 |
|
Books Reviewed: |
...To listen to the conservatives, it would sometimes appear that workers ought to be willing to work at any wage, that the dignity of employment should be enough no matter how dirt cheap the wage level.
...Conservative commentators like Michael Novak are fond of deriding liberal concern about inequality. The wealthy have earned their fortunes, they often aver, and the poor have probably earned their misfortunes... But focus on either the poor or on the gap between the rich and the poor tends to miss the central point, because it tends to emphasize the extremes of the income distribution, the "atypical" experience. I place so much emphasis in this book on the wage squeeze, rather than on poverty or rising inequality, because meager livelihoods are a typical condition, an average circumstance in the United States, not an extreme condition. You don't need to earn especially low wages in the United States to face spare cupboards. The average hourly wage will serve you just fine... And this begins to explain why it might be the case that the decline in real wages over the past twenty years has had some of the severe consequences I trace in this and the following chapter. Millions of American households work and live on the edge. There is no cushion. Even a small decline in wages, at the margin, can hurt severely and force considerable sacrifices.
...The current path seems clear. The financial services industry will continue to pay tens of millions of dollars to lobbyists and congressional campaigns to fend off regulation. Derivatives will continue to cause billions of dollars in losses by hundreds of derivatives victims, along the way destroying reputations, twisting lives, and emptying bank books. Young salesmen will, as I did, continue to join the derivatives business and become rich beyond their wildest dreams. And Wall Street will continue to argue that there is no compelling reason to regulate derivatives. So far, this argument has persuaded Congress and the investing public not to worry too much about derivatives.
...my private gang of four thought of me as someone with business ethics, even though many of my colleagues thought the term was an oxymoron...
...These Equity Swaps were a pure, unadulterated tax scam... In recent years the capital gains taxes collected from wealthy individuals in the U.S. have been close to zero, in large part because of these Equity Swaps... Equity Swaps were one reason why U.S. corporations paid essentially zero capital gains taxes... There no longer was any need for wealthy shareholders to lobby politicians to repeal the capital gains tax; for a fee, investment banks offered a top-secret individualized do-it-yourself capital gains tax repeal.
...I believe derivatives are the most recent example of a basic theme in the history of finance: Wall Street bilks Main Street. Since the introduction of money thousands of years ago, financial intermediaries with more information have been taking advantage of lenders and borrowers with less.
...although these three cases offer some hope for investors, they also raise serious questions about whether investors can protect themselves from abuse. If Wall Street is bilking Main Street on such simple deals -- basic trade execution -- and yet the only way to recover is to sue, what real chance do individual investors have of getting a fair shake in the financial markets?
{ Global Search-and-Replace: Vietnam War => Gulf War } ,
"Individualism, in other words, is a narcotic, and when its virtues are touted by those in power, it's a useful divide-and-conquer technique. For example, it gives the individual the 'freedom' to stand alone as a powerless and inevitably naïve consumer against massive organizations like ITT, the federal government, General Motors, and so on. Co-operation, organization, and co-ordination are necessary for human survival, and individualism is a romantic denial of this -- a denial that leads to still larger and more impersonal organizations. In the end it's the huge bureaucracies that derive the 'benefits' of individualism. Their life is made easier when they can say, 'Go do your own thing; we'll mind the store.' "
"...The more we try to solve our problems by increasing personal autonomy, the more we find ourselves at the mercy of these mysterious, impersonal, and remote mechanisms that we have ourselves created. Their indifference is a reflection of our own."
[Discussing welfare]... "Yet I personally would far rather pay people not to make nerve gas than pay them to make it; pay them not to pollute the environment than pay them to do it; pay them not to inundate us with instant junk than pay them to do it; pay them not to swindle us than pay them to do it; pay them not to kill peasants than pay them to do it; pay them not to be dictators than pay them to do it; pay them not to replace communities with highways than pay them to do it, and so on. One thing must be said for idleness: it keeps people from doing the Devil's work. The great villains of history were busy men, since great crimes and slaughters require industry and dedication."
"...The automobile, in other words, tends by its very nature to make people competitive, arrogant, ruthless, and irascible. It cannot fulfill the dreams of power and speed that it arouses because it contains within itself no system for co-ordinating its movements with those of others. The automobile is thus the perfect symbol of American life, the ultimate expression of doing your own thing... The flexibility that individualism gives us, for example, is undermined by the delusions it encourages: that our fates are not intertwined, that our neighbor's suffering will not ultimately rub off on us. The traffic jam is a symbol of what this illusory freedom does to us: a whole lot of people pretending they're unrelated to another -- and hence frantic with frustration, unable to move."
"We seem unwilling to recognize and deal with the fact that our economy rests upon a profound misdirection of energy... The question is not, how do we spend our money, but how do we spend our time and energy? If we spend it all in competition, we get little back. If we spend it all in co-operation, we get it all back."
"...Furthermore, tax money is used to do the things we as a nation have decided we want. To give tax relief as an incentive is to deny the common benefits taxes bring."
Every year Fortune Magazine comes out with a big thing on the Fortune 500. This year [1995] is a particularly interesting one, because this is the 40th anniversary, a big celebration of the Fortune 500. The May 15th issue is worth looking at... In last year's, for 1994, which discussed 1993 [data], they described 1993 as a "dazzling" year for corporate profits, even though sales growth was stagnant -- so they're not selling anything, but they're making huge amounts of money. 1994 was far better. They say profits went up a "stunning" 54%, on a sales growth of 8% and employee growth of 2.6%. You just listen to those numbers and you see a lot about the world...
The numbers are revealing and they mean something... And this is expected to continue. [KAW Note: Yes, these general trends have continued steadily to the present day -- record profits, wage slump.] The May 1 issue of fortune has a big article they call "Why profits will keep booming..." That's the 4th successive year of double-digit growth and profits. And they expect it to go on through 1996, at least. Remember, this is a period when [real] wages are going down, and working hours are going up, but profit is just "dazzling." Profit margins are up, working hours are up, temporary workers are way up (as a portion of the work force), the only thing that's down is wages -- and benefits -- and working conditions -- ...other things are up too, as I mentioned before, like industrial accidents have shot way up. So a lot of things are doing really good, but some things aren't doing so good, namely the [quoting Business Week] "...pampered western workers and their luxurious lifestyles."
The Wall Street Journal... said that in 1993, the change in unit labor costs finally reached zero (and there's always inflation, remember) and stayed there... in fact, total labor costs last year [1994] were lower than any year since 1983... The [WSJ] headline reads "Economic Gains Fail To Increase Benefits, Wages", which kind-of understates it.
Yesterday’s New York Times had a front page story... It quoted an expert as saying "New York is simply not wealthy enough to afford services to the general population." The expert was a J.P. Morgan executive. J.P. Morgan is 5th among the banks in the Fortune 500 listing, doing quite nicely... In fact, the country is flooded with capital, it's super-wealthy, but it's not wealthy enough for services for the general population. Because you've got to increase the "stunning, dazzling, stupendous" profit levels that are shooting way up, for a few percent of the population... If you look at the back pages of the NY times, you'll notice that they mention, All the tax cuts are for the benefit of business. So you cut taxes for the rich, meanwhile you increase taxes for everyone else.
But here comes some advice, to those of you who want to get into the commissar class: You don't call them taxes. You call them something else. Here's what you call them (I'm quoting from the Times), you call them "multi-million dollar reductions in subsidies to the city's mass transit system, and cuts in aid to education and higher education." Well... you can figure out what that means. When you cut what they call "subsidies" to mass transportation and to city schools, you're increasing taxes to the people who pay for those things. That's what it amounts to. You don't call it a tax, but of course it's a tax. When the subway fares go up beyond their already astronomical levels, as they do when you cut these so-called "subsidies," -- meaning, paying for services for people, using taxpayer funds for the purposes of people, that's called a "subsidy" -- when you cut those subsidies, the rates go up; when the tuition goes up for the City schools, and somebody pays for those rates, namely poor people, it's a tax. And a highly regressive tax, a tax that slams the poor, meaning most people. So that's the right kind. The rich guys who ride in the limousines, they want to make sure that everybody's on the subways, so they can get through the New York traffic, BUT they don't want to have pay for it. They want somebody else to pay for it, namely the school children, who now no longer get free/reduced rates for rides on the subways. But you don't call that a tax.
And this goes across the board... social policy is geared with delicate precision to have these deliberate effects. Take the idea of forcing welfare recipients to work... The people on it, welfare mothers, they have to be driven to the work force. There's an interesting assumption there, which nobody seems to challenge: and that is that they're not working. If you're raising children, that's not work. If your husband loses his job you gotta go out to the work force, because you're not working when you're raising children, that just comes "free," like everything women do. Real work is the kind of stuff you get paid for.
Remember we live in a meritocracy; that's another thing we're taught -- you live in a meritocracy and you measure the merit of work by the amount of income that accrues to it. So real work is the kind of stuff that you do when you're in Wall Street, speculating against currency to drive down growth rates and wages. That's real work, and you can tell from the fact that in our meritocracy you get very high pay for it. On the other hand, raising children, that's not even work at all, you don't get paid a cent for that, in fact you gotta be driven into the work force. Which has the extra side benefit -- as everybody knows -- when these people who aren't doing any work, just taking care of children, when they're driven into the work force, they're gonna have to have subsidized jobs, because there aren't any jobs around, which means taxpayer-subsidized jobs at very low wages. This has the nice side effect of undermining union wages, so everybody's wages go down at taxpayer's expense. Well, that's another part of social policy, very nicely designed, not very brilliant, because you can figure it out pretty obviously; but that's the way it's working.
In countries where unions are weak, like ours, we tend to find what they call "tough love," as they call it these days, which means love for the privileged, and tough for everyone else...
There's no tough love for Cobb County, Georgia, where Newt Gingrich comes from -- or in a way there is: they're getting a $72 million boondoggle to build F-22's, to defend ourselves from countries, to whom we're selling F-16's (for which we're also paying), because they might turn on us... So that's another part of the system.
from "Notes on Anarchism":
...skepticism is in order when we hear that "human nature" or "the demands of efficiency" or "the complexity of modern life" requires this or that form of oppression and autocratic rule.
from "The Prosperous Few and the Restless Many":
[asked about alternatives to the "Free-Market / Invisible Hand" economic theory of Adam Smith]
Herman Daly and Robert Goodland, two World Bank economists, circulated an interesting study recently. In it they point out that received economic theory -- the standard theory on which decisions are supposed to be based -- pictures a free market sea with tiny little islands of individual firms. These islands, of course, aren't internally free -- they're centrally managed.
But that's okay, because these are just tiny little islands on the sea. We're supposed to believe that these firms aren't much different than a mom-and-pop store down the street.
Daly and Goodland point out that by now the islands are approaching the scale of the sea. A large percentage of cross-border transactions are within a firm, hardly "trade" in any meaningful sense. What you have is centrally managed transactions, with a very visible hand -- major corporate structures -- directing it. And we have to add a further point -- that the sea itself bears only a partial resemblance to free trade.
So you could say that one alternative to the free market system is the one we already have, because we often don't rely on the market where powerful interests would be damaged. Our actual economic policy is a mixture of protectionist, interventionist, free market, and liberal measures.
[on the roots of racism]
There has always been racism. But it developed as a leading principle of thought and perception in the context of colonialism. That's understandable. When you have your boot on someone's neck, you have to justify it. The justification has to be their depravity. It's very striking to see this in the case of people who aren't very different from one another. Take a look at the British conquest of Ireland... It was described in the same terms as the conquest of Africa. The Irish were a different race. They weren't human. They weren't like us. We had to crush and destroy them...
If you're robbing somebody, oppressing them, dictating their lives, it's a very rare person who can say: "Look, I'm a monster. I'm doing this for my own good." Even Himmler didn't say that.
A standard technique of belief formation goes along with oppression, whether it's throwing them in gas chambers or charging them too much at the corner store, or anything in between. The standard reaction is to say: "It's their depravity. That's why I'm doing it. Maybe I'm even doing them good."
If it's their depravity, there's got to be something about them that makes them different from me... You can always find something -- they have a different color hair or eyes, they're too fat, or they're gay. You can find something that's different enough. Of course, you can lie about it, so it's easier to find.
[note this dovetails very nicely with my definition of Evil under my Opinions about Philosophy, as does this quote from Necessary Illusions:]
...It is probable that the most inhuman monsters, the Himmlers and the Mengeles, convince themselves that they are engaged in noble and courageous acts.
[or this quote from an interview for Cogswell's book, Chomsky for Beginners:]
...His motivations were "stability" and the usual things. When you ask whether Carter was a hypocrite or not, I haven't the slightest idea. You'd have to get into his head and find out. Maybe he believed he was doing the right thing, who knows? In my opinion, these are not very interesting questions. Most people, we all know from our own personal experiences, if not from reading history, that it's very easy to construct a pattern of justification for just about anything you choose to do. I mean none of us are so saintly that we haven't done ugly and unpleasant things in our lives, like maybe you took a toy from your five-year-old brother when you were a kid, or something. Just ask yourself, anybody can ask themselves, how often did I say to myself, "Boy, I'm really rotten, but this is what I feel like doing." Very rarely. Usually you set up a pattern of justification that makes it exactly the right thing to do. That's the way beliefs are formed.
Motivations are kind of hidden... It's awfully easy and a common experience to construct a pattern of justification for things you do out of some kind of self interest. And that's done in statecraft all the time. So the question whether someone's being hypocritical or not is almost meaningless.
more from Chomsky for Beginners:
[in the interview with the author, Chomsky sums up the walking contradiction that is America:]
There are a lot of interesting things about American society, even unusual things. On the one hand, it's a very free society, so there's very little government control, in fact by comparative standards remarkably little. On the other hand it's a very isolated society. People are really alone to an unusual extent. That's a technique of control. I mean, if you're sitting alone in front of the tube, it doesn't matter a whole lot what you think.
[compare how well that analysis jibes with Philip Slater's The Pursuit of Loneliness.]
[on whether competition is instinctive]
There are certainly conditions under which people will compete, and there are also conditions under which people will co-operate. For example, take a family. Suppose that whoever is providing the money for the family loses his or her job, so they don't have enough food to eat.
The father is probably the strongest one in the family. Does he steal all the food and eat it, so all the kids starve? (I guess there are people who do that, but then you lock them up. There's a pathological defect there somewhere.) No, what you do is share.
Does that mean that they're not competitive? No. It means that in that circumstance, they share. Those circumstances can extend quite broadly -- for example, they can extend to the whole working class. That's what happens in periods of working class solidarity, when people struggle together to create unions and decent working conditions...
Let me tell you a personal story. I'm not particularly violent, but when I was in college, we had to take boxing. So the way we did it was to spar with a friend, wait until the thing was over, and go home. But we were all amazed to find that after doing this pushing around for awhile, we really wanted to hurt that other guy, our best friend. We could feel it coming out -- we wanted to kill each other.
Does that mean that the desire to kill people is innate? In certain circumstances that desire is going to come out, even if it's your best friend. There are circumstances under which this aspect of our personality will dominate. But there are other circumstances in which other aspects will dominate. If you want to create a humane world, you change the circumstances.
[in an interview in Speak magazine, the interviewer asks, "But do you understand why people are frightened to confront power in that way?"]
Yeah. You're going to get into trouble. Things are purposely made hard to stop people from getting involved. Take the way higher education is shaping up. In part, as a result of the ferment of the 1960s, the education system is now being made much more authoritarian. For one thing, there's the issue of debt. A kid comes out of college now, and he's in so much debt he's swamped. That makes becoming politically-active that much more difficult.
[a truth I can personally attest to... and I believe the debt vs. activism principle applies across the board to issues like home ownership vs. political involvement, marriage and kids vs. civil rights... Furthermore, an additional "filter," to weed out those who seek justice, is employment itself -- as put by the authors of Chomsky for Beginners,
"One of the great 'filters' in corporations of every kind is, either you learn to read your boss's mind, or you're out of a job."
...Explaining, once again, how media censorship occurs in a society where freedom of speech is explicitly legislated. Or, in Chomsky's own words, from The Chomsky Reader,
"Case by case, we find that conformity is the easy way, and the path to privilege and prestige; dissidence carries personal costs,"
...yes, even in a society that loudly commends itself for its tradition of individualism and fighting for the underdog.]
Noam also has a blog, but he doesn't update it very often: http://blog.zmag.org/ttt/
Return to my Utilitarian Home Page
***
