By Jan Hively
Now they are asking how we plan to spend our stimulus checks. Whether it’s the Bush Administration or the Obama Administration sending out stimulus checks, the message is clear. We should go out and buy more because the future of the economy hinges on the volume of spending. If we just spend enough, we will “kick start” the economy and get back to the good old days.
“Real economics is the interface between human beings and the world all around,” says Homer Dixon. What are you seeing in the world all around you? I see our leaders trying to revive the massive producing and selling of stuff at a level that goes way beyond our basic needs. While in the meantime, increasing numbers of people lack the basics. Isn’t there some other way of doing business?
The big question is:
How can we transform this market-based society, which is dependent upon the consumption of manufactured goods and natural resources, to a commons-based society, which is focused on developing human and environmental assets?
The “Gospel of Consumption”
It’s worthwhile to consider the way this big question was posed and answered at the beginning of the Great Depression. The parallel is remarkable!
During the boom years after World War I, the industrial capacity for turning out consumer goods (cars, electric lights, vacuum cleaners, radios, washing machines, etc.) appeared to be increasing at a pace greater than the number of interested buyers. The textile mills could produce all the cloth in six months that Americans needed for a year, and 14% of American shoe factories could produce a year’s supply of footwear. “Ultimately, it may be that the world’s needs will be produced by three days work a week,” Said Secretary of Labor James Davis in 1927, suggesting that work hours could be reduced, thanks to labor-saving machinery as well as labor-saving tools for the home. Workers would have more time for themselves and their families.
The issue in the late 1920s was how manufacturers would respond. Would they: a) adapt to the market demand of frugal American families by idling machines and reducing work hours; or b) find a way to expand consumer demand and keep people and machines working nonstop. You can guess which direction they headed.
Charles Kettering, director of research for General Motors, proposed a strategic shift in industrial planning in a 1929 magazine article titled, “Keep the Consumer Dissatisfied.” He suggested that manufacturers go beyond fulfilling basic human needs to creating new ones. President Herbert Hoover’s 1929 Committee on Recent Economic Changes followed up by celebrating what one industrial consultant called “the gospel of consumerism:” “We have a boundless field before us. There are new wants which will make way endlessly for newer wants, as fast as they are satisfied.”
Here is the irony as expressed by Jeffrey Kaplan, author of a 2008 Orion magazine article titled, “The Gospel of Consumption,” “Machines can save labor, but only if they go idle when we possess enough of what they can produce. In other words, the machinery offers us an opportunity to work less, an opportunity that as a society we have chosen not to take. Instead, we have allowed the owners of those machines to define their purpose as ‘higher productivity’ – and with it, the imperative to consume virtually everything that the machinery can possible produce.”
In 1932, Arthur Dahlberg, one of the critics of consumerism, declared that, “The failure to shorten the length of the working day…is the primary cause of our…excess industrial plant, our enormous wastes of competition, our high pressure advertising, and our economic imperialism.” By not shortening the working day, “the profit motive becomes both the creator and satisfier of spiritual needs. For when the profit motive can turn nowhere else, it wraps our soap in pretty boxes and tries to convince us that that is solace to our souls.”
Dahlberg was describing the impact of a tidal wave of consumer goods sweeping away savings and encouraging the use of credit way beyond the payback capacity of families. Does this sound familiar? Then as now, the strength of the economy succumbed to the false promises of consumerism. In 1932, the country continued its slide from recession into the Great Depression. And what is our future now?
Options for Tangible Change
To create a commons-based society, people need more than exposure to new ideas. They need tangible ways of practicing and living out these bright possibilities. Old habits about how we organize and pay for work maintain the sharp divisions between rich and poor and tie us to the consumer values of the market-based society. At this time when unemployment due to layoffs is growing, we should try out some new ways to share the work and spread the wealth. Here are three examples:
Shared Work. New York State’s Department of Labor (DOL) generated most of the innovative ideas for the New Deal in 1933, and today it is still a source of innovative new programs. One of them, the Shared Work program, helps employers survive recessions and seasonal business adjustments by providing an alternative to laying off full-time workers. Instead of cutting staff, an employer can reduce by 20% to 60% the number of hours of all workers, or those of a select work group. Under an approved plan, employees may collect partial Unemployment Insurance (UI) benefits. To qualify, an employer must have at least five full-time employees and have paid UI tax contributions for at least four consecutive calendar quarters before applying.
Through the Shared Work program, employers demonstrate that they appreciate valued employees and want to keep them on despite tough times. It is costly to find, hire and train new workers. It is also costly to pay overtime to employees who work longer hours to make up for people who were laid off. Most important, it provides stability and hope for valued workers who would otherwise be laid off.
The Shared Work approach could make a huge difference as a federal policy. It would also be useful to brainstorm other ideas of spreading the workload so that more people can be employed and earn enough to meet basic needs in this period of recession.
Reduced Hours. In 1930, the world’s leading producer of ready-to-eat cereal, the Kellogg Company, announced that all of its nearly 1,500 workers would move from an eight-hour to a six-hour workday. The company president, Lewis Brown, and owner W.K. Kellogg noted that if the company ran, “four six-hour shifts…instead of three eight-hour shifts, this will give work and paychecks to the heads of 300 more families in Battle Creek.” At a time when the country was sliding into the Great Depression, this was welcome news to workers.
As Benjamin Hunnicutt describes in his book Kellogg’s Six-Hour Day, Brown and Kellogg wanted to do more than save jobs. They hoped to show that the “free exchange of goods, services, and labor to the free market would not have to mean mindless consumerism or eternal exploitation of people and natural resources.” Instead, “workers would be liberated by increasingly higher wages and shorter hours for the final freedom promised by the Declaration of Independence – the pursuit of happiness.”
The company leaders argued that men and women would work more efficiently on shorter shifts. With more people employed, the overall purchasing power of the community would increase, thus allowing for more purchases of goods, including cereals. Kellogg’s vision was of a commons-based society from a business perspective.
Frances Perkins, New York’s Secretary of Labor, was interested in cutting working hours when she was named the U.S. Secretary of Labor by President Roosevelt in 1933. She and her friend, Senator Hugo Black, both influenced by the Dahlberg book and the Kellogg example, drafted legislation requiring a 30-hour workweek. Although Roosevelt at first appeared to support Black’s bill, he was heavily lobbied by the business leaders and backed down. Later, he and Perkins gained approval of the 40-hour week that is still the standard seventy years later.
Several Western European nations with strong unions, have legislated shorter workweeks. Here in the U.S, a growing number of workers seek out part-time rather than full-time employment for an assortment of reasons: older adults seek bridge jobs, young adults seek jobs to support their education, parents seek jobs that complement their children’s school schedules, adult children seek jobs that complement caregiving for their parents, and so forth. Rather than focusing on a standard for workweek hours, Americans would benefit by removing barriers to fully flexible work schedules, which could be adapted to productivity outcomes and employee needs.
Universal Benefits. First and foremost for any shared work plan, neither health care nor retirement benefits should be tied to employment. In Western Europe, both are provided by the government from tax payments. The U.S. should adopt similar policies. Small business owners are now restrained from hiring more workers by regulations requiring payment for benefits that should be universal.
Stipends for Young and Old. In comparison to the 20th century, there are limited opportunities in the 21st century for adolescents to be employed. Too many lack work experience with the supervision that teaches lifelong skills, habits and attitudes related to productivity. Similarly, there are limited opportunities for older adults to find employment. Many millions of older adults are finding it hard to live on Social Security now that they have lost much of the supplementary savings they had counted on. They need employment to supplement their retirement incomes.
Older adults receiving Social Security payments and adolescents who are still family dependents should receive minimum wage stipends for providing hours of part-time service employment through public and non-profit agencies. Some of the older adults receiving stipends could coordinate primarily intergenerational programs that will teach skills by assuring training and coaching, performance feedback, etc.
In the process of shifting from a market-based to a commons-based society, it’s important to develop and harness the full potential of human capital. Whatever the age of the worker, every position in a stipend program should be structured to match jobs with participant strengths and interests, teach 21st century work skills, and document performance outcomes so that stipend work will build bridges to ongoing employment.
Here is another useful parallel between now and the ‘30s. Between 1936 and 1939, the Works Progress Administration (WPA) paid over $7 billion to more than three million jobless citizens for “work relief to restore human dignity.” Harry Hopkins, the WPA Director, insisted that the work provided should match the skills of the unemployed. Artists were employed to paint murals in public buildings, sculptors created park and battlefield monuments, and actors and musicians were paid to perform. Critics created the word “boondoggling” to describe some of these “white-collar” WPA projects. But the artists’ projects merged with more utilitarian schools and roads, stadiums and parks as a humanist legacy for future generations.
Those of us who seek tangible ways to shift from a market-based to a commons-based society need to get involved in shaping implementation of the stipend volunteer service programs approved through the Serve America Act as well as the stimulus jobs created through the Economic Recovery Act. If properly managed, the federal funds will stimulate human resource development that fits the social and economic needs of this 21st century society.
The Challenge
In his book about the commons, Capitalism 3.0, Peter Barnes explains that the American experience after World War II repeated what occurred after World War I. A huge media industry developed and revved up demand for consumer goods. As the wage needs of U.S. workers began to rise, manufacturers went overseas to find people who would work longer hours for less pay. When the ability of U.S. consumers to purchase the goods was not adequate to match the supply of good, financial institutions created new kinds of easy credit. And now we know where that led.
The advantage we have in 2009 in comparison to 1929 is that we do have hindsight. And we have a groundswell of interest in working together to restructure the society. As Barnes suggests, it’s time to move to a new stage of capitalism through which we both protect and leverage our full range of natural resources – including human capital and the commons.
What are your ideas for new ways to share the work and spread the wealth? Let’s make change!