Musings Report #27 06-30-12 Revolutionizing Work and the Economy
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More Ideas Than Time
One of my happier frustrations is that I have more ideas for blog entries and Musings than there are days in the week. I have a backlog of dozens of topics I want to address but alas, new topics constantly pop up and the backlog grows ever larger.
Revolutionizing Work and the Economy
Longtime correspondent Michael M. sent me a sharply written and controversial (judging by the many comments) essay by a Millennial (a.k.a. 20-something) frustrated by the parenting and expectations of Baby Boomers and Gen-X and by the moribund economy: Open Letter from a Millennial. The essay touches on many generational, financial, educational and parenting "hot button" issues, and it's not surprising that the comments are often equally emotional.
My own occasional excursions into the politics of generational conflict have revealed a vast reservoir of raw emotions that lie just beneath the surface of American life. If you puncture the "happy-happy everything's going great" membrane, a hot jet of generational angst, resentment, guilt and plain old anger gushes out. This essay expresses many of the views shared by Millennials.
As a 58-year old Boomer, I'm not a fan of Status Quo parenting or education, but what struck me most profoundly about this essay is its complete absense of political and economic context. It is a teen-centric perspective where parents, parenting and schooling are seen as the critical drivers. The reality that the future would be just as bleak regardless of parenting or education or expectations is missing from this worldview.
The fundamental nature of work is changing, along with the foundations of the economy, and it's understandable that young people feel cheated that the conventional lifestyle of the past 60 years is no longer their birthright.
The conventional lifestyle was based on what amounts to a State-corporate industrialized economy that transitioned to a post-industrial "service economy" on the broad back of ever-rising debt and asset valuations. But that 40-year expansion of debt-based consumerism has run its course, and diminishing return is wreaking havoc on every level of the economy.
The return on a college education has diminished even as the cost has skyrocketed, for example. As I noted on Friday, the return on debt has also declined; borrowing more money to maintain the Status Quo is a financial death spiral. Tremendous increases in healthcare expenses yield increasingly modest returns in actual improved health, and indeed, "lifestyle" diseases are offsetting whatever improvements have been gained from new technologies.
In national defense, the $300 million-a-piece Joint Strike Fighter may actually be inferior to the $54 million-a-piece F-18 aircraft it is replacing. The 1,200 page Obamacare "reform" may yield very little in the way of universalizing care and lowering the systemic cost of healthcare. The 1,000+ page Dodd-Frank financial reform bill is equally costly in terms of compliance and equally low in observable yield.
In my book "Resistance, Revolution, Liberation" I describe society and the economy as being constructed of three primary parts: the capital-dominated market, the Central State and the community (the non-market, non-State private society). Community has atrophied to the point that most Americans have little idea what community even means. Their experience of the atrophied remains is limited, and it now takes an act of imagination to even properly conceive of what community once meant. Americans now turn to "the government" for everything (food, jobs, healthcare, loans, pensions, housing, etc.) and consider a high-paying secure position in the market economy to be the only measure of "success."
I have long suggested that the number of formal market-economy jobs will decline from 130 million to around 100 million, and the driver of this contraction will be the devolution of the debt-dependent consumerist economy that has propped up the Status Quo for the past 30 years. Put another way, the Red Queen will lose the race: running in place (borrowing more to pay the interest on past debt and to consume, consume, consume) will no longer keep us from sliding backward.
That is, by the way, my view of the latest "Europe is saved" euphoria: boiled down to its essence, bad bank debt will be replaced with "good debt" issued by the European central Bank (ECB). The debt will still require interest payments, and that money will be drained from economies that are starved of the massive new borrowing binges that fueled their "growth" for 30 years. It's a death spiral wrapped in prettier paper.
The Millenial generation has been handed the opportunity, and the necessity, of revolutionizing the U.S. economy, and by extension, the global economy. As the State and capital-dominated market parts of the economy contract, the non-market community sector will have to expand dramatically to fill the void, both in work but also in self-identity and in providing meaning.
This is the core of what I call "hybrid work," a mix of market and non-market labor and human capital investment. This is the model of work for all generations--a vastly lower cost basis, a revaluing of self-reliance, resilience and resourcefulness, and a positive model for living that no longer depends on an upper-middle class income. That lifestyle is already only available to the top 20%, and that will shrink to the top 10% within this decade.
Rather than bemoan the loss of the debt and State-dependent middle class, we must revolutionize our understanding of work, identity and meaning, and rediscover the non-market economy based on community and reciprocity. Much of this "new economy" does not yet exist; only the first stirrings are visible.
From Left Field
San Francisco Rent Control Madness: wealthy people gaming rent control to keep low-cost pied-a-terres. People respond to whatever incentives and disincentives are presented....
"Journalism is printing what someone else does not want printed: everything else is public relations." George Orwell
Thanks for reading--
charles