Free Market Capitalism: Miracles, Magic, and Mental Illness

 

Free market economics promised magic.
We got the Hustle instead.

The Miracle-That-Isn’t

This year’s State of the Union Address featured an “economic miracle,” citing economic growth, decreased unemployment, and a soaring stock market. There’s nothing miraculous about any of that. It’s all on purpose. The U.S. economy is doing exactly what it’s designed to do — promote capitalism for capitalists — and it’s hitting on all cylinders.

Capitalists are people and companies with access to capital: the corporate nation-states and the people who own and manage them; the entrepreneurs who start them; and the financial firms who trade their securities. U.S. economic policy provides structural support for the massive amount of worldwide capital: low corporate taxes leave more profits in the companies’ coffers, and low capital gains taxes generate higher returns for those who provide the capital.

Since the new USA tax policy went into effect after the 2016 election, corporations have been using their profits to buy back their own securities in record amounts. Stock buybacks are easier to predict than corporate quarterly performance and dividends; instead, you get cash payouts on schedule. As for the shares that remain, when a company takes some of its shares off the market, the ones left are worth more – same numerator, smaller denominator. That’s good for the remaining shareholders and for executive compensation, which is largely based on share value. Stock buybacks have become what Goldman Sachs called the “dominant” reason for stock market demand.[1] Again, all of that is by design, and if you’re a corporation or investor, the Miracle-That-Isn’t is working just fine for you.

How’s all this working for the non-capitalists?

The Magic That Isn’t

Google “state of the union economic miracle,” and the results are predictable. The right crows over robust growth, the left nitpicks over percentage points, and neither side mentions that non-capitalists aren’t benefiting from the economic Miracle-That-Isn’t – none of that robust economic growth gets to them.

Non-capitalists don’t make money from capital, they work for a living, and their ranks include small businesses and self-employed individuals — your local tech consultant, plumber, florist, bookstore owner, micro-brewer. They aren’t capitalists. They’re not entrepreneurs either. Starting a business on a credit card, pledging your home as collateral, spending your savings to pursue a dream… those things don’t make you a capitalist.

All these working people were supposed to benefit from the same “free market” economic theory that’s powering the economic Miracle-That-Isn’t. This was supposed to happen because benefits at the top would “trickle down” to those below. (The term “trickle down” has been around since the 80’s. We don’t seem to notice that it’s condescending and stingy.) This theory was championed by Nobel prize-winning economist Milton Friedman and the Chicago School of Economics:

“The core of [the school’s teaching on the free market] was that the economic forces of supply, demand, inflation and unemployment were like the forces of nature, fixed and unchanging. In the truly free market imagined in Chicago classes and texts, these forces existed in perfect equilibrium, supply communicating with demand the way the moon pulls the tides

“Just as ecosystems self-regulate, keeping themselves in balance, the market, left to its own devices, would create just the right number of products at precisely the right prices, produced by workers at just the right wages to buy those products — an Eden of plentiful employment, boundless creativity and zero inflation.[2]

As we’ve seen previously, although Friedman and his colleagues characterized their capitalist vision as science, it wasn’t; it was instead a belief system, promoted with religious zeal. The belief was that “trickle down” would happen automatically, like magic. All you had to do was give capitalists free reign — cut taxes, provide trade protection and other incentives — and the economy would grow, the capitalists would get rich, and everybody else would be better off, too.

That’s the theory. Has it worked?

U.S. economic policy has given free market economics its best shot for four decades, including that most recent all-in super-size of the current administration. We now have the empirical data Friedman & Co. didn’t. What it shows is that the policy truly works at the top, but there’s no trickle down.

Trickle-down doesn’t happen magically.
It happens deliberately.
It happens when it’s part of the plan.
And when the plan is carefully executed.

Intentional trickle down policies need to work both sides of the ledger – income and expenses. For example, you could collect tax revenues on some of that newly-created economic “miracle” wealth and spend it for the benefit of the Public (which includes the capitalists). Trouble is, as we’ve seen previously, free market economics has eliminated the Public from policy-making. That leaves low unemployment as the best chance to move money to the pockets of the people who work for a living. But that’s not effective either, because not all jobs are created equal.

Jobs for the Poor

Free market economics’ belief that low unemployment is the best way to benefit non-capitalists has made jobs a sacred cultural norm. Young? Just starting out? Poor? Can’t make ends meet? Get a job! Jobs are morally right – they build character, they’re how you make your way in the world. Public goods and social safety nets are evil, but jobs are everlastingly good. If you don’t work (at a job), you don’t deserve to eat. (That’s in the Bible; [3].it’s also in Lenin’s The State and Revolution.) If unemployment is low, that means there are plenty of jobs to go around, and the slackers have no excuse.

Right?

Wrong.

The capitalist Miracle-That-Isn’t is not creating the kind of jobs that pay a living wage to full-time employees. The jobs are not full time, and the workers aren’t employees. Instead, the jobs are part of the new gig economy. The workers are self-employed contract labor, temporary and short-term. And since there is no Public good anymore, these new gig jobs have to pay enough to cover self-employed FICA and benefits, as well as living costs. That’s not happening, which means we now have something that sounds like a dance craze, but isn’t. We have…

The Hustle

The Hustle is what non-capitalists do when the Miracle-That-Isn’t creates gig jobs.

“Doing my taxes this year, I noticed that the W4 form has transformed into a somewhat confusing jumble of tables and boxes. In one of these boxes, you’re meant to identify if you’re working another job to make ends meet, like freelancing or picking up Instacart shifts. Basically, the form wants to know: “Are you hustling?”

“For most people I know, the answer is a resounding yes. A friend of mine is a talented videographer who bartends and takes odd jobs on the side. I know a preschool teacher who also babysits and moonlights as a Lyft driver. Two employees in my company run a side company and create content on Twitch. A fellow writer on Medium works a nine-to-five, then freelances in the evening. And me? I’m no different. I write, freelance in graphic design, and build websites to provide for my family.

“We’re hustling to make ends meet, ‘building our brand,’ ensuring our startup doesn’t tank, or dreaming about the day our side hustle takes off and we can walk into the office and give everyone the bird.

“Some of the things exacerbating Hustle Life™ are out of our control. I live in Austin, Texas, where the cost of living has skyrocketed in the past few years. Between 2017 and 2018, the cost of living rose by $20,000 per person, about a 33% increase. Also, the average CEO’s salary has grown by 940% since 1978, whereas their workers’ wages have grown by just 12%. It stands to reason, then, that most of us are hustling because we literally have to in order to survive.”[4]

The Hustle means living from paycheck to paycheck, with nothing left over for savings, home ownership, and other out-of-ordinary costs.

“It seems like everyone is just trying to make ends meet.

“One of the latest hashtag games making the rounds on Twitter TWTR, -4.31% invites social media users to provide pithy and honest answers to this open-ended statement: ‘With my next paycheck I will…’

“While these games generally draw amusing memes and witty zingers, many of the responses trending under #WithMyNextPayCheckIWill early Tuesday morning were pretty bleak, with ‘still be broke’ being the general consensus.

“This reflects just how many Americans are living paycheck to paycheck.

“Depending on the survey, that figure runs from half of workers making under $50,000 (according to Nielsen data) to 74% of all employees (per recent reports from both the American Payroll Association and the National Endowment for Financial Education.) And almost three in 10 adults have no emergency savings at all, according to Bankrate’s latest Financial Security Index.” [5]

Poor Becomes the Norm

When robust economic growth doesn’t tickle down, the gap widens between capitalists at the top and the poor at the bottom – this is the economic inequality that dominates economic news – and then the middle class falls into the gap and joins the poor. According to a 2017 Federal Consumer Financial Protection Bureau report,

“Measured by the By the Official Poverty Measure (OPM), more than 95 million Americans (nearly 30 percent of the total population) are either in poverty or considered ‘low-income’ (living below twice the poverty line) … That number rises to 140 million people (43.5 percent) when using the (SPM) [Supplemental Poverty Measure].”[6]

What do we mean by “poor”?

“The OPM was adopted in the mid-1960s and has garnered widespread criticism because it measures pretax income and food-purchasing power, updated yearly to account for inflation. That methodology, experts say, fails to capture many people struggling financially in modern society.

“The Census Bureau responded with the SPM, which since 2011 has measured after-tax income, food costs and other necessities such as clothing, housing and utilities. The SPM accounts for geographic variations in the cost of living, includes welfare benefits such as food stamps and housing subsidies, and subtracts child-care expenses.”[7]

Therefore, “poor” officially means you struggle with food, housing, utilities, and childcare. But what if you can’t come up with $500 to cover an unexpected expense[8] –does that count as a necessity? Or what about a car, washer and dryer, TV, air conditioning…maybe even home ownership, a shot at upward mobility, or relief from the insecurities of the gig economy? Are those necessities?

We have now landed squarely in the center of the necessity vs. luxury debate, which apparently will endure until the seas all melt, and to which the most reliable answer seems to be, it depends on what socio-economic level you’re talking about. For the middle class and up, things like a reliable car, smart phone, high-speed wireless, home ownership, savings… plus the occasional night out… are givens. As for the poor,

“There is a moralistic presumption that poor people, especially those receiving benefits, should not be spending money on anything but the bare essentials, denying themselves even the smallest ‘luxury’ that might make their lives less miserable.”[9]

If 32% – 43.5% of Americans are living at the official poverty line, the USA has truly become what one writer calls “the world’s first poor rich country.”[10] That means look left, look right, and one of you:

  • Does not plan for the future in the press of making ends meet right now;
  • Makes money and purchases stretch as far as possible;
  • Is shadowed by the what if? of emergencies and other unplanned costs;
  • Regularly opts out of social engagements for lack of funds;
  • Relies on unreliable transportation to get around;
  • Constantly sacrifices this in order to do and have that;
  • Does not ask for help because it’s too embarrassing and shameful.[11]

Things get worse when the poor become impoverished. Poor is lack of money, the inability to make ends meet. Poverty goes beyond poor: it is a mindset and belief system that drags the poor into a pit of mental ill health.

Why do the poor make so many dumb decisions?

The poor don’t, not necessarily. But the impoverished do. People use “poor” and “poverty” interchangeably, but not everyone who’s poor is also impoverished. The poor are poor because they lack money, but poverty goes further: it’s a chronic, grinding, demeaning, despairing condition that generates a specific outlook and way of approaching life. When that condition is shared, it becomes a culture. You might not know it when you’re around poor, but you definitely know it when you’re around poverty.

Poverty is institutionalized economic mental illness.

The Lost War on Poverty

“In the sixties we waged a war on poverty and poverty won.”

Ronald Reagan

Poverty is a “personality defect.”

Margaret Thatcher

That’s true: poverty won the war against it. But it’s also true that the poor lost.

The Gipper was referring to LBJ and his Great Society, but he got it wrong:  the Great Society failed to eliminate poverty because it never got all the way to dealing with it. Instead it took a more politically acceptable path focused on education and community involvement — not bad things, but there’s a difference.

As for the Iron Lady, there’s actually some truth in what she said, but almost certainly not in the way she probably meant it. She was more likely voicing the common attitude that the poor are intellectually impaired, morally flawed, prone to bad lifestyle choices, and criminally inclined, and therefore worthy of only the most grudging kind of help. That attitude and the Great Society reputed loss of its War on Poverty[12] explain a lot about today’s lack of safety nets for the poor – which, remember, refers to 40+ percent of Americans.

Rutger Bregman[13] tackles this subject in his book Utopia for Realists: And How We Can Get There (2017). (As smart and creative as he is, he still uses “poor” and “poverty” interchangeably. I wish he wouldn’t.):

“A world without poverty– it might be the oldest utopia around. But anybody who takes this dream seriously must inevitably face a few tough questions. Why are the poor more likely to commit crimes? Why are they more prone to obesity? Why do they use more alcohol and drugs? In short, why do the poor make so many dumb decisions?”

He continues with more tough questions:

“What if the poor aren’t actually able to help themselves? What if all the incentives, all the information and education are like water off a duck’s back? And what if all those well-meant nudges [toward self-help and away from government assistance] only make the situation worse?”

He then profiles the work of Eldar Shafir, a psychologist at Princeton, and Sendhill Mullainathan, an economist at Harvard, who formulated a theory of poverty based on the concept of “scarcity mentality.” Their research shows that the chronic poor are really good at scrambling after short term solutions, but tend to be inept at sustainable long-term thinking. It’s a matter of mental bandwidth: today’s urgency gets all the attention, leaving other matters to go begging (sometimes literally). In fact, their research estimates that poverty costs a person about 13-14 IQ points. In other words, living in a chronic state of being poor can eventually rewire the human brain to the point where clear thinking and prudent behavior are challenged. Hence the grain of truth in Margaret Thatcher’s comment that the poor have a “personality defect”: having your brain rewired by chronic poverty is a personality defect in the same way that a “personality disorder” is a mental illness.

Mental Illness On A Societal Level

But mental illness is not limited to impoverished individuals. It seems that economic policy may have created an entire “Generation of Sociopaths” of policy-makers and the people who elect them. That’s the premise of a book with that title.[14]

“What happens if a society is run by people who are, to a large degree, antisocial? I don’t mean people who are ‘antisocial’ in the general sense, the sort who avoid parties and hide from the neighbors, I mean people who are antisocial in the clinical sense: sociopaths. Could a sociopathic society function? Unfortunately, this is not a thought experiment or an investigation into some ramshackle dictatorship in a distant land; it is America’s lived experience. For the past several decades, the nation has been run by people who present, personally and politically, the full sociopathic pathology: deceit, selfishness, imprudence, remorselessness, hostility, and the works. Those people are the Baby Boomers, that vast and strange generation born between 1940 and 1964, and the society they created does not work very well.

“The goal of American politics has been, until the advent of the Boomers, the creation of a ‘more perfect Union’ and the promotion of the ‘general Welfare’ to ‘secure the Blessings of Liberty to ourselves and our Posterity.’ The Constitution promises as much, and over time America generally made good on that promise, first to a few, then to many. By the twentieth century, constitutional abstractions had taken concrete form, and ‘Blessings’ in the modern vernacular were understood to mean the creation of an ever larger and more affluent middle class. If the middle was not doing well, neither was America. James Carville, the operative who brought Bill Clinton to power as the first Boomer president, understood that modern politics boiled down to ‘It’s the economy, stupid.’ And the Council of Economic Advisors (CEA) has made clear how to evaluate that economy: the ‘well-being of the middle class and those working to get into the middle class… is the ultimate test of an economy’s performance.’ [Citing the 2015 Economic Report of the President] Measured against the Constitution’s noble imperatives of the more prosaic words of Carville and the CEA, America generally made a great success of things for two centuries. Since the Boomer’s ascension to power, American has accomplished far too little, and in many important ways has slid backward.”

The book ticks through the diagnostics on the clinical sociopathic checklist — e.g. risk seeking, breakdown of relationship, lack of long-term thinking and short-term gratification – and cites a 1991 report[15] issued by the National Institute of Health” compiling the work of UCLA, Yale, Johns Hopkins, Washington, and Duke universities, using DSM (Diagnostic and Statistical Manual of Mental Disorders) criteria that found higher levels of antisocial personality disorder in the Boomer cohort. The result goes beyond poverty-related individual mental illness, to systemic cultural mental impairment. (I’ll be looking further at all of this in upcoming posts.)

Why Poverty Matters to Capitalists (or Should)

Capitalists are sometimes characterized as unsympathetic to the poor, but it’s clearly in their best interests not to be: a sustainable economy needs consumers to buy the stuff they make. The rich can only buy so much, then it’s up to the rest of us, but we can’t do our part if our gig income is gone too soon. Ironically, the neglected middle class will have the last laugh. But by then nobody will be laughing.

“The fundamental law of capitalism is: When workers have more money, businesses have more customers. Which makes middle-class consumers—not rich businesspeople—the true job creators. A thriving middle class isn’t a consequence of growth—which is what the trickle-down advocates would tell you. A thriving middle class is the source of growth and prosperity in capitalist economies.

“Our economy can be safe and effective only if it is governed by rules. Some capitalists actually don’t care about other people, their communities, or the future. Their behavior, if left unchecked, has a massive effect on everyone else.

“The danger is that economic inequality always begets political inequality, which always begets more economic inequality. Low-wage workers stuck on a path to poverty are not only weak customers; they’re also anemic taxpayers, absent citizens, and inattentive neighbors.

“Economic prosperity doesn’t trickle down, and neither does civic prosperity. Both are middle-out phenomena. When workers earn enough from one job to live on, they are far more likely to be contributors to civic prosperity—in your community. Parents who need only one job, not two or three to get by, can be available to help their kids with homework and keep them out of trouble—in your school. They can look out for you and your neighbors, volunteer, and contribute—in your school and church. Our prosperity does not all come home in our paycheck. Living in a community of people who are paid enough to contribute to your community, rather than require its help, may be more important than your salary.

“Prosperity and poverty are like viruses. They infect us all—for good or ill.

“An economic arrangement that pays a Wall Street worker tens of millions of dollars per year to do high-frequency trading and pays just tens of thousands to workers who grow or serve our food, build our homes, educate our children, or risk their lives to protect us isn’t an expression of the true value or economic necessity of these jobs. It simply reflects a difference in bargaining power and status.

“Inclusive economies always outperform and outlast plutocracies. That’s why investments in the middle class work, and tax breaks for the rich don’t. The oldest and most important conflict in human societies is the battle over the concentration of wealth and power. Those at the top will forever tell those at the bottom that our respective positions are righteous and good for all. Historically we called that divine right. Today we have trickle-down economics.

“Some of the people who benefit most from that explanation are desperate for you to believe this is the only way a capitalist economy can work.

“The trickle-down explanation for economic growth holds that the richer the rich get, the better our economy does. But it also clearly implies that if the poor get poorer, that must be good for our economy. Nonsense.” .[16]::

What IS Magical and Miraculous

One thing that truly is miraculous about all this is that Americans persist in debating what’s a necessity and what’s a luxury. Why wouldn’t we want everybody to have as much as possible? Instead we concede luxuries to the capitalists but begrudge them to non-capitalists.

Similarly, Americans also persist in debating whether money can buy happiness, when we all know that of course it can, because it can buy things that make us happy – things like food, clothing, a place of our own, clean water to drink and take a shower in, safety and health, a chance to improve ourselves, a net to catch us if dreams don’t come true… all those things that used to be considered part of the Public Good. Countries that still provide those things for their citizens are the happiest in the world.[17] Countries that don’t – like the USA and the former Soviet Union – turn their citizens into a mob of stressed, afraid, hustling, poverty-avoiders who cast our sociopathic votes to elect sociopathic representatives who perpetuate more of the same.

Why?

  • Why wouldn’t we want all those things for ourselves, and for the people around us?
  • Why wouldn’t we think that having all those things is a sign that the human race is making progress, that we’re improving our lives, our world?
  • Why do we instead cling to the self-righteous and self-defeating notion that moral character requires suffering with unmet needs, poverty, and jobs that don’t pay the bills?
  • Why do we want our lives to be precarious and unhappy instead of secure and joyful?

And you know what else is miraculous?

That nobody notices the contradictions and double standards, how we perpetuate cultural norms that work against our own best interests, or that both economic growth and trickle down can’t happen without economic policies that favor both capitalists and non-capitalists.

  • The capitalists don’t notice.
  • The capitalist policy-makers don’t notice.
  • The non-capitalists don’t notice;
  • The former middle class — now the new poor — don’t notice.
  • The voters don’t notice.

The impoverished and the sociopaths don’t notice either, but we wouldn’t expect them to.

But wait — I guess it’s not quite true that nobody notices. I mean, the people quoted in this article notice, and they’re not nobody. But still…

I think we need a longer list of people who notice. A much longer list.

[1] See, for example: Share Buybacks Could Approach Record Levels In 2020 After 2019 Fell Short, S&P Global Market Intelligence (Feb. 13, 2020); Stocks To Buy For Buybacks, Forbes (Jan. 17, 2020); Buybacks Are The ‘Dominant’ Source Of Stock-Market Demand, And They Are Fading Fast: Goldman Sachs, MarketWatch (Nov. 9, 2019).

[2] The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein (2017)

[3] “If any man does not work, neither let him eat.” 2 Thessalonians 3:10

[4] Sledge, Benjamin, We’ve Embraced the Hustle Life, and It’s Making Us Miserable, Medium (Mar. 5, 2020).

[5] A shocking number of Americans are living paycheck to paycheck, MarketWatch (Jan. 11, 2020).

[6] Joe Biden apparently got his math wrong when he said half of Americans are poor – see Fact Checker: Joe Biden’s Claim That ‘Almost Half’ Of Americans Live In Poverty, The Washington Post (June 20, 2019). Right-leaning Ballotpedia also corrected Biden’s math, concluding that only 32% of Americans are technically poor. On the other hand, progressive Common Dreams is sticking with one-half.

[7] Again from The Washington Post’s Fact Checker:

[8] A $500 surprise expense would put most Americans into debt, CBS New Money Watch (Jan. 12, 2017).

[9] Standing, Guy, Basic Income:  A Guide For the Open-Minded, Guy Standing (2017).

[10] Hague, Umair, Why America is the World’s First Poor Rich Country, Medium (May 23, 2018).

[11] Everyday Things Poor People Worry About That Rich People Never Do, Everyday Feminism (May 7, 2015),

[12] Not everyone agrees that we lost the War on Poverty. See this article that considers both sides.

[13] Rutger Bregman is a historian and author. He has published five books on history, philosophy, and economics. His book Utopia for Realists was a New York Times Bestseller and has been translated in 32 languages. The Guardian called him “the Dutch wunderkind of new ideas.”’

[14] Gibney, Bruce Cannon, A Generation of Sociopaths: How the Baby Boomers Betrayed America (2018). “Sure to be controversial,” Fortune said about the book, and it certainly is that.

[15] Psychiatric Disorders in America,

[16] A Wealthy Capitalist on Why Money Doesn’t Trickle Down, Yes! Magazine (Sept. 10, 2019).

[17] While free market indoctrinated Americans seems to have a bad case of being right instead of being happy, the social democracies that feature the public good routinely score the highest in The World Happiness Reporta list dominated by the Scandinavians:Finland again takes the top spot as the happiest country in the world according to three years of surveys taken by Gallup from 2016-2018. Rounding out the rest of the top ten are countries that have consistently ranked among the happiest. They are in order: Denmark, Norway, Iceland, Netherlands, Switzerland, Sweden, New Zealand, Canada and Austria. The US ranked 19th dropping one spot from last year.”

Economics 000: Addiction, Belief, Bible, and Bad Financial and Career Advice

My name is Kevin and I’m a belief addict. Here’s my story.

The Widow’s Mite

I once told a friend who was a legend in the financial planning industry how I was attempting to follow the advice of the Bible story known as “the Widow’s Mite”:

[Jesus] looked up and saw the rich putting their gifts into the treasury,  and He saw also a certain poor widow putting in two mites. So He said, “Truly I say to you that this poor widow has put in more than all; for all these out of their abundance have put in offerings for God, but she out of her poverty put in all the livelihood that she had.”

Luke 21:1-4 (NKJV)

“That’s dangerous advice,” my friend said, always blunt, “It makes no sense today. It will hurt you.”

Did he just say Jesus gave bad advice?

I had no comeback. I was an evangelical Christian at the time, trying to follow all kinds of Biblical advice in my career and finances. “Dangerous advice.” “Makes no sense today.” “Will hurt you.” How could that be? I mean, we’re talking Jesus here. And anyway, doesn’t God’s advice move with the times?

If you start wondering if Jesus gave bad advice or that something he said is outdated, you’re not an evangelical Christian anymore. You violated the Protestant Reformation doctrine of sola scriptura – the belief that anybody can get all the truth they need from the Bible.

“[Martin Luther] insisted that clergymen have no special access to God or Jesus or truth. Everything a Christian needed to know was in the Bible. So every individual Christian believer could and should read and interpret Scripture for himself or herself. Every believer, Protestants said, was now a priest.

“Apart from devolving religious power to ordinary people — that is, critically expanding individual liberty — Luther’s other big idea was that belief in the Bible’s supernatural stories, especially those concerning Jesus, was the only prerequisite for being a Christian.”[1]

You can’t be an evangelical without the Bible, especially the parts about Jesus. Question either, and you’re out. You’re no longer a believer.

The Economics of Faith

Further, I saw in the Gospel an alternate economic system, to which believers were automatically subscribed.  In this alternate economic system, things like the widow’s mite and other counter-intuitive and counter-cultural ways ot approaching economics and personal financial planning made sense.  It was the “Kingdom of God” economy, and you activate it in your life by believing in it.  Once activated, this alternate economy allows you to take an unconventional approach to money and career, because God himself has your back.

Jesus himself set up the primacy of belief:

“Truly, I say to you, whoever says to this mountain, ‘Be taken up and thrown into the sea,’ and does not doubt in his heart, but believes that what he says will come to pass, it will be done for him.”

Mark 11:23 (ESV)

Obviously, belief is a completely different paradigm for approaching economics and finance.  And it’s not enough just to believe – you also have to not doubt. Plus there’s one more implicit clause in there:  if the mountain doesn’t move, it’s all you fault. If you start out believing but then have your doubts, belief won’t work for you. Jesus’ disciple James made sure we got the point:

If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it w”ill be given him. But let him ask in faith, with no doubting, for the one who doubts is like a wave of the sea that is driven and tossed by the wind. For that person must not suppose that he will receive anything from the Lord; he is a double-minded man, unstable in all his ways.

James 1:5-8 (ESV)

Okay, I think I get it — God gives generously, but if you doubt you can’t receive. Right? God does His part, but you can screw it up. Does that strike anyone else as sort of… unfair?… lopsided? If nothing else, God doesn’t seem to be very effective in the way He “generously” hands out advice. And why do I keep calling God “He” anyway?

But you don’t think that way when you’re in the grip of belief.

You are always the problem.

Belief seeks its own purification by cleansing itself from doubt. It does that by making the believer the problem. To stay on the right side of belief, you need to believe your way through your doubts. Belief is a closed loop — you either believe or you don’t – you start in belief and end in belief. Thus belief disposes of every criticism against it. You’re either in or out, either with us or against us. Or, as a friend of mine used to say, “The Bible says it, I believe it, and that settles it!”

I wandered intellectually my first couple years of college, then had to declare a major. Okay, let’s see… I’m a Jesus Freak… I know, I’ll be a religion major! Studying the world’s religions, I was soon swimming in doubt. I told that to my “that settles it” friend. He handed me a Bible and said, “Read Luke 6: 62.”

Jesus said to him, “No one who puts his hand to the plow and looks back is fit for the kingdom of God.”

Luke 9: 62  (ESV)

End of discussion.

I can still see the hardness on his face. Religions venerate those who long endure and despise those who don’t. My character and commitment were suspect. I declared a new major the following quarter. Lesson learned: you don’t entertain doubt, you double down on belief.

Belief’s endless loop is what snared me, got me addicted. It played directly into a tendency I’d demonstrated all my short life: be exceptional, take everything to the extreme, out-commit, out-work everybody. Decades later, I would learn where that came from. But as a kid, an adolescent, and a young adult, it was my identity, my calling card. Eventually it would also be my ruin.

After we graduated, we missed the intensity of our college experience, and looked for ways to replicate it. Our leaders — zealous young men like me, only a few years older but they seemed so much wiser — started writing books about how to create authentic new testament churches, meeting in small groups and homes, teaching the Bible and doing miracles. We called this “church planting” and prided ourselves on the idea that we were doing just as the early apostles had done.

That’s who I was when I had the “that’s dangerous advice” encounter. In the face of that blunt dismissal, I needed to prove up my beliefs by pushing them to the limit, one more time.

And so I did.

Belief reminds you that if your doubts persist, there are consequences. Turns out there are also consequences to not doubting when you really ought to – which was how my life played out for the next couple decades, as I set about to prove that Jesus’s financial advice was doable.

My education in bad financial and career advice started early.

Everybody went to church where I grew up: mostly Scandinavian Lutherans, enough German Catholics to make up a parish, plus the “other” — Baptist, Episcopal, Presbyterian, Dutch Reformed, Methodist…. My family was “other” – we went to the Congregational Church, where we were into the 60’s Revolution. We read poetry, played guitars, thought believing everything the Bible said was anti-intellectual. Our Sunday bulletins from HQ advocated social justice. I can still see one of them like it was yesterday: stacks of coins like poker chips, with the words “and God said to him, you fool!” – that was from the Bible, the back cover said.[2]

The Parable of the Rich Fool

One of the multitude said to him, “Teacher, bid my brother divide the inheritance with me.” But he said to him, “Man, who made me a judge or divider over you?” And he said to them, “Take heed, and beware of all covetousness; for a man’s life does not consist in the abundance of his possessions.” And he told them a parable, saying, “The land of a rich man brought forth plentifully; and he thought to himself, ‘What shall I do, for I have nowhere to store my crops?’ And he said, ‘I will do this: I will pull down my barns, and build larger ones; and there I will store all my grain and my goods. And I will say to my soul, Soul, you have ample goods laid up for many years; take your ease, eat, drink, be merry.’ But God said to him, ‘You fool! This night your soul is required of you; and the things you have prepared, whose will they be?’ So is he who lays up treasure for himself, and is not rich toward God.”

Luke 12: 13-21 (RSV)

Powerful stuff. I was an impressionable 7th grader. I pinned the bulletin up in my room, and kept it with me for years.

Consider the lilies…

About that same time, my older sister was into art and calligraphy. She made a poster with some watercolor lilies and these lines:

Consider the lilies of the field, how they grow: they neither toil nor spin, yet I tell you that even Solomon in all his Glory was not arrayed like one of these.

Luke 12: 27 (RSV)

I loved it, memorized it, used to sneak into her room to look at it when she wasn’t around. The text comes right after the Parable of the Rich Fool:

And he said to his disciples, “Therefore I tell you, do not be anxious about your life, what you will eat, nor about your body, what you will put on. For life is more than food, and the body more than clothing. Consider the ravens: they neither sow nor reap, they have neither storehouse nor barn, and yet God feeds them. Of how much more value are you than the birds! And which of you by being anxious can add a single hour to his span of life? If then you are not able to do as small a thing as that, why are you anxious about the rest? Consider the lilies, how they grow: they neither toil nor spin, yet I tell you, even Solomon in all his glory was not arrayed like one of these. But if God so clothes the grass, which is alive in the field today, and tomorrow is thrown into the oven, how much more will he clothe you, O you of little faith! And do not seek what you are to eat and what you are to drink, nor be worried. For all the nations of the world seek after these things, and your Father knows that you need them. Instead, seek his kingdom, and these things will be added to you.

Luke 12:22-32 (ESV)

That was the sum total of my financial education growing up: don’t worry about money, don’t worry about making it, don’t worry about saving it, don’t worry about where it comes from or what it’s for, and whatever you do, don’t ever get rich or you’ll end up like the guy with his new barns full of harvest and the grim reaper at his door. And the best part was that if you just keep your priorities straight – i.e., you keep believing what the Bible says — everything you need will just show up – food, drink, the whole deal.

When I read that now, I think it’s crazy. I agree with my friend: it makes no sense. But as a pre-teen I thought it was the ultimate in cool.

I never grew up.

My financial education was fixed at age 12. It survived intact through college economics, a few years in insurance and financial planning, an MBA program, all the way into a career in law. There was plenty of fodder for doubt all that time, but it never touched me.

Never mind that my radical Biblical economics didn’t have much company. Most Christians seemed to know it didn’t work. Maybe that’s what the Book said, but… well never mind. But I minded a lot. I had something to prove. I was a commando Christian, living on the edge, taking belief to the extreme, going where weak belief dared not go, out if front showing everybody else back there that Jesus’s unorthodox advice really did work.

Hmmm, no ego in that…

I was committed. I probably should have been… committed, that is.

One Career and Financial Disaster After Another

The first couple decades of my adult life followed a pathetic pattern of first doing well in my career and then dropping out to pursue some kind of Christian vision. Making a living always came in second to the important stuff and besides God would provide, just like Jesus said. The result was a series of financial disasters about every two or three years, followed by me sulking back to work until I had enough savings to afford getting inspired and trying again. It helped that I was smart and worked hard, so new employers kept forgiving my patchwork resume.

After yet one more disaster to end all disasters, I finally started to learn self-awareness, started asking questions, started doubting. I didn’t know yet that to doubt at all is to end belief – that’s all it takes to break the spell.

A couple decades later, and I was what I am today: an atheist. I didn’t see that coming, didn’t set out to become one, resisted for a long time, finally just sort of drifted into it. I’ve read others who’ve told the same story. We’re not as alone as we think we are.

Self-Help Economics

Along the way, I spent considerable time hanging out in the world of self-help. I am going to write separately about that, so I won’t say much at this time, just that after a few years I finally saw the remarkable similarity between self-help and Jesus’s teachings on belief. I had never heard so much God language since my early Christian days, although people often substituted “The Universe.” Create your own financial and career reality by believing it into existence, and God/The Universe will back you up. But you do need to believe, and keep believing, keep intending and reminding yourself first thing in the morning and before going to sleep at night, and you need to make a vision board and read this book and especially that one, and you need to go to these seminars, and lay your money down everywhere you go… all to stay pumped up, to keep believing. And if it didn’t work for you, well you are responsible for everything in your life, so if it’s not what you want then you need to up your belief commitment – do more, more, more.

Believe, believe, believe… Christianity and self help were indistinguishable. Life as a “believer” –- religious or secular -– worked the same way: believe and don’t doubt, and you get the goods.

A couple key experiences kept repeating, and the lessons I drew from them started to loosen the tether.

One was that belief was never about the thing you were trying to believe into existence — the mountain you were telling to get up and jump into the sea. Instead, belief was one long exercise in the dynamics of belief itself. Belief was about believing. You spent all your energy believing and believing in your belief. You never got out of the loop.

Another – the hardest lesson of all — was that believing was the culprit, not me. It wasn’t all my fault after all. Gospel Finance 101 truly was lousy advice, even when it was recast as self help. It truly didn’t work in today’s world. It truly was dangerous. It truly did hurt me – and my family.

The over-arching problem was how belief operates in the human brain, and in human culture.[3] When you start to doubt, you drop out of the cultural context that’s been supporting your belief system. Without constant reinforcement, the neural pathways that run your belief fall into disuse and eventually go dormant as you start looking elsewhere for answers, which requires new neural pathways, and in time your new skeptical neural pathways take over.

No, belief isn’t all bad.

Belief is inspiring and motivating. It throws off the restraints of normal and mundane, replaces them with a world of new possibilities. The brain hormone dopamine is what’s behind all the punch and pizzazz. Dopamine makes the unreasonable and impossible worth doing. It’s the crowd chanting “go for it!” We get a rush of it when we break out, try new things, take risks.

Larry Smith is an economics professor at Waterloo University in Ontario, and a career inspiration Meister. As of this writing, his combative, tongue-in-cheek TED Talk “Why You Will Fail to Have a Great Career” has been viewed closing in on seven million times. Here’s the Amazon blurb for Prof. Smith’s book No Fears, No Excuses: What You Need To Do To Have A Great Career:

“This book captures the best of his advice in a one-stop roadmap for your future. Showcasing his particular mix of tough love and bracing clarity, Smith itemizes all the excuses and worries that are holding you back—and deconstructs them brilliantly. After dismantling your hidden mental obstacles, he provides practical, step-by-step guidance on how to go about identifying and then pursuing your true passion. There’s no promising it will be easy, but the straight-talking, irrepressible Professor Smith buoys you with the inspiration necessary to stay the course.”

Scott Barry Kaufman is another inspiration Meister, and his own weather system. His website says he’s a “psychologist at Barnard College, Columbia University, exploring the depths of human potential.” These are his books. He wrote the following in a Harvard Business Review article entitled “Why Inspiration Matters.”[4]

“In a culture obsessed with measuring talent and ability, we often overlook the important role of inspiration. Inspiration awakens us to new possibilities by allowing us to transcend our ordinary experiences and limitations. Inspiration propels a person from apathy to possibility, and transforms the way we perceive our own capabilities. Inspiration may sometimes be overlooked because of its elusive nature. Its history of being treated as supernatural or divine hasn’t helped the situation. But as recent research shows, inspiration can be activated, captured, and manipulated, and it has a major effect on important life outcomes.”

Good for dopamine: it gets us moving, and that’s usually a good thing.

But it might be too much of a good thing.

“I need to get motivated.”

You might want to rethink that.

Google “how to motivate yourself” and you get lots of self-help inspirational quotes and to do lists. They’re okay as far as that goes, but they’re not the whole inspiration story. We need inspiration to get going, but all that dopamine can be too much of a good thing. The following is from Larry Howes — “lifestyle entrepreneur” and former arena football player and member of the USA men’s national handball team.[5]

“One of the most dangerous drugs an entrepreneur can become addicted to is motivation.

“I’ve heard far too many entrepreneurs say,  “I just need to get more motivated” in order to start a project or achieve a goal.  This usually means they’ll spend a few hours reading or listening to other people’s success instead of creating their own.

“This is how the motivation addiction begins.

“Don’t get me wrong – motivation is great.  It’s nature’s reward for achievement, but it can easily become your “drug” of choice if it’s misused.

“This may sound a little funny, but one of the best drug dealers in the world is your brain. Your brain is wired to release a shot of dopamine each time you … achieve goals, take risks, try something new. They’re all natural highs and designed to keep us coming back for more.

“It’s great to be goal driven and to have feelings of fulfillment following our achievements, but the moment we began wanting those feelings before doing the work we’re in HUGE trouble.”

The issue is dependence: the motivated feeling isn’t easily summoned; and reliance on it is dicey. Plus, dopamine acts like any addictive substance: each successive time you reach for a shot, you need more than last time:

“Once again, there’s nothing wrong with motivation or learning from the success of others, but that moment we need the ‘reward feeling’ of motivation in order to get started, we’re in serious trouble.

“Not only does it take away from precious time you should spend working, it also means that you’ll need a higher dosage of motivation as time progresses.”

And don’t fall for the line that you can be anything you want, adds “journalist, author, and broadcaster” Leslie Garrett: your brain will hurt you if you do, this time because of the “stress hormone” cortisol.[6]

“As long ago as the fourth century BCE, the Greek philosopher Aristotle celebrated the value of a meaningful goal when he coined the term eudaimonia (‘human flourishing’). The concept re‑emerged in the 16th-century Protestant concept of a ‘calling’. More recently, in the 1960s, a whole generation of young people brought up at the height of an economic boom began asking whether work could amount to more than just paying the bills. Couldn’t it have something to do with meaning and life, talents and passions?

“It was then that the episcopal clergyman Richard Bolles in California noticed people grappling with how to choose that special, meaningful career, and responded by publishing What Color is Your Parachute? (1970), which has sold more than 10 million copies, encouraging job‑hunters and career-changers to inventory their skills and talents. Bolles bristles at the suggestion that he’s telling people to be ‘anything’ they want to be. ‘I hate the phrase,’ he says. ‘We need to say to people: Go for your dreams. Figure out what it is you most like to do, and then let’s talk about how realistically you can find some of that, or most of that, but maybe not all of that.’

“The situation even endangers health. In 2007, psychologists from the US and Canada followed 81 university undergraduates for a semester and concluded that those persisting in unattainable goals had higher concentrations of cortisol, an inflammatory hormone associated with adverse medical outcomes….”

Dopamine is why belief is addictive, why belief always wants more, more, more. It’s not a legally controlled substance, but it ought to be – especially for people like me.

Use it at your own risk.

I kind of wish somebody had told me that. But I doubt I would have listened. I was enthralled with the alternative gospel economy.  It was unquestionably good news.  I just couldn’t make it work.  Money and career ultimately suffered as a result.

Addict? Who me?’

 

[1] Fantasyland: How American Went Haywire, a 500-Year History, Kurt Andersen (2017)

[2] Apparently it was okay to use the Bible for our social causes, even if we dismissed it for other purposes.

[3] See this blog’s series on Belief Systems and Culture, also Knowledge, Conviction, and Belief.

[4] Harvard Business Review (Nov. 8, 2011).I tried to provide a link, but it wouldn’t work. Google “Harvard Business Review Scott Barry Kaufman Why Inspiration Matters” and it will come up.

[5] “Why Motivation is Hurting your Productivity (And How to Fix It” Forbes (Aug. 20, 2012). I tried to provide a link, but it wouldn’t work. Google “Larry Howes Forbes Why Motivation is Hurting your Productivity,” and the article will come up.

[6]You Can Do It, Baby! Our Culture Is Rich With Esteem-Boosting Platitudes For Young Dreamers, But The Assurances Are Dishonest And Dangerous,” Aeon Magazine (July 17, 2015)

Horatio Alger is Dead, America Has a New Class Structure, and it’s Not Your Fault

horatio alger

January 23, 2020

The member of the month at the gym where I work out is a guy who looks like he’s in his early 20’s. One of the “get to know me” questions asks “Who motivates you the most?” His answer: “My dad, who taught me that hard work can give you anything, as long as you can dedicate time and effort.”

The answer is predictably, utterly American. “Hard work can give you anything” — yes of course, everybody knows that. Parents tell it to their kids, and the kids believe it. America is the Land of Opportunity; it gives you every chance for success, and now it’s up to you. “Anything you want” is yours for the taking – and if you don’t take it, that’s your problem, not America’s.

Except it’s not true, and we know that, too. We know that you can work really, really hard and dedicate lots and lots of time and effort (and money), and still not get what you want.

Why do we keep saying and believing something that isn’t true? Why don’t we admit that things don’t actually work that way? Because that would be un-American. So instead we elevate the boast: America doesn’t just offer opportunity, it gives everybody equal opportunity — like Teddy Roosevelt said:

“I know perfectly well that men in a race run at unequal rates of speed.
I don’t want the prize given to the man who is not fast enough to win it on his merits, but I want them to start fair.”

Equal opportunity means everybody starts together. No, not everybody wins, but still… no matter who you are or where you’re from, everybody has the same odds. None of that landed gentry/inherited wealth class system here.

Except that’s not true either, and we know that, too.

But we love the equal opportunity myth. We love the feeling of personal power – agency, self-efficacy – it gives us. It’s been grooved into our American neural circuits since the beginning:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the .pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”[1]

We’re all equals here in America, divinely ordained to pursue the good life. That’s our creed, and we – “the governed” — declare that we believe it.

Even if it’s not true.

Equal opportunity is a foundational American cultural belief. Cultural myths are sacred – they’re afforded a special status that makes them off limits to examination. And national Founding Myths get the highest hands-off status there is.

Never mind that the Sacred doesn’t seem to mind being doubted – it’s the people who believe something is sacred you have to watch out for. And never mind that history and hindsight have a way of eventually outing cultural myths – exposing them as belief systems, not absolute truths. But it’s too late by the time history has its say: the fraud is perpetrated in the meantime, and attempts to expose it are shunned and punished as disloyal, unpatriotic, treasonous.

If we can’t out the myth, what do we do instead? We blame ourselves. If we don’t get “anything you want,” then we confess that we didn’t work hard enough, didn’t “dedicate the time and effort,” or maybe we did all that but in the wrong way or at the wrong time. Guilt, shame, embarrassment, frustration, depression… we take them all on as personal failings, in the name of preserving the myth.

You may have seen the Indeed commercial. (Go ahead, click it – it’s only 30 seconds.)

Indeed advert

It brilliantly taps the emotional power of the equal opportunity myth.

“With no choice but to move back home after college, they thought he’d be a little more motivated to find a job.”

The kid is glued to his phone, and it’s driving his parents crazy. He’s obviously a slacker, a freeloader. Household tensions mount. The phone dings at the dinner table. Dad snatches it up.

“Turns out, they were right.”

He’s using it to find a job! Faith and family harmony restored! That’s our hard-working boy!

Heartwarming, but still untrue.

But What About the Strong Job Numbers?

Yes, unemployment is low. But consider this analysis of those numbers[2], just out this month:

“Each month, the Bureau of Labor Statistics releases its Employment Situation report (better known as the ‘jobs report’) to outline the latest state of the nation’s economy. And with it, of late, have been plenty of positive headlines—with unemployment hovering around 3.5%, a decade of job growth, and recent upticks in wages, the report’s numbers have mostly been good news.

“But those numbers don’t tell the whole story. Are these jobs any good? How much do they pay? Do workers make enough to live on?

“Here, the story is less rosy.

“In a recent analysis, we found that 53 million workers ages 18 to 64—or 44% of all workers—earn barely enough to live on. Their median earnings are $10.22 per hour, and about $18,000 per year. These low-wage workers are concentrated in a relatively small number of occupations, including retail sales, cooks, food and beverage servers, janitors and housekeepers, personal care and service workers (such as child care workers and patient care assistants), and various administrative positions.

“Just how concerning are these figures? Some will say that not all low-wage workers are in dire economic straits or reliant on their earnings to support themselves, and that’s true. But as the following data points show, it would be a mistake to assume that most low-wage workers are young people just getting started, or students, or secondary earners, or otherwise financially secure:

      • Two-thirds (64%) of low-wage workers are in their prime working years of 25 to 54.
      • More than half (57%) work full-time year-round, the customary schedule for employment intended to provide financial security.
      • About half (51%) are primary earners or contribute substantially to family living expenses.
      • Thirty-seven percent have children. Of this group, 23% live below the federal poverty line.
      • Less than half (45%) of low-wage workers ages 18 to 24 are in school or already have a college degree.

“These statistics tell an important story: Millions of hardworking American adults struggle to eke out a living and support their families on very low wages.”

When the kid got a text at the dinner table, it was about one of these jobs. Mom and Dad better get used to the idea that he’ll be around for awhile. Even if he gets that job, it won’t offer benefits, could end at any moment, and won’t pay him enough to be self-sustaining. That’s not how Mom and Dad were raised or how things went for them, but that’s how the economy works nowadays.

Economics Begets Social Structure

The even bigger issue is that the equal opportunity myth has become a social norm: uber-competitive free market economics controls the collective American mindset about how adult life works, to the point that it’s become a nationalist doctrine.

The Chicago School of Economics – the Vatican of free marketism — believed so ardently in its on doctrines that its instructional approach took on the dynamics of fundamentalist indoctrination:

“Frank Knight, one of the founders of Chicago School economics, thought professors should ‘inculcate’ in their students the belief that economic belief is ‘a sacred feature of the system,’ not a debatable hypothesis.’”[3]

Free market ideology preaches that capitalism promotes both economic and social opportunity. It has had the past four decades to prove that claim, and has failed as spectacularly as Soviet-style communism failed to benefit the workers it was supposed to redeem. Instead, free market ideology has given America what it wasn’t ever supposed to have: a stratified socio-economic class system that skews rewards to the top 10% and leaves the rest in the grip of the dismal statistics listed above.

But we don’t see that – or if we do, we don’t say anything about it, we just keep reciting the “trickle down” mantra. Member of the month and his Dad and the parents in the Indeed commercial and most Americans still believe the myth. Ironically the ones who see through it are the top 10% members who got in before they closed the gates. Meanwhile, the lower 90% — the decimated middle class, the new poor, the hard-working wage-earners – keep blaming themselves.

Even though it’s not their fault. If the kid in the commercial can’t find a job to support himself, it’s not his fault.

“I can’t pay my bills, afford a house, a car, a family. I can’t afford healthcare, I have no savings. Retirement is a joke. I don’t know how I’ll ever pay off my student loans. I live paycheck to paycheck. I’m poor. But it’s not my fault.”

Try saying that to Dad at the dinner table.

But unlike “anything you want,” “it’s not your fault” is true: current economic policy and its companion social norms do not deliver equal opportunity. Horatio Alger is dead, but the equal opportunity myth lives on life support as we teach it to our children and elect politicians who perpetuate it, while all of us ignore the data.

Horatio Alger is Dead

There’s no more enduring version of the upward mobility ideal than the rags-to-riches story codified into the American Dream by Horatio Alger, Jr. during the Gilded Age of Andrew Mellon, John D. Rockefeller, Cornelius Vanderbilt, Andrew Carnegie, and the rest of the 19th Century Robber Barons. If they can do it, so can the rest of us, given enough vision, determination, hard work, and moral virtue — that was Alger’s message. Except it never worked that way, especially for the Robber Barons – opportunists aided by collusion and chronyism carried out in the absence of the antitrust and securities laws that would be enacted under the New Deal after history revealed the fraud.[4]

But never mind that — according to Roughrider Teddy and politicians like him, government’s job is to guarantee equal opportunity for all, then get out of the way and let the race to riches begin. Thanks to our devotion to that philosophy, a fair start has become is a thing of the past — so says Richard V. Reeves in his book Dream Hoarders.

Reeves begins by confessing that his disenchantment over the demise of the Horatio Alger ideal will no doubt seem disingenuous because he didn’t grow up American and is now a member of the economic elite himself:

“As a Brookings senior fellow and a resident of an affluent neighborhood in Montgomery County, Maryland, just outside of DC, I am, after all, writing about my own class.

“I am British by birth, but I have lived in the United States since 2012 and became a citizen in late 2016. (Also, I was born on the Fourth of July.) There are lots of reasons I have made America my home. But one of them is the American ideal of opportunity. I always hated the walls created by social class distinctions in the United Kingdom. The American ideal of a classless society is, to me, a deeply attractive one. It has been disheartening to learn that the class structure of my new homeland is, if anything, more rigid than the one I left behind and especially so at the top.

“My new country was founded on anti-hereditary principles. But while the inheritance of titles or positions remains forbidden, the persistence of class status across generations in the United States is very strong. Too strong, in fact, for a society that prides itself on social mobility.”

Reeves also wrote a Brookings Institute monograph called Saving Horatio Alger: Equality, Opportunity, and the American Dream, in which he said the following:

“Vivid stories of those who overcome the obstacles of poverty to achieve success are all the more impressive because they are so much the exceptions to the rule. Contrary to the Horatio Alger myth, social mobility rates in the United States are lower than in most of Europe. There are forces at work in America now — forces related not just to income and wealth but also to family structure and education – that put the country at risk of creating an ossified, self-perpetuating class structure, with disastrous implications for opportunity and, by extension, for the very idea of America.

“The moral claim that each individual has the right to succeed is implicit in our ‘creed,’ the Declaration of Independence, when it proclaims ‘All men are created equal.’

“There is a simple formula here — equality plus independence adds up to the promise of upward mobility — which creates an appealing image: the nation’s social, political, and economic landscape as a vast, level playing field upon which all individuals can exercise their freedom to succeed.

“Many countries support the idea of meritocracy, but only in America is equality of opportunity a virtual national religion, reconciling individual liberty — the freedom to get ahead and “make something of yourself” — with societal equality. It is a philosophy of egalitarian individualism. The measure of American equality is not the income gap between the poor and the rich, but the chance to trade places.

“The problem is not that the United States is failing to live up to European egalitarian principles, which use income as a measure of equality. It is that America is failing to live up to American egalitarian principles, measured by the promise of equal opportunity for all, the idea that every child born into poverty can rise to the top.”

There’s a lot of data to back up what Reeves is saying. See, e.g., this study from Stanford, which included these findings:

“Parents often expect that their kids will have a good shot at making more money than they ever did…. But young people entering the workforce today are far less likely to earn more than their parents when compared to children born two generations before them, according to a new study by Stanford researchers.”

The New American Meritocracy

Along with Richard Reeves, philosopher Matthew Stewart and entrepreneur Steven Brill cite the same economic and related social data to support their conclusion that the new meritocrat socio-economic class has barred the way for the rest of us. I’ll let Matthew Stewart speak for the others[5]:

“I’ve joined a new aristocracy now, even if we still call ourselves meritocratic winners. To be sure, there is a lot to admire about my new group, which I’ll call—for reasons you’ll soon see—the 9.9 percent. We’ve dropped the old dress codes, put our faith in facts, and are (somewhat) more varied in skin tone and ethnicity. People like me, who have waning memories of life in an earlier ruling caste, are the exception, not the rule.

“By any sociological or financial measure, it’s good to be us. It’s even better to be our kids. In our health, family life, friendship networks, and level of education, not to mention money, we are crushing the competition below.

“The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other people’s children. We are not innocent bystanders to the growing concentration of wealth in our time. We are the principal accomplices in a process that is slowly strangling the economy, destabilizing American politics, and eroding democracy. Our delusions of merit now prevent us from recognizing the nature of the problem that our emergence as a class represents. We tend to think that the victims of our success are just the people excluded from the club. But history shows quite clearly that, in the kind of game we’re playing, everybody loses badly in the end.

“So what kind of characters are we, the 9.9 percent? We are mostly not like those flamboyant political manipulators from the 0.1 percent. We’re a well-behaved, flannel-suited crowd of lawyers, doctors, dentists, mid-level investment bankers, M.B.A.s with opaque job titles, and assorted other professionals—the kind of people you might invite to dinner. In fact, we’re so self-effacing, we deny our own existence. We keep insisting that we’re ‘middle class.’

“One of the hazards of life in the 9.9 percent is that our necks get stuck in the upward position. We gaze upon the 0.1 percent with a mixture of awe, envy, and eagerness to obey. As a consequence, we are missing the other big story of our time. We have left the 90 percent in the dust—and we’ve been quietly tossing down roadblocks behind us to make sure that they never catch up.”

Two Stories, One Man

In a remarkable display of self-awareness and historical-cultural insight, Stanford professor David Labaree admits that his own upward mobility story can be told two ways — one that illustrates the myth and one that doesn’t, depending on your point of view.[6]

“Occupants of the American meritocracy are accustomed to telling stirring stories about their lives. The standard one is a comforting tale about grit in the face of adversity – overcoming obstacles, honing skills, working hard – which then inevitably affords entry to the Promised Land. Once you have established yourself in the upper reaches of the occupational pyramid, this story of virtue rewarded rolls easily off the tongue. It makes you feel good (I got what I deserved) and it reassures others (the system really works).

“But you can also tell a different story, which is more about luck than pluck, and whose driving forces are less your own skill and motivation, and more the happy circumstances you emerged from and the accommodating structure you traversed. As an example, here I’ll tell my own story about my career negotiating the hierarchy in the highly stratified system of higher education in the United States. I ended up in a cushy job as a professor at Stanford University.

“Is there a moral to be drawn from these two stories of life in the meritocracy? The most obvious one is that this life is not fair. The fix is in. Children of parents who have already succeeded in the meritocracy have a big advantage over other children whose parents have not. They know how the game is played, and they have the cultural capital, the connections and the money to increase their children’s chances for success in this game.

“In fact, the only thing that’s less fair than the meritocracy is the system it displaced, in which people’s futures were determined strictly by the lottery of birth. Lords begat lords, and peasants begat peasants. In contrast, the meritocracy is sufficiently open that some children of the lower classes can prove themselves in school and win a place higher up the scale.

“The probability of doing so is markedly lower than the chances of success enjoyed by the offspring of the credentialed elite, but the possibility of upward mobility is nonetheless real. And this possibility is part of what motivates privileged parents to work so frantically to pull every string and milk every opportunity for their children.”

Pause for a moment and wonder, as I did, why would the new meritocrats write books and articles like these? Is it a case of Thriver (Survivor) Guilt? Maybe, but I think it’s because they’re dismayed that their success signals the end of the American equal opportunity ideology. You don’t trample on something sacred. They didn’t mean to. They’re sorry. But now that they have, maybe it wasn’t so sacred after all.

The new socio-economic class system was never supposed to happen in America. We weren’t supposed to be like the Old World our founders left behind. But now we are, although most of us don’t seem to know it, and only a few brave souls will admit it. Meanwhile the Horatio Alger mansions are all sold out, and the gate to the community is locked and guarded. That kind of thing just doesn’t happen in America.

Until it did.

[1] The Declaration of Independence.

[2] Low Employment Isn’t Worth Much if the Jobs Barely Pay, The Brookings Institute, Jan. 8, 2020.

[3] The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein (2017).

[4] The best source I’ve found for the American history we never learned is Americana: A 400-Year History of American Capitalism, Bhu Srinivasan (2017).

[5] Matthew Stewart is the author of numerous books and a recent article for The Atlantic called The 9.9 Percent is the New American Meritocracy. Steven Brill is the founder of The American Lawyer and Court TV, and is the author of the book Tailspin: The People and Forces Behind America’s Fifty-Year Fall–and Those Fighting to Reverse It and also the writer of a Time Magazine feature called How Baby Boomers Broke America. The quoted text is from Stewart’s Atlantic article.

[6] Pluck Versus Luck, Aeon Magazine (Dec. 4. 2019) –“Meritocracy emphasises the power of the individual to overcome obstacles, but the real story is quite a different one.”

School’s Out, What’s Next?

Mini bua

In November 2016, one of my daughters and I shared an espresso and a big life conversation at the Minibus Café in Gangnam, Seoul. (Yes, as in Gangnam Style.) At one point, I told her someone in her generation ought to go to grad school (probably in London, I guessed) and develop an economic model to make sense of the new economy and its new paradigm job market.

“Maybe you should,” she replied.

So I did, but minus grad school, London. and the economic model. Instead, “maybe you should” became the ultimate autodidactic independent study, touching nearly all academic disciplines. By now, three years later, I’ve gotten the college education I was too clueless to get when I was there. (I was definitely a case for “college is wasted on the young.”) The learning got personal, too – it explained my own economic and work history in surprising ways that put to rest several career ghosts,

All that, from studying economics and jobs! Who would have thought?!

I started reading and researching in January 2017, and started blogging half a year later. Each post was a 750-1,000 word paper due every week, quoting experts and citing sources. I had no intention of becoming an economist, and did my best to dodge political polarizing. I just wanted to understand the world my kids were growing up in (the same world I was growing old in). Jobs and careers and surviving in the “real world” weren’t the same — I knew that much; I wanted to know more.

Today’s post is #128. Even that many hasn’t emptied my research files. Plus, I’d seen over and over how much economic conversation relies on long-held ideas that don’t work anymore. To move on, we need to challenge our cherished but outdated beliefs and institutions. So I started another blog whose goal is to do that in areas other than economics.

I decided early on to keep studying economics and jobs only until I stopped uncovering new topics – kind of like when Bono said U2 would stop making albums when they became irrelevant. Last summer, I thought I was close to that point, but things kept coming up … until the past two “Reckoning” posts, when I thought surely this is it, surely school’s finally out.

But now I’m not so sure.

All told, I’ve been blogging for nearly nine years on a series of topics that usually last 1-3 years. A couple were collected into books (free to download here, or available from Amazon for a price here and here). But another cut and paste job from this blog didn’t feel right. Blog posts are about the topic du jour, which is great for learning and keeping up, but lacks continuity. Meanwhile, as I’ve been researching this series, I’ve developed a fondness for “long reads” – articles 3-4 times longer than the ones I’ve been writing. They invite both writer and reader to slow down, be more thorough.

I’ve therefore decided to keep my promise and stop blogging – both here and in my other blog – and instead write longer, less frequent, more developed articles. In this forum, I’ll go back, organize past material thematically, update the research, find out what the authors I quoted have to say now, find new people with new things to say, and generally follow new rabbit trails as I’ve done before.

School’s out, but I’m not done learning.

That’s what’s next for 2020. Thanks for reading, following, and sharing.

Click the image below, have a listen, and remember what it’s like to be a kid on June 1st.

Alice Cooper

Out for summer, out ‘til fall,
We might not go back at all

School’s Out, Alice Cooper

Progressive Capitalism

torn dollar bill

Torn dollar bill image source and license.

We’ve been looking at economic winners and losers in the zero-sum economy — particularly in the context of higher education, where cultural belief in the importance of college and post-graduate degrees on upward mobility and success in the job market is driving behavior that harms both parents (the college admissions scandal) and the economic and mental health of their children (student loan debt, general anxiety disorder, depression, suicide).

This series of blog posts is now in its third year — throughout, we’ve seen how hyper-competitive capitalism and its staunch faith in the implicit justice of the “free” market is causing other economic loses. For example:

  • the stagnation of middle class real incomes;
  • the rise of the numbers of statistically poor people in the U.S.;
  • the dismantling of compassionate social safety nets in favor of expensive, counterproductive, and humiliating replacements;
  • the rise of the “rentier” economy in which formerly public benefits have been privatized, making them accessible only to those who can afford them through the payment of economic “rents”;
  • the end of the American ideal of upward social and economic mobility;
  • the high cost of housing and the death of the American dream of home ownership;
  • the elimination of “normal” jobs through off-shoring, outsourcing, and the delegation of productivity to intelligent machines;
  • the advent of the short-term, contract-based “gig economy” with its lack of fringe benefits and its precarious prospects for sustainable income;
  • economic inequality that favors the wealthiest of capitalists at the expense of the bottom 90% (or 99%, or 99.9%, depending on your data and point of view);
  • the creation instead of an insular top-level “meritocrat” socio-economic class;
  • the new state of “total work” and the “monetization” of goods and services;
  • rising rates of career burnout, mental illness, and suicide resulting from social isolation and the vain struggle to find meaning and purpose at work;
  • the rise of corporate nation-states with economic and policy-making power that dwarfs that of many governmental nation-states;
  • the private (non-democratic) social policy-making initiatives of the wealthiest elites;
  • and much, much more.

Nobody meant economic policy to do this, but it has, for roughly the past 30-40 years. Good intentions; unplanned results.

We’ve seen that both plutocrats and progressives advocate for systemic change, while status quo inertia weighs in on the side of those who don’t see what all the fuss is about, since capitalism is undeniably the best economic option and always has been, and besides it’s still working just fine, thank you very much. Instead of meaningful discourse, we have a predominant nostalgic, populist doubling down on the neoliberal socio-economic cultural ideology that jet-propelled post-WWII recovery but finished running its course in the 1970s, while the retrenchers and the media slap those who beg to differ with the kiss-of-death label “progressive.” As a result, we’re left with incessant lobbing from one end of the polarized spectrum to the other of ideological bombs that originate in data and analysis skewed by cognitive biases, intentional blindness, and fake news . Economic policy-making resembles WWI trench warfare — a tactical grinding down of the opposition and the numbing and dumbing of everyone else. It was a bad idea then, and it’s still a bad idea now.

I had no idea this is what I was getting into when I decided three years ago to research and write about the new economy and the future of work.

It’s in the context of this toxic environment that Economics Nobel Laureate Joseph E. Stiglitz, offered his “progressive capitalism” alternative, based on “the power of the market to serve society.” Progressive Capitalism Is Not an Oxymoron: We can save our broken economic system from itself, New York Times (April 19, 2019). His article, like virtually all of the economics books and articles I read these days, begins with a long parade of evils and ends with a handful of policy ideas. His version of the former is by now quite familiar:

“Despite the lowest unemployment rates since the late 1960s, the American economy is failing its citizens. Some 90 percent have seen their incomes stagnate or decline in the past 30 years.

“This is not surprising, given that the United States has the highest level of inequality among the advanced countries and one of the lowest levels of opportunity — with the fortunes of young Americans more dependent on the income and education of their parents than elsewhere.

“There is a broader social compact that allows a society to work and prosper together, and that, too, has been fraying. America created the first truly middle-class society; now, a middle-class life is increasingly out of reach for its citizens.

“We confused the hard work of wealth creation with wealth-grabbing (or, as economists call it, rent-seeking).

“Just as forces of globalization and technological change were contributing to growing inequality, we adopted policies that worsened societal inequities.

“Even as economic theories like information economics (dealing with the ever-present situation where information is imperfect), behavioral economics and game theory arose to explain why markets on their own are often not efficient, fair, stable or seemingly rational, we relied more on markets and scaled back social protections.

“Politics has played a big role in the increase in corporate rent-seeking and the accompanying inequality.

“Markets don’t exist in a vacuum; they have to be structured by rules and regulations, and those rules and regulations must be enforced.

“We are now in a vicious cycle: Greater economic inequality is leading, in our money-driven political system, to more political inequality, with weaker rules and deregulation causing still more economic inequality.

“If we don’t change course matters will likely grow worse, as machines (artificial intelligence and robots) replace an increasing fraction of routine labor, including many of the jobs of the several million Americans.

“The prescription follows from the diagnosis: It begins by recognizing the vital role that the state plays in making markets serve society.

“Progressive capitalism is based on a new social contract between voters and elected officials, between workers and corporations, between rich and poor, and between those with jobs and those who are un- or underemployed.

“Part of this new social contract is an expanded public option for many programs now provided by private entities or not at all

“This new social contract will enable most Americans to once again have a middle-class life.

“The neoliberal fantasy that unfettered markets will deliver prosperity to everyone should be put to rest.

“America arrived at this sorry state of affairs because we forgot that the true source of the wealth of a nation is the creativity and innovation of its people.”

His point seems to be that merely reciting litanies of economic woes won’t bring about systemic relief — for that, we need to embrace an essential factor:

Paradigms only shift when culture  shifts:
new ideas require new culture to receive them,
and new culture requires new belief systems.

Systemic change requires cultural change — remodeled institutions and revised social contracts that tether ideas to real life. Trying to patch policy ideas into the existing socio-economic system is like what would happen if a firm were to abruptly change its products, services, and strategic and marketing plans without bothering to change its mission statement, values and beliefs, and firm culture.

Like that’s going to work.

Coming up, we’ll look beyond policy bombs to the higher ground of revised cultural beliefs, starting with next week’s search for the “public” that’s gone missing from the Republic.

Can Capitalism Buy Happiness?

smiley face

Over two years ago, the first blog post in this series asked, “Can money buy happiness?” Today’s question looks past the medium of economic exchange to the more foundational sociological and psychological implications of contemporary hyper-competitive capitalism — a good example of which is the “meritocracy trap” we looked at last time, which clearly is not making capitalism’s elite happy, but instead is driving maladaptive behavior like the college admissions scandal.

The scandal evokes the kind of horrified fascination you get from reading the National Enquirer headlines in the checkout line:

“A teenage girl who did not play soccer magically became a star soccer recruit at Yale. Cost to her parents: $1.2 million.

“A high school boy eager to enroll at the University of Southern California was falsely deemed to have a learning disability so he could take his standardized test with a complicit proctor who would make sure he got the right score. Cost to his parents: at least $50,000.

“A student with no experience rowing won a spot on the U.S.C. crew team after a photograph of another person in a boat was submitted as evidence of her prowess. Her parents wired $200,000 into a special account.”

Actresses, Business Leaders and Other Wealthy Parents Charged in U.S. College Entry Fraud, New York Times (March 12, 2019)

What the…?

The parents who wrote those big checks now face a stiff legal price, but why did they do it in the first place? An ongoing discussion over the past several years[i] suggests an answer:  they did it because of the “meritocracy trap” as evident in higher education, — an economic necessity for more than just the elite — where the current dynamics of of how capitalism is practiced are a significant contributor to mental ill health.

A long article on that topic came out last weekend:  The Way Universities Are Run Is Making Us Ill’: Inside The Student Mental Health Crisis. The Guardian (Sept. 27, 2019). The subhead reads “A surge in anxiety and stress is sweeping UK campuses. What is troubling students, and is it the universities’ job to fix it?” The article’s U.K. examples mirror those that prompted the USA’s college admission scandal,. Predominant mental health issues on both sides of the Atlantic include general anxiety disorder, depression, and “an alarming number of suicides.” What’s behind all this? Consider these quotes from the article:

“In the drive to make universities profitable, there is a fundamental confusion about what they are for. As a result, there has been a shift from prizing learning as an end in itself to equipping graduates for the job market, in what for some can be a joyless environment.

“Studies have looked at the impact of social media, or lack of sleep caused by electronic devices, as well as the effects of an uncertain job market, personal debt and constricted public services.

“In his book Kids These Days: The Making of Millennials, Malcolm Harris … identifies the pressures of the labour market, rising student debt and a target-driven culture as contributing to steep increases in anxiety and depression among young people.

“Driving our universities to act like businesses doesn’t just cannibalise the joy of learning and the social utility of research and teaching; it also makes us ill,’ wrote Mark Crawford, then a postgraduate student union officer at UCL, in a 2018 piece for Red Pepper magazine… ‘It’s self-worth being reduced to academic outcomes, support services being cut, the massive cost of housing,’ he says.

“[Mental health authorities] have noticed a fall in participation. It’s getting harder to fill up events, most likely a symptom of the sharp increase in students living far away from campus to save money… Others have limited time as they juggle studies with paid work.

“For [Sean Cullen, a student featured in the article], money worries have been a grinding and ever-present aspect of his university experience. In his first year, he socialised more than he does now. But given that a single night out costs as much as a weekly food shop, he soon began to think twice about going out with friends. To complicate matters, the amount he receives from Student Finance England, the body responsible for student loans, changed year by year, with unpredictable amounts and repayment terms. “The financial aid is getting worse and worse, even though the cost of living is going up,” he says.

“In 2017, Cullen was elected as the student union’s disability officer… He heard accounts of mental health problems from hundreds of other students, many of whose experiences chimed with his own. ‘I’ve not yet met a student that hasn’t experienced high levels of stress while studying, whether it’s because of deadlines, balancing paid work, or problems with housing,’ he says.

“While many students survive more or less on their overdrafts, …many have mental health problems in their final year. ‘Nowadays, getting a degree doesn’t necessarily guarantee you a job, or not a better job than without one,’ he says.

“[The need to work many hours per week] has an impact not only on academic performance but on students’ ability to fully participate in university life.

“Students exhausted from working while studying full time, and still struggling to cover their basic living costs, are bound to be more anxious about deadlines and exams. ‘It’s all the environmental stuff that makes it more stressful… If you’re tired, you haven’t had time to study, you have to make a long journey to university, it’s all cumulative.’”

Cuts in social services, educational and housing costs, social isolation, student loans, constricted access to upward mobility, a stingy job market, precarious prospects for sustainable income, a struggle to find meaning and purpose at work… these are economic issues, not education issues. This series has looked at all of them. Next time we’ll look further into what’s behind them..

[1] See, for example, this NCBI study:  “Anxious? Depressed? You might be suffering from capitalism: Contradictory class locations and the prevalence of depression and anxiety in the United States.”

The End is at Hand

the end is at hand

… but you still might want to check out the bus schedule for your ride home.

I’ve been studying jobs and the new economy for nearly three years, and blogging about them for two. For reasons I’ll talk about later, I’ll be drawing this blog series to a close at the end of September. In the meantime, I thought this might be a good time to invite you to check out my other blog — here’s a link to its About page.

I say that because I just started a new “consciousness and the self” series there, and today I’m drafting an installment that borrows from an earlier post here, on the topic of “finding your true calling” in your vocation.

The other blog has a different focus than this one, but there’s some overlap in content, and I write it in the same style, with a commitment to research and letting the pros offer their opinions. If you like that approach, you might like what you find over there.

That’s all. Just wanted to give you a heads up. See you on Thursday with the next installment of “homo economicus.”

Free Market Professionalism

snake oil salesman 2

10- 15 years ago I discovered the Wannabe Economy.

It’s staffed by speakers, writers, facilitators, hosts, coaches, consultants… awake, aware, alive, attractive people ready to show us how to have it as good as they do. I needed their help. I dove in, gobbled up their wares.

At one point, I tried to be a Wannabe provider myself (books and workshops). But then doubt started stalking me: was I promoting sustainable change or just trashing people’s lives? How would know? I meant well, but so do lots of harmful people. The Wannabe Economy didn’t have an existential crisis:  it championed personal responsibility and trusted the marketplace to sort  things out.

The pitch is, “Do this, get that” — here’s the secret, the key, the code. the password, the knock. This gets you in. We want in, so we lay our money down. We feel grateful. We go for it. Then what? It’s all on us — personally responsibility, remember? — so if it works, we did it right, and if it doesn’t, we didn’t. We don’t call our guru to account; instead, we buy more.[1]

Why? Because we want desperately to play until we win. The sellers are invariably charismatic, assured, happy, rich — or appear to be. We believe in their sincerity, look for and find evidence that they live what they’re selling. (They’re making money selling to us, but we miss that point.) So we keep shelling it out, keep trying to finesse our way to the promised land. Meanwhile, our guides have no skin in the game — not our game, at least. There’s no investment, only well wishes.

I suspect that 99.999% of the helpers in the self-help industry genuinely want to help. But it’s a business, after all, not charity.[2] There’s no mens rea for buyer’s remorse in the Wannabe Economy. You pays your money, you takes your chance. Caveat emptor.

And, more pertinent to this blog, what I just described has become how “professional” services are bought and sold. Capitalism serves up both the Wannabe Economy and Free Market Professionalism.

Any problem with that?

In two words, trust and accountability, which are reducible to one word:   professionalism. And professionalism is taking a beating in the free market. That’s the message of this article: Why A Market Model Is Destroying The Safeguards Of The Professions. It’s written by a German academic mostly about the medical profession, but it applies to other professions as well.

“Wasn’t there a time when professionals still knew how to serve us – a cosy, well-ordered world of responsible doctors, wise teachers and caring nurses? In this world, bakers still cared about the quality of their bread, and builders were proud of their constructions. One could trust these professionals; they knew what they were doing and were reliable guardians of their knowledge. Because people poured their souls into it, work was still meaningful – or was it?

“In the grip of nostalgia, it’s easy to overlook the dark sides of this old vocational model. On top of the fact that professional jobs were structured around hierarchies of gender and race, laypeople were expected to obey expert judgment without even asking questions. Deference to authority was the norm, and there were few ways of holding professionals to account.

“Against this backdrop, the call for more autonomy, for more ‘choice’, seems hard to resist. This is precisely what happened with the rise of neoliberalism after the 1970s, when the advocates of ‘New Public Management’ promoted the idea that hard-nosed market thinking should be used to structure healthcare, education and other areas that typically belonged to the slow and complicated world of public red tape. In this way, neoliberalism undermined not only public institutions but the very idea of professionalism.

“This attack was the culmination of two powerful agendas. The first was an economic argument about the alleged inefficiency of public services or the other non-market structures in which professional knowledge was hosted.

“The second was an argument about autonomy, about equal status, about liberation – ‘Think for yourself!’ instead of relying on experts. The advent of the internet seemed to offer perfect conditions for finding information and comparing offers: in short, for acting like a fully informed customer.

“These two imperatives – the economic and the individualistic – meshed extremely well under neoliberalism. The shift from addressing the needs of citizens to serving the demands of customers or consumers was complete.

“The imperatives of productivity, profitability and the market rule.

“We are all customers now; we are all supposed to be kings. But what if ‘being a customer’ is the wrong model for healthcare, education, and even highly specialised crafts and trades?

“What the market-based model overlooks is hyperspecialisation, as the philosopher Elijah Millgram argues in The Great Endarkenment (2015). We depend on other people’s knowledge and expertise, because we can learn and study only so many things in our lifetimes. Whenever specialist knowledge is at stake, we are the opposite of a well-informed customer. Often we don’t  want to have to do our own research, which would be patchy at best; sometimes, we are simply unable to do it, even if we tried. It’s much more efficient (yes, efficient!) if we can trust those already in the know.

“But it can be hard to trust professionals forced to work in neoliberal regimes.

“Responsible professionalism imagines work-life as a series of relationships with individuals who are entrusted to you, along with the ethical standards and commitments you uphold as a member of a professional community. But marketisation threatens this collegiality, by introducing competitiveness among workers and undermining the trust that’s needed to do a good job.

“Is there a way out of this conundrum? Could professionalism be revived? If so, can we avoid its old problems of hierarchy while preserving space for equality and autonomy?”

Good questions that deserve engaged, real-time answers from people with skin in the game.

[1] For a scathing description of this particular consumer behavior in the Wannabe Economy,  see 11 Billion Reasons The Self Help Industry Doesn’t Want You To Know The Truth About Happiness (Hint: Unhappy People Buy Things) Inc. (Oct. 19, 2017).

[2] Although it is very much a religion — I write more on topics like that in another context.

“What Do You Do?”

Anybody else remember when “networking” was something you did at cocktail parties? That was before it became a fact of computerized life — see this pictorial history . The idea of old-style networking mostly gets eye rolls these days — too much objectifying, I’d guess — but it’s not dead yet:  as this promo for Social Media Marketing World 2020 makes clear.

The standard cocktail party question is, of course, “What do you do?” Turns out we’ve been asking and answering that question the same way for 114 years — ever since German sociologist and political economist Max Weber published The Protestant Ethic and the Spirit of Capitalism.[1]

“We use the word ‘capitalism’ today as if its meaning were self-evident, or else as if it came from Marx, but this casualness must be set aside. ‘Capitalism’ was Weber’s own word and he defined it as he saw fit. Its most general meaning was quite simply modernity itself: capitalism was ‘the most fateful power in our modern life’. More specifically, it controlled and generated ‘modern Kultur’, the code of values by which people lived in the 20th-century West, and now live, we may add, in much of the 21st-century globe.

“The idea that people were being ever more defined by the blinkered focus of their employment was one he regarded as profoundly modern and characteristic.

“The blinkered professional ethic was common to entrepreneurs and an increasingly high-wage, skilled labour force, and it was this combination that produced a situation where the ‘highest good’ was the making of money and ever more money, without any limit. This is what is most readily recognisable as the ‘spirit’ of capitalism

“It is an extremely powerful analysis, which tells us a great deal about the 20th-century West and a set of Western ideas and priorities that the rest of the world has been increasingly happy to take up since [the end of WWII and the advent of neoliberal economics].”

What Did Max Weber Mean By The ‘Spirit’ Of Capitalism? Aeon Magazine (June 12, 2018)

“What do you do?” was culturally relevant for most of the 20th Century, when jobs as we normally think of them were still around — but not so much today, especially for the new socio-economic lower class known as “the precariat.”

 “Globalization, neo-liberal policies, institutional changes and the technological revolution have combined to generate a new global class structure superimposed on preceding class structures. This consists of a tiny plutocracy (perhaps 0.001 per cent) atop a bigger elite, a ‘salariat’ (in relatively secure salaried jobs, ‘proficians’ (freelance professionals), a core working class, a precariat and a ‘lumpen precariat’ at the bottom.

“The precariat, which ranks below the proletariat in income, consists of millions of people obliged to accept a life of unstable labour and living, without an occupational identity or corporate narrative to give to their lives. Their employers come and go, or are expected to do so.

“Many in the precariat are over-qualified for the jobs they must accept; they also have a high ratio of unpaid ‘work’ in labour — looking and applying for jobs, training and retraining, queuing and form-filling, networking or just waiting around. They also rely mainly on money wages, which are often inadequate, volatile, and unpredictable. They lack access to rights-based state benefits and are losing civil, cultural, social, economic and political rights, making them supplicants if they need help to survive.”

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay, Guy Standing (2017)

I Googled “how to answer ‘what do you do?’” and got lots of articles about how to give your answer the right spin and turn the question into meaningful conversation — mostly directed at job applicants and people who hate their jobs — but the question’s relevance as an accurate reflection of Kultur is lost to the “gig economy” where the precariat hang out. It could be worse, though:  you could be a member of the “lumpen precariat.” Again from Guy Standing:

 “Below the precariat in the social spectrum is what might be called a ‘lumpen-precariat,’ an underclass of social victims relying on charity … Their numbers are rising remorselessly; they are a badge of shame on society.”

I’ve written before about how I made an ill-timed (at the height of the Great Recession) and otherwise disastrous exit from law practice for a new creative career that bombed,[2] while at the same time dealing with an as-yet-undiagnosed onset of “Primary Progressive MS” (the most degenerative kind you can get). During those years, I barely slowed down as I crashed through “precariat” on the way down from “salariat,” before ending up on the roles of the “disabled,”  a lumpen subclass. I did some awkward old-style networking during those years, and eventually developed my own Q&A. When asked “what do you do?” I would simply describe what I’d been doing that day. When it was my turn, I simply asked, “Who are you?”

Great conversation starters, as it turned out.

Photo is from Nimble Bar Co., re: how to throw an unforgettable party.

[1] Naturally there’s been lots of argument about whether the work ethic was Protestant or Catholic… and if Protestant, if it would be more properly “Calvinist” or “Puritan.” Sigh.

[2] For the full story, see my book Life Beyond Reason:  A Memoir of Mania, available here as a free download and on Amazon for cheap. It’s a short, quick read, I promise.

Burnout at the Top:  Trust in the Age of Artificial Intelligence

Fire

The late Paul Rawlinson, former Global Chair of Baker McKenzie, left a multifaceted  career legacy:

“Rawlinson, an intellectual property lawyer, achieved a number of triumphs in his professional career, including becoming the first British person to lead the global firm as chairman and overseeing a run of outstanding financial growth during his tenure.

“But a key part of Rawlinson’s legacy is also his public decision to step down from the chairman’s role in October, citing “medical issues caused by exhaustion.” He and his firm’s relative openness about the reasons for taking leave helped stimulate a wider discussion about the mental and physical stresses of the profession.”

Baker McKenzie Chairman Helped Erode Taboos About Attorney HealthThe American Lawyer (April 15, 2019)

Inspired by Rawlinson’s decision to step down, several other similarly-situated leaders went public with their own struggles.[1] Among their stressors was the challenge of how to lead their firms to meet the commercial demands of an era when artificial intelligence has already established its superiority over human efforts in legal research, due diligence, and discovery.[2] It’s not just about efficiency, it’s about the erosion of a key aspect of the attorney-client relationship:  trust. As Rawlinson wrote last year:

‘‘‘The robots are coming’. It’s fast becoming the mantra of our age. And it comes with more than a hint of threat. I’ve noticed especially in the last year or so the phrase has become the go-to headline in the legal news pages when they report on technology in our industry.

“For our profession – where for thousands of years, trust, diligence and ‘good judgement’ have been watchwords – the idea of Artificial Intelligence ‘replacing’ lawyers continues to be controversial. From law school and all through our careers we are taught that the Trusted Advisor is what all good lawyers aspire to become.

“The fundamental issue is trust. Our human instinct is to want to speak to a human. I don’t think that will change. Trust is what we crave, it’s what separates us from machines; empathy, human instinct, an ability to read nuances, shake hands, and build collaborative relationships.”

Will Lawyers Become Extinct In The Age Of Automation? World Economic Forum (Mar. 29, 2018)

Rawlinson acknowledged that clients are often more concerned with efficiency than preserving the legal profession’s historical trust-building process, demanding instead that “lawyers harness AI to make sure we can do more with less… Put simply, innovation isn’t about the business of law, it’s about the business of business.” As a result, Rawlinson’s goal was to find ways his firm could “use AI to augment, not replace, judgement and empathy.”

Speaking from the client point of view, tech entrepreneur and consultant William H. Saito also weighed in on the issue of trust in an AI world.

“As homo sapiens (wise man), we are ‘wise’ compared to all other organisms, including whales and chimpanzees, in that we can centralize control and make a large number of people believe in abstract concepts, be they religion, government, money or business. .. This skill of organizing people around a common belief generated mutual trust that others would adhere to the belief and its goals.”

“Looking back at our progress as a species, we can distinguish several kinds of trust that have evolved over time.

“There is the ability to work together and believe in others, which differentiates us from other animals, and which took thousands of years to develop;

“trust associated with money, governments, religion and business, which took hundreds of years;

“trust associated with creating the “bucket brigade” of passing packets of data between unfamiliar hosts that is the internet, which took decades; and

“network trust that has enabled new business models over the past few years.

“Not only is this rate of change accelerating by an order of magnitude, but the paradigm shifts have completely disrupted the prior modes of trust.”

This Is What Will Keep Us Human In The Age Of AI, World Economic Forum (Aug. 4, 2017)

Rawlinson asked, “will lawyers become extinct?” Saito asked, “Are we humans becoming obsolete?” Both men wrote from a globalized perspective on big policy issues, and the stress of facing them took its toll. Rawlinson’s case of burnout was ultimately terminal. As for Saito, a fter writing his article on trust, he was discredited for falsifying his resume — something he clearly didn’t need to do, given his remarkable credentials. That he would do so seems appropriate to his message, which was that trust in the AI age is not about human dependability, instead it’s about cybersecurity. I.e., in the absence of human judgment and collaboration, your technology had better be impeccable.

Most of us don’t live at the rarified level of those two men. We live where trust still means “empathy, human instinct, an ability to read nuances, shake hands, and build collaborative relationships.”

Or, as my daughter summed it up when I told her about this article, “Buy local, trust local.”

Photo by Ricardo Gomez Angel on Unsplash.

[1] On May 12, 2019, The American Lawyer introduced a year-long initiative Minds Over Matters: A Yearlong Examination of Mental Health in the Legal Profession “to more deeply cover stress, depression, addiction and other mental health issues affecting the legal profession.”

[2] It’s also changing appellate practice, which makes it easy to predict we’ll soon see AI court opinions.