308. "How to make a humane market," New Statesman, (November 20, 1998), p. 25-27.
This is a true account. It would take a Bertolt Brecht to improve on this ultimate analogue for the dehumanization of the social market. Rod Grimm (his real name) is an American truck driver who delivers loads from coast to coast, specifically from Los Angeles to Maine, in a great hurry because he is part of the "just in time" system. If his load of frozen shrimp is not delivered on schedule, the restaurants he serves will be forced to shut down. He is on the road 340 days a year. To be able to be with him, his wife moved in with him and they now practically live in the cabin of the truck. Meals are taken on the run at truck stops, or--grabbed and eaten while driving. The couple does their laundry, shops and prays mostly at the same sparse truck stops. Friendships are reduced largely to casual encounters with other truckers at gas pumps. Rod's only child has been left with a succession of babysitters since she was six years old unless she rides with her parents across the land. Birthdays are marked by calls on Grimm's cell phone.
A recent study found that such truckers, of which America has about a million, sleep five hours a night on average, and when they are not taking pills to stay awake, they are popping them to be able to sleep. They tend to nod off at the wheel, causing a disproportional share of traffic accidents. Many trucks nowadays are equipped with electronic devices that allow dispatchers to determine whether the trucks idle too long at truck stops or otherwise do not rush on.
The press account about Rod (it comes to us courtesy of the Wall Street Journal) reminds me of an old book, Around the World in 80 Days. As the racing train, "Henrietta," reaches the last stretch, which must be traversed quickly for the hero to win the bet, the stock of coal is exhausted and so he feeds the train's furnishings to the stove. Soon having consumed all loose items, he tears down the walls of the train--and the roof--and most of the floor--to feed the engine. Nothing is to stand in the way of competitiveness, even if winning means that damn little is left.
The US is now widely acclaimed for having developed a winning economic engine. Like other miraculous designs--those of Japan, Germany, and Korea--the American wonder may well not last for many more years, but meanwhile it is the envy of many and emulated to one extent or another by many more. Most admirers, while aware that capitalism in the US has few of the features of the European social market, seem unaware of the extent and nature of the sacrifices that has been made to make America highly competitive in the new global economy.
Before I list the offering made on the altar of efficiency, one may wonder why this should matter to non Americans, given that most other industrial societies maintain much higher levels of social caring, even if they have recently been lowered a bit. Indeed, it might be said that while the US is cutting into the bone, European welfare states are merely trimming the fat. The question, though, that all welfare states must face is where the fat stops and the bone begins. This is of great significance for sound public policies, democratic politics, and matters of principle. Even societies that have experienced fewer welfare cuts than the US are occasionally swinging across the line that separates streamlining the social market and dehumanizing it, if for no other reason than that the line has not been clearly drawn. Talking old people out of life-saving medical treatments to reduce costs is a glaring example. Furthermore, the absence of a vision of what a restructured social market is going to end up looking like--what will be gutted as compared to firmly protected--grossly undercuts the legitimacy and the political support for these streamlining endeavors.
Before I can try to sketch a possible vision of a restructured social market, I must depict what is happening in American society, the champion of much less fettered capitalism. Some of what follows has not been previously reported; other evidence has not been pulled together as an up-to-date account for which Rod Grimm stands as such a sad and troubling symbol. In any such account one must constantly remember that the US's curtailing of social services and amenities starts from a much lower level than that of other Western democracies. (The US spends 15.8% of its public budget on welfare, compared to 30% dedicated to the same even currently in the West). It is sufficient to recall that the US still does not have a national health insurance plan, which other nations have had for over 100 years, a major social safety net citizens of these nations take for granted.
One last word of introduction: reference here is not merely or firstly to beating up on the poor or the rise in economic inequality, very important but often noted topics. What I am about to examine are the lives of most members of American society, including those like Rod Grimm, who are quite well off, financially speaking.
Child and elder labor
American families work much more to maintain their standard of living than they did a generation ago. This may at first seem to fly in the face of statistics that show that the length of the work week has barely budged. What has happened is that instead of there being one bread winner per family, the majority of American families now have two, with the majority of mothers now working outside the household. As a result, even with very little increase in real income per worker, many families have been able to increase their income. (Single parent families are often poorer for this and other reasons). To put it differently, while individual workers do not work many more hours--the members of any one family do.
The result of the necessity for two incomes has been an enormous decrease in the quality of life. People have much less time for their children, for one another, for community life and voluntary work, and for practically everything else that is not work related. True, there are only few signs that people watch less TV, unless they are glued to their computer screens. (In addition, while there are few reliable statistics, it seems that workers, especially white collars and professionals, while at their job often labor harder, having lunch at their desk, and staying after hours without extra pay.)
Next to no attention has been paid to another feature of the increase of the labor force and decline of the home force as the major means of shoring up families' income: this trend cannot be continued much longer because most adults have already left the home to seek gainful employment. How to keep revving up the standard of living now?
Surprisingly, the answer is through increased child and elder labor. I am not being dramatic. Of high school seniors, 75% of boys and 38% of girls work more than twenty hours per week during the school year, in fast food restaurants, record stores, ice cream parlors and other such places. Fifty-two percent of all students had a part-time job during the 1996-97 school year, averaging 18 hours per week. Fifty-eight percent of students said their job interfered with their school work. While it is true that upper middle class youngsters use the income mainly to buy trinkets (and cars) for themselves, lower class ones help to keep up the family's income. The damages to education are numerous and extensive. Many schools consider it impossible or "unfair" to expect students to do homework. Making money is considered more important than bothering with "impractical" subjects--especially the humanities. Some educators believe that working at McDonald's, ice cream parlors, and doughnut shops while in school teaches youngsters the importance of good work habits, discipline, and responsibility. Those who find their students asleep at their desks, after they worked past 11:00 p.m. the previous night, may question this.
And millions of elderly Americans, theoretically retired, work "off the books," to be able to collect Social Security and--to help take care of themselves and their families. While much has been made in recent years about the growing burden the old are putting on the young, so far in the US--if wealth and not merely income transfers are taken into account--the elderly contribute to the young roughly two dollars for every one they get from them. Next time you see an eighty plus year old widow, dragging her feet to serve customers in an American restaurant or drug store chain, note that she is not alone. True, Americans between the ages of 65 and 85 are often healthy and able to work. But it is hard to see taking them off the golf carts and away from their bridge games to serve tables or mind the store as anything but a decline in their quality of life.
The proportion of the labor force that works at home has also swelled significantly, although it is a long way from reaching the size it had in the early, weaving days of the industrial revolution. Working at home may be good for children and the environment but it often leads to self exploitation. People at home tend to work long hours and part of the weekend.
All said and done, the US is heading back toward an earlier age, that of rawer capitalism, when people labored longer and harder and the whole family worked, leaving little time or energy for other pursuits.>
The diluting of benefits
Over the last years, to become more competitive and to reduce public outlays and labor costs for industry, health care benefits for those who receive them, have been diluted, diminished, and hollowed. This is a point that is often overlooked when jobs lost are compared to jobs gained. Critics have made much out of the fact that steel workers, who used to earn $26 an hour, end up flipping hamburgers for $7 or less. Actually, authoritative statistics show that new jobs on average pay a small bit more than old ones (women gaining on average while men losing a bit on average). However these data ignore considerable qualitative differences in benefits. First of all, a rapidly growing number of Americans, 20%, said to go to 50% in the near future is becoming what is called contingent workers: part timers, temporary or contract laborers. In the American system, unlike French workers for instance, such workers receive no benefits at all or only minimal ones. Given that benefits amount to between 25 and 33% of compensation, for workers to become contingent laborers entails a very significant loss. The Wall Street Journal reports that still fewer small businesses are providing health insurance: 39 percent of small businesses offer health benefits in 1998, down from 46% in 1996.
Other workers may keep their benefits but find that they have been grossly thinned out. For example, people's stay in hospitals has been sharply curtailed. This change is particularly illuminating if one thinks in terms of fat and bones: while the first cuts were into hospitalization days that could be eliminated with little harm, even some benefits to health, the newer cuts have been extended to a point that there are reliable reports of considerable harm. For instance, hospital stay after childbirth was cut from five days to one, but following reports of serious ill effects, has been re-increased to 2 days. Another case in point: Many American employees used to be entitled to considerable amount of psychotherapy; they are now often limited to three sessions or less. Above all, to gain treatment most patients now face several bureaucratic hurdles that de facto limit what they can gain even if nominally a wide array of benefits are still on the books. All this slimming down, champions of the changes argue, has not for naught; the costs of health care that were spiraling out of control have increased much less than in previous years. Fair enough, maybe the belt tightening was needed. It still leaves people's lives tighter.
Retirement benefits have also been dialed down. Americans must rely now more and more for their retirement, beyond whatever social security has to offer, on private saving (through such devices known as IRAs and Keogh plans) rather than pension funds to which their corporations contribute. And a sizable number of those corporate pension funds that are still in place, have made their terms less favorable to the elderly or even retroactively cut back the benefits to those already retired. Thousands of these plans are underfunded, undermining the psychological assurance they provided long before one reached the age one could draw down the actual funds. Social Security, the one assured benefit American society does provide to one and all, taxes more, pays less, and--is repeatedly reported to face bankruptcy (albeit only 32, some say 50 years, down the road).
Job security in the US has always been much lower than in Western Europe. Severance pay to workers who are fired in the US is rare and labor unions are much weaker. Globalism has further reduced job security; there is an ever-present threat to move plants out of the country, even when it remains unspoken. The extent of the psychological costs of such losses in job security are difficult to measure but they--together with fears of being "downsized"--contribute to an overall rise in tensions that result from enhanced competitiveness. The few American companies that used to provide life-long guaranteed employment, Delta Airlines for instance, have announced that all bets are off.
Public services and inspections
Consumers and citizens are not doing better then employees, meaning that most people are thrice hit. Inspection of most anything from food (for e coli, bone and iron shavings in ground beef and so on) to quality of care in nursing homes, weak to begin with, have been cut back both by diluting government regulations and by reducing the budget of the enforcement staff. In the name of efficiency, speed limits on highways have been reduced or eliminated, with the expected increase in fatalities. The FDA testing of drugs, thought to be too long and complicated, is now being excessively hurried. For instance, Viagra has recently been approved for marketing before its interaction effects with several other drugs the same sub population often takes have been studied. As these lines are written, the drug has been associated with 30 deaths, although cause and effect have not been established. In the nine months that have passed since Congress enacted the fast track for drug approval for the FDA, and cut the approval time by half, five drugs had to be recalled, each after causing several fatalities. These include a pain killer (Duract); diet pills (Phen Fen and Redux); and a blood pressure medication (Posicor). The damage is easier to see in another area: a sharp reduction in the quality of workers who grind glasses and of in-house quality control has resulted in 53% of the glasses tested being below par by the industry's own standards, making them less costly.
The hours open, staff, and services available in practically all institutions from public libraries to museums, have been cut. Public television and radio budgets have been curtailed and they have been forced to become more commercial. Publishers issue fewer serious books and focus more on blockbusters, investing less in editing the books they do issue, although computerized programs (such as spell-checks) have made up for some of the loss. Newspapers and magazines have become slimmer, more "useful" and less newsworthy, even the New York Times looks ever more like the Murdoch London Times.
All the examples given so far concern most Americans. The numerous cuts that have been made in those programs that pay out to poor Americans, especially welfare, have often been noted. The debate about their merit is a familiar one and needs no repeating other than to note that they too raise the question: when do these cuts turn from a cure to overdependency and budget deficits to abuse of the most vulnerable members of society? At least two developments seem to me to cross the line between a sound social market and a dehumanizing one. Cutting mothers of young infants off all public support (not merely cash but also in kind) and rather than solving the admittedly difficult questions of how to find shelter for the homeless--one tolerates policies that end up swelling the numbers of people who live in the streets. These kinds of policies turn the great society into graded society.
All said and done, the social element of the social market has not disappeared in America, but it has been thinned out (and was rather dilapidated to begin with). This observation does not reflect some kind of new, critical, or old left curmudgeon viewpoint. The Wall Street Journal asked recently in a front page story "Is the market penetrating too deeply into America life?" Conservative Bill Bennett's response "I am concerned about the idolatry of the market." What are the rewards, and how far is one willing to go to reap them? >
If its so bad why is it so good? Or leaner but not meaner?
The obvious question is if enhanced competitiveness of America causes such grief, why are people not up in arms, or at least much more disaffected? In part, Americans continue to blame themselves (or bad luck) for whatever befalls them, a political acquiescence European governments who rush to adopt the American model cannot count on. In part, the recent upward jump of financial assets has half the country speculating in the stock market, feeling richer for the moment. The other half believes that it could hit the jackpot--next year. But above all, the American experiment in restructuring the social market has had two very substantial and important economic payoffs, that in turn also yield social and humanizing benefits.
Firstly, the US has been much more successful than other Western democracies in distributing the work that is to be had. Jobs' real pay may have increased little and benefits may have been lowered--but instead of protecting the well heeled jobs of some workers while tolerating high unemployment, the restructured American economy has made it much easier for industry to hire one and half workers where it used to employ one--and save money in the process. (Others out it in terms of generating millions of new jobs, which amounts to the same). As a result, unemployment practically disappeared.
Given that holding a job is a major source of self identity, self esteem, [physical] and mental health, and family stability--and that jobs are now available to all who seek them, explains to a great extent why personal resentment and political opposition to the restructuring is low and general satisfaction with the state of affairs is rather high. All this may change when the current stock bubble bursts and if it, or some other factor, restores the business cycle causing massive unemployment. But for now full employment is a major source of support for current economic policies.
As I see it, the preceding statement is not merely a psychological and politically valid observation, it lays a moral claim. A reformed market system that inflicts many a pain but results in a much better allocation of work and as a result in effect abolishes unemployment, and earns several merit points. At issue is the regard in which one holds work. If one sees it as a drudgery that one must suffer, avoiding it as much as possible becomes a desirata, and a good welfare state allows one to minimize such labor. Work is a place a person contributes to the community's well being, a way a person proves her or his worth, and finds a wholesome identity. Reference of course is to a person who is well, and I am careful to write "a place" rather than the only place. Still, work has a compelling moral worth. A great achievement of the restructured American market, one that must be measured against the suffering that results from extensive restructuring, arises out of making work for all.
Second, the reconstruction has an obvious payoff that as a result is no less enormous. The main success of the American economy is that from 1994-98 it grew at two percent or so above what used to be considered the level at which intolerable inflation would take off. Two percent does not sound like much, but of course it entails huge amounts of goods and services, significantly higher tax revenues--without raising the levels of taxation, lower deficits or even surpluses (not merely on the Federal level but also in numerous state and city governments, which provide in for many social services in the US), and much else. To what extent this success can be attributed to a lesser social market is difficult to determine but let us assume that it contributes greatly to higher competitiveness and great economic largesse.
In the last few years, the U.S. also experienced significant declines in crime, including violent crime, and of teen pregnancies. The high level of anger, pollsters previously reported, expressed by about two third of the citizens, has been replaced by a widely spread sense of optimism and approval. While it has not been established to what extent the high level of employment and production of goods and services causes these social gains, they seem to play a role in having brought them about.
The question still stands whether these higher rates of employment and economic growth have been attained at unacceptably higher human costs. Do all societies, to be able to hold their own in the world market, have to make the same tradeoff or can some restructure their social markets in ways that keep the "social" more robust? Moreover, the question of whether higher economic growth and more wealth is worth the tradeoff cannot be understood until we have a clearer understanding what is on the other side of the scale. How far is a society willing to go to gain a few extra percentage points of economic growth and four percent less unemployment?
A Lesson for Other Societies
As I see it, for ethical as well as political reasons, other societies that seek to enhance their competitiveness by unleashing the market would be well served if they had a grand public dialogue--a megalogue--that would lead to a shared moral understanding, of which social arrangements are to be considered inviolate, which may be weakened but not gutted, and which may be sacrificed on the altar of competitiveness. To put it in the most general terms, the question is how to protect human dignity and a humane society in face of rising global economic pressures.
The rhetoric of dehumanizing capitalism flows all too easily, but does tap a profound unease we all sense. However, to prime a sound examination of the future of social democracies, one must move to a higher level of specificity. Here are some conversation starters for such a dialogue. They are meant to illustrate that the kind of principles that need to be articulated hardly provide the required shared understanding. To attain these requires much more deliberation, and above all, must arise out of society-wide dialogues. Some provide for "no entry" posts to market forces; others are "go slow," (yellow warning lights); and still other blink green, for full speed ahead.
An analogue might help to capture the basic approach. Rather than alloying the market free range or seeking to suppress it, one may view it like nuclear fission. If well contained, it can be of much human service. If allowed to escape from its vessel, it can be a very destructive force. The following elements, which combine laws, social mores, and social arrangements, are to constitute the societal capsule which, if well maintained, can contain the market without significantly inhibiting the good it can produce. >
* Numerous social elements should be considered out of bounds, untouchable by the market. Human organs, that are sold and bought in India, for instance, should not be tradeable. Nor should be children up for adoption. Pencil in here other items that command our highest respect.
* Privatization of those functions that involve the legitimacy of the state should not be allowed. No profit making hangmen and, for that matter, prisons.
* Moving from taboo zones (no entry) for market forces to "drive slow" zones: A society may tolerate the lowering of some social safety nets but the removal of none. Ergo, lowering unemployment benefits may be acceptable, but not terminating people once a time limit is exhausted if work is not available. Raising the minimum wage may be a source of argument, but not revoking it, and so on. Welfare payments may be too high but all people (even affluent ones) should be able to rest assured that whatever illness, misfortune, or other unforeseeable disaster befalls them--they will not end up in the street with their children, without such basics as food and health care. (Note though, that to ensure all people that, come what may, their basic needs will be attended to, does not necessarily entail providing these benefits in cash).
* Some new intrusion of the market into the social realm might be tolerated but it must be carefully circumscribed and supervised. For instance, youngsters under the age of 16 should not be allowed to work during school days and those 16 to 18 only a set number of hours while in school. Schools and corporations might form some shared guidelines to ensure that these work experiences are more educational than they often are, steering students to those workplaces that are willing to abide by these standards.
* The market should be allowed freer range to find the best means for new social needs but not to determine their normative merit. For example, the US government determined a need to protect children from violence on TV; instead of articulating the need, but allowing broadcasters to develop the filtering procedures or technologies required to block undesired screening, the government locked in on a specific device (known as the V-chip) which turned out to be a particularly unsuited way of serving what is widely considered a rather legitimate goal.
* Industries and professions should be allowed, indeed encouraged to self regulate, but--government inspections should verify that these self regulations are effective.
* Last but not least, economic and humane considerations do not always have to be faced as a tradeoff. When people live in communities, and help one another, their lives become less costly and more humane. Critics may scoff at many hundred thousands of self help groups as some kind of a New Age form of groupism. The fact is that the millions of cancer patients, former alcoholics and drug addicts. HIV infected, and others involved help one another in powerful and effective ways, which enrich their lives, make them better people and help them better the lives of others, and--reduce public costs, enhancing competitiveness.
Above all, a society needs a better vision than that thousands of little cuts in social services and the amenities of life, with no defined end or limiting principles, will lead to economic well-being. A social market may be reconstructed but requires some kind of vision of the qualities of the new society, other than that it will be more efficient.
Amitai Etzioni is the author of The New Golden Rule (London: Profile Books Ltd. 1997). He is the founder and director of the Communitarian Network, http://www.gwu.edu/~ccps