Monday, July 21, 2014

Millennials: Who's the Dominator, Business or Government?

We've been looking at business and government, and noting their huge power to dominate in the modern age.  But which is worst?  If you ask the politician or the activist they would say it's no contest.  The only thing saving the worker from a fate worse than death is the social legislation and regulation that the modern state has enacted over the last century to curb the power of business and corporations.

It was, of course, Karl Marx that set the campaign against business into overdrive.  Actually, his critique was nuanced.  He marveled at the wonders of technology and the world-wide reach of the trading system; he just felt that it would all end in tears because the efficiency of the system would squeeze out the worker, with corporations lowering wages down to subsistence level as they competed for business with each other.

In a way, Marx was right.  Older established corporations wither away and die all the time, and their workers suffer.  That's what the Joe Soptic steelworker story was all about in 2012.  But the story of the last century and a half is that while some workers suffer when their industries decline and fail, most workers benefit as technology and markets throw up more products at lower prices.  In the process farmers have become miners and steelworkers and manufacturing workers, and manufacturing workers have become service workers.  To put it crudely, whereas workers used to wield a shovel to move the earth, and then a machine, most workers today use machines (computers) to interact with other people.

It got to the point, in 1920, when the thinking Marxists of the Frankfurt School started moving towards the idea that both modern business and modern government were dominatory, exploitative entities.  What was needed was something to balance the power of system.  And Jurgen Habermas suggested that the answer was the free and intersubjective communication between humans as equal humans rather than the mechanical forces of business or government systems.  You mean they use machines to interact with other people?

But I want to push the argument a little further.  I want to suggest that, even in the interest of pure power, there is a limit to how far you can use business or government to dominate people.  Let's take business first.

The pure industrial system of human domination was not the satanic mill of the 19th century but the slave plantation of the 18th century.  People wrote books about how to organize a slave plantation on the "gang system" -- the prototype of the assembly line -- and how to apply a steady driving "force" to make the whole thing work.  Since the plantation owners on the West Indian sugar islands ran the government, they could apply whatever "steady driving force" they felt was needed.  And it was needed because post-pubertal males would not submit freely to the gang system.  But the plantation owners found that they got better results from their slaves by freeing them up to be creative and resourceful.

A century later the factory bosses found that it was almost impossible to get post-pubertal males to submit to the factory system.  The solution was compulsory education to get little kiddies used to submission for K through 12th grade.  Then they could be good productive employees in big organizations and do what they were told.

Still, businesses found that dutiful obedient employees weren't enough.  They needed creative resourceful employees that could solve problems and come up with new ideas.  So even as government was writing laws to regulate the relations between employer and worker the businessmen found that the best employees were free, creative employees.  Or they might leave.  Today, even at mega-corporation Walmart employees can go in the back room and take online courses to raise their hourly pay.  And if they see a product flying off the shelves at their store they have the authority to order more.

It's telling that when big government really got going in the 20th century it applied a degree of force in Soviet Russia and Maoist China that made the brutality of the slave-drivers look like a Sunday picnic.

But if you don't apply discipline, how do you get the workers to work?  In The Ordeal of Change longshoreman philosopher Eric Hoffer gives the answer.  It is individualism.  Why?  Because in the individualist society "the individual in the mass who turns to work as a means of proving his worth and usefulness."  In a collective society, you have worth just because you belong.  We are not talking about individual geniuses here.
All we can claim for the individual in [individualist] society is that he is more or less on his own; that he chooses his course through life, proves himself by his own efforts, and has to shoulder the responsibility of what he makes of his life.
In fact, individual freedom delivers the individual into the hands of a ruthless taskmaster: himself.

Do you see the paradox here?  In our society the left makes a big deal that we are all in this together and that you didn't build your business on your own.  But unless society promotes individualism the government or the employer will have to drive everyone at work.  It is only an individualist society where people motivate themselves to work, and thus do not need supervision and the encouragement of the overseer's lash.

In business, everyone is ceaselessly striving to improve their product or their service, to prove their worth and usefulness.  Even in my lifetime, we have seen the fall of the steel companies, the fall of the auto companies, the rise and fall of mainframe and minicomputers, the rise and fall of Sears and K-Mart.  Now we are seeing the old-line publishers in the coils of upstart Amazon.  Business reinvents itself every day; that's the only way it can keep offering jobs to American workers.

But look at government.  We are still in thrall to the bigger-is-better mentality as we try to make health care into a one-size-fits-all mega-program.  Suppose Obamacare is the best thing since sliced bread. How do we adjust it and reform it ten years, twenty years from now?  Notice how eager everyone is to reform Social Security and Medicare?  It is almost impossible to fix anything in government; that's because government is all about free stuff, and nobody will agree to give up their loot.  Don't cut my Medicare, says grandma.  Don't raise my payroll taxes, says the worker.  So nothing happens until the system breaks down.

There is no such thing as a free lunch, wrote Milton Friedman half a century ago.  If you want to lift the burden of responsibility from people and provide them with a safety net, then you must increase the level of force to make them work.  But if you leave people "on their own" then they will work and strive to provide products and services for other people.  If you leave business "on its own" then it will ceaselessly create a froth of new and improved products without anyone telling business what to do.  But if you decide to micromanage business and make it more socially conscious then you will have to ramp up the coercion and you will throttle the economy with rules and you will find that the poorest will suffer most.

These days the Millennial generation is having a tough time getting their adult lives off the ground.  There aren't many jobs and many Millennials are groaning under the weight of student debt.  The question is whether the answer is more government, to target the Millennials with special government programs and subsidies.  Or is the solution less government, to let Millennials create opportunities for themselves with a smaller government taking a smaller cut of the nation's product.

The answer, I suggest, is in the words of Aneurin Bevan, the British politician who got the National Health System started in the 1940s.  In order to get his bill passed he "stuffed their mouths with gold," in other words, he gave away the store to the medical profession.  Is that really the best we can do?  To help the poor we must enrich the special interests?  That's the way that Obamacare was passed, with handouts to insurance companies and drug companies.  There has to be a better way, and it probably means smaller government and fewer handouts to the powerful.

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