Creating a New Economy – Value over Growth
Now is the time to reorient the American economy from emphasis on consumer growth to generating value in what is produced and in the lives of producers—us.
We were promised that the value would come later, retired with fat 401-K and IRA accounts coupled with social security and high home values. For previous generations of workers the payoff was the American dream. Defer long vacations and truly fulfilling occupations for 2,000 hour work years and pension funds. This is the Protestant ethic. But for this generation we are seeing the unraveling of the entire enterprise. Americana is bankrupt as a treasury and as a working concept; we adapt or be driven aside in a new global economic order decentralized of American influence. Not only will our retirement accounts be worthless but our currency and national reputation too. Fortunately, we have a way and example.
Discussion in economic circles like Tom Davenport’s blog The Next Big Thing at Harvard Business Review center around transforming the American economy to producer-driven, on the right track but the wrong train. What America will export is its value, and quality, of life. America is unique in its adaptability as a young country. We don’t want to follow anyone; we strive to lead, so copying the European model is out of the question. If we’re emerge on top of the next global financial order, we have to have something everyone else wants, like last century. Transformation is within our capability, more than the renovation Davenport argues for–the next evolution of economic order.
We have nothing to lose. Our future is wiped clean of expectation, and our near-future is going to wipe away the last notions that our current system is the best we can do, or even worth continuing to support. Americans by-and-large sacrifice the pleasures of daily life for a dream we’ve woken from and found wanting. Why wait? Like the famous hedge fund manager who retired just before the crash with his millions, with the farewell, “So long suckers!” His retirement before age 40 will be comfortable no matter what happens to the rest of us in the coming months and years. We were all suckered into supporting a pyramid scheme that is still collapsing (Next up: mass layoffs, budget crises, followed by Social Security and Medicare insolvency.). We either screw the world by leveraging our currency for a few more years of dominance followed by complete collapse–years? maybe months for Bush to leave office–or embark on a new, New Deal program to transform into a stronger and enviable America.
A value-driven economy recognizes first the many benefits of a happy workforce. Medical studies in England and elsewhere have found a direct correlation between missed time, bad health and stressful work environments. The Brits have national health care, remember, and the health of its citizenry in a notoriously harsh environment is tantamount to good government. Better work environments with more individual input and stake in the outcome are the ultimate cure for blue flue. Some if not many American businesses apply this wisdom, but in an economy driven by profit and productivity, even the most enlightened work environments still include unhealthily long hours, which wouldn’t be necessary in a value-driven economy.
America is a victim of its own system, chained to a monster of its own making. We have allowed our highest value to become consuming, and our highest ideal to be the bottom-line. We are beholden to making a buck anyway we can because that’s what is demanded. So while we bemoan the decline of family values and small-town life, we condone the economic necessity of two-income households and Exurbia. We lament the loss of our undeveloped land and the trashing of our environment but write it off as a business by-product. Responsibility for consequences is passed to a mythical Capitalism, which demands unrelenting sacrifice in return for opportunity and prosperity.
It is time to recognize the fallacy of infallibility as a creation of our work masters, who shape our perceptions, control our access to information, and unduly influence our law-making with Big Money. Who is ultimately responsible if no one is? A perfect cover for shadow to work; a perfect disguise to raid our treasury and infiltrate our government at all levels. And ultimately to gain our wholehearted belief in its efficacy, its unchallengeable position. Put lipstick on that pig, the drive for profit above all else will soon smear it, dilute it, and eventually wipe it away.
At the end of the last Gilded Age before the Depression, Capitalism had created a similarly unfettered environment as it has now, with similar consequences for similar reasons. Americans worked harder with less tangible benefit than anyone else, but a few people got extravagantly rich and enjoyed the high life. Until the Depression it was the best game around. Opportunities were class-driven in most other economies. Heavy pressure was exerted for Capitalism to achieve its inherent ideal: equal opportunity, not as understood today–Socialism.
Socialism, if we all remember our Marxist theory, is not the competitor to Capitalism, it is Capitalism’s next evolution, and we saw a hybrid of it in the New Deal. Free-market idealists have raged for decades about institutionalizing Socialism in the form of Social Security, Medicaid and Medicare, unemployment benefits and payroll taxes for social programs, unions, and on and on. Anything that stinks of a social safety net violates the tenets of Capitalism, but the country had no other choice in the early 1930s. It was adapt–instead of evolve–or face revolution at the hands of foreign prognosticators. Communism was more a political ideology than an economic system, falling far short of what Marx envisioned.
“From each according to his abilities, to each according to his needs,” sayeth Marx. This whole notion scares Capitalism to its core. The motive for work life is no longer profit in a Socialist system, it is value. The high-achiever still has special statue and everything needed to succeed, but the collective need for a stable and just society comes first before individual opportunity for generating excessive wealth. We all share in the reward, and we all have a greater stake in the outcome. Owners of production are rewarded with the opportunity to create enterprises and build stability around them; they even have more access to material resources and flexibility to abandon outdated methods, but they sacrifice a golden parachute for another kind of safety net: the wholehearted devotion of their employees and contribution to collective value.
We’ll always need innovators and entrepreneurs, managers and analysts, but in a value-driven economy we never pass the buck of responsibility for the results of our labor, but no boss is worth ten thousand employees in pay, which is passing responsibility for the common good by allowing the hoarding of resources. Money is supposed to be a unit representing value. When people at the bottom struggle to get by, ground down by stress and cruelly teased by opportunities dangled before their eyes but denied in their lives, we sacrifice human dignity. We all lose, even if we appear to be the winner because we live in a mansion. And yet once again we’ve been fooled into believing in the inevitable consequence of generating wealth: Some people are going to lose out, and that’s just too bad.
We know better. We know that we can take children out of the ghetto to the suburbs in good schools and caring environments, and by the time they graduate high school, they’re caught up. Their potential is unleashed. They go to college. They generate value. As dependents living in a ghetto they’re dead weight, a burden, on unsightly consequence for the have-nots. Thus we justify a country being both the richest and having the greatest disparity between rich and poor. The poor souls left out were just unlucky to born ethnic or stupid or redneck or across the tracks. We don’t recognize the value of each individual life, so using collective resources to promote that value is secondary to promoting an unfettered Capitalist environment. We know better, but as Marx predicted, the system would have to be driven to its most extreme before the workers revolted.
The only reason why America isn’t Socialist or even Communist now is because the New Deal copped popular socialist ideas and created a hybrid of socio-capitalism. The conservative movement in America, beginning with Ronald Reagan, used national debt as a way of eroding the socio in their capitalism, and over time the strongest safety net in the world has been shredded as interest payments have consumed twenty percent or more of the national budget. The neo-cons are taking it a step further, attempting to bankrupt the national treasury so it’ll shed all of its social obligations and focus solely on protecting accumulated wealth. They realize the social unrest that’ll be created when people are starving, and that’s what prisons are for, and martial law, and massive domestic spying operations, and draconian terrorism laws that criminalize economic disruption and political protest.
Socialism might not be Capitalism’s destiny, as predicted by Marx and asserted by his remarkably prescient theory of Historical Materialism, but a consumer-driven economy of unregulated drive for profit at any cost is a thing of the past. As we consider what direction to go in, value is our best choice. All of the benefits of switching to a producer-driven economy will be realized, along with the achievement of a new ideal in interrelation that’ll be the envy of the world. A few brave thinkers are already headed in this direction, realizing time is ripe for radical change. Or not so radical but evolutionary, like Tom Friedman’s proposal that America can lead a worldwide transition to clean energy and sustainability. Value over growth. This is our new mantra, and people are the true value any country possesses.
Next to see it on our currency.