Wednesday, March 28, 2018

Economic Insanity: Chapter 6 (part 2)

A Nation of Wage Earners (Part 2)

The Individual versus the Human Resource
The fundamental question we must resolve when contemplating the individual’s place in organizational America is, once again: “Which is more important, the individual or the organization where he or she works?” Do individuals serve the organization or does the organization serve the community of individuals? In spite of our traditional American ideals, the sorry answer is that in twentieth-century America, individuals are less important than and serve the organizations to which they belong.
Human beings are viewed, even in these days of enlightened organizational thinking, as property. Human resources. Resources are things we buy and then use to make a profit. Our employees are our most valuable asset. An asset is a piece of property, something you own and use until it is either depleted or obsolete.
This sort of talk is intended as a compliment, and, as such, it sheds light on the status of workers in today’s economy. I hear from all quarters the apparently sincere belief that the only way American companies can be competitive in the current global marketplace is to train the American workforce to be more productive. “We must invest more in our workers,” I hear. “We must give them the mathematical and statistical and scientific training that will make them more useful to corporate America.”
This generous offer to educate and train workers is admirable, but it is also misdirected—because it is motivated solely by the organizational imperative of survival. It has virtually nothing to do with the needs and desires and talents and values of individuals.
Our society is so bottom-line oriented that we feel we cannot afford to cater to the whims and preferences of individuals. Organizations must thrive, therefore we must learn to view individuals as resources and assets, things to be used, and not to be improved for their own sake. It doesn’t matter what innate talents or proclivities they might have, they must sacrifice their dreams on the altar of corporate profitability and become what corporate America wants them to become. And because of the faulty assumptions that drive our economic institutions, we have created an increasingly high-tech, fast-paced world in which only one kind of intelligence—quantitative—is rewarded, almost to the exclusion of all others. Consequently, everyone must excel in that area, or the organizers of economic enterprise regard (and discard) them as useless.
Many, perhaps even most, Americans are being crammed into jobs that do not fit them very well. Not everyone is in the 90th percentile of mathematical aptitude. Most of us, truth be known, are not very good at numbers. We would rather be doing something more meaningful (which usually means something in which we have some innate talent, where we feel we can offer something to society). But in our increasingly high-tech world, we focus more and more narrowly on that one particular type of intelligence. Those of us who are intelligent and talented in unmarketable areas may find ourselves unemployable, or at least grossly underpaid.
Human beings, in other words, must subordinate their own talents and desires, not to the good of society, but to the welfare of organizations that have an intense need for nothing other than survival. Organizational exigencies determine what areas I can pursue as a career, as my life’s work. This is the common lot of a “human resource” in organizational America. But simply giving everybody rigorous math, science, and technical skills is as unindividualistic as making everyone a good communist. People should be free to choose how they will make a contribution to society. So, instead of running hell-bent after every new technological wonder, just so the economy can be more productive and competitive, a society that ranks human beings above organizations, I argue, would look at the diverse nature of individuals and make room for all, so that they can contribute in ways they are best suited for.
To try to make everyone adept at high-tech, mathematical work is to pursue the fallacious theory that human beings are perfectly malleable and have no innate talents and tendencies and can consequently be shaped to fit the organization’s (or nation’s) needs. Perhaps we need to mold organizations instead to fit individual needs. Is this possible? What might happen if we expended our money and energy in helping individuals discover and develop the areas where they are truly gifted and assisted them in finding useful outlets for the expression of those talents?

Work versus Labor
David K. Hart points out a subtle distinction between work and labor. Labor, he says, is what all animals do, what human beings must do, to eat and survive. Labor is drudgery. There is nothing ennobling about it. Work, on the other hand, is the opportunity for individuals to place their unique stamp upon whatever it is they are producing—whether it be an oak table, a book, a car, a haircut, or a music lesson. Work not only shapes the produce of an individual’s time and energy, it shapes the individual.
We define ourselves partially by the work we do. And if we must labor instead of work, we are less than human. This, I submit, is the greatest abuse perpetrated on individuals by modern organizations: that they deny them the opportunity to work. They require individuals instead to fit themselves into some preconceived pattern; to think and behave in certain approved ways; to be a function; to give up the things they are passionate about and adopt stale organizational goals and mission statements and pretend to be excited about them; to produce to someone else’s specifications products they care not one iota about; to trade their time, their lives, and large portions of their souls for sterile security and the hollow promise of marginal prosperity.
And we wonder why people feel powerless, why there is a growing sense of despair, or worse, indifference, regarding our future. Most of our population has been turned into a huge, collective “human resource,” and yet we wonder why they are not happy and optimistic and motivated. How long can we expect people to be satisfied with fading security and dwindling prosperity while offering more and more of themselves on the altar of organizational dependence? How long can we expect people to shelve their innate talents and deny their rightful desires to be fully human?

Democracy, Power, and Ownership
Corporate America has finally come to realize on a subconscious level that it has deprived its employees of certain basic or integral ingredients. Intense global competition has revealed that something is missing from the modern capitalist recipe for success. Consequently, three popular buzzwords are making the rounds in corporate America: empowerment, democracy, and a sense of ownership. But these terms are deceptive. Most of what passes itself off as democracy in organizational America is actually only a token sharing of responsibility. It’s a half-baked, watered-down version of self-rule. Likewise, empowerment in corporate America, of necessity, involves the bestowal of a tractable, emasculated form of power. And the “sense of ownership” that management talks about is simple make-believe.
Democracy implies equality, the shared power to combine with your equals in making decisions, in governing the group to which you belong. But democracy of this sort exists only where ownership is divided equally among those who spend the days of their lives serving together in the organization. Such equality is also the source of appropriate, accountable power. If there is always someone, or a group of someones, whose actual, legal ownership gives them more power than the employees, then they can make arbitrary decisions without being accountable to the body of individuals who work for the organization. In such companies there is no real democracy, no true empowerment, and the political structure of the organization is by definition authoritarian in nature.
In the current “cutting-edge” management literature, I read repeatedly that management is supposed to give employees a “sense of ownership” or, stranger yet, that employees are supposed to take upon themselves this “sense of ownership.” The reason, of course, is that organizations cannot survive in today’s ultracompetitive marketplace without dedicated, intelligent, motivated workers. This “sense of ownership” is supposed to give employees the commitment they need to be truly valuable to the organization. But what on earth is a “sense of ownership”? It is, in truth, a pretense, an illusion. It is management asking workers to pretend they own something they don’t actually own. It is the illusion of ownership, a bald-faced attempt to conceal the true nature of business relationships, to make workers think that the authoritarian structure of capitalist business does not really exist.
But ownership is ownership. A “sense of ownership” is a lie we tell one another and ourselves to make us feel better about the inherent injustice and inconsistency of our organizational relationships. If management wants workers to have genuine commitment, then it must give them actual ownership, the only real source of commitment. And the consultants who roam the hills and valleys of organizational America telling workers that they must take upon themselves “ownership” of the business are selling a bill of goods. You can’t simply “take” ownership, not unless the current owners give you a piece of it.
And the reason all this talk of “empowerment” and “sense of ownership” is empty rhetoric is that those who sit in power and who possess today’s corporate kingdoms are not simply going to give up their power and ownership out of the generosity of their hearts. Peter Block tells a story that pretty much sums up the sham of corporate “empowerment” programs.
A friend of mine who works for a big telecommunications company was asked to devise ways for people at the bottom of the organization to take more ownership for the success of the business. One of his recommendations was to eliminate reserved parking for the top executives . . . a symbolic gesture to communicate we are all part of the same team working toward the same goal. He suggested this to Bob, the general manager, and Bob’s response was, “If you ask for my parking space now, you will want my salary later. I don’t want to give you my salary, I know you don’t want to give your people your salary. The answer is no.”1
      Bob was at least honest. Most executives and owners are not. They are using the same manipulative marketing tactics we see in the consumer arena to sell their employees on the idea that they can have ownership without really owning anything and without sharing equally in the profits created by their increased dedication. They are merely constructing another elaborate illusion to milk their employees of whatever it takes to keep the business in business. And please note that they are not asking employees to develop and apply their intelligence, ingenuity, and good judgment because it is important for individuals to cultivate and use such qualities in their lives. They solicit increased dedication for the express reason that the organization simply cannot succeed without intelligent, versatile, creative, motivated workers. It is the organization’s welfare, not the employees’, that matters.

The Avalanche
Now that I’ve stated my position on token democracy, empty empowerment, and imaginary ownership, let me turn this same argument on its head for a moment and suggest that some good might actually come from the empowerment movement, misdirected though it is. It is quite possible that the proponents of this movement have unleashed a force more powerful than they understand. It is possible that they have started an avalanche that will not stop halfway up the slope where all the empowerment gurus and progressive managers believe it will.
If you understand their argument, what these theorists are saying, without actually saying it, is that the movement underway today to empower employees and democratize the workplace will eventually lead to actual employee power, real democracy, and genuine ownership. This is the logical conclusion to their arguments, even if they haven’t yet arrived at that conclusion. They are talking about a revolution, if you listen carefully to their rhetoric. The forces that have been unleashed in organizational America, they claim, are inexorable and will change the face of business from one end of this country to the other. If this is true—and we have no reason to doubt that it is—then these relentless forces will not stop at token empowerment and democracy in name only. The avalanche won’t stop midslope. It may, however, run into some determined and resourceful opposition.
The increase in token democracy, the push for employee empowerment, and the creation of a “sense of ownership” are certainly steps in the right direction, and it may be glibly argued that they are merely waystations along the inevitable path to true democracy, real ownership, and full employee power-holding, but try fitting that theoretical shoe on the foot of any capitalist or million-dollar-salaried CEO. They may agree to cosmetic empowerment and the illusion of democracy that is currently in vogue, they may even give up their parking spaces, but see what happens when you ask for their salaries, their offices, their bloated staffs, their golden parachutes, their mansions, their separatism, and their prestige. And don’t deceive yourself into thinking those things won’t be asked for. They lie on the lower slopes, below where the consultants and progressive leaders think the avalanche will stop. But it will not stop until it reaches level ground.
Who will win? No one can say. Someday the capitalists and popular consultants may wake up to discover that they have been playing with fire, that this token democracy and the illusions of empowerment and the “sense of ownership” they’ve supported have put ideas into people’s heads, correct ideas. And they may get burned. People in general are a lot smarter than they are given credit for. Someday it will dawn on them that if token democracy is good, then real democracy must be better. If watered-down empowerment is their right, as they have been told, then why not real power? And if their organizations can’t succeed unless they develop a “sense of ownership,” then certainly real employee ownership should be even better for their organizations. They will eventually realize that someone has been stealing their lives, and they will demand what is rightly theirs.

Who Really Creates Capital?
In the next chapter, we’ll look in greater detail at what I’ve already suggested briefly—that we must consider redistributing capital rather than income. The capitalists, who now claim ownership, will undoubtedly cry foul. “That would be stealing,” they will certainly say. I would respond, however, by asking, “Are the police stealing when they take back your car from the person who stole it from you?” It is only stealing when you take something that doesn’t belong to you. To take back what is rightly yours can hardly be called stealing.
The real question regarding ownership is the one asked by John Steinbeck in this chapter’s epigraph. What constitutes ownership, especially of capital? Shouldn’t ownership be related somehow to the question of who creates it, who works and slaves and toils to bring it into existence? Is it the person who plants the seeds or the person who works the land and pulls the weeds and nurtures, fertilizes, and irrigates the soil who should reap the harvest? The answer, I submit, is that both deserve a share.
The capitalist invests a sum of money, but that money will not create a product and generate a profit without the time and energy of other human beings. Don’t they have just as great a role in the creation of new capital as the one who invested the money to start the venture? And if they aren’t given a fair share of the capital, hasn’t someone been stealing from them? Says Michael Ventura:
As a worker, I am not an “operating cost.” I am how the job gets done. I am the job. I am the company. . . . I’m willing to take my lumps in a world in which little is certain, but I deserve a say. Not just some cosmetic “input,” but significant power in good times or bad. A place at the table where the decisions are made. Nothing less is fair. So nothing less is moral. . . . It takes more than investment and management to make a company live. It takes the labor, skill, and talent of the people who do the company’s work. Isn’t that an investment? Doesn’t it deserve a fair return, a voice, a share of the power? . . . If the people who do the work don’t own some part of the product, and don’t have any power over what happens to their enterprise—they are being robbed. You are being robbed. And don’t think for a minute that those who are robbing you don’t know they are robbing you. They know how much they get from you and how little they give back. They are thieves. They are stealing your life.2
Indeed, they pay themselves as much as possible and pay you as little as possible. By contrast, an equitable redistribution of capital would eliminate this double-standard pay system. It would also abolish authoritarian economic organizations, foster true democracy, and bring our out-of-control economy back into harmony with our political aspirations and social ideals. As I hope I’ve made clear in the preceding chapters, this is not merely something we should consider because it is the moral thing to do—and it is the moral thing to do—we should move rapidly in this direction because it is also perhaps our best hope for averting economic ruin.
1. Peter Block, Stewardship: Choosing Service over Self-Interest (San Francisco: Berrett-Koehler, 1993), 38–39.
2. Michael Ventura, “Someone Is Stealing Your Life.” Utne Reader, July/August 1991, 78, 80. Reprinted from the L.A. Weekly.

Monday, March 19, 2018

Economic Insanity: Chapter 6 (part 1)

A Nation of Wage Earners (Part 1)

Sure, cried the tenant men, but it’s our land.
We measured it and broke it up.
We were born on it, and we got killed on it.
Even if it’s no good, it’s still ours.
That’s what makes it ours—being born on it, working it, dying on it.
That makes ownership, not a paper with numbers on it.

We’re sorry. It’s not us. It’s the monster.
The bank isn’t like a man.

Yes, but the bank is only made of men.

No, you’re wrong there—quite wrong there.
The bank is something else than men.
It happens that every man in a bank hates
what the bank does, and yet the bank does it.
The bank is something more than men,
 I tell you. It’s the monster. Men made it,
but they can’t control it.

—John Steinbeck,
The Grapes of Wrath

Ownership. The ground-level assumption of modern American capitalism is that individual ownership of capital should be unlimited. This assumption gives shape and direction to our wayward economic system and opens the door to the other faulty assumptions we’ve talked about. When we peel away all its window dressing, capitalism isn’t really about free markets or free enterprise, as the economic elite would have us believe; it is about ownership of capital. Period. Capitalism, like communism, is a philosophy about ownership. Over the years capitalism has come to mean “unrestricted private ownership of capital,” a condition that is decidedly incongruent with our political precepts and our social ideals. This, however, was not always the case.

A Misconception
The great misconception about modern capitalism is that it is a democratic economic system. We’ve always equated communism with authoritarianism and capitalism with democracy. The logic goes something like this: since democracy is the opposite of authoritarianism, since capitalism is the opposite of communism, and since authoritarianism and communism always seem to go together, then democracy and capitalism must be one package—you can’t have one without the other. This is nonsense. It is theoretically possible to have political democracy without capitalism. It is also possible to have capitalism without political democracy. Any dictator who allows his subjects to own property and accumulate capital has created capitalistic authoritarianism.
Most capitalists would be shocked, however, to learn that modern capitalism is, in practice, as incompatible with democracy as is the enforced cooperation of communism. Capitalism, technically, is the unlimited private ownership of property and the means of production. The italics here are important, because they point to two conditions that conflict with democracy, create increasing inequality, and spawn a host of problems in society. The fact that I can own a piece of property, build a house on it, and reside there is of little consequence. But the unlimited ownership of capital, the means of production, is exactly what places capitalism at odds with our political and social ideals.
In an unlimited capitalist system such as ours, ownership of capital, although it can take any form, tends to be either concentrated in the hands of one or more active individual owners or dispersed among a large, shifting, external body of passive owners. These two types of ownership are very dissimilar, even opposite, in form, but in effect they are actually quite similar.

Concentrated Ownership
Concentrated ownership, the more traditional form, produces people we generally think of as capitalists: individuals who have accumulated or inherited such large amounts of capital that they can hire others (buy their time and energy, a portion of their lives) to produce products for them. The employees are paid a nominal amount that we call a “fair wage,” the products are sold, profits are reaped, and the owner then uses these funds to increase his capital—so that he can purchase the time of more individuals and further increase his wealth, his capital, and his distance from those whose lives he more or less owns.
And he does own them in more than a metaphorical sense, because he owns the produce of their hands and minds, a literal part of them. And they can’t escape his employ (except to flee to someone else’s), because they don’t have capital. They’re not paid enough by the capitalist to become independent, as he is. He doesn’t share his capital with them. Instead they’re paid just enough to stay one step ahead of the bills (if they happen to be prudent money managers), and for this they should be grateful, or so they are indoctrinated.
Now, you may argue that this is a gloomy, Marxist view of our relatively prosperous economic conditions, especially considering the perceived outcome of the Cold War, but let’s take a closer look at democracy. One would have to be hallucinating to suggest that capitalist businesses of any size are democratic institutions, even those that seriously are trying to “democratize” the workplace. Do the people hired by an industrialist or small business owner have an independent voice in the fundamental decisions or direction of the business? Are they equal with the owner in either pay or power? Of course not.
“But,” some may protest, “many employers are benevolent and treat their employees well.” Certainly, and there have also been many benevolent monarchs throughout history, but their subjects didn’t enjoy democracy, government by the people. The employees of an industrialist don’t govern the organization. Even when they are empowered, they still live in an authoritarian system. There is a world of difference between employee empowerment and employee ownership. You don’t have to “empower” owners. The key here is that someone else is able to exercise arbitrary power in the employees’ lives, even if that person elects not to. It is the ability, the possibility, that is relevant here. The owner, if he chooses, can even require them, if they want to keep their jobs, to conform to trivial or demeaning rules and customs.
A benevolent business owner can easily become a tyrant if the company experiences a few setbacks. WordPerfect Corporation, mentioned in an earlier chapter, was a very good company to work for, or so many of my neighbors have informed me. Employee salaries were above industry average, the atmosphere was relaxed, and year-end bonuses were consistent and generous. Then the atmosphere in the software market, dominated by Microsoft, grew ominous. WordPerfect owners announced that they would terminate 21 percent of the workforce. They deemed this necessary, but that is irrelevant to this discussion. The point here is this: Did these terminated workers have any recourse, any real power? No. They discovered the hard way that they didn’t belong to an organizational democracy. They couldn’t maintain their corporate citizenship by virtue of the fact that it was their business. They couldn’t vote the owners out of office. All they could do was pack their things and hit the pavement. One day they were under the illusion that they were valuable and happy citizens of a wonderful corporate kingdom; the next day they were gone, with a new understanding of why corporate citizen is an oxymoron. Republics have citizens; authoritarian systems have subjects.
Employees in most businesses are trapped. Because they don’t own capital, they can’t just walk away and declare their independence. They have to make a living in some way, unless they prefer to either starve or live off government handouts. Independence and equality have been withheld from them by a system—capitalism—that is overtly authoritarian in nature. And even when it wears a benevolent mask, it is still structurally authoritarian and retains its oppressive potential.
The question today’s progressive business leaders and consultants are asking is: How do we make authoritarianism palatable? Or worse: How do we disguise authoritarianism to make it seem more democratic. These questions will never yield a satisfactory answer.
We extol the virtues of the free-market system, because it is largely (as its name suggests) free; at the macro level, it is consistent with our democratic ideals. But that system ends at the front door to most businesses. The free market exists between businesses, but not within them. Companies in the market are free, but employees within those businesses are not. Gifford and Elizabeth Pinchot have coined the term free intraprise to describe a free-market system that ought to exist within organizations. “The alternative to corporate bureaucracy is not merely training managers to behave in an empowering way within a bureaucratic structure; it is developing a system of freedoms and institutions analogous to free enterprise.”1 It is my contention, however, that free intraprise cannot truly exist unless ownership patterns change within organizations. Ownership is the entire question where liberty and democracy are concerned.

Dispersed Ownership
As indicated above, our authoritarian system of ownership also has another face. Dispersed ownership, the opposite of concentrated ownership, results in an even more insidious state of affairs. Here we’re talking about the massive corporations that dominate the economic (and physical) landscape of twentieth-century America. These conglomerates are owned (sometimes indirectly through mutual funds and pension plans) by a mass of faceless names that usually play no role within the business as employees or managers and may even have no direct contact with the business as either suppliers or customers. They are strewn from one end of the country to the other, almost as if a big wind had swept them up like autumn leaves and scattered them across the countryside. Some have called them absentee owners. Normally we call them stockholders.
Since these absentee owners are little concerned with the day-to-day operations of the business—taking specific interest only in stock prices, dividends, and earnings per share—they hire professional executives to run the show. And since professional executives actually have more power than the dispersed body of owners, they represent the corporate equivalent of the individual capitalist, the industrialist. They perform the same function, enriching themselves on the labors of others, paying themselves exorbitant wages, acting as rulers and decision makers for the masses of employees whose workaday lives they have purchased (albeit with someone else’s money).
But there are significant differences between an individual capitalist or industrialist and a professional executive. The industrialist invariably has a knowledge of both the product itself and the process by which it is created; he (or sometimes she) is more community oriented, more aware of the lives of his employees, often seeing himself as some kind of benevolent, provident feudal lord; and he is the legal owner of the business.
Most professional managers, on the other hand, are generalists, often having no specific knowledge of the products and processes they are hired to manage. Instead, they’ve been trained in modern business schools; they have white collars and are dressed for success. They know finance rather than the nuts and bolts of a particular industry; and their financial training, they firmly believe, qualifies them to work in any business with any product—because they don’t really deal with products, only with the numbers that surround them.
So they play with ratios and financial statements, dream up marketing strategies, and acquire other companies and products that they don’t begin to understand, secure in the knowledge that their jobs are safe as long as the bottom line, market share, and dividends are on the increase. This is why a company like General Electric, with its relentlessly return-crazy chairman, “Neutron Jack” Welch, now sells bonds, makes jet engines and locomotives, hawks a direct-broadcast satellite service, markets industrial diamonds, and runs a TV network.
Because professional executives see themselves as exactly that—professionals, hired specifically to make tough and perhaps unpopular decisions—they add up the numbers, and if the numbers tell them to lay off thousands of workers, that’s exactly what they do. Neutron Jack, for instance, has at this writing erased 170,000 jobs at GE, sometimes going so far as to send lower-level managers packing on the spot and then shipping their personal effects home by UPS.2 This from the man who once said, “Any company that’s going to make it in the 1990s and beyond has got to find a way to engage the mind of every single employee. . . . What’s the alternative? Wasted minds? Uninvolved people? A labor force that’s angry or bored? That doesn’t make sense!”3 Neither does amputating 170,000 people from the body of those supposedly valuable employees.
For fundamental reasons, professional executives have little personal interest in the impact their decisions and policies—from plant closings to pollution—have on communities. They generally don’t live in the communities affected by their decisions. And because they don’t actually own the business, they’re free to look out for themselves, preferring loyalty to career over loyalty to employees or even the organization, usually leaving themselves an open door and a golden parachute, just in case the organizational plane takes a nose dive or the pilot’s seat in a larger aircraft becomes available.
So which masters do you prefer, industrialists or CEOs? As for me, I prefer freedom, for either form of capitalism is at odds with democracy and human dignity. Should this statement surprise us? Of course it should. We’ve always been taught that capitalism is morally superior to communism. In reality, these competing systems are more similar than they are different. They are two sides of the same rusty coin—both outdated, both authoritarian in practice, although, ironically, it is communism, not capitalism, that claims to be democratic in theory.

Times Have Changed
The rise of capitalism actually brought favorable changes in its early years—greater freedom, equality, and democracy—but with no inherent restriction on ownership, capitalism was doomed to its present course. In hindsight, it is perfectly logical that communism should have arisen in reaction to the injustices and abuses that resulted from unlimited capital ownership. It’s interesting to note in this context that Karl Marx’s monumental work, which laid the theoretical foundation for the communist revolution, was titled Das Kapital. Capital ownership was always the central issue. The communist mistake, however, was to swing the pendulum too far—from unrestricted private ownership of capital to no private ownership at all—and then to enforce this arrangement with authoritarian government.
Capitalism, originally, was a liberal economic doctrine, a rebellion against the monarchic and aristocratic systems of Europe. In those days, capitalism was seen as a great tool in dispersing property, wealth, and power among a much broader group of citizens. But capitalism soon developed its own authoritarian and aristocratic classes, and power, wealth, and property soon became restricted and concentrated, just as they had been under the old monarchies.
“Right-wing economics,” according to Christopher Lasch, “conceives of the capitalist economy as it was in the time of Adam Smith, when property was still distributed fairly widely, businesses were individually owned, and commodities still retained something of the character of useful objects.”4 But much has changed since then. The rise of large, impersonal economic bureaucracies, the increasing inconsequence of owning private property, and the shift from a production ethic to a consumption ethic have transformed capitalism into something far different from what it might have become.
The most notable manifestation of this transformation appears perhaps in the life of the common man or woman. As the captains of industry consolidated their power, and as their organizations increasingly became employers of the masses, people felt great pressure to change, to trade independence for supposed security and marginal prosperity, to fit the functional corporate mold, and, consequently, they became systematically dehumanized. “The division of labor, John Ruskin argued, was misnamed. It was not the labor that was divided but the men, who were ‘divided into mere segments of men—broken into small fragments and crumbs of life.’ . . . Men were now condemned to forms of labor that made them ‘less than men’ in their own eyes. ‘It is not that men are ill fed, but that they have no pleasure in the work by which they make their bread, and therefore look to wealth as the only means of pleasure.’”5 This happens when people do not own the produce of their hands and minds. They become something less than human, and the market mechanism is crippled.
Adam Smith’s “invisible hand” cannot function properly in either the unbalanced power structure of corporate America or our undisciplined “shop till you drop” marketplace; it works best in an ambience of widespread and limited (relatively equal) property ownership. Well into the next century after Smith’s death, it was generally agreed that freedom could not thrive in a nation of hirelings.
1. Gifford and Elizabeth Pinchot, The End of Bureaucracy and the Rise of the Intelligent Organization (San Francisco: Berrett-Koehler, 1993), 114.
2. Paul Hawken, The Ecology of Commerce: A Declaration of Sustainability (New York: HarperCollins, 1993), 124.
3. Noel M. Tichy and Stratford Sherman, Control Your Destiny or Someone Else Will: How Jack Welch Is Making General Electric the World’s Most Competitive Organization (New York: Doubleday, 1993), 251.
4. Christopher Lasch, The True and Only Heaven (New York: Norton, 1991), 519.
5. Lasch, True and Only Heaven, 137.

Sunday, March 18, 2018

The Cost of a Kidney Stone

If you have never had a kidney stone, count yourself blessed. I had one in 1999 after returning from the Philippines. It was small, excruciating, and gone within 24 hours. The doctor said it may have been caused by dehydration during my trip to the Philippines. But he also told me to avoid spinach and asparagus. It turns out the advice on spinach was good. It’s extremely high in oxalate, one of the two substances that combine to form about 85 percent of kidney stones. The other substance is calcium. Asparagus, however, is pretty low in oxalate. But I followed doctor’s orders and didn’t have another kidney stone . . . until a week before Christmas 2017. So I went 18 years without one.
When the pre-Christmas stone hit, I was pretty sure what it was, having had some experience with that sort of pain. I might add that I’ve now had three different mothers inform me that they have had both children and kidney stones, and the kidney stone was definitely more painful than childbirth—and the result was not nearly as cute. I’m not speaking from experience here on pain comparisons, of course, just repeating what I’ve been told.
Anyway, this time around I was not so lucky on passing the stone quickly. My wife drove me to Orem Community Hospital, part of Intermountain Healthcare, where they gave me some opioids for the pain, did a CT scan, and sent me to a urologist. This stone, they said, would not pass on its own. They estimated it at 9 mm. That’s about 3/8 inch. So the urologist scheduled me for lithotripsy, which is the technical term for blasting kidney stones with sound waves. They thought they’d pulverized it, but when the dust settled, I still had some pretty impressive chunks left, and they caused significant pain before they finally decided to pass.
I want to talk about a different kind of pain today, though. This past week I finally received the itemized bill from Intermountain Healthcare for my little trip to the emergency room. Ouch. I’ll forego the little stuff, but I was pretty impressed with the outrageous costs of our health-care system. For instance, they charged $2,048 for the CT scan. It took maybe five minutes. Japan has figured out how to do this for under $200. The cost of what I’ll call room and board for my short stay in the ER was $1,180. That’s one heck of an expensive hotel. And they didn’t even have a swimming pool or offer me a continental breakfast. I know, I know, they have to cover their overhead, not to mention malpractice insurance. But the item on the bill that really floored me was the IV. They poked me in the arm, pumped in a bag of sodium chloride, and gave me the aforementioned opioids. Counting the medications, this routine IV was billed at $884.
The total damage for my short stay in Orem Community Hospital was $4,361. And that didn’t count the ER doctor, who billed separately—$792 for the perhaps 15 minutes he spent with me. And after all this extravagant billing, I still had a 9-mm kidney stone when I left the ER. Fortunately, I have good insurance, and Deseret Mutual has an understanding with Intermountain Healthcare that they will pay only a portion of the charge. In fact, they paid just $2,212. My portion of the bill was a copay of $75 and another $242 out of pocket for the various elements of my short stay at Orem Community. I owed the ER physician only $38.
If I had known what that ER visit would cost and what the rest of the ordeal would cost, I certainly would not have gone to the emergency room. I would have taken some Tylenol and called the urologist. If I have another kidney stone, that’s what I will do. (Note for anyone planning on having a kidney stone: don’t take aspirin or ibuprofen, because they can’t do lithotripsy within a week of your last dose. These medicines thin the blood, which puts you at risk to lose a kidney.)
So, what about the rest of the adventure? The lithotripsy, counting the urologist’s fee came to about $8,000. Because we had already purchased plane tickets to visit our daughter and her family in Houston over NewYear’s and I didn’t want to have an attack on the flight, or in Houston, the urologist put a stent in for a couple of weeks. That was billed at $4,400. There were also several relatively small charges, for things like x-rays and their interpretation, prescriptions, and office visits. In total, this little piece of human-created rock resulted in initial charges of about $18,000.
If you’re thinking that’s pretty crazy, you’re right. And we’re the only developed country on earth that does this sort of thing. Yes, the insurance and I together paid maybe $11,000. But still, that’s pretty crazy. I couldn’t help thinking about those people we’ve decided to exclude from our health-care system, who can’t afford insurance or who otherwise slip between the cracks. A simple kidney stone could bankrupt some of these people. Only in America. And only because of the Republican Party.
My experience with the kidney stone reminds me of two medical encounters our family had in 2005 (back when health care was relatively cheap in America). My oldest son managed to experience a ruptured appendix while serving a mission in Germany. His abdomen was full of peritonitis, a life-threatening condition. He spent a week in the ICU while the doctors got the infection under control. Then he spent another week in the hospital recovering. When he was released, because he was still quite weak, the mission president assigned him to the mission office as financial secretary, which means he got to pay his own hospital bill. We figured that the German health-care system, because both we and the Church had insurance, would charge us a pretty pfennig. The entire bill came to $6,000. That included surgery, a week in the ICU, and another week in the hospital. The doctors were highly qualified. In fact, the one I talked with most often, as we monitored Matt’s progress from afar, was educated at the University of Chicago. We spoke in English because his medical English was a lot better than my medical German.
At about this same time, I had nonemergency outpatient surgery in Provo to repair a hernia. For that routine half-day experience, our insurance was billed $12,000. Twice as much as the two-week treatment for a ruptured appendix in Germany. Yes, I know that the Germans pay taxes so that they can enjoy relatively inexpensive universal care. But overall they pay far less than we do, all because of government involvement. In 2014, Germany spent 11.3 percent of GDP on health care. The United States spent 17.1 percent. Canada is at 10.4 percent, France at 11.5 percent, Denmark at 10.8 percent, the United Kingdom at 9.7 percent, Norway at 9.7 percent, Sweden at 11.9 percent, Finland at 9.7 percent, Switzerland at 11.7 percent, Australia at 9.4 percent, Netherlands at 10.9 percent. You get the idea. We spend 44 percent more than the highest of these countries, 82 percent more than the lowest. But we’re not comparing apples and apples here. These countries all cover everyone. We don’t. And they get better overall results than we do. Yes, conservatives love to point out how bad the care is in these other countries, but this is largely myth, not supported by either statistics or personal sentiment. Granted, no system is perfect, and people love to complain, but virtually no one in these countries would trade their system for ours.
There really is no rational argument against America adopting a system based on the best features of our foreign neighbors. It would be more humane, better for our overall health, and far less expensive. And here’s the biggest irony. My German friends have a lot more freedom in selecting health-care options than I do. Republicans love to play the freedom card. But in health care, government involvement in creating a system that covers everyone actually gives everyone more freedom. Everyone, that is, except those who would prey on the sick to make exorbitant profits. The biggest difference between our “system” and our neighbors’ systems is that we are the only country that allows the profit motive to control (and restrict) medical care.
Republicans get all up in arms about Bernie Sanders and the “extremists” on the left who want to implement “socialized medicine,” that old bogeyman the right wing loves to throw verbal darts at. But this isn’t extremism. It’s common sense. It needs to happen. We gave the Republicans their opportunity to “repeal and replace” the ACA. They couldn’t do it. All the options they came up with made things worse, not better. It became obvious that their whole “repeal and replace” dog and pony show was just political theatre. They never wanted to replace the ACA. And they couldn’t, really, because it was already built upon a flawed conservative foundation. The Democrats would have chosen a single-payer system that covered everyone, but they knew the Republicans would never go for it. And look at the political price they paid for implementing even a conservative health-care plan. But now things have changed. The GOP has had its chance to come up with something better. They couldn’t. We still need to fix health care. Our only reasonable choice at this point is to follow the example of our foreign neighbors and embrace a lower-cost system that covers everyone and gets the profit motive out of health care. That means raising taxes. But as I’ve explained on this blog before, we are one of the lowest-taxes countries in the OECD. And overall, we would end up saving a lot of money by doing this. We need to start being responsible and practical instead of ideological.