Saturday, October 21, 2017

Economic Insanity: Chapter 3 (part 1)

Not Everything
That Grows Is Good

Growth of healthy organisms is a natural phenomenon, but unregulated
and unlimited growth is found in nature only in cancers that ultimately
destroy their hosts and themselves. We are creating an unregulated
economic system that has become the equivalent of a cancerous tumor,
and its unfortunate host is human society. In the name of free markets,
prosperity, and democracy, modern society is embarked on a path that
ultimately can lead only to the destruction of all three.

—David C. Korten,
“A Deeper Look at
‘Sustainable Development’”

In their book The Second American Revolution, James Patterson and Peter Kim give a somewhat outdated analysis of our recent economic woes, then present four widely divergent plans for strengthening the economy—one promoted by Lester Thurow, another backed by Robert Reich, a plan devised by the Council on Competitiveness, and, finally, Jack Kemp’s proposed return to supply-side economics. Though individual pieces of each plan have some merit, all four are based on the assumption that economic health is a function of growth. If American companies can just become more competitive, the economy will grow, and everything will be all right.
Well, American companies in general have become, or are rapidly becoming, very competitive, the economy is growing once again, but everything is not all right. The problem is that we are looking for answers in the wrong place. We are trying to find solutions within a system that makes sense in the short term but is illogical for the long haul. We need systemic change, not just a more efficient economic machine.
Why should we want a different system, though? Isn’t the current arrangement good enough? Perhaps we can find the answers to these two questions by asking two related questions: Is it possible for the modern capitalist economy to grow forever, without hitting any kind of ceiling? and Is limitless growth a good thing? My contention is that our continued belief in the assumption of limitless growth will bring catastrophic results. At some point, growth comes only at a tremendous price to society. Further, the capitalist economy simply cannot grow forever. It has built-in limits, and both economic and environmental ruin is the price of ignoring them.

Cancerous Growth
Every economic plan I’ve ever seen begins with the assumption that growth is necessary for a healthy society. Herman E. Daly and John B. Cobb, Jr., point out that although economists, like other scientists, claim to be value-neutral, “their shared values are [in fact] easy to identify. They are, above all, for economic growth. To challenge that as a goal is to place oneself outside the community [of economists].”1 But what if growth is no longer the panacea it once was? What if our economy has grown to the point where its size and continued growth are actually hazardous to our social and economic health? What if the answer is not growth? If so, then the community of economists has been asking the wrong questions, which means that all their answers are also wrong. It is not the way the system functions or malfunctions that is the problem; it is the assumptions upon which the system rests and that have guided its evolution.
As David Korten points out in the epigraph to this chapter, not everything that grows is good. Indeed, the only instances of unlimited growth found in nature are cancerous tumors, which grow by stealing sustenance from healthy tissue, by fooling the immune system, by deceiving nearby cells into forming food-bearing vessels and producing growth-enhancing chemicals, and by opening new pathways for the malignancy to spread throughout the body. In essence, cancer tricks the body so that it actually contributes to its own destruction.
The unlimited-growth assumption makes capitalism similar in many respects to cancer. It creates economic growth at the expense of health in other areas of social concern. And as it becomes entrenched, it converts the surrounding society into a support structure for its continued growth. Everything becomes economic, and self-perpetuation becomes the guiding rule of the economic system.
Is there an alternative, though? Can we even imagine an economic system not dependent on perpetual growth? I suggest that we must begin to think along those lines, because the growth assumption is fast reaching the end of its long, long rope.
Let me introduce three arguments against limitless economic growth that may help put this issue in perspective. The first argument is simple and straightforward and has been presented in greater detail by others who have a more specific interest in environmental matters. The last two are more theoretical in nature, but point to an inherent flaw, an internal illogic in our system of unlimited capital ownership that suggests we must look beyond the present system.

The Environmental Argument
Kenneth Lux points out that our capitalist economic theory does not concern itself with human needs. In economics, need is a nonword. Economists are interested only in wants, or demand. “An important thing about wants,” says Lux, “is that they are ultimately infinite and therefore unsatisfiable.” Add to this the overall objective of conventional economics, which is to satisfy these wants, and a paradox emerges.
It appears that economics has construed itself so as to attempt to accomplish the impossible: to satisfy that which cannot be satisfied. . . . From this we can start to see that economics, even at the level of its theory, may have something to do with why we are destroying our natural world.
We live on a finite planet. If human beings are defined as being made up of infinite wants, and the task of an economic system is to fulfill that infinity, then such a system will go on endlessly churning out goods in an attempt to reach what is from the beginning an impossible goal. When the infinite production of goods meets up with a finite planet there is bound to be a collision.2
If we were to imagine the traditional capitalist system as a container for wealth and consumable products, its shape would be that of an inverted cone, extending forever upward and outward. The growth assumption insists that we can keep pouring time, energy, and natural resources into the cone in the form of consumable products, and that it will never be full, never overflow. It will simply hold everything, forever. This, however, is an utterly irrational assumption.
Environmental factors alone should convince us that eventually two things will happen: (1) we shall run out of various natural resources to pour into the economy, and (2) we shall discover that all along the cone has not been self-contained, that it has been leaking toxins, contaminating the world around it, creating an enormous, costly mess.
Both economists and businesses have always operated on the assumption that the future will be similar to the past, that since the capitalist economy has grown over time, it will continue to grow. They don’t consider the possibility that as the economy grows, it encounters constraints that were irrelevant when it was small. We might liken the economy to a seven-foot-six basketball player who had no trouble with doorways or finding clothes that fit when he was ten. But at twenty he has to duck to leave a room or to dodge light fixtures and must special-order pants, shirts, and shoes. The minimal impact of industrialization on the environment when the earth was a seemingly infinite, sparsely populated place has little relevance to our present circumstances. Times change. We cannot logically expect the effects of the ever-expanding capitalist economy to remain negligible.
      “If capitalism has one pervasive untruth,” declares Paul Hawken, “it is the delusion that business is an open, linear system: that through resource extraction and technology, growth is always possible, given sufficient capital and will. In other words, there are no inherent limits to further expansion, and those who wish to impose them have a political agenda. . . . [But] ever-expanding abundance is not a theory based on science, or history, or nature. It is based solely on self-interest.”3

Capitalism’s Imperialist Tendencies
John Hobson, a frail little Englishman with a speech impediment and a penchant for economic heresy, argued a century ago that in order to grow, indeed, in order to survive, capitalism had to become imperialistic. Without exporting both production capacity and products abroad, he maintained, capitalism will eventually suffocate itself. At the time, no one really took him seriously except the Marxists, who twisted his ideas into a strange confirmation of their own misconceptions. But Hobson’s reasoning was both fascinating and deceptively simple: growth, the very engine that drove capitalism, also created a situation in which a nation could never consume everything it produced.
The poor, Hobson argued, didn’t have the means to buy their fair share, and the rich had too much money to consume their proportion of the nation’s production. Someone with a million-dollar income couldn’t (or wouldn’t see any reason to) buy a thousand times more consumer goods than a person with a thousand-dollar income. In fact, the wealthy in every society are mindful of what they don’t spend, for if they spend all they have, they are no longer wealthy. Wealthy people, because they both want to and have to, save a good portion of their excess, but those savings must be put to use. If they are invested in new production capacity, which they usually are, it only compounds the problem, says Hobson. If society is already having difficulty consuming all it produces, then this perpetual increase in production capacity will only flood an already saturated market.
In order to grow, Hobson concludes, capitalist economies must not only invest their capital abroad, they must also sell their increased production abroad. They must export more than they import. From one nation’s perspective, this provides a temporary solution for the necessarily imperialist capitalist economy, but in the long run it ruins a world economy, as more and more nations need an outlet for their excesses.
Hobson’s ideas, although largely forgotten, are nonetheless significant, especially when seen in the light of American expansion after World War II. Because it was the dominant and, for a long time, the only real economic power on the block, America was able to fill the world not only with factories and production equipment, but also with Coca-Cola and Levis and Chevrolets. We ran large trade surpluses. And at home our standard of living shot skyward. There was no underconsumption to bog down our economic growth, because we sent excess production abroad and real wealth was our most significant import.
Predictably, though, the rest of the world began to catch up with us, even surpass us. We tend to see this as a tragedy, of course, for many of our industries have either failed or lost their competitive edge, but it had to happen. We could not expect to live forever in the unreal economic conditions that prevailed after World War II. Now the tables are turned. Japan and Korea and Germany and other countries are investing in America, selling us their excess production, pursuing the same policy of economic imperialism that gave us such prosperity in the 1950s and 1960s. And we have a huge trade deficit, for we insist on overconsuming in an environment that suggests we should actually be underconsuming. Somehow, we’re actually consuming much more than we produce. How is this possible?
It’s simple, really. We have found a way around Hobson’s insistence that capitalist societies cannot consume all they produce without becoming imperialistic: debt. We are buying on credit. Not only is the trade deficit healthy and growing, but consumer debt accounts for an incredibly large portion of the average family’s monthly budget. And what we can’t afford to pay for with our own credit, Uncle Sam covers. Government spending over the past decade exceeded government revenues by about $3 trillion. And on top of this we have a mountain of corporate debt, which directly funds economic expansion. In short, we’re paying for our expanding production with debt. We’re not even coming close to covering it with money we earn today. Theoretically, it is impossible to do so. And unless we replace our assumptions about growth, we’ll just continue to dig a bigger hole for ourselves.
Interestingly, of the four economic plans I mentioned at the beginning of this chapter, Patterson and Kim found through extensive surveys that the American public overwhelmingly favors Jack Kemp’s return to supply-side economics. In other words, most Americans want to use government resources to spur an even greater expansion in our production base, in hope that we can somehow consume all that production and keep the economy growing. This is both madness and a sure-fire recipe for economic disaster.

The Problem of Profit
The preceding discussion of John Hobson’s ideas hints at the underlying question of this chapter. What makes the capitalist economy grow? The answer is very simple: profit. Profit is of course the difference between what a company charges for its products and what it spends. If the company reinvests that excess to expand production capacity, we call it capital, and it is the pursuit of capital that makes the capitalist economy grow. And Hobson would tell us that it is this engine of growth itself that prevents a capitalist society from consuming all that it produces—unless it invests abroad or purchases on credit.
The lust for capital is what causes the gap between the haves and have-nots to widen. Most people are motivated by the desire to increase their wealth. Why not? I don’t know many people who would rather be poor than rich. But those who own or control capital have leverage in this quest for wealth. They profit by keeping costs down while charging as much as the market will allow for their products. Their incentive, therefore, is to pay their employees as little as possible, and to keep for themselves as much as possible. The widening gap between rich and poor is simply evidence of this incentive.
So those who already own capital strive to increase that capital by reaping a profit. And this brings us to a question that perplexed worldly philosophers for centuries: Where do profits come from? Curiously, only three reasonable answers were ever put forward: one by Karl Marx, another by Joseph Schumpeter, and a third by Thorstein Veblen. Even the venerable Adam Smith wavered on this question between two possible answers.
For a more detailed examination of these theories, I recommend Robert Heilbroner’s classic, The Worldly Philosophers, but let me briefly outline the three answers to this pivotal question. Marx would tell us that in capitalist economies, profits tend to disappear over time as market forces equalize wages and advantages. This was not an original insight. Adam Smith, David Ricardo, and John Stuart Mill had already pointed out the same thing. What Marx did was to create a model of capitalism to show where this phenomenon would lead and to explain how it worked.
Marx’s model was not patterned after reality. It was a theoretically “perfect” capitalism. And what he concluded was that profit could exist in the capitalist system only when the capitalists stole it from the laborers. By paying them less than their actual value, capitalists were able to extract profit from their operations.
Marx’s model is very involved and does have several gaping holes in it, and others have adequately exposed these, but Marx’s ideas are significant because they do offer an explanation of where profit comes from.
To Joseph Schumpeter, profit was not stolen into existence; rather, it came honestly from innovation. He describes production and consumption as a circular flow that follows a regular and predictable course: people trading money and products with one another. So where do profits come from? They magically appear whenever the circular flow of production and consumption departs from its usual course. And when does this happen? Whenever an innovation enters the system. Whenever someone invents a new machine or new product, devises a new method of production, or improves quality, this disrupts the flow.
Innovation allows someone to take money out of the flow, either because quality has increased and people are willing to pay slightly more, or because production has become more efficient and the capitalist needn’t pay as much to someone else, yet can temporarily charge the traditional price for a product. Profit, to Schumpeter, is a temporary glitch in the flow of production and consumption. Before long, everyone’s quality will increase or their costs will decline as they learn the new method or purchase the new machinery. Then, as in Marx’s model, profit is squeezed out of the system. Profit exists in Schumpeter’s world only in a transient state. It is a temporary phenomenon, a constantly recurring temporary phenomenon, which explains the survival of the system.
Thorstein Veblen offers yet another view of profit. He saw “the economic process itself as being basically mechanical in character. Economic meant production, and production meant the machinelike meshing of society as it turned out goods. Such a social machine would need tenders, of course—technicians and engineers to make whatever adjustments were necessary to ensure the most efficient cooperation of the parts.”4 But, asked Veblen, where does the businessman fit in? The businessman, he concluded, was basically a saboteur of the system who extracted a profit by disrupting it.
The system itself saw no other end except making goods. The businessman, however, was interested only in making money. But “if the machine functioned well and fitted together smoothly, where would there be a place for a man whose only aim was profit? Ideally, there would be none. The machine was not concerned with values and profits; it ground out goods. . . . So the businessman achieved his end, not by working within the framework of the social machine, but by conspiring against it! His function was not to help make goods, but to cause breakdowns in the regular flow of output so that values would fluctuate and he could capitalize on the confusion to reap a profit.”5
And how did the businessman cause these breakdowns in the production machine? By creating the never-never-land of corporate finance. “On top of the machinelike dependability of the actual production apparatus,” explains Heilbroner, “the businessman built a superstructure of credit, loans, and make-believe capitalizations. Below, society turned over in its mechanical routine; above, the structure of finance swayed and shifted. And as the financial counterpart to the real world teetered, opportunities for profit constantly appeared, disappeared, and reappeared.”6
Now, all three—Marx, Schumpeter, and Veblen—were partially right. They isolated direct causes of profit in individual businesses, but none of them carried the question to the next logical level and identified the underlying source of all profit (and all growth) in the capitalist economy.
It’s easy to see where one company’s profit comes from. Xerox, for instance, simply charges more for its copiers than it pays to produce them. The difference between what it brings in as revenues and spends as various expenses appears on its financial statements as profit. But if we look at the economy as a whole, how does it profit, or expand, each year? Where does growth come from? Well, directly, it comes from the surpluses of its specific parts and pieces. Individuals and corporations either reinvest their wages and profits in production capacity to expand our product base or spend them on old and new products to increase the overall level of consumption. Who can deny that the economy encompasses more goods and services than it did a decade ago? There are more cellular phones, more microwave dinners, more books about the economy, more consultants, more accountants, and more fast food outlets than there were last year. But this explanation—that the economy grows because of recurring profit in its individual parts and pieces—misses something important: How is it that the sum of all businesses experiences more profit than loss in a given time period?
As we trade money and products with one another, shouldn’t profit and loss cancel each other out? In other words, in an economy where imports and exports balance (and therefore cancel each other out), shouldn’t total business revenues exactly equal total business expenses? Some may point out that business revenue is made up of both expenditures by other businesses and consumer purchases. But where do consumers get the money to spend? From their wages, which are a business expense. Where, then, does the surplus come from? How do we solve this paradox? The answer is that, yes, indeed, total revenues and expenses should be equal—unless the quantity of money in the system increases. If new money enters the picture, then total revenues can in fact exceed total expenditures.
This, then, is how the economy expands. New money is introduced—primarily through a nifty bit of financial magic we might call borrowing money into existence—and this sustains economic growth. The new money permits capitalists to extract a profit from their operations (it also permits individuals and organizations to profit from financial speculation), and it allows revenues to exceed total expenses in any given period of time.
[This explanation is incomplete, but it is as good as I could come up with in 1995. Maybe when I’ve finished posting the chapters of Economic Insanity, I’ll post a more complete explanation of where profit comes from. Next up will be the remainder of chapter 3.]
1. Herman E. Daly and John B. Cobb Jr., For the Common Good: Redirecting the Economy toward Community, the Environment, and a Sustainable Future (Boston: Beacon Press, [1989] 1994), 131.
2. Kenneth Lux, Adam Smith’s Mistake: How a Moral Philosopher Invented Economics and Ended Morality (Boston: Shambhala, 1990), 9.
3. Paul Hawken, The Ecology of Commerce: A Declaration of Sustainability. New York: HarperCollins, 1993), 32–33.
4. Robert L. Heilbroner, The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers, 6th ed. (New York: Simon & Schuster, 1986), 235.
5. Heilbroner, Worldly Philosophers, 235–36.

6. Heilbroner, Worldly Philosophers, 236.

Monday, October 9, 2017

Economic Insanity: Chapter 2

Consumerism: A Perfect Circle
That’s Empty in the Middle

[Note: This chapter seems a bit quaint after all these years, and I would probably disagree with a few minor points, but since my purpose is simply to see how well these ideas hold up after almost a quarter century, I’ll leave it as it was written.]

The small volume of saving by the average man, and its absence
among the lower-income masses, reflect faithfully the role of the
individual in the industrial system and the accepted view
of his function. The individual serves the industrial system not
by supplying it with savings and the resulting capital; he serves it
by consuming its products. On no other matter, religious, political,
or moral, is he so elaborately and skillfully and expensively instructed.
—John Kenneth Galbraith,
The New Industrial State

Before I address the topic of consumerism and the problems that arise from placing this enormous burden on a shrinking middle class, let me backtrack a little and make an observation. If we are to solve our deeper social and economic problems, we must reverse our thinking about growth and prosperity and start imagining ways in which we as a society can attain a comfortable degree of prosperity without having all our economic activities be dependent on endless growth. Perhaps the first step in this rethinking process is to come to grips with one simple fact about progress, the philosophical doctrine that undergirds our growth imperative: Progress is a journey without a destination.

Goalless Movement
In The True and Only Heaven, Christopher Lasch debunks the notion that our belief in progress stems from either the Christian doctrine of the millennium, that thousand-year period of peace preceding the end of the world, or the ubiquitous secular ideal of utopia, a perfect society toward which all human beings should be striving. It is not my purpose here to recite Lasch’s arguments against the supposed millennial or utopian roots of progress. Suffice it to say that the fundamental distinction between our present-day conception of progress and the older notions of utopia and the Christian millennium is that the last two are end conditions, goals to guide our footsteps in the present. They are destinations toward which we are (or should be) traveling. Not so with progress. Progress has no destination, no culmination in something perfect or even desirable.
Progress is never satisfied. It assumes that what we have is never enough. We must continue to accumulate and consume, accumulate and consume, forever and ever, with no upper limit. This, of course, is insanity of the highest order. But the idea of progress is open-ended. It always looks beyond the present to the next step. It denies the existence of such a thing as the good life and focuses only on bettering our current state. But if there is no goal, no ideal to direct us, how do we know what progress even is? How do we know we are improving, moving forward instead of backward? Well, we don’t. Movement is all that matters. Direction is a nonissue. This is why so much of our material progress is accompanied by social and moral deterioration.
And this is the fatal flaw of the progressive ideology: it cannot admit to an ideal. It cannot say, “This is good,” for then the chance would exist that we might actually achieve that good, and progress would necessarily come to an end. But the doctrine of progress assumes we shall never arrive anywhere.
Progress can never answer the question “Where are we going?” because any answer would concede the existence of a destination, an ideal, a perfect pattern we are trying to achieve. It would also admit to certain moral absolutes, such as goodness, truth, and happiness. So, in the absence of moral certainty and a specifically desired destination, how can we possibly know we are “making progress”? We can’t. Such knowledge is impossible.
The only evidence of progress is movement. Not movement toward something, just movement. Any movement is better than no movement at all. And the more technically quantifiable that movement is, the easier it is to document. This is why we measure our progress in terms of technological advancement and scientific breakthroughs and the size of the economy instead of by how compassionate or cooperative or moral or happy we are. Measurement is everything where progress is concerned, and such intangible attributes are nearly impossible to measure.
This is why good is a nonconcept in our progress-minded world. Good can’t be measured. Better, on the other hand, can be measured, because it compares two different things. But in the absence of an ultimate destination, how do we know which of two different things is better? We don’t. And so to get around this obstacle, the ideology of progress quietly embraces one unusual absolute: more. More is better. This axiom lies at the core of our belief in progress, and yet, strangely, this one absolute is in perfect harmony with the relativistic idea of endless progress, for more is never a final destination. By definition, it implies instability, insatiability, expansion, and obsolescence.
Indeed, the governing reality in the progressive dogma is the notion of obsolescence. Every advance shall be superseded by a new advance. Nothing is best, because everything can be exceeded and, therefore, nothing is certain. “That nothing is certain,” says Lasch, “except the imminent obsolescence of all our certainties—our scientific theories, our technology, our artistic styles and schools, our philosophies, our political ideals, our fashions—naturally gives rise to the sense of impermanence that has been celebrated or deplored as the very essence of the modern outlook.”1 Impermanence, you might say, is the one permanent fixture in our progressive lives.
The upshot of this reasoning is that in terms of the rationale of progress, there can be no such thing as an American Dream. The Dream vanishes in the wake of an endless and measurable parade of technological innovations, because progress allows no ideals, no desirable and attainable stations where we can stop our goalless march and simply declare, “This is good. This is what civilization is supposed to be like. Let’s stay here forever.”

Endless Upgrades
Let’s look at an example of the insanity spawned by the progressive ideology. An interesting scenario has been playing itself out in the software industry. WordPerfect and Novell, two companies headquartered in the valley where I live, recently merged, creating the third largest firm in the industry. They saw this as the best, perhaps even the only, option for staying in a game increasingly dominated by Microsoft. Novell and WordPerfect are not alone. Adobe and Aldus are joining forces, as are Electronic Arts and Broderbund. Consolidation is typical in this industry, as it is in many others. If companies do not grow, they die, and the easiest (and certainly the quickest) way to ensure future growth is to merge, to become instantly as large as possible.
The only problem with this is that ultimately growth in the software industry rests on only two pedestals: (1) new applications and (2) upgrades of existing applications. Unfortunately, both pedestals have inherent limitations. How many new applications do consumers really need? And how many can they afford? Likewise, why should consumers buy an upgrade when the current, “obsolete” version has more bells and whistles than they’ll ever use? Take me, for example. I am using WordPerfect 5.1 for DOS to write this book. Depending on how you count, it’s either one or two full steps—and soon will be three or four—below the current top-of-the-line upgrade. Sure, I’d like to have WordPerfect 6.0 for Windows, but my current version has more features than I’ll ever use. Besides, I can’t afford an upgrade. What happens when most users reach my situation?
The growth imperative is illogical, yet Microsoft, WordPerfect, Novell, and all their competitors are caught in its irresistible pull. They must create demand out of thin air, especially for upgrades that people don’t need. Why? Because if they don’t, the competition will. Then they will lose market share. This example holds true for most other industries also, whether you’re talking about electronics or automobiles.
Perhaps no one else sees it this way, but it seems to me that most companies in these endless-upgrade industries have somehow misplaced the reason for their existence. They don’t see the company’s primary purpose in (1) providing a good working environment for members of the community, (2) bringing prosperity to the community by selling a quality product, or (3) serving society in general. Their primary purpose has evolved into an imperative to grow, even if growth means selling products no one needs. But the reasons for this growth rest snugly in the arms of self-interest. It is not good enough anymore for a company to produce a quality product, offer good working conditions for many members of the community, or serve society. It must become the biggest, the best. Market share is everything.
Can every company in a given industry afford to embrace this self-centered philosophy? No, because for every company that gains market share, there is another that must lose market share. But in this intricate dance of organizational survival called capitalism, every company is driven by the growth imperative.
This, however, is a false, illogical, immoral imperative. The economy simply cannot grow indefinitely. Every industry in the economy cannot grow indefinitely. Every company in an industry cannot grow indefinitely. Technological progress cannot play itself out in an endless panorama of repeated obsolescence and perpetual replacement. This is a bankrupt economic philosophy that will reach its logical conclusion in relatively short order. We cannot afford such insanity. No society can. And yet we are hell-bent on pursuing this course, regardless of what either reason or the hard facts tell us.
We consumers must continue to buy things we don’t really need—endless upgrades of nonobsolete products and a perpetual parade of new “stuff”—and we must consume it in increasing quantities. If we do not consume, overcapitalized businesses can’t make a profit, they lay off workers, disposable income contracts, consumption falls even lower, and a particularly insidious cycle kicks in. And yet, as unbridled capitalism unwinds along its inevitable course, we consumers are less and less able to consume enough to maintain high enough levels of economic growth.
As I write, the economy is riding the momentum of a four-year-old recovery, but the closer one looks at this recovery, says Time magazine, “the more it appears to be unlike any in recent memory. It is a split-level surge in which mass layoffs are continuing side by side with new hiring and heavy overtime; high-income people are making more money, while many others are working at worse jobs for lower wages than a few years ago and still others have seen pay raises, if any, fall behind even today’s slow (2.5 percent) pace of inflation.”2
National polls show that as many as 40 percent of the workforce think the nation is still in a recession. There has been no recovery in their personal economies. Even President Clinton admits that “this appears to be a recovery for investors.” That’s a nice way of saying that the capitalists are getting richer, while everyone else is getting left further behind. More and more people can’t make ends meet, and myriad others are using up savings and going into debt to maintain a subsistence level of consumption. Let’s not fool ourselves into thinking that we’re going to recover from this economic malaise. Its source lies deeper than our repeated recessions and recoveries, which, like waves on the sea, are merely indicators of more profound forces.
Perhaps Bertrand de Jouvenel was right when he suggested that “societies are governed in their onward march by laws of which we are ignorant.”3 Maybe the dynamism that “carried them to their prime” is the same force that leads them to their doom. Perhaps there is nothing we can do about our addiction to progress and the illusion that we can pursue it like an ever-retreating pot of gold at the end of the technological rainbow. Still, I would like to think we can change course before it’s too late, that we the people can regain control of our wayward nation and rein in the extreme economic, political, and social philosophies that are driving us to the precipice.
Of the two opposing political orientations popular in America today, theoretically, you would expect the liberals to believe in progress, which they do. But Lasch points out the inherent paradox of a “movement calling itself conservative” that doesn’t “associate itself with the demand for limits,” and not only on economic growth, but also on “the conquest of space, the technological conquest of the environment, and the ungodly ambition to acquire godlike powers over nature.”4 Liberals and conservatives alike have always worshipped at the altar of unending technological progress. And progress, Lasch contends, has become our secular religion.
Contrary to the Christian millennial vision that it replaced, the gospel of progress has no culmination, no utopia or paradise in which mankind will find rest from the competitive arena, from the mercenary world of commerce. Progress simply goes on forever, changing, growing, consuming everything in its path. The reason the secular theology of progress does not aim toward some ultimately desirable and happy ending is because its roots are not religious. They lie rather in the soil of moral relativism, agnostic science, and economic Darwinism. Human society, as a species, is adapting and reshaping itself, but not with any particular end in mind. Survival is our only motive, and the process—progress—is all that matters. We are pursuing a means without an end. But that means will indeed have an end, an unexpectedly abrupt and tragic one—unless we mend our ways.
The notion that progress does not have any noble objective or purpose bothers most people, when they take time to think it through carefully. Even George Bush (or one of his speechwriters) expressed dismay at the idea in his 1989 inaugural address: “What is the end purpose of this economic growth?” he asked. “Is it just to be rich? What a shallow ambition. Is there really any satisfaction to be had in being the fattest country? . . . What will they say of us, the Americans of the latter part of the twentieth century? That we were fat and happy? I hope not.”
But what is the purpose of endless economic growth? What is the purpose of all our progress? According to our modern, technological definition, it has none. Progress is not actually taking us anywhere; it is merely a joyride we have pursued for the sake of what we might see and experience along the way. If, in the end, it deposits us back at the very beginning, where our journey began, then that, we must concede, is as good a place as anywhere else.
And what exactly do we experience along the way? The only experiences that count in the current progressive ideology are those we buy. Consumption is the name of the game, because consumption keeps the whole mechanism moving. Not only must we consume at ever-increasing levels to perpetuate the ride (like buying ticket after ticket at the amusement park so that we can go in circles until we’re dizzy and nauseated), we must also consume because without consumption our lives would be empty. With no end destination to all this growth and progress, we can achieve satisfaction only through the “ride,” through the illusion that we are going somewhere and experiencing something worthwhile. Laurence Shames decries modern consumerism as consumption without justification, without purpose:
During the past decade, many people came to believe there didn’t have to be a purpose [for consumption]. The mechanism didn’t require it. Consumption kept the workers working, which kept the paychecks coming, which kept the people spending, which kept inventors inventing and investors investing, which meant there was more to consume. The system, properly understood, was independent of values and needed no philosophy to prop it up. It was a perfect circle, complete in itself—and empty in the middle.5
Consumer-based, progress-driven capitalism is completely amoral. It must be. If our economic system were governed by a well-defined morality—say, for instance, that corporations were required to abide by the man-made laws that hold individuals in check or the absolute laws that regulate nature—it would die. It is, in fact, capitalism’s amorality that makes it so strong. It professes no inherent need to bend either its methods or its motives to conform to any but the most forceful external moral restraints. The sole purpose of capitalism is to provide goods for consumption, at ever-increasing levels.
John Maynard Keynes proclaimed that such abundance would produce a “decent level of consumption for everyone” and would free people to pursue more important noneconomic interests.6 The flaw in his reasoning is that capitalism can’t settle for a “decent level of consumption.” Its dependence on progress and growth dictates that consumption must increase without end. Hence, a “decent” level of consumption is always “a bit more than what I now consume.”
What this means is that production, likewise, will always increase. We can never say, “We’ve arrived. This is enough productive capacity.” More is always better. The engine of capitalism is specifically designed to create profits and turn those profits into new capital—forever. The engine may burn out, or we may turn it off, but it will never create something other than what it was designed to create. And what capitalism is designed to create is an increasingly capitalized world, a world filled to overflowing with both products and production capacity. More factories, more equipment, more products, for ever and ever. And we must consume everything that is produced. That is the other side of the coin.

A Nation of Consumers
Because we are expected to consume everything that capitalism produces, America has evolved from a nation of citizens (who are so necessary in maintaining a republic) into a nation of consumers (who are essential only in maintaining an economy). Consumerism is our second job, you might say. “One of the most pervasive myths in contemporary society,” write William G. Scott and David K. Hart, “is that, regardless of what people must do on the job, when they leave work, their time is their own. . . . The sacrifices and responsibilities that organizational obedience entails are amply rewarded by salaries that enable people to exploit their leisure time to the fullest. This is a cruel deception.”
They go on to explain that, even though the range of options is great, what one does away from the job is also determined to a large degree by the needs of profit-seeking organizations. This predetermination of leisure activities is a logical extension of the organizational imperative: “that all behavior must enhance the health of modern organizations. . . . The rule is: The primary obligation of the individual off the job is to consume.7
One largely unrecognized difficulty with this obligation, however, is that even though “we call ourselves consumers, . . . we do not [really] consume. Each person in America produces twice his weight per day in household, hazardous, and industrial waste, and an additional half-ton per week when gaseous wastes such as carbon dioxide are included.”8 Perhaps what we need is not just a redefinition of our purpose as citizens of this nation, but a redefinition of basic terms, such as production and consumption.
If we were to redefine production to mean the creation of either fully consumable or easily reusable products, rather than simply the churning out of quantifiable, purchasable stuff, and redefine consumption to mean the judicious acquiring of life-sustaining, rather than lifestyle-enhancing, goods and services, we might begin to rein in the rampant growth imperative that governs corporate America and threatens to destroy our society.
We toss about the term economy, as if all it meant were an expanding smorgasbord of delectables to consume, but economy, in the more original sense, refers to the thrifty, efficient, frugal use of resources. Our “economy,” ironically, has come to represent the exact opposite of this original definition. It is, in fact, so uneconomical that its profligacy is consuming us.
1. Christopher Lasch, The True and Only Heaven: Progress and Its Critics (New York: Norton, 1991), 48.
2. George J. Church, “Recovery for Whom?” Time, April 25, 1994, 30.
3. Bertrand de Jouvenel, On Power, trans. J. F. Huntington (Boston: Beacon Press, 1962), 378.
4. Lasch, True and Only Heaven, 39.
5. Laurence Shames, The Hunger for More: Searching for Values in an Age of Greed (New York: Vintage Books, 1991), 80–81.
6. Lasch, True and Only Heaven, 536.
7. William G. Scott and David K. Hart, Organizational Values in America (New Brunswick, N.J.: Transaction Publishers, 1989), 72.

8. Paul Hawken, The Ecology of Commerce: A Declaration of Sustainability (New York: HarperCollins), 1993, 12.

Monday, October 2, 2017

I Mourn for My Country

Tonight I mourn for my country. I mourn for those who lost their lives or were injured in the horrific massacre in Las Vegas. But beyond that, I mourn for what America has become.
I mourn that we have elected politicians who are so cowed by the NRA that they make excuses for not banning military-style weapons. These weapons have one purpose and one purpose only—to kill people, as many as possible, as quickly as possible. There is no reason on earth why anyone other than a soldier should be allowed possess one of these weapons.
I mourn that so many of my fellow Americans think the right to own a gun is the supreme right, that it trumps all others. It certainly trumps the right to feel safe in public places.
I mourn that so many of my fellow Americans do not understand that rights come with responsibilities, and if we as a people cannot be responsible, we must forfeit the associated right. We prove every day, over 30,000 times a year, that we are not responsible with the right to own guns. We are the only “civilized” country on earth that permits this many gun deaths. Which means, I suppose, that we are not civilized.
I mourn that a majority of us has elected leaders whose highest priority is to funnel as much wealth as possible into the hands of those who do not need it and to withhold food and shelter and medical care from those who so desperately do need it. I mourn that they are willing to lie in order to camouflage the true intent of their legislative agenda.
I mourn that those same leaders would attempt to replace an imperfect health-care system with an abominable alternative that would primarily do harm to millions of Americans—all for political gain—rather than try to fix the imperfect system.
I mourn that we have allowed a corporate economy based on greed to prevail over our better instincts of sympathy, compassion, service, and generosity.
I mourn that a slight minority of us prevailed in the recent presidential election (through a quirk of the Electoral College) and has placed in the White House a narcissistic, amoral, crude, nationalistic, sexually predatory, fraudulent, vindictive, petty, insecure man who is both unfit for the office and consistently embarrassing to our country. And I mourn over the millions of Americans who are willing to apologize for his abhorrent behavior rather than hold him to a higher standard.
I mourn that this same group of Americans has turned its collective back on science and in the name of bogus economic benefits is willing to make the earth eventually uninhabitable. This is inexcusable, and their posterity will curse them for their willful blindness.
I mourn above all that my country is no longer a beacon of light to the world, but is a gaping black hole of moral hollowness.

Tonight I mourn for my country.

Sunday, October 1, 2017

Recycled High Council Stuff

I'll get back to Economic Insanity with the next post, but some of the conference talks this weekend got me thinking about a different topic. Since Sabbath Day observance has been a point of emphasis for the General Authorities lately, I thought I’d post a rather unconventional talk I gave on that subject last year. I serve on the high council and happened to be assigned to my home ward for this topic. I’m pretty sure you’ll never hear a talk like this in general conference (or probably in your own sacrament meeting), but here goes. Thanks to Craig Harline for most of the history.

The Sabbath Day Is a Perpetual Covenant 
The topic the stake presidency asked the high council to address comes from Exodus 31:16: “Wherefore the children of Israel shall keep the sabbath, to observe the sabbath throughout their generations, for a perpetual covenant.”
In our instructions from the stake presidency, they asked us specifically to extend their love “to each and every member.” They also asked us to thank you for your “goodness and obedience in following this prophetic priority in ‘elevating the spirit and power of the Sabbath day.’”
So, it’s my challenge to speak about the Sabbath. I’ve got more family here than usual today. Tricia and her family are visiting from Texas, and Matt is here from New York. Believe me, they didn’t come all the way to Utah to hear me speak, and I’m sure they’re saying to themselves, “He can make anything complicated. I wonder what he’s going to do to a simple topic like this.”
Well, the truth is, it’s not me that makes things complicated. Most things in life, when you look at them carefully, are already complicated. I just don’t see any purpose in simplifying them unnecessarily. So, what about the Sabbath?
As most of you are aware, when the Lord gave the commandment to keep the Sabbath day holy, he was referring to the seventh day of the week, which began and ended at sunset. But here we are, on Sunday, the first day of the week, which begins and ends at midnight, attending worship services, trying to make it a day of rest, and even calling it the Sabbath. How did this happen?
Most Mormons, I suspect, just assume that after Jesus was resurrected on the first day of the week, either he himself or his Apostles determined that the Sabbath should just be shifted one day so that it would now be celebrated on the first day of the week instead of the seventh. Well, as you might suppose, it isn’t quite that simple.
And I knew just where to look to find out how this shift took place. Craig Harline, a history professor at BYU, wrote a book titled Sunday: A History of the First Day from Babylonia to the Super Bowl. Some of you might recognize Craig as the father of Jonny Harline, the BYU tight end who caught the pass from John Beck in the end zone with time running out to defeat the Utes a few years ago. But Craig is actually a very good historian and is quite entertaining.
So, let’s go back in time a few millennia. Harline begins his book by observing that trying to find the origins of Sunday is like trying to find the source of a great river. “The delta at the end and the long channel flowing into the delta are easily recognizable. Yet the farther one moves upstream toward the source of the river, the trickier the going: tributaries multiply, lead astray, or go underground. And when finally located, the humble source may bear so little resemblance to the massive amounts of water downstream that one will surely wonder what the beginning can possibly have to do with the end.”1
But this much is clear: “‘Sun Day’ emerged in the ancient Middle East, as part of a seven-day planetary week.”2 But this was just one of many options. Weeks in the ancient world varied anywhere from five to sixteen days. But parts of the Middle East and then the Roman Empire settled on a seven-day week. Each day was named for one of the known planets. “Saturn Day was the first day (not the seventh), Sun Day was the second day, then Moon Day, Mars Day (Tuesday), Mercury Day (Wednesday), Jupiter Day (Thursday), and Venus Day (Friday). (Some of our English day names seem a bit obscure because they come from the old Germanic names for the gods the planets were named after.)3
The idea that one day of the week was superior to the others came from a different seven-day system, that of the Jews. They also had a seven-day week, but only two of their days had names: the Sabbath and the day before the Sabbath, called the Day of Preparation. The other days were numbered.4
Now, as you might suspect, these two seven-day systems bumped into each other, and by the first century AD, the Romans started observing a weekly day of rest. Their initial choice was apparently Saturn Day, the first day of their week, which just happened to coincide with the Jewish seventh day or Sabbath. This was convenient for everyone. And by at least AD 100, the Romans had started regarding Saturn Day as the seventh day, instead of the first.5
As you are probably aware, the Jewish day began at sunset. So did the days in the old planetary system. But the Romans began their days at midnight. So what we now have is the result of two or three different systems colliding.
Only one element of our current system was missing. That is the prominence of the first day, Sunday. This came, apparently, from the followers of both the Roman Sun God and the early Christians, who began calling the first day “the Lord’s Day” because that was the day on which Jesus was resurrected.6
Craig Harline says that “the early Christian portion of the long-flowing Sunday river is perhaps murkier than any other.”7 Scholars have never been able to be certain about when, where, and why the Lord’s Day emerged among early Christians. “Was it in Jerusalem or Rome or elsewhere? Was it the work of the apostles or later church leaders? And most of all, was it meant to replace the Jewish Sabbath, to accommodate the pagan Sun Day, or to establish something entirely new and uniquely Christian?”8 Unfortunately, there is not enough evidence in the surviving records to say for sure.
We do know a few things, though. First, while the Sabbath for the Jews was a day of both rest and worship, the Lord’s Day for early Christians was just a day of worship. In the Roman Empire, Sunday was initially a work day, so the Christians met early and late, before and after work.9 Many of the early Christians also regarded the fourth of the Ten Commandments as obsolete, because it was part of the Old Testament, which had been fulfilled by Jesus. They regarded the Jews as an apostate people and sometimes criticized them for being lazy because they rested on the seventh day.10 But for the first three centuries, some Christians observed both the Jewish Sabbath and the Lord’s Day. This explains why so many elements of the Jewish Sabbath found their way into our observance of Sunday. If this is all a bit confusing, welcome to real life.
In AD 321, the Emperor Constantine declared Sun Day as the official holy day in the Roman week. And by the later fourth and early fifth centuries, Christians began treating Sunday as a day of rest. After the fall of the Roman Empire, church leaders continued supporting Sunday as a day of rest and worship. According to Craig Harline, the Council of Rouen, in AD 650, “was the first church council explicitly to require a twenty-four-hour Sabbath-like Lord’s Day, to make rest and worship obligatory.”11 The council also produced a list of penalties for violating the day of rest—but only after “first condemning all ‘superstitious’ rules and penalties of the Jewish Sabbath.”12 In the year 755, “the Frankish king Pepin III gathered the bishops of France, condemned Judaizing within the Church, then promptly proclaimed a long list of prohibited Lord’s Day activities.”13
This is a tendency that has prevailed since ancient times. We know that the Jews of the Old Testament had created numerous rules and penalties regarding what a person could and couldn’t do on the Sabbath, which caused them to criticize some of Jesus’s activities and caused Jesus in return to remind them that the Sabbath was made for man and not man for the Sabbath. This tendency is obviously hard to avoid. In our LDS efforts to make sure people are observing the Lord’s Day appropriately, we often resort to similar sorts of formal or informal list making. But I think this may defeat the purpose of the day.
There are two general types of commandments we are given. There are higher laws and lesser laws. The lesser laws are usually rather straightforward and involve some minimum standard of acceptable behavior. There is, for instance, only one way to keep the commandment “thou shalt not kill.” You just don’t kill anyone. Likewise, there’s only one way to keep the commandment “thou shalt not steal.” You don’t take something that’s not yours. Higher laws, by contrast, are usually open-ended. An example is the commandment to love your neighbor as yourself. There are millions of ways to keep this commandment. So, of which type is the commandment to keep the Sabbath day holy? For the most part, I would suggest, it is a higher law. It has a stated objective, but it is pretty much left up to us just how we go about keeping the commandment.
Of course, there’s also the question of why, exactly, we think that Sunday is the Sabbath. It’s not really, of course. Sunday is the Lord’s Day. But over the centuries, Christians have largely transferred both the intent and the injunction given in the fourth commandment from the seventh day of the week to the first day. As Craig Harline concludes, “It would remain this way for so long that countless generations in the Western world would consider the day’s very existence, name, and status as obvious, unquestioned facts of life, as if things had always been this way.”14
He spends chapters discussing how Sunday was observed over the centuries in various countries. He explains, for instance, how America inherited (through the Puritans) a very strict version of Sunday, while in continental Europe a very different and more pleasant sort of Sunday prevailed. One aspect of Sunday was rather common, though. In the agrarian economies that existed until the Industrial Revolution, Sunday, of necessity, was for most people a day of work, to one degree or another. In spite of all the lists of rules. And after the Industrial Revolution, the capitalist owners of businesses made sure that it was a day of labor for the working class, until the labor unions and churches gained enough influence to convince business owners to give their workers one day off each week.
If you look at all the tributaries that flow into the river of modern LDS Sunday observance, they would include the ancient Jews, the Romans, the early Christians, the Catholic Church, the Reformers, labor unions, a particularly strict Puritan writer named Nicholas Bownd, the Methodists of the 1820s and 1830s, latter-day scripture, and, dare I say it, the modern corporation, which is at least partially responsible for the extreme level of organization we now have and all the planning meetings Mormons like to hold on Sunday.
So, what instructions does the Lord actually give us in modern revelation about what we should do on his day? The only information we get is in D&C section 59. In verses 9 through 14, we read:
And that thou mayest more fully keep thyself unspotted from the world, thou shalt go to the house of prayer and offer up thy sacraments upon my holy day;
 For verily this is a day appointed unto you to rest from your labors, and to pay thy devotions unto the Most High;
 Nevertheless thy vows shall be offered up in righteousness on all days and at all times;
 But remember that on this, the Lord’s day, thou shalt offer thine oblations and thy sacraments unto the Most High, confessing thy sins unto thy brethren, and before the Lord.
 And on this day thou shalt do none other thing, only let thy food be prepared with singleness of heart that thy fasting may be perfect, or, in other words, that thy joy may be full.
 Verily, this is fasting and prayer, or in other words, rejoicing and prayer.
The phrase that jumped out for me in these verses was “And on this day thou shalt do none other thing.” I wonder how all of our meetings and other Sunday duties fit in with this commandment. I know, for some of us, Sunday is actually the busiest day of the week. Hardly a day of rest, and often not a day of rejoicing and prayer either. Perhaps we should strive to view the Lord’s day as the early Christians did—as a day of joy.
I can’t help thinking of Sunday evening two weeks ago. Sheri and I, somewhat like peasants in the Middle Ages, were out in the garden picking raspberries because they were ripe and we weren’t going to have time to pick them Monday morning. I couldn’t help hearing what was happening in our next-door neighbors’ backyard. Their kids and grandkids were there, and I could hear some of them playing some sort of a game. It may have been kickball. If you know the Nelsons, it had to involve a ball. But they were having a great time. Now, some people might look down on this sort of activity on Sunday, but I knew at the time that I would be speaking on this topic, and I couldn’t help thinking that there was a lot of joy going on in the Nelson’s backyard. And joy is what the Lord’s Day meant to early Christians.
One other thing we ought to remember is that we shouldn’t judge each other on how we decide to keep this higher law.
My hope is that you will focus more on the purpose of the Lord’s Day, which is to remember him and worship him, and not get bogged down by lists of rules or questions about what is and isn’t appropriate. If you get the purpose right, chances are you’ll also get the behavior right.
1. Craig Harline, Sunday: A History of the First Day from Babylonia to the Super Bowl (New York: Doubleday, 2007), 1.
2. Harline, Sunday, 2.
3. Harline, Sunday, 2–3.
4. Harline, Sunday, 3–5.
5. Harline, Sunday, 5–6.
6. Harline, Sunday, 7.
7. Harline, Sunday, 6.
8. Harline, Sunday, 7.
9. Harline, Sunday, 16.
10. Harline, Sunday, 12, 19–20.
11. Harline, Sunday, 22.
12. Harline, Sunday, 22.
13. Harline, Sunday, 22.

14. Harline, Sunday, 25.

Thursday, September 21, 2017

Economic Insanity: Chapter 1

Part 1
Questioning the System

When he was young Phædrus used to think about cows and pigs and chickens and how they never knew that the nice farmer who provided food and shelter was doing so only so that he could sell them to be killed and eaten. They would “oink,” or “cluck,” and he would come with food, so they probably thought he was some sort of servant.
      He also used to wonder if there was a higher farmer that did the same things to people, a different kind of organism that they saw every day and thought of as beneficial, providing food and shelter and protection from enemies, but an organism that secretly was raising these people for its own sustenance, feeding upon them and using their accumulated energy for its own independent purposes. Later he saw there was: this Giant. . . .
      The Giant began to materialize out of Phædrus’ Dynamic dreams when he was in college. A professor of chemistry had mentioned at his fraternity that a large chemical firm was offering excellent jobs for graduates of the school and almost every member of the fraternity thought it was wonderful news. . . .
      So here was this Giant, this nameless, faceless system reaching for him, ready to devour him and digest him. It would use his energy to grow stronger and stronger throughout his life while he grew older and weaker until, when he was no longer of much use, it would excrete him and find another younger person full of energy to take his place and do the same thing all over again.

                                          —Robert M. Pirsig,
                                            Lila: An Inquiry into Morals

Chapter 1

Feeding the Bastard Child

Most of you [graduates] are here [at commencement]
today only because you believe this charade will help you
get ahead in the world. But in the last few years things
have got out of hand; “the economy,” once the most
important thing in our materialistic lives, has become
the only thing. We have been swept up in a total
dedication to “the economy,” which like . . .
[a] massive mudslide . . . is rapidly engulfing
and suffocating everything.

—Hugh W. Nibley,
“Leaders and Managers”

The original American Dream, the Dream that inspired the Founders, has diminished in our day. Indeed, it has shriveled from a grand and comprehensive social ideal to an economic wish list, a self-centered program of selective prosperity in which we make our mark as consumers, not as producers and creators. The economy has become our greatest concern—for the simple reason that we have allowed it to control both our collective and individual lives. Yet in the context of what America once meant, the economy is but one small part of a much larger ideal, an ideal that, sadly, we have shoved into the background.
This is not to say that economic matters are unimportant. Indeed, if the economy is ailing, all other aspects of the American Dream can’t help but be affected. But a healthy economy alone will not restore the American Dream any more than giving an AIDS patient a million dollars will make him well again. Several other factors must first be put back into the American equation, for the Dream is not just economic—it is also political and social in nature. Instead of spending time and energy trying to make the economy more efficient, we ought first to put economics back into the social and political context where it rightly belongs.
In the day of Jefferson, Adams, and Washington, the economy was not the primary adhesive that held the people together. Indeed, economic differences almost prevented the thirteen original states from uniting into one country. Today, by contrast, it seems the economy is all that holds us together. In every other area of life, we find only divisiveness. The common ideals, values, and dreams that once united us as a people are fracturing and fading before our eyes. The only thing we agree on anymore is that America is in deep trouble, and the only thing that binds the Union together is our voracious economy.

Everything Is Economic Nowadays
Perhaps the best way to cut through the layers of complex theory, conflicting opinion, and thoughtless tolerance that obscure our view of this insatiable beast is to ask an almost insultingly simple question: How do we best satisfy the physical needs and wants of human beings? This is the fundamental question of economics, but unfortunately it is not as simple to answer as it is to ask. Indeed, seventy-odd years of East-West tension resulted from this question, for communism offered one answer (a strictly controlled, centrally planned economy) and capitalism another (a largely unregulated, profit-motivated market), and the world wasn’t quite big enough for both perspectives. Even if we limit ourselves to market-based economic systems, the question is not easy to answer, for the market mechanism is both complex and controversial, fraught with disconcerting moral and social issues.
In spite of, or perhaps because of, its simplicity, this question, to my knowledge, is never expressed so directly in the economics courses offered at our colleges and universities. The reason it is not asked is because it is actually a moral and philosophical, not a mathematical, question, and economics has evolved into a mathematical science.
As a field of scholarly study, economics has distanced itself from real-world concerns and conditions to the point where it has become little more than an exercise in mental gymnastics, a discipline filled to overflowing with complex mathematical models constructed of Greek symbols and impossible, otherworldly assumptions. Economics, the science, is evident in the media-happy, everyday world where we live and work. Facts and figures constantly bombard us: unemployment, cost of living, consumer price index, business cycles, recessions, real wages, inflation, exchange rates, wealth distribution, poverty levels, GNP, GDP, leading indicators, lagging indicators, and so on, ad nauseam.
Economics has reached such a sterile plateau, in fact, that Robert Heilbroner asks in his classic The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers whether there even are worldly philosophers anymore. And his answer is no. “There are certainly a vast number of economists,” he says, “over twenty thousand of them in the United States alone. . . . There is a Nobel Prize for Economics. There are economists in every bank and corporation; there are economists in the newspaper columns in the morning and on the television broadcasts at night.” But are there worldly philosophers? “Not if we mean by the term great prognosticators or great visionaries. . . . In the main, economics has become a technical, often arcane calling, and ambitious projections of imagination into the future are no longer listed among its aims.”1 Although there are notable exceptions, most economists today, even some Nobel Prize winners, are technicians, not philosophers.
Why is this so? Because the realm of economics has become a world unto itself, a world of numbers and equations that are becoming less and less relevant because they are no longer attached to the basic questions and issues that spawned the whole field of economics in the first place. Economic thought is now merely an analytical tool, not a guiding philosophy.
Even on the most practical level, economics has distanced itself from the real questions of life and is setting up its own ground rules. We speak of the “business world” because it is a world of its own, and it is consuming the larger world of which it used to be only a part. Sports, entertainment, the arts, politics, the media, medicine, law, education, charity, the family, human relationships—all are being devoured, partially digested, and regurgitated with an acrid economic flavor. Everything is economic nowadays, at least on the surface, and yet few seem willing to look beneath this veneer and ask the questions that troubled the great thinkers of past centuries, questions that make us evaluate our most basic assumptions. Especially since the demise of the Cold War, we have apparently assumed that all the fundamental questions of economics have been put to rest. Capitalism won, communism lost, end of story.
This, specifically, is where we have failed, for those questions have never been answered satisfactorily. The great worldly philosophers debated them and never arrived at a suitable answer. But now there are no great worldly philosophers, no inquisitive minds to attack the larger picture and make us rethink the inadequacies of our system at its most fundamental level. We are in the hands of technicians, who have no interest in a panoramic view.
This particular brand of myopia persists because we have anesthetized economics and severed it from its philosophical underpinnings, because we have interpreted the fundamental question of economics in terms of processes and techniques. How do we best provide for the physical needs and wants of human beings? The key word here is “best,” which on those rare occasions when we bother with the larger view, we have interpreted to mean “most efficiently.” But best can have a much broader meaning. We can define it in moral or philosophical terms. How do we create the greatest good for all human beings while providing for their physical needs and wants? That is a completely different question, one we have yet to answer. Neither communism nor capitalism in any of its various guises has addressed this question in a meaningful way.
Consequently, our present system contains no satisfactory answer. And yet that is exactly where we have been searching. For decades we have been tinkering with the knobs on an old black-and-white TV, moving the rabbit ears around, trying somehow to get a tolerable picture. It has apparently never occurred to us that what we need is a new color TV, or a cable hook-up, or maybe, heaven forbid, to throw the tube away for good and spend our spare time living life in the flesh and not vicariously. We need somehow to become uncomfortable with our present habits of thought and behavior.

The Bastard Child
As suggested by this chapter’s epigraph, “the economy” has become our all-consuming interest. By elevating it above and divorcing it from our political and social aspirations, we have allowed the economy to get out of control—and by that I mean out of our control—to the point where it is now in control. The result is that, to a surprising degree, most Americans live under the yoke of a system from which they are more or less excluded. To be more specific, most Americans are noncapitalists living in a capitalistic system. You can be a noncapitalist in two ways: First, you can disagree philosophically with the basic premises of capitalism. This category is surprisingly small. Second, whether or not you believe the theory, in a practical sense you are not a capitalist unless you possess capital. This group is inordinately large.
Many Americans own stock in some corner of corporate America. But that does not necessarily make them capitalists. If we define capital as “accumulated goods devoted to the production of other goods,” most stockholders cannot consider themselves capitalists just because they own a little stock. Their primary intent is not to produce goods with their capital. To them, investing their savings in corporate America is no different from putting their money in a six-month CD at the local bank. It’s simply the prudent thing to do if you don’t want inflation to get the best of you; and if the stock market isn’t performing so well, then you sell your shares of stock and invest your hard-earned money in T-bills or municipal bonds or soybean futures—whatever pays the highest return. Frankly, these passive stockholders don’t even care whether or not a product is produced. What they care about is the capitalist holy trinity of stock price, earnings per share, and dividends.
Most of these token capitalists are employees of corporations or small businesses. And, as such, they are not independent, they are bound—to their current employers and, more important, to the system. They can escape with relative ease and at any time from their respective employers—and either find a new employer or fight the exhausting self-employment battle— but they can’t really escape the yoke the system puts on them, because they don’t own capital.
These people are, in practice, noncapitalists, because they are dependent. Dependent on what? First and foremost, on their paychecks. But in the larger sense they are dependent on the ebb and flow of “the economy.” Gone are the days when communities were more or less self-sufficient, when people didn’t lose their jobs because of events or changing business practices in some other corner of the nation, or of the globe.
By contrast, let’s assume for a moment that I am employed at a General Motors plant in middle America. If the economy takes a downturn, consumers across the nation will reduce or delay their car buying. Because of lower demand by people I shall never know but on whom I depend, I may lose my job when the plant closes, along with hundreds or thousands of my co-workers. But this is not the end of it. This is merely the stone that causes ripples to surge outward in the economic pond. The collective payroll of my closed plant will now be missing from the local economy. Retailers, small businesses, restaurants, and other services that depend on the disposable income of GM employees will be hurt. Many will fail. Tax revenues will shrink, causing hardship among teachers and other civil servants. Fewer people will have health insurance to cover their medical bills. Charity cases will increase at the hospitals, which will not only drain federal funds but also increase premiums for those who do still have medical insurance. And the ripples spread out further and further. We are all interconnected by “the economy.”
Although their incentives naturally run toward perpetuating the system, even big-time capitalists aren’t immune to the whims and fluctuations of “the economy,” which is infinitely more potent than even the wealthiest billionaires. No one is immune, because our lives are shaped and misshaped by large, unwieldy, impersonal organizations. We’ve become one giant community—a community too large to maintain the balance that interdependence requires, too large to be governed effectively, too large to prevent the individual from being swallowed up in the needs of the impersonal whole, too large, indeed, even to be called a community. We are an “economy.” That’s what binds us together now, not community. Economic ties have supplanted social ones.
And yet “the economy” is nothing more than the bastard child of modern-day capitalism and the illegitimate assumptions that drive it. And now the bastard child is both in control and out of control, simply because we won’t admit to ourselves that somewhere along the road to organizational dominion we sired it by our greed, our ignorance, our self-interest, and our desire for instant gratification. We won’t claim responsibility for it, and therefore it isn’t required to play by the same rules that govern individuals and made possible the birth of our nation.
Nevertheless, we are mortally afraid of disciplining “the economy.” We simply feed it, make certain it keeps growing, regardless of how fat and insolent and burdensome it becomes to us as individuals. “The economy” even dictates our morals, for what is good for the economy, we are told, is good for the American people. This inverted moral imperative then filters on down to the organizational level and infiltrates our lives through the economic activities we pursue during most of our waking hours.

Organizational Morality
Because of the way our particular system has grown up, all that we see as good and desirable in people’s lives—everything from canned beans and high-top basketball shoes to laptop computers and Beethoven on CD—comes from the large organizations of capitalism; therefore these organizations must survive, at all costs. And not only must they survive, they must prosper. They must guard themselves against any future possibility of failing. They must increase their assets, their profits, and their market share, at the expense of any competitors, or the environment, or even their own employees.
Organizations must grow, for if they do not grow, they become vulnerable and may fail. And if businesses fail, dire consequences follow: employees become unemployed, become a burden on society; “the economy” is harmed; consumers have less disposable income to buy the products they want and need; and our standard of living, that elusive economic measure of relative wellness, declines. Therefore, organizations must, absolutely must, prosper. This is the cardinal rule of “the economy,” the highest law of economic America. Large organizations must not perish.
And because of this cardinal law, any act that enhances organizational success can be rationalized, because it works for the greater good of humankind, regardless how repugnant it may be to moral individuals. Thus, because we have exalted economic exigencies above political, social, or moral considerations, organizational morality now supersedes individual morality. Often it even supersedes the law.
Citing U.S. News and World Report statistics, Paul Hawken claims that 115 of the Fortune 500 were convicted of serious crime during the 1980s. No one knows how much misconduct went undetected, but the more important question is this: What was their punishment? Sometimes nothing. Sometimes a handslap, a fine, which can be written off as a business expense. Are they ever closed down, even after a long history of flouting the law? No. Union Carbide lives on, although many victims in Bhopal have not received even a penny of compensation. Indeed, “following the accident, Union Carbide proceeded to liquidate a substantial portion of its assets and give them out to shareholders in special dividends, thus reducing the corporation’s potential payout to the victims.”2
According to Russell Mokhiber, author of Corporate Crime and Violence, corporations kill 28,000 people and seriously injure another 130,000 every year by selling dangerous or defective products. More than 100,000 employees die each year because of exposure to toxins and other dangers at work.3 Are these organizations ever given the death penalty? No. Because the organization is more important than either the people it employs or the society it should serve.
Executives understand this. Middle managers understand this. The lowest-level employees understand this. Above all, the government understands this. Why? Because if the large organization fails, masses of people—both managers and employees—suddenly become “occupationally abandoned” and are at the mercy of the economy. This is why employees put up with the moral imperative of organizational survival; this is why they submit themselves to arbitrary authority; this is why they become “good corporate citizens.” This is why no one demands that organizations play by the same rules and adhere to the same moral principles deemed appropriate for individuals.

The Founding Values
Tackling this separate and self-serving organizational morality head-on, David K. Hart argues that all organizations in our nation should be governed by what he calls the Founding values, for these values are congruent with human nature and ensure that people are productive and happy. “The Founders believed that the Founding values should guide all human institutions: Government, economic, and social institutions were bound to observe the same moral rules. They understood Adam Smith’s argument that people become what they spend most of their lives doing. And if their lives never transcend the manufacture of pin heads, then there they stay.”4
Hart bases this argument of organizational responsibility on three notions: that organizations exist to better the human condition (not vice versa), that human happiness is the ultimate goal of society, and that this happiness can only be achieved where organizations honor a certain transcendent moral truth.
“It is quite risky to suggest a single moral a priori that guided the Founders,” he admits, “but I believe it can be argued that everything was based upon an extended meaning of the first word in the Jeffersonian triad of ‘life, liberty, and the pursuit of happiness.’” That extended meaning is, quite simply, the absolute sanctity of each individual’s life. “As free agents, individuals can magnify or squander the possibilities of their lives, but those lives are sacred. Therefore, no organization, public or private, has any right to deny, or even trivialize, the possibilities of individual lives with organizational requirements.”5 With this statement, Hart brings to light a pivotal question: Which is more important, the organization or the individuals in it? The form of government the Founders established suggests their answer to this question. Unfortunately, we have turned their wisdom on its head and have permitted a different answer to shape our lives in modern America.

The Individual
Implicit in the notions of liberty, democracy, equality, morality, justice, happiness, human dignity, and even material prosperity is the fundamental concept—the bedrock, if you will—upon which the American Dream was built: that the individual is more important than any particular organization, including the nation itself, to which he or she belongs. Belongs. The word implies ownership. Does the individual really belong to an organization, or does the organization belong to the individuals who devote pieces of their lives to it? That is a question we must address as Americans, for the answer tells us where power really resides in this country.
If the individual is, in practice as well as in theory, more important than the organizations in his or her life, then organizations exist to serve society, never to be served by it. Jefferson suggested this arrangement in the statement that follows his assertion of unalienable rights: “That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government.” If the government (or any other organization) becomes burdensome rather than of service to the people, it is their right to change or even do away with it.
If individuals are truly more important than organizations, then the people have the power to abolish any institution that proves abusive or even ineffective and replace it with a better one. The fact that every corporation in this land is granted a charter by the government and cannot exist without that express permission also suggests that the people have every right to revoke that charter should the corporation either break the law or endanger the lives or health of individuals. Indeed, in the latter part of the eighteenth and most of the nineteenth centuries, states regularly revoked the charters of corporations for abusing the powers granted them by the people. “Even when corporations met charter requirements, legislatures sometimes decided not to renew those charters.”6
The people were cautious about granting corporate charters, determined to maintain control over these impersonal business entities and to ensure that they served society, not the other way around. “The colonists did not make a revolution over a few bags of tea,” Richard Grossman and Frank Adams observe. “They fought for many reasons but chiefly to create a nation where citizens were the government and ruled corporations.”7
Times have indeed changed. Why, to put it bluntly, do corporations that flout the law with impunity still exist? Why do we put up with organizations that spend millions of dollars lobbying Congress to ease restrictions on pollution; that cheat the military on defense contracts; that defraud the public with lavish spending and fast-and-loose investment schemes; that deceive government about product safety; that render sterile hundreds of foreign employees who must work with chemicals banned in America; that worry more about profits than about human life; that are repeatedly convicted of violating health, environmental, and safety standards? Is it perhaps because they have become not only more powerful but also more important than the individuals they harm?
If this is true—if organizations are in fact more important and more powerful than the individuals either in or around them—then people are at the mercy of things; individuals become mere functions in the inexorable arithmetic of organizational survival, and pretty much anything can be justified. This, I suggest, is exactly the state of affairs in America today, and this explains why an increasing number of Americans are so frustrated, why we often feel we are something less than fully human, why the American Dream is diminished.
When I assert that individuals are more important than the organizations in their lives, I am not arguing for reckless and irresponsible individualism. The individual is not intended to live in isolation, heedlessly pursuing selfish interests at the expense of everyone and everything else. Indeed, the American Dream, which is, among other things, a social ideal, can only be achieved in collective settings. In essence, you can’t be equal alone; you can’t have a democracy of one; you can’t be unified with just yourself. You have to have others to whom you are equal, with whom you can unite, who serve and are served by you in a collective effort to maximize each individual’s potential.
This is what America is all about. But somewhere along the path that lies between our nation’s founding and our present-day mess, we went astray. Somewhere we adopted the idea that people exist to serve the systems and groups and organizations in which they find themselves. People have become tools, human resources, to use the awful modern metaphor. The collective, then, is of a higher order than, and even defines, the individual. Consequently, we do not possess the power to determine the shape and contour and terrain of our lives. We are pawns on someone else’s chessboard. And increasingly, that chessboard is an economic board, for economic matters have come to dominate our lives as individual Americans, to both define and constrict our dreams.
This should never be. As John Steinbeck so aptly expressed it: “Man . . . grows beyond his work, walks up the stairs of his concepts, emerges ahead of his accomplishments.”8 Work has a practical purpose—to provide food, clothing, and shelter for the individual in society—but work is something more than mere utilitarian labor. Work has purposes beyond the economic fruits it produces. Work helps individuals define themselves, define their place in the world, fix their unique stamp upon the physical, social, intellectual, or cultural environment. And this is the danger of placing other American ideals lower in our estimation than our economic needs and wants: When the acquisition of wealth or even basic necessities becomes our primary objective, the individual, by definition, is less important than the work he or she performs and thus becomes a mere resource to be used by the organizers of economic endeavor. Somehow we have reversed our fundamental moral position about which is more important, the organization or the individual.
If the Founders lived in our economy-worshipping society, where moral relativism and situational ethics define our organizational morality, they would likely be seen as arrogant, egotistical, or (heaven forbid!) politically incorrect. “Yet,” Hart insists, “with their passionate hatred of unaccountable power and their commitment to liberty, such moral relativism would have been anathema, because it leaves people unprotected from arbitrary power exerted in their lives by organizations. That was unacceptable to them.”9
Arbitrary power, unaccountable power. These are unflattering expressions, yet they precisely describe the type of power exercised by many individuals and virtually all organizations in our present system. And until we understand why this is so and what it means for us as individuals, we shall achieve neither our full potential as human beings nor a full measure of freedom and democracy as a people. Why is it that we do not demand freedom and democracy in our economic as well as our political affairs? Do we need another revolution?
As suggested earlier, the economy is both out of control and in control. And the longer we simply feed it, permit it to grow as fat as it can, we as individuals will be at its mercy. Inequality will continue to increase, and liberty and democracy will continue to shrink. The only way we can regain control of our economic lives is by questioning some of the most basic assumptions that drive our present system.
1. Robert L. Heilbroner, The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers, 6th ed. (New York: Simon & Schuster, 1986), 322–23.
2. Paul Hawken, The Ecology of Commerce: A Declaration of Sustainability (New York: HarperCollins 1993), 116.
3. Russell Mokhiber, Corporate Crime and Violence: Big Business Power and the Abuse of the Public Trust (San Francisco: Sierra Club Books, 1988), 15.
4. David K. Hart, “Life, Liberty, and the Pursuit of Happiness: Organizational Ethics and the Founding  Values.” Exchange (Spring 1988): 6.
5. Hart, “Life, Liberty, and the Pursuit of Happiness,” 5.
6. Richard L. Grossman and Frank T. Adams, “Citizenship and the Charter of Incorporation.” World Business Academy Perspectives 7, no. 4 (1993): 21.
7. Grossman and Adams, “Citizenship and the Charter of Incorporation,” 18.
8. John Steinbeck, The Grapes of Wrath (New York: Penguin Books, [1939] 1982), 164.
9. Hart, “Life, Liberty, and the Pursuit of Happiness,” 6.