if a man habitually uses wisdom and prudence and self-restraint for himself and his own, then his self-interest is often going to be a sound measuring rod for estimating the risks and benefits of whatever proposal is offered for his perusal.

Self-interest is not the same thing as Interest in Self or self-focus. Can there be virtuous self-interest, of course. Self defense is one such example. Resisting the urge to yell at a person who cuts one off in traffic is another. The type of self-interest that turns from virtue is the type of self-interest that really is concerned with self apart from others.

Is it true that vicious self-interest can be confined to the individual? Can the drunk who goes for the bottle be said to be not really harming anyone else? Society is tainted both with moral virtue and moral vice. Every action by every individual affects others. This was St. Paul's conclusion. Vice is like a parasite that sucks the life out of society and makes it rotten. There is no balance sheet such that if fifty men commit vice and fifty men commit virtue the net effect is zero. Make no mistake, virtue is greater than vice, but virtue is prepared to suffer. Vice avoids suffering or at least prioritizes suffering and accepts only the least damaging it can get away from. Vice leads to wounded animals with limbs eaten off. If you want to see the limbs that have been chewed off in modern corporations, look no further than downsized employees - these are the limbs sitting on the ground that have been chewed off so that the company can escape a trap that they have often sprung on themselves.

I cannot reconcile the fact that 90% of Americans claim to believe in God and yet men and women have become little more than intelligent animals. It is work and procreation that are part of the activities that reveal that man is more than mere animals. We have abandoned this birthright for false Gods made of the material of ease and self.

The chicken

Copies of the above homilies may be obtained by sending a self-addressed stamped envelope and one dollar (because I have self-interest to pay for on the investment in my ego) to:

The Grousing Galliform
P.O. Box 3.1415926
Chickenville, WI 00001

The Chicken

Undoubtedly there exists a balance between over- and under-regulation in each of these various situations. It is difficult to achieve it however when extremists from both sides -- those who believe that less regulation is always the answer vs. those who believe that more is always the answer -- are the ones making the most noise about the problems.

~~When folks like Smith, Friedman and Hayek talk about self-interested individuals in a free market, they aren't talking about greedy jerks -- they are talking about individuals who know their own situation best and are hopefully endowed (a big hope, but Smith especially was writing when he could assume a Christian population) with basic virtue and what Tony calls habitual "wisdom and prudence".~~

No doubt. But given the fact that the rise of finance capitalism and the concurrent cultural and moral decline have greatly reduced the general sense of a "public" morality, it seems ill-advised to rely on a system which needs such a morality to operate effectively.

Smith, Friedman and Hayek obviously aren't talking about greedy jerks. But what do you do when the morality of a culture no longer proscribes either greed or jerkdom in any meaningful way?

No doubt. But given the fact that the rise of finance capitalism and the concurrent cultural and moral decline have greatly reduced the general sense of a "public" morality, it seems ill-advised to rely on a system which needs such a morality to operate effectively.

The government comes from the society it governs. A corrupt society produces corrupt regulators like those at the MMS who were too busy taking bribes and sleeping with oil company people (and then too focused on alternative energy) to handle Deepwater Horizon before it go out of hand.

So then, the fault lies on both sides, correct? It is wrong then for the Dear Leader to blame the entire thing on BP, and it is also wrong for the conservative talking heads to downplay BP's responsibility and to blast the administration instead.

Just as in the financial crisis, there's plenty of guilt to go around.

All,

I thought this Vox Day post was particularly timely and relevant to the discussion we are having:

http://voxday.blogspot.com/2010/06/breaking-civilization.html

Please be warned that if you click on the embedded link it will take you to a blog run by an anonymous blogger known only as "Roissy" who is very, very crude. As a Christian man, I find Roissy's blog toxic, but apparently Vox finds some merit in it.

I find, in my zeal for pointing out the moral failings in the contemporary workplace, that I have been unduly harsh, myself. There are many people who are out of work due to no fault of their own who, if given the chance, would be excellent moral examples in the workplace. There are also people who are near the breaking point and burnout because they are loaded down with extra work because a stingy boss it too cheap to hire more people. These people, too, if given the chance, might show good character in the workplace. There are innocent victims and not all businesses are vicious. I am sure the proportion of moral plumbers is probably pretty high. Some jobs and some environments tend to foster viciousness more than others. To the people I might have offended by my overly Puritanical stance, I apologize. I think my connections are correct in a general sense, but I must be more careful in applying them too generally.

I do have a question for the Econ geeks in the crowd, since I am a simple man where money is concerned and this question has been bothering me for a long time (probably because I don't understand the underlying assumptions). Perhaps someone can explain it to me.

It is 1950. If I invest ten dollars in company A, they get to use it for what they need to make the company grow. I no longer have the ten dollars, so, in justice, when they do start making money from my ten dollars, I am entitled to a small slice of the profits. Let's say they use my ten dollars to buy a typewriter (which costs exactly ten dollars in my 1950's scenario). They use the typewriter in their business and this helps to make them money, so they pay me a little from the profits because they have my ten dollars, thus depriving me of it and they are making money while using it.

Fast forward. Three years later, the typewriter breaks and is deemed too expensive to repair. It is thrown out. By then, I have recovered my initial investment and a few dollars extra. i have all of my original money back and then some.

My question is: in what justice do they own me any further money? They no longer have the typewriter; I have my investment back. Is it just to keep paying me year after year for money that has long since been used up and all of its profits collected?

How does this differ from the current stock market? If I invest in a company, do I own a stake in the company in perpetuity (or until I sell the stock)? Is this stake sufficient to require them to keep paying me, even though the use of the money is no longer? How does this differ from an open system (i.e., an unlimited supply of money)?

I really have a hard time understanding what the Stock market is all about. It seems like a bank coupled to a roller coaster - if nothing happens, if the stock goes neither up nor down, is this not just like putting my money under a mattress (except for the dividend I would be getting back while my money is actually being used)? To say that my original investment is still making money like some bacteria that keeps fissoning seems silly. Is this what people think? Again, this leads back to an open system.

Can someone help a poor Chicken out? If this is the wrong post to ask this question, would Paul or someone consider opening a new post so that someone can explain why people think buying stock is not something insane?

The Chicken

"As usual here, I am not asking that you agree with us; but I am asking that you properly understand what we're driving at."

Paul, you've totally missed ny point. For the purpose of being around sharps, practically everyone counts as a "stranger". Putting aside minor annoyances like lice and fungus infections, things like Hep C are a one way street. To use folks in the public domain let us consider, say, Ted Haggard or Jimmy Swaggart, You know your pastor, right? He's no stranger, is he? Or, a long haul trucker pulls off I 5 into the USA truck stop in Orland and decides he needs a trim...

"And (as I have been trying to persuade Jeff Singer to accept) it is a culmination that could only have been reached by the combined work of private enterprise and government intervention."

And the nature of human reproduction and invention. Also there are reasons we have regulations concerning barbers and we aren't going back to being a sparsely populated rural nation or world (actually we might if the upper bounds of temperature change come to pass).

"When folks like Smith, Friedman and Hayek talk about self-interested individuals in a free market, they aren't talking about greedy jerks..."

"Or, to apply a small corrective here, the only so-called "self-interest" that gets applied is one that is sadly mis-directed and is a highly deformed sort of self-interest, one driven by selfish vice rather than virtue."

I really want to live in that universe, please can I live in that universe. Ok, now back to the universe in which we actually live. You know, the one in which greedy, short-sighted, mendacious folks aren't somehow identified at birth and set out on a rock to our (and the vultures) benefit. Or to quote Adam Smith,

"With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches, which in their eye is never so complete as when they appear to possess those decisive marks of opulence which nobody can possess but themselves,"

and

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

and this gets us to the usury question and the problems inherent with finance capitalism. This may be of interest,

http://balkin.blogspot.com/2010/06/kosmans-buyout-of-america.html

While we aren't going back to a world that never was anyway, there are things we can do to encourage production and discourage the casino-like churning that is too large a part of the worlds economy. As always, I will point out that a steeply progressive tax rate on income that favors long term capital gains (maybe 10 years or so) would help to refocus things. Things like the carry-interest provisions of the tax code are merely licenses to steal. After a fair and reasonable exemption as well as provisions for relatively small holdings, estate taxes should border on the confiscatory.

"You say "We relied on self interest to police the financial markets." If only it were true! The financial markets in the U.S. before and during W. were heavily regulated and distorted by all sorts of bad policies which we've talked about on this blog before. Do some serious reading before you post more nonsense."

Jeff, we started deregulating financial markets back in the 80s, remember the S&L thing? We repealed Glass-Steagall and refused to regulate derivatives. The Fed steadfastly refused to raise margin requirements and kept interest rates too low. Was Greenspan lying when he admitted to ideological blindness?

"As for the "pressures of the present cause most of us to minimize unlikely but potentially catastrophic risks", this is a potentially interesting argument but I doubt that except for a few exceptional cases, it has much real world validity."

That is the definition of tail risk and your reaction to my invoking it by discounting it makes my point. That you scoff at the concept after the events of the past couple of years is simply stunning. The financial crisis and the BP well blow out are textbook examples.

As for hiring unlicensed folks - not necessarily a problem - lots of good unlicensed guys, but always check for proof of workmans comp as the homeowner is on the hook without it and I have seen some real horror stories (goes for licensed contractors too). This especially goes for things like roofing and excavation.

Roissy needs to get a job, move out of his parent's basement and get into therapy if he ever hopes to get a date.

Masked Chicken, If you purchase a typewriter and lend it to the company, then the lending terms should cover what happens if it breaks, and your compensation should include either returning the typewriter to you at the end of the lease term, or a sufficient additional fee that you can "write off" the typewriter over 10 years or whatever is its expected lifespan.

If you provide them with money by buying stock, what you own is a share. Literally, a share (percentage) of the company. You don't own any carved out or specified subset of the assets, you own an undivided generalized percentage of the whole enchilada. Your ownership remains as long as the company exists and has any potential for value. Your ownership is on exactly the same terms with anyone else who owns a percentage: if someone initially put up 1/5th of the original starting capital, and the company's value over time triples up to today, when I want to buy in by buying that person's 1/5 portion, I have to pay today's value 3 times what they paid. But when I do, I get an equivalent share that is just as valuable as every other 1/5 owner's interest today.

There is a big difference between a lender and a stock owner. If part of the money you put up as capital is used to buy a typewriter, the value to the company doesn't cease when the typewriter is thrown out: before then, it helped develop new customers, helped establish position descriptions, helped locate qualified foremen, etc. What you as stock-owner retain is a 1/5 share of all of the benefits that the typewriter enabled by which the stock shares retain value at all. When the stock shares' value decrease to 0, then the dividends will be non-existent as well and you won't have to worry about dividend for nothing of value.

After a fair and reasonable exemption as well as provisions for relatively small holdings, estate taxes should border on the confiscatory.

Al, estate taxes DO border on confiscatory. Last year the highest rate was 45%, and next year it will be 55%. At 55% per generation, 80% of the wealth of a Bill Gates will be in government's hands by the time his kids die, around 35 years after he dies. That's confiscatory in my book.

Tony, I believe most of the Gates fortune is earmarked for a non-profit foundation. The estate tax is repealed this year only so we should probably expect at least a small blip in the mortality of the super rich :). Next year it comes back with a $1,000,000 exemption. It seems as a general rule, the offspring of the very wealthy are a misuse of carbon atoms. After a certain point, say $50,000,000, a third bracket with a 90% marginal rate would be appropriate. That way a $100,000,000 estate would leave around $24,000,000 for the heirs. Most folks have two or three kids - my heart bleeds.

Al, the super-rich wouldn't get a lot of tears from me with a 90% tax over 50M. But that kind of tax does present a problem for some situations. If you have a sole proprietor owner of a large valuable specialty business (worth X million in the right special person's hands), and his son has been learning the business for 20 years to take over, when Dad dies the son can't take over because he has to sell it for taxes. But a prospective buyer won't pay X million (or even close) for it because, as a specialty business, a lot of the value is wrapped up in having people like Dad and the son run it.

The problem is not just that Dad can't leave the business to the son. (Well, I can't leave my business to my son, 'cause I work for someone else. Tough.) No, the problem is that by taxing at a really high rate, the business itself ends up being wrecked because it cannot be sold and still remain the going concern that it had been, worth the same to others and the community. The result is a net decrease in wealth for the entire American polity, public and private.

This is not likely to be a problem. Usually the family farm or ranch is the example used. Problem is that last I heard no one has been able to find a real world example. There are already exemptions for farms and small businesses as well as 15 year extensions to pay any taxes owed. The 50M was an arbitrary pick on my part. A simple analysis of the stats on estate taxes would reveal any problems. It's likely your example is a group with no members. Anyway, here is a paper from the CBO,

http://www.cbo.gov/ftpdocs/65xx/doc6512/07-06-EstateTax.pdf

Well, I read 6 or 7 pages, but after the 15th time the paper explicitly said its conclusions are weak, or that data is hard to come by, or that they made X assumptions about what constitutes a small business, I gave up.

Problem is that last I heard no one has been able to find a real world example.

Well, no. Just last January I helped analyze a will and trust for a guy who owns a 30M business. That is, it's valued at 30M based on the annual income. There are a goodly number of employees, but most are truck drivers and warehouse loaders - not executive material. His son and the son's wife are the only ones that know enough to keep the business operating to maintain that level of income, and a good share of the business depends on good will generated by the owner and his son. When dad dies, they will have to sell it to pay 18M in federal tax, another 2M in state. A buyer won't pay 30M for it, because he cannot expect it to generate that level of income, since he won't have that level of good will and knowledge of the customers, employees, and suppliers. Estate will be lucky to get 24M for the business, maybe less. And 20M goes for taxes. Or, the estate can borrow the 21M for tax and pass the business and debt on to the son.

Yes, when Dad dies, the tax bite will result in a business that is in tough times, even supposing it can remain afloat, which is not a given since it will have a huge debt load.

YES, that is a confiscatory tax rate. No, that itself doesn't make it wrong.

Al can comfort the truck drivers and warehouse loaders who lose their jobs by assuring them solemnly that it was necessary in order to "encourage production and discourage the casino-like churning that is too large a part of the worlds economy."

Jeff Singer,

Please be warned that if you click on the embedded link it will take you to a blog run by an anonymous blogger known only as "Roissy" who is very, very crude. As a Christian man, I find Roissy's blog toxic, but apparently Vox finds some merit in it.

The hardest part for many people when reading Roissy is the fact that he's right about the vast majority of things he says about dating, sexuality and marriage.

"That is, it's valued at 30M based on the annual income."

My understanding is that fair market value would be the basis not the income and you have placed that at 24M down. Hard to reply beyond that without more information. I assume the son has a significant minority interest and that figured in your calculations as has life insurance. As my proposal suggested 50M for a higher marginal rate. your example is not affected.

Paul, ten years ago we had a surplus at the federal level, we blew it on tax cuts for the very wealthy, wars, and entitlements. I have a problem with that, you seem not to. I believe the financial sector is too large and much of its activity of little or no benefit to the common good, you disagree? I think we have a problem when Warren Buffett has a lower tax rate then his secretary, you don't?

Getting off the train at Willoughby isn't a very good solution.

If you provide them with money by buying stock, what you own is a share. Literally, a share (percentage) of the company. You don't own any carved out or specified subset of the assets, you own an undivided generalized percentage of the whole enchilada. Your ownership remains as long as the company exists and has any potential for value.

I understand that, Tony. The problem still is that in a situation of finite resources that are shuffled around, it is literally impossible for everyone to make money (fixed point theorems and all that). As I mentioned, earlier, if one gets 6% back on the investment per year, then the money is safer in a bank. Unless the company makes a lot more than that in profits, per year, the amount made by the shareholder isn't really worth it.

This attitude fosters two unhealthy things: a) the idea that one must sell when the stock is high to make extra money - there goes any notion of loyalty to the company and the idea of stock being a "share" in the business, b) it forces companies to try to make ever larger and larger profits by whatever means are necessary (including cut-throat means) just to keep the shareholders happy and not willing to sell their shares. In other words, the idea of stocks tempts people to a delusional or autonomous state where they are forced to think only of themselves.

Stocks simply do not work well in a finite and fallen world.

The Chicken

"Paul, ten years ago we had a surplus at the federal level, we blew it on tax cuts for the very wealthy, wars, and entitlements."

No we didn't, I've heard this repeated many times before. The Myth of the Clinton Surplus, but it doesn't seem to be true, here's some articles criticizing it.

http://www.craigsteiner.us/articles/16

http://www.craigsteiner.us/articles/30

http://www.theneweditor.com/index.php?/archives/3063-The-5-Trillion-Surplus-The-Myth-that-Refuses-to-Die.html

The success of the Clinton years stem mainly from the fact that there was an artificially created Dot-Com Bubble, mixed with the fact that the government then increased taxes in order to reap the rewards from this. Most of the savings that were made during the Clinton years were from Republican policy's (welfare reform) and most of them took place after they had taken Congress.

Also, I think we need to take into consideration the fact that the Dot-Com bubble created by Clinton and Greenspan laid the foundation for the banking crisis. Economist Robert Shiller said in 2005, “Once stocks fell, real estate became the primary outlet for the speculative frenzy that the stock market had unleashed. Where else could plungers apply their newly acquired trading talents? The materialistic display of the big house also has become a salve to bruised egos of disappointed stock investors. These days, the only thing that comes close to real estate as a national obsession is poker.” After the crash, people diverted there money to the next best area and they chose the housing sector mainly because of the low interest rates put on by the Federal Reserve (another Greenspan Policy).

This attitude fosters two unhealthy things: a) the idea that one must sell when the stock is high to make extra money - there goes any notion of loyalty to the company and the idea of stock being a "share" in the business, b) it forces companies to try to make ever larger and larger profits by whatever means are necessary (including cut-throat means) just to keep the shareholders happy and not willing to sell their shares. In other words, the idea of stocks tempts people to a delusional or autonomous state where they are forced to think only of themselves.

It also fosters risk-taking by offering the possibility of material reward, perhaps significant reward, for putting up capital in a new venture filled with uncertainties. This is how wealth is created, living standards are raised and more human life is able to be sustained and to flourish.

Since US sovereign debt forms the framework for bond markets of the whole world, the idea of a sustained balance in the US budget seems far-fetched to me. What -- are they going to stop issuing the various bonds that every pension fund for teachers, cops and firemen relies on to run its trades? "Sorry, CALPERS, no 10-year T-notes this quarter." Not bloody likely. Heck, most of our Treasury Secretaries, D and R, have come from one of the primary dealer firms that bid for Treasury debt.

Paul, ten years ago we had a surplus at the federal level, we blew it on tax cuts for the very wealthy, wars, and entitlements. I have a problem with that, you seem not to. I believe the financial sector is too large and much of its activity of little or no benefit to the common good, you disagree?

You know a whole lot less about me than you think you do, brother.

Anyway, the positive steps made during the 1990s in our budgetary position were hardly the kind of thing that many liberals were interested in pushing with a Democrat in office. Liberals grumbled about Clinton's concession to budget hawks on the center-right constantly. And Obama has already eviscerated much of welfare reform.

In a word, your ignorance has led you to make several of my forensic arguments for me. I do find it somewhat tiresome be lectured on points I have made.

Our dispute concerns what to do with the facts before us. Granted that super-sophisticated finance and the reign of technique has beggared the Republic; what then shall we do? To my eyes so much of what liberals propose partakes so fully of the same technocratic error as to render it a persuasive nullity. We'll fix a colossal failure of the scientific mindset, by letting experts and technicians to regulate it all away. The faith of a Krugman in Rationalism is no less than any rational markets theorist.

Moreover, it's positively hilarious to me that folks expect that the antique leftists who run the committees of our Congress, some of them men who came to Congress in the 60s and 70s, will save us from Wall Street subtleties. Chris Dodd (a spring chicken compared to some of these guys) comes out and promises repeatedly that Too Big to Fail is gone forever. "The key thing is, we'll never again have to face a situation where ..." Pristine old Charlie Rangel will keep the plutocrats in line, oh yes.

So while we may agree on some of the descriptive details of our crisis, we differ profoundly on what to do about it, or who to trust in doing it.

The hardest part for many people when reading Roissy is the fact that he's right about the vast majority of things he says about dating, sexuality and marriage.

You must be excluding then the post he wrote a couple months ago about the proper way to -- how do I say this? -- simulate a rape experience with your partner for heightened sexual gratification. He even included the use of a blade to the neck for those who are more "advanced." That this creature gets air play in conservative circles is a terrible stain on conservatism.

He gets airplay because not everyone in conservative circles is happily married. So many young folks today are so scarred by what the sexual revolution has unleashed, these pitiful walking wounded, that we are likely to see more and more similar gurus and bizarre enthusiasms for decades to come.

I think Jeff Singer did us all a service and is to be commended for warning about the link to this toxic person from Vox's site and that Jeff Culbreath will (beyond doubt) not appreciate further details about this person's...recommendations on his thread. From the little I know, which is already more than I want to know, he's horribly bad news, and anybody who can't recognize him as toxic is in big trouble already.

"Game" (Roissy's schtick) is one of the stupider rightist obsessions in a sea of stupid rightist obsessions.

My understanding is that fair market value would be the basis not the income and you have placed that at 24M down.

IN theory, the value is the willing-buyer, willing-seller amount. In practice, a valuation expert uses a capitalized income, or cost to build, or comparable sales methods to determine. Comparable sales method is shaky when there is significant good-will involved. Cost method works better for improved real estate than a business with tons of volume. Capitalized income would be the preferred approach.

As my proposal suggested 50M for a higher marginal rate. your example is not affected.

If the already provided 2011 tax rate is already confiscatory for an estate like this, then it hardly matters whether he would or would not be subject to a still higher rate. Hell, what's wrong with pegging the rate at 120%? THAT's confiscatory for you, ayyy?

Fascinating that when Leftists blast the 'super rich' they don't include a certain neo-Marxist Hungarian-American billionaire who's bankrolling the worldwide Progressive movement and simultaneously making huge amounts of money from big oil investments.