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Fixing the Economy

Almost everything I need to know about the economy, I learned while working as a security guard.

About ten years ago, like many people in yet another ‘jobless recovery’ (an oxymoron if ever I heard one), I was reduced to survival-level employment. I was working in security for a major Swiss investment bank. The opulent surroundings broadcasted to the world that times were indeed good — for the people who mattered, anyway.

But, walking my five miles a day worth of patrols, I saw some interesting things behind the scenes. I saw them contracting out every function other than sales. I saw how heavily they relied on unpaid intern labor. I saw their huge art collection being quietly dismantled for sale. I saw the IT department staffed almost entirely by H-1B visa holders, while thousands of new computer-science grads flooded the job market.

This company — this financial giant, one of the drivers of the modern economy — knew that economy to be a house of cards. It cannot stand for long. We slave away at our jobs, watching our companies try to do more with less every year, knowing our 401(k) plans will evaporate along with the company sooner or later, but unable to do anything about it. In fact, our survival now depends on our helping along its eventual collapse.

A major element of the Green New Deal is an end to economic injustice. In America, many people live under conditions that we might associate with the Third World, while a handful enjoy so much luxury as would make a sultan blush. How does one fix that, especially while the political process is controlled by that handful of the wealthy?

I have an idea. And I won’t even make you buy a book to hear about it.

Our present economy is based upon two conflicting principles. First, scarcity: the rarer a thing is, the greater the cost. And as resources deplete, eventually even the necessities of life are put out of reach of common people. Secondly, though, is the demand for infinite growth — the company must do more, earn more, get bigger, and dominate its market, at all costs.

What if we threw all that out and started again? What if we replaced ‘more’ with ‘enough’? We can achieve both sustainability and economic justice by basing the unit of exchange on the only thing that really matters — an hour of labor.

Some things cost more to make than others: there is the harvesting and refinement of materials, the manufacture of the base components, their assembly, the finishing and packaging of the product, and then transportation and distribution. The common thread in all these processes is labor.

Therefore I suggest that the only appropriate price to pay for a thing is the cost of that thing — expressed as the total number of labor hours spent on its creation, divided by the total number of units. Finally, an hour of the security guard’s labor is of equal value to that of the CEO. An hour of an athlete’s performance is equal in value to that of the guy who makes his shoes.

Some people would call that communism, but it isn’t. Private ownership is preserved. Choice is preserved. Efficiency gains are preserved. The state isn’t setting production goals or controlling distribution. The difference is that a thing will finally cost what it actually costs, for everyone.

An hour of mental labor, such as teaching a college course or even studying it, would be of equal value to an hour of physical labor. Maintaining a home and family would be a valid career choice at last. One could do volunteer work to bank additional hours, and community service to pay taxes. Child labor? Outsourcing and offshoring? Done away with; no incentive to use them. And, with value set by natural forces rather than the drive for growth at all costs, manufacturing and industry could be slowed to realistically sustainable levels.

This idea would need some refining; obviously I cannot have come up with the answer to every detailed question or contingency. Resistance from the wealthy would be fierce, which means that implementation would rely on a strong mandate from the people and a fairly heavy hand from the chief executive. No solution is perfect.

But hopefully you see the basic sense of the idea: this could be the economic vehicle that allows us to implement a sustainable and just society. It all hinges on our ability to appreciate the meaning of enough.

Pass the word!
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7 Replies to “Fixing the Economy”

  1. Have to disagree with the premise that an hour of labor is inherently equal or should be set as equal. An hour of a neurosurgeon’s time performing life saving surgery is arguably and demonstrably more valuable than an hour of other types of mental and physical labor. Moreover, just using this example, what is the motivation to spend the years and years of effort acquiring the skills to be a neurosurgeon when your labor will be valued the same as labor for a job requiring no education or pre-acquired skills. This would apply to a large number of jobs which require intensive training and years of work to even qualify to perform.

    1. Hi Nate, and thanks for your feedback. For me, the answer to your question lies in the motivations of our prospective neurosurgery students. Are they motivated by a desire to save and improve the quality of human lives, in a way that challenges and fulfills them? Or to be “better” than their co-workers who sterilize the instruments, clean the operating room, wash the linens, and essentially, make the neurosurgeon’s job possible?

      If the answer is the latter, that to me sounds like the whole problem. We have a social sickness called “status”. We’re born into a caste system, from which most of us can never break free regardless of merit or effort. No, everyone does not have the aptitude to be a neurosurgeon. But if we honestly believe that surgeon deserves to be propped up by hundreds of people living in poverty and misery, then we are expressing the narcissism, apathy and ignorance that is driving humanity to a well-earned extinction.

  2. Alan,
    I expected you would bring up the motivation question. Yes, there would remain motivation (for many I would hope) to go into neurosurgery (or any field along those lines) for altruistic purposes. However, the reality is very few are going to expend those years of effort without additional motivation and without the end result being that their work is valued more than others who did not put in such work. I don’t think its about a neurosurgeon being “better” than their co-workers who do less advanced or even menial work…it’s about the fact that their work is more valuable because less people can do that work. Is that ideal? No, but it’s the truth. Now that doesn’t mean I don’t agree that people doing those other jobs shouldn’t earn a good living, I do…but it should not be the same and it isn’t realistic for it to be the same. I would argue that if you actually valued the neurosurgeon’s work the same as every other type of job, you would probably no longer have neurosurgeons….or certainly very few. And we haven’t even touched on people doing the same job but having disparity in how well or even how much effort they put into it. You and I both have daughters…if our daughters became welders and they were both the best welders in the country and put max effort into their welding each hour, should that hour be valued the same as the lazy welder who does minimal work in that hour? Absolutely not. So I think you’re advocating (correct me if I’m wrong) doing away with all merit-based valuation simply because merit and effort aren’t perfect predictors of success now…even though they assuredly do matter.

    And I don’t agree that a surgeon is propped up by people living in poverty. I think poverty is a much larger and more complex problem than how much people like surgeons are making. I also don’t agree that merit and effort don’t equate to success or opportunity. No doubt there are barriers many face that others don’t and merit and effort don’t guarantee anything…but I don’t think it’s as absolute as you do.

    I think your overall argument better applies (or is at least resonates more with me) to corporate pay structure. Having worked at Intel for a long time, I can tell you that the CEO making 40-50 times what I made (and Intel actually is one of the better companies in terms of pay disparity if you compare it to someone line Disney where I think it’s more like 1000 times the average employee), is something I have an issue with because I don’t believe there is as strong of relationship between skills, ability and education as there is with my surgeon example. However, even with that, I don’t believe valuing all labor as the same is the answer and would have the same impact on motivation.

    1. I appreciate your thoughts, Nate. Coming from an environment of extreme income disparity yourself, I think your counter-argument comes from a place of better understanding than most. We’re probably in closer agreement than you suspect, and people of good will can use their disagreements to find better answers.

      Nate, I have been jobless, homeless and hungry in my lifetime for reasons that had nothing to do with merit or effort. Bad things happen to good people, and vice versa — a truth that Americans remain willfully blind to because it flies in the face of our “we deserve what we get” ethic. Obviously, a crap welder shouldn’t make as much as a superb one — in fact, they shouldn’t keep that job long.

      My idea is just that — an idea. It is imperfect, but I offer it because I’m not hearing any others. It can be discussed, kicked around, refined; because that’s what a civilized people can do. Best wishes.

  3. I appreciate yours as well. And my arguments were merely meant to convey my thoughts and a different view point on your idea, hope you took it that way. And I certainly agree that people can suffer hardships that have nothing to do with or even in spite of their best efforts. I certainly saw that illusion of merit come into play many times at Intel where those rewarded most were certainly not always the most deserving. Best wishes to you as well.

  4. In all sincerity, I think a better system of valuation would be against a commodity like energy production. Even the gold standard was better because you have something tangible to use as a yardstick against currency. I think by making all labor equal, you may soon find yourself out of garbagemen, plumbers, sewage plant operators and more if they can all make the same money being professional thumb twiddlers.

    1. I don’t think I need my thumbs professionally twiddled, as I’m at least an Olympic-caliber amateur myself. Even under my suggestion, there are things that need doing and things that do not need to be done at all. Things that do not need to be done, would not see people paid to do them.

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Alan Augustson: author of Rust, Protocol Six and other stories
Alan Augustson: author of Rust, Protocol Six and other stories