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WHY BOTHER? GETTING A LIFE IN A LOCKED-DOWN LAND |
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Chapter Three: FALSE PROFITS One of the problems with living around powerful myths is that you can start to feel personally responsible when they don't work out. If you don't lose weight, have better sex, kick your phobia, earn 20% annually in the stock market, or get the job you want, there are few around to tell you that such outcomes are pretty normal. Instead, we are surrounded by hucksters of success and salvation constantly luring us towards illusory certainty. If we succumb to these chimeras of profit and prophecy, if we accept the idea that God rightly favors the successful, the economy justly favors the lucky, and society fairly favors the glamorous, it can ultimately leave us with a sense of failure for no greater fault than being a normal human being. It is hard in such a context to remember that nearly all people who dial the 900 number beckoning them on the cable screen continue to find hard times on easy street. One of the greatest of our present myths is that a free market cures all ills. One would never guess from the commentators of NPR and PBS, for example, that if there were actually a free market in this country, they would be out of work, as would be the conservative economists and other welfare intellectuals sinecured at public universities. Thousands of Washington lawyer-lobbyists would also he unemployed, the defense industry would crash, and all the airports would have to close. The truth is, as with every society that has ever existed, our economy is not only a conglomerate, but a part of, and dependent upon, a huge number of values, rules, systems, and characteristics that comprise a culture. We can no more isolate the use of money or labor from these factors than we could declare society to be henceforth based on free lunch. Fortunately, economists discovered money as an organizing principle rather than, say, defecation. Otherwise, instead of the GDP, we would have to listen to Eleanor Clift or George Will pontificating on the latest trends in the Gross National Movement. Aside from avoiding that mishap, however, the monomaniacal obsession with the flow of money offers little in the way of insight. It is -- there is really no better word -- childish, for it simplifies reality into infantile dichotomies beyond all logic and evidence. You need look no further than the free marketers themselves to see how false the notion of a free market is. Would a truly free market, for example, tolerate government officials with as much arbitrary power as the members of the Federal Reserve? Can one -- as a matter of logic rather than economics -- love both the Federal Reserve and a free market? Isn't monetarism really just a form of socialism that favors capitalists instead of workers? Certainly, if one thing has not characterized the last two decades it has been any reluctance by our leaders to inject themselves into our lives. An era that has been devoted to the free market has simultaneously been the most governmentally intrusive in our history. In the name of a free market we have indentured ourselves to a system overflowing in other regards with contempt for personal liberty. In such ways, concepts such as the "market economy" and "monetarism" have gilded the lily of the very power they pretend to oppose. They provide a comfortable cover for what the government has really been about. Peter Jay once noted that introducing the mother of new capitalism, Margaret Thatcher, to monetarism was like showing Genghis Kahn a map of the world. Thatcher had a mean and narrow view of life; she didn't even accept the existence of community, declaring once that "there is no such thing as society. There are individual men and women, and there are families." Thatcher wrapped herself in economic slogans that justified greed not only to accomplish economic ends but also to deal with gays and abortions and everything else she didn't like. In her paradigm, the free market and Victorian tyranny formed a civil union. By the time Reagan, two Bushes, and Clinton were through with the concept, they had created a gaping corporate exemption from common morality and decency. The market not only offered adequate justification for any act, it had replaced God as the highest source of law. Until the Reagan-Bush-Clinton-Bush era it would have been next to impossible to find a culture that survived for long believing that the unfettered, rapacious flow of money and goods was the core of human existence. Elsewhere, to be sure, commerce had looked to bottom lines, but these had included those established by church, community, government, and tradition. Of course it could be argued that the new capitalists, as single-factor fetishists, were no worse than Marxists. I know, for example, that I can usually stop an eruption of Marxist rhetoric for at least a few minutes by asking the simple question: who will run the restaurants in utopia? I find few people even on the hard left who wish to eat and drink the product of collectivism for the rest of their lives. Marxists and capitalists share an obsession with money and a taste for cliched mantras about it. They also share a willingness to reduce the complexity of human existence to just a couple of choices. Nonetheless, it makes more sense to devote our attention to the capitalists because they are doing a far better job of making everyone go along with them. And making us suffer in the process. One of the reasons a free market is so hard to come by is because it has never existed. In modern times the drug trade comes closer in some respects than more legal activities, but even there mafias and murders interrupt the free flow of capital goods. The form of capitalism known as "free trade" doesn't even come close, else one wouldn't need 2,000-page agreements and the World Trade Organization. And we wouldn't have laws against usury and on behalf of workplace safety. Besides, culture keeps interfering with the economists' theories. A foreign aid official once noticed that women in a certain third-world village had to row daily across a broad lake in order to reach the marketplace. Using the efficient analysis of first-world MBAs, it was determined that what these third-world women needed were some outboard motors. And so motors were bought and distributed. Within a month or two, however, every one of them had fallen overboard. At which point, the aid official realized an important non-economic truth: the women actually liked rowing together across the lake, finding it a convivial, communal activity. The idea that such factors as social mores or religious values take precedence over efficient cash flow did not really seem odd until the 1980s. The term capitalism wasn't even invented until the middle of the 19th century, and the early robber barons carried out their business without a manic need to justify their addictions publicly. Part of the earlier privilege of wealth was that no one had to know what you did with it. And it wasn't until the 1980s that the proselytizing of greed became so ubiquitous that even otherwise humble human beings began using words in ordinary conversation like entrepreneur, bottom-line, strategic vision, and market-driven. Much of this language is not that of management, but of marketing. It is almost as if the ghost of Willy Loman had risen from the dead to exercise some supernatural vengeance on the nation. Not only is the salesman-hustler fully alive, he is all of us everywhere all the time -- from the several thousand advertising messages we confront daily; to the hour each day we spend reading, hearing, or viewing them; to the 77 distinct images in one 60-second GE commercial; to the massive shift in the work day during which the production of propaganda has often replaced the production of products. *** But haven't we been repeatedly told that it all works out for the better in the end? Well, that isn't what Adam Smith thought. The patron saint of capitalism said in Wealth of Nations that "Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumers ... In the mercantile system the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce." The state restraints and protectionism that bothered Smith were those that affected small business, not huge corporations. As David Korten notes, today's economic system "bears far greater resemblance to the monopolistic market system [Smith] condemned than it does to the theoretical competitive market system he hypothesized":
Nor can historical justification for the boomer barons be found in the history of our own country, though the "market economy" is often mentioned as though embedded in the Constitution. It is true that the American Revolution was an economic as well as a political victory, triumphing over a system in which only the nobility and a few large merchants held economic power. But the definition of economic freedom was quite different from that used by today's corporate chief executive seeking yet another tax break or a bigger bonus. Early free Americans widely believed that one was entitled to the "fruits of your labor" and no more. They opposed the concentration of property because it would allow property owners to seize political power. There was already more than a little experience with this. Eric Foner points out that by 1770,
In America, by the time of the Civil War, slaves were the country's most valuable capital asset. In a nation with an annual federal budget of only $50 million, slaves had a market value of $2 billion, or more than twice that of all the country's railroads. That was not a free market. *** Further, the Constitution was written for non-slave Americans and not for corporations. Free enterprise was not mentioned in it. During the entire American colonial period only about a half-dozen business corporations were chartered. In the first 20 years after the Revolution only about 150 corporations were chartered. Each of these charters required that the corporation be in the public interest. Jefferson to the end opposed liberal grants of corporate charters and argued that states should be allowed to intervene in corporate matters or take back a charter if necessary. These early Americans were, however, deeply commercial. One reason for this was that commercial activity allowed you to break free of the social and economic restrictions of a British economy based on nobility and monopoly. Americans didn't want to work for such a system; they wanted to work for themselves. And they weren't concerned about competition because there wasn't much. With the pressure for more commerce, and growing indications that corporate grants were becoming a form of patronage, states began passing free incorporation laws and before long Massachusetts had 30 times as many corporations as there were in all of Europe. Still it wasn't until after the Civil War that economic conditions turned sharply in favor of the large corporation. These corporations, says historian James Huston:
Concludes Huston:
It truly represented a counter-coup against the values of the American Revolution. It dramatically undermined both political and economic freedom, corrupted politicians and ransacked national assets. It replaced the feudalism of the monarchy with the feudalism of the corporation. Perhaps the most important event occurred 110 years after the launching of the Revolution. In 1886, the Supreme Court ruled that a corporation was a person under the 14th Amendment and entitled to such constitutional protections as those of free speech. With this fiction, the court helped to boost the corporate takeover of America. It helped personalize the corporation and depersonalize the individual, giving the former moral standing without moral responsibility, and making the human soul subservient to a soulless creation of the law. As Morton Mintz pointed out, the court ignored the fact that "the only 'person' Congress had in mind when it adopted the 14th Amendment in 1866 was the newly freed slave." Justice Black observed in the 1930s that in the first 50 years following the adoption of the 14th Amendment, less than one-half of one percent of Supreme Court cases "invoked it in protection of the Negro race, and more than 50 percent asked that its benefits be extended to corporations." During this same period the courts moved to limit democratic power in other ways as well. For example, the Supreme Court restricted the common law right of juries to nullify a wrongful law; other courts erected barriers against third parties and banned fusion slates. It was during this time that the myth of competitive virtue sprouted, helping to justify the rapaciousness of American business. It was a time when J.P. Morgan would come to own half the railroad mileage in the country -- the same J. P. Morgan who got his start during the Civil War buying defective rifles for $3.50 each from an army arsenal and then selling them to a general in the field for $22 apiece. What we now proudly call the ''American free market system," was initially propelled by slavery and flowered in an era of enormous bribes, massive legislative corruption, and great anti-competitive cartels. It was a time when the government, in a precursor to modern industrial policy, gave two railroad companies 21 million acres of free land. It was also the time that American workers, who had once used commerce to free themselves from the economic and social straitjacket of feudalism, found themselves servants of a new rigid hierarchy, that of the modern corporation. As persons, corporations could inject themselves fully into civic life (such as influencing campaigns and politicians) while still repelling public interference in their own affairs. They could construct barriers on civil liberties grounds against efforts to control their greed. Many of the rights that corporations secured by law came even as blacks and women were still struggling towards full enfranchisement. The political movement of populism did battle with the new corporations but lost, as did the socialists who followed. Save during the Depression, generations of Americans would come to accept the myth of free enterprise. They did so in part because these companies provided higher incomes and ever-increasing jobs. But in the last quarter of the 20th century, these two conditions began to disappear. No small part of today's political tension stems from the rising power of big corporations even as their social and economic contribution to America declines. For many years the free enterprise myth was countered by competing perspectives, but since the 1980s economists have firmly established themselves as the official judges of human progress, replacing such numerically challenged trades as philosophy, anthropology, religion, political science, and history. These economists have argued that we would be rewarded by economic growth when, in fact, the Reagan-Bush-Clinton era was one of unusually low growth, matched in the 20th century only in 1910-'19 and during the Depression. Here are some things, however, that have grown:
Even workers, though, have come to accept the free market mythology. As Sister Souljah said, "They think that if they're not doing all right they're an individual failure. They can no longer draw the relationship between their lack of success and the system which is set up for them to be unsuccessful." Richard Sennett in The Corrosion of Character pinpoints some of the personal consequences of work under the new capitalism:
*** Such strains put a burden on workers that is generally underrated. A 1999 British study found that employers could expect to lose two out of five workers as a direct result of too much pressure. Nearly one in three employees reported health strains, and more than one in four said their sex life had suffered because of their work. The biggest complaints:
Managers fared no better. A contemporaneous survey by the British publication, Management Today, found that 55% of manager respondents felt frequently stressed at work and 50% said they were too busy to create proper relationships outside of the office. As with so many aspects of our lives, we are stymied in addressing such problems in part because our culture frowns on those who confront them. Even in such elite corners of information as book reviews and public broadcasting, we find a cultured ignorance perpetuating the deceptions of the corporate world. After all, if NPR thinks we live in a "free market democracy," who are we to argue? If Jim Lehrer is willing to explain patiently and somberly the wonders of multinationalism, who are we to point out that one of his major corporate underwriters paid a record $100 million fine for international price fixing? This conspiracy of silence also dumps down the memory hole the problems of the non-college educated, the farmer, small businesses (which produce most of the new jobs in this country), young males, and those otherwise not qualified for capitalistic celebration. It slides over massive criminality by corporations. It ignores the fact that American business grew faster during the rise of the labor movement than it did after it learned how to suppress unions. It ignores the true variety of economic systems that can exist in favor of a trite and false dichotomy between capitalism and socialism. Such distortions can have profound consequences. The collapse of the Russian economy following the breakup of the Soviet Union was due, in no small part, to extraordinary exploitation by western "free market" advocates, assisted by an absurdly low valuation of the country's financial assets. It was said that the Russian stock market was the cheapest place in the world to drill for oil and natural gas. Russian expert Stephen Cohen of New York University would later remark, "It may be that President Gorbachev's much-scorned gradualism and goal of a mixed economy, based on combining marketization and privatization with whatever was viable in the old state system, were (and may still be) the best way to reform Russia, and other Soviet republics." Neither is America stuck with rigid economic models that have caused so much individual and aggregate pain. There are all sorts of mixed economies. There are big consumer cooperatives like Land o' Lakes Butter and the United Services Automobile Association that have thrived happily amongst conventional capitalists. The town of Green Bay, Wisconsin, holds its professional football team in community ownership. As a result, it's one of the few professional sports teams in America that we know won't be moving to someplace else. There are various forms of local currency, including "time dollars" with which people earn time credits that can be redeemed in services. Perhaps most significantly, we prove again and again the limits and liabilities of promiscuous capitalism by personal actions that mitigate its evils and compensate for its failures. Every labor union, every act of charity, every anti-sweatshop group, every barter, every voluntary activity for the good of the community, every code of conduct that defines the morality of commerce, every deal foregone for reasons of decency, every time someone does something for someone and says, "think nothing of it," is a revolt against the Church of False Profits. The impact of these non-capitalistic activities can be enormous. Nike sales dropped 27% after news of the company's sweatshop practices were widely circulated. The Trends Report of 1997 found three out of four customers willing to switch equal quality brands if one is associated with a good cause. A Business Week survey found that 95% of Americans don't think a corporation should only exist to make money. A report published in Management Accounting found that "one investment dollar out of every ten is placed with ethical or social criteria in mind." Further evidence of the options available can be found by comparing cultures. For example, in American Exceptionalism, Seymour Lipset cites an eight year study of 15,000 managers and executives in six countries in which 40% of the Americans agreed that "the only real goal of a company is making a profit," while only 8% of the Japanese managers felt the same way. All but one percent of the Americans expected that their employment at a company would be of limited duration, while a majority of the Japanese thought they would be employed at their companies for life. And while 85% of the Japanese believed that the best way to pick someone for a position was to meet and discuss the selection until almost everyone had agreed on someone, only 38% of Americans felt that way, preferring a simple majority vote. *** Even in this country there are many companies that have offered alternatives to the compulsive, controlling, and often corrupt capitalism so often used as the desirable prototype. Three frequently cited are L.L. Bean, Tom's of Maine Soap, and Ben & Jerry's. Interestingly, each began in New England in a culture with a long tradition of respect for the individual and for integrity in personal dealings. The companies shared an understanding that business is just one part of life that must be integrated with all the others. Of course, such behavior is not purely altruistic. Traditions of fair-dealing survive because they work well for everyone, including the company. Besides, the Reagan-Bush-Clinton years took their toll on L.L. Bean which, like so many other large corporations, began hyping the image of what it is supposed to be even as the reality behind the image was fading. Bean's problems began in part when the company hired some Boston consultants in 1998 who advised it to "restructure" the corporate offices into "eight strategic business units" such as L.L. Home, L.L. Kids, and L.L. Sports. The firm also suggested a number of other moves popular with contemporary techno-managers. Soon, however, the company found itself also faced with a major unionization effort by the Teamsters. According to Lisa Chmelecki of the Falmouth Forecaster newspaper
Such changes reflect the corrosive effects of the new capitalism and some of the bizarre management techniques that have accompanied it. These changes, according to one survey, found 56% of employees nationally saying their company did not genuinely care about them and a similar percentage saying that they have no strong loyalty towards their firm. In the end, L.L. Bean avoided unionization after giving employees some of the benefits that a union would have sought and Bean itself might have offered without prompting in an earlier time. Bonuses, not seen for five years, were resumed and employees were granted additional holiday time off, night-time premium pay, a relaxation in the dress code, and a fitness program. Another company that, until it was sold, provided an alternative model was Ben & Jerry's. In 1992, Ben & Jerry's sales jumped 36% while profits rose 79%. Early that year Ben Cohen wrote a letter to shareholders in which he said:
Needless to say, some business observers remained skeptical, especially when Ben decided to take a six-month sabbatical. Forbes ran an article in March 1992 reporting that Ben had quit as CEO after coming down with "a bad case of the guilties" over the company's financial success. The day the magazine hit the streets, the company's stock lost 10 percent of its value. By November, however, Forbes had to admit that B&J was still on its list of the 200 best small companies in America -- for the third year in a row. Another New England businessman, Tom Chappell of Maine, started a natural ingredient toothpaste firm in 1974 with a $5,000 loan and a few investors. By 1981 his firm was doing $1.5 million in sales and has been going strong ever since. A few years later, however, Chappell found himself telling a minister friend, "I'm tired of creating new brands and making money." In his book, Soul of Business, Chappell recalls, "I had never thought such a sentence would come out of me. But there I was, asserting that though I was very successful, I felt empty." Chappell's remarkable solution was to go to Harvard Divinity School. He returned later, not only revived, but with theologian Richard Niebuhr in tow. He gathered his board -- including a business school dean and a Washington lawyer -- to listen to Niebuhr and discuss their assigned reading, Martin Buber's I and Thou. After the talk, the board broke up into small groups, augmented by staff members and local ministers, to discuss "how we might apply Huber's ideas to our lives and business practices." The Washington lawyer later told Chappell, "This was the most exciting thing I've done in a long time." To Chappell the message was:
*** Having spent considerable time in Maine, such things don't really surprise me. After all, I once bought a used car sight unseen over the phone from R&D Automotive in Freeport because I figured I'd do better that way than shopping around at Washington area lots. The 1983 Chevy station wagon got both my sons back and forth to college and made two and half trips across the country. From childhood on I have run into traits that, while not unique to Maine nor universal in Maine, were nonetheless in considerably greater supply there than in many other places. I make no claim as to the persistence of these traits nor do I to wish to romanticize them. After all, when I first went to Maine as an eight-year-old there were four times as many acres in farmland as there are today and much else has disappeared as well. Still, certain Maine values have floated on the surface of my experience like lobster buoys off the starboard bow. Among them:
*** My sense of commerce as a part of the holistic web of culture has also been strengthened by having had a Quaker education. It has been said that the Quakers came to this country to do good and did very well. This was not only a matter of choice, it was a necessity. As with so many later immigrants, commerce was part of the escape route to freedom and a better life. The values espoused by Quakers -- particularly trustworthiness -- served them well in business. In both England and America it helped lead to major accumulations of wealth. A descendent of a prominent Quaker thinker established Barclay's Bank; the Quaker Lloyd family built another of England's "big five" financial institutions; and the Cadburys started a chocolate firm. Being a fairly literate and conscientious crowd, Quaker entrepreneurs left a useful paper trail of reflection, self- justification, and remorse on the question of blending commerce and conscience. A common theme was the one laid out early by George Fox:
In 1839, John Sargent fretted:
Martha Routh, whose school had outgrown its quarters, also worried about mergers and acquisitions. She visited a possible new site:
David Ferris, in 1855, was concerned about the rum he was selling:
As Quaker businesses grew they carried their traditions with them. The big English firms of Cadbury, Fry and Rowntree built whole communities for their workers and, in America, Quaker firms even welcomed the idea of unions. Writes Robert Lawrence Smith:
As late as 1951, a British Quaker industrialist addressed his colleagues this way:
Did the speaker's words conceal certain hypocrisies or perhaps represent paternalism parading as equality? It is not unlikely. But the question is not whether Quaker business people lived up to their professions of conscience but whether such professions positively affected the nature of their businesses. History strongly suggests that they did and that personal witness in the marketplace worked better for customer, worker, and owner than did an economy unnagged by conscience. Actions are seldom better than the beliefs that drive them. We live in a time that attempts to deny this, that wishes to give commerce alone an exemption from all the moral and philosophical constraints that help to define a decent culture. This is done with the help of fraudulent computations of the market's worth and by imputing efficiency to what is merely greed. Here, rather than in theoretical arguments over neatly dichotomized economies that have not and will not exist, should be our central question about commerce. What has traditionally kept commerce on track has been a complex network of social controls and individual conscience. Not just competition but the fact that the owner of the small town bank belonged to the same church as his customers. Not market share but a fair market. Not just a new customer base but customers you had to face. Far too many have suffered from the self-serving dicta of the new capitalism, which replaced the Bill of Rights with the commerce clause. The counterfeit economy has served none of us well, not even those who have been its strongest advocates. For example, Robert Kurzon, a 1990 graduate of that corporate auxiliary, the Harvard Law School, interviewed his classmates for Esquire and found "those who have left law, especially law firms, seem happy. Those who have not are suffering, or, worse, resigned. They talk about losing themselves. These are strange times in the workplace, and one need only look to Harvard Law School for an example." A number were even afraid to talk to him for fear of losing their jobs. Said one, "I hope you find someone who will talk -- God knows there's enough of us suffering out there." Said another. "My dream is to become a clerk at Barnes & Noble ... I've got the store picked out. I literally fantasize about this." Among those who did escape, one ended up as a comedian and another shifted his practice to represent taxi drivers in traffic court. Behind much of this angst is an economy that has separated even its own practitioners from the support, sense, discipline, and integrity that comes from blending one's ambitions and values with those of others and from knowing and accepting that in economics, as in ecology, there is still no free lunch.
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