Daily Archives: July 18, 2015

The Future of Work Revisited

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A reader posted a reply to The Future of Work – III When Jobs End. It is copied below:

“Does it only count as a job if you get paid for it? Or does a job also imply some kind of accountability? If you don’t do your job you don’t get paid. How is the welfare mother held responsible for the outcome of her ‘work?’ It seems that she gets paid whether she ‘works’ or not. Maybe that is the frustration of the working class against the welfare loafers–that those with regular jobs are held accountable to a standard which feels very judgmental–the dreaded performance review. Hence, the workers are judgmental against those who aren’t held accountable and still get paid. How do we remove accountability from the equation?”

Living in a Max Weber world (wrote “The Protestant Ethic and the Spirit of Capitalism,” in 1904) and also under the influence of the protestant ethic itself which emphasizes that hard work and frugality are the result of a person’s salvation in the Protestant faith, it is hard to envision a society that is based on other virtues than capitalism and sanctification by work.

There are places where capitalism survives but is subsumed into socialism as the primary ethic. One thinks of the Nordic countries but the top ten socialist nations in the world includes Canada. Reference:

http://blog.peerform.com/top-ten-most-socialist-countries-in-the-world/

This website has a short paragraph about each country and is a good place to start one’s investigation of socialist ideals and how GDP functions in a socialist culture.

What is important to us as we contemplate the future of work is individual happiness. If happiness or at least contentment is a dominant ethic, the workplace must accommodate that ethic – rather than first accommodating personal profit and success over others. Microsoft Corporation in Redmond, Washington has made the physical workplace one which induces contentment in the employees. A Microsoft employee has a liberal leave policy, flexible hours, babysitting services, picnic and exercise space, 24-hour food services and a host of smaller conveniences. Microsoft is rated the best among peer companies for its profit sharing/401K retirement program. One will never say that Microsoft does not support capitalist principles and does not have profit in mind. Still, the working individual is allowed to integrate the reality of living an individual human life with accountability to the corporation.

Despite the expense of an employee’s contentment, Bill Gates is the wealthiest man in the world. Gates is an exception in a country known for its capitalism; he is known for his liberal philosophy and is one of a handful of billionaires actively supporting human welfare around the world. However, if one is not so wealthy, putting individual happiness first is virtually impossible in the competitive environment of capitalism. Culturally, it will be immensely difficult for today’s political and business environment to adopt contentment as a requisite in the future of work. The economy of today’s culture also will require mind-bending adjustment. It is common knowledge that the US is an oligarchy; wealth is the first measure of a person’s value – even in the little town where the mariner lives. Putting profit first leaves behind a broken and insecure middle class and an underclass comparable to 19th century India.

It is virtually impossible to move a person embedded in the current work culture to the future work culture – particularly a person older than a millennium who has worked a lifetime in the labor class. Referring to the three cases in FOW II, this person still would call the part time worker lazy, still would call the welfare mother lazy, and would fault the children as much as the parents for not accepting responsibility; the person would give credit to the parents for their work ethic. Being embedded in today’s capitalist culture is why it is difficult to imagine the future of work.

To address the issue of accountability, the future of work is based on the principle that “it takes a village,” if the mariner may borrow a term. The reason the welfare mother is seen as a risk to the work ethic today is that she is isolated, has virtually no peer support, and does not have enough income to pursue a normal life; in other words, she is programmed to fail then she is blamed for the failure. If the culture around the mother included her as a resource and supported her as if she were an asset to the “village,” she likely will be judged in a better light by others and could be depended upon to do a better job. The social pressure on her would be as strong as being wealthier than one’s neighbor is today.

Ancient Mariner

 

The Lobby Economy

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Mind you, the mariner observes the world from dockside. He is a generalist and an idealist and his assumptions, while based on factual research, may not be simpatico with all readers. That is fine with the mariner. He wants only to inform on all matters of interest, leaving the reader to receive the information as the reader chooses. This has been a public service announcement.
The mariner is finished with the future of work. It is an alien world to our capitalist society; only large numbers of unemployed will force change in the Federal and State Governments. Fortunately, we have a foot in the door to future work with the existence of entitlement programs and safety net programs like Social Security, Welfare, Medicaid, and unemployment insurance. It is important in coming elections not to let entitlements slide backward. Generally speaking, this means democrats must control Congress.
The topic in this post is to ponder the economy the US has today given that a handful of major industries control both social and economic priorities for our daily life, cost of living, and what the policies portend for the future. Specifically, the mariner will look at banking, fossil fuels, agriculture, alternative resources, guns, and an overview of issues related to personal rights. This is another series requiring more than a single post.
In this post, we will look at banking.
No doubt, the reader remembers the recession that began in 2007 and, in some respects, continues today. The noisy headlines of media focused on the Federal Government bailing out Chrysler, General Motors and Wall Street. The phrase commonly heard was, “The banks are too large to fail!” but fail they would if fiscal conservatives and libertarians had their way. The reader may remember that shady dealings with subprime mortgages bundled and rated AAA were priced accordingly and sold despite the fact that the mortgages in too many cases were sold to homeowners under false pretenses and were bound to be foreclosed when balloon payment came due. A domino effect ran through the mortgage industry calling in loans that were under water. 1.2 million families lost their homes and any equity they may have had. Real estate values plummeted.
Interestingly, from the beginning Goldman-Sachs purchased insurance against failure of the derivatives – knowing that the derivatives were overrated and likely will not hold the price. Some large investors went so far as to put short orders on the derivatives and when the derivatives fell, made tens of millions of dollars.
Some analysts were shrewd enough to ask the real question: Why had these mortgage shenanigans caused a recession? The basic banking answer is the banks did not hold enough liquid reserve to cover their losses and compensated by covering risk with their own insurance which still was charged against the bank’s bottom line. But there is more.
Unfortunately, the banks were gambling with depositor savings, something the Glass-Steagall Act in 1933 prohibited until it was repealed in 1999 when President Clinton signed the Financial Services Modernization Act into law. The battle continues today as Congress tries to dismantle the Dodd-Franks bill passed in 2010 that restored the separation mandated by the Glass-Steagall Act. Note: Of all lobbying contributions, the banking industry is the by far the largest.
The real question remains. Why are the banks running the economy? Why is the idea that banks are too big to fail even a catch phrase?
The answer is that the banks are filling a vacuum. In a healthy economy, the Gross Domestic Product (GDP) is driven by companies that produce something – manufacturing, agriculture, oil, technology, etc. In recent decades, corporations have moved manufacturing overseas; agriculture has a dysfunctional economy heavily underwritten by government subsidies and loans; oil is not a meaningful export; technology is international. What theses normal GDP industries have in common is that they hide profits overseas and may be unnecesarily leveraged to banks. Being in debt to a bank, as is often quoted, is like having a partner.
This is an overly simplified analysis; it identifies the fact that banks need regulation by governments as much as any industry. There are other fiascos like the power of eight people on the Monetary Policy Committee in Great Britain that determines worldwide interest rates; collusion abounds. Still, the banks have power because they are the big boys on the cash flow field. The US and private enterprise are on the dime to restore manufacturing, correct hidden profit schemes, to stop moving corporate headquarters to places like the Cayman Islands, and to reorganize agriculture.
At the consumer level, credit cards are a profit tool for banks. Interest rates are exorbitant – pushing as much as the consumer market will bear. As consumers move into a non-cash world, they are susceptible to interest rates as high as 29%. What happened to usury laws? The mariner recommends strongly that un-indebtedness is the most important family policy; it can make the difference between a quality life and being owned by the banks like a tick owns a dog.
Ancient mariner