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Why the Economy CAN’T work for us all

This is the text of the speech I delivered at the Ecology Center in Berkeley, CA on 9/29. Because I shared the event with another speaker, I did not say all that I wanted to say, but it’s a start. I am also writing a book on the subject.

Hello, thank you for coming and thank you to Transition Albany, Transition Berkeley and the Ecology Center for putting this program together.

This speech is dedicated to the memory of Dennis Paul Abrams, a Nevada man who committed suicide in 2010, at age 57, broke and in ill health after the job market had discarded him at age 55. His death certificate lists his last occupation. The state would not allow him to be listed as unemployed. This corruption of data makes it difficult for epidemiologists and investigative journalists to see the full impact of long-term unemployment. I think that’s deliberate. This speech is also dedicated to the people from Wall St. in New York to Athens in Greece, who are protesting the predations of finance capitalism.I’m a demonetarist. Rather than finding new ways for all of us to make more money, I believe we must end money– and create the truly free world. But to create the free world we must raise our consciousness. And that starts by asking “Why must we pay to live on the planet we’re born on?”

Matthew Vadum of the Capital Research Center recently wrote an article for the American Thinker in which he said

“Why are left-wing activist groups so keen on registering the poor to vote?” “Because they know the poor can be counted on to vote themselves more benefits by electing redistributionist politicians. Welfare recipients are particularly open to demagoguery and bribery.” “Registering them to vote is like handing out burglary tools to criminals,” “It is profoundly antisocial and un-American to empower the nonproductive segments of the population to destroy the country– … Encouraging those who burden society to participate in elections isn’t about helping the poor. It’s about helping the poor to help themselves to others’ money.”

What I call un-American is Vadum’s presumption that it should be self-evident that the “Productive” segments of society are a better class of people. As Thomas Jefferson put it so eloquently in the Declaration of Independence “all men are created equal” (And, of course, we know now that means women, too). We haven’t yet actualized that proposition. But it must be our goal.

Here’s how we are equal despite our many superficial differences: We come into the world naked and helpless from the womb of a woman, we all go through the same maturation process. Crawl before we walk, walk before we run etc. and, rich or poor, we all die and you cannot take it with you! He who dies with the most toys still dies!

David Korten, Co Founder of Yes! Magazine wrote in a blog that:

“Money is a system of power. The more our lives depend on money, the greater our subservience to those who control the creation and allocation of money.”

If you are subservient then you’re not equal. Some people have the power of life and death over other people by their ability to grant or deprive a person of employment, or by their willingness or not, to purchase goods or services put into the market by an entrepreneur. Life or death. I’m not exaggerating. Maybe you have heard of Kyle Willis, the 24 year old Cincinnati man who died of a tooth infection because he was unemployed, uninsured and couldn’t afford the medications that would have saved his life.

Everyone should be free to decline the labor time or goods of another. But that freedom to decline must never ever threaten the life of that other. The legal definition of assault is an act that puts a reasonable person in fear for life or limb. So in a money-based economy, a layoff is an act of assault.

The right wing is always blaming individuals for not trying hard enough. The more the media reports about jobs being cut, the more the right wing talks about personal responsibility. On Sept. 16, 2011, Rep. Steve King of Iowa took to the House floor to speak out against unemployment insurance, saying,

“The 80 million Americans that are of working age but are simply not in the workforce need to be put to work. We can’t have a nation of slackers…We’ve gotta get this country back to work and get those people out of the slacker rolls and onto the employed rolls.”

But neither politicians, left or right, nor the media talk, about the ugly truth: Our economic system allocates resources competitively and it is the nature of competition to create losers as well as winners. Consider sports: Fifty percent of the teams in any league, in any sport, from your neighborhood beer league to the pros, will lose on any given day. We know this before any of the games start. It doesn’t matter how hard the teams try, how experienced, skilled and disciplined the players are, or how well they are coached or managed. Fifty percent lose on any given day. Everybody plays by the rules, all the officials are perfectly fair and honest. Fifty percent lose. In the so called individual sports, such as golf or various forms of racing, the ratios of losers to winner is much higher. It is the nature of competition. Personal responsibility does not overcome the very nature of competition.

Take baseball for example. There are 30 teams in the major leagues. At the end of the year only 1 team is the world champion. Every team wants to win the World Series but only one will. So, if success is winning the WS, 29 out of 30 teams will fail, every year, that’s a 96.66% failure rate.

Now, apply the principle of competition to the job market. Getting the job is success, not getting it is failure. On October 21, 2009, the NY Times published an article by Michael Luo called “$13 an hour. 500 apply, 1 wins job”. WINS… my analogy to sports is not far fetched. 1 person succeeded, 499 failed. 99.8% failure rate. That’s worse than trying to win the World Series.

But that’s only 1 job, you say, Well, it’s not much better when multiple jobs are at stake. On April 19, 2011 McDonald’s held its first ever national hiring day. The plan was to hire 50,000 nationwide.

On April 28, a highly respected business website—–published an article by Leslie Patton headlined “McDonald’s Hires 62,000 in U.S. Event, 24% More Than Planned.” It said “McDonald’s and its franchisees hired 62,000 people in the U.S. after receiving more than one million applications” 62,000 out of a million = 6.2% They said that actually more than one million applied so lets say 6% were hired. That means a 94% failure rate. Better chance than winning the WS, but not by much.

The story goes on to say that the McDonalds spokeswoman “declined to disclose how many of the jobs were full- versus part-time.” But that’s how they hired 24% more people, they changed some full-time jobs to part time. How do I know? Because any business only needs so many people. So 6% of the applicants got into McDonalds, although for some it was only part time. McDonald’s has a training program called Hamburger University. That inspired me to look at well-known US News and World Report College Rankings that listed the following acceptance rates for Fall 2010: Remember. McDonald’s was 6%… Harvard 7% Yale 8%, Brown and Princeton 9%, Columbia 10%, Dartmouth 12%, & University of Pennsylvania 14%. The people who applied to Ivy League Colleges had a better chance of getting in than the people who applied to McDonald’s!

We live under a cultural imperative that everyone who has the physical and mental capability of gainful employment must “earn a living” or be supported by a job holder if they are not working outside the home…preferably within the context of the married heterosexual nuclear family. Reliance on the public is supposed to be the very last resort under the Doctrine of Least Eligibility, a doctrine that goes back to the Puritan colonial days. That Doctrine held that charity should be a less eligible choice than the meanest form of work in the community. And that doctrine still bears on modern times.

In 1984, I lived in a rooming house in Indianapolis. One of the other boarders was a VietNam Vet who was out of work. When the vet was down to a single can of tuna, he called the Perry Township trustees for help. They sent over a social worker who looked in the cupboards and saw the can of tuna and said she could disqualify him on the grounds that he still had a can of tuna. She chose not to reject him on that basis but she made it clear she had the authority to do so. Now, get this. If you went to the township trustees for help, you were supposed to have absolutely nothing, and then wait a week for your first benefit check. That’s the Doctrine of Least Eligibilty. They figure that if you know you’ll go hungry for a week, you’ll take any job.

But at the same time we have the competitive job system. That you want the job. That you qualify for the job, does not mean that you will get the job. Depending on what your source is, you hear that there are anywhere from 4 to 8 people on average for every job opening. I applied for a part-time job last summer, which I did not get, and I was told that they had over 80 applicants. Personal responsibility does not counter the nature of competition.

So you say: We just have to create more jobs. But businesses exist to make money, not to provide employment. Businesses only hire when they find it beneficial to their ability to make profit. On Sept 9, 2011 the NY Times published an article by Motoko Rich, full of reactions to Obama’s jobs plan. It was headlined “Employers Say Jobs Plan Won’t Lead to Hiring Spur”. In that article a businessman named Jeffery Braverman said: “You still need to have the business need to hire,” While a $4,000 credit could offset the cost of the company’s lowest-cost health insurance plan, he said, it would not spur him to hire someone. “Business demand is what drives hiring,” he said.

I know personally how capitalism uses unemployment for its own ends. I worked for a law book publisher called Bancroft-Whitney between mid-1987 and the end of 1991. After that, I worked for the company, which by that time had been sold, as a so-called independent contractor. Why I say so-called is a story I don’t have time to tell right now. I tell people I did the work for 4.5 years in-house and for 5.5 years outhouse. At first, it was a good deal, I used my severance to go to school full time for a year and I could make my own work schedule. But after three years of outhouse work at the same rate, I inquired as to a raise because the cost- of -living was going up. I got back a letter saying that “Market reality” was such that there would be no raise because there were people waiting for work who would do it at my current rate.

That’s why people like Matthew Vadum, who call the poor, especially welfare recipients, the “non-productive segments of society” are wrong. The unemployed are performing a function that capitalism wants: They provide slack in the job market that keeps a downward pressure on wages. So as the poet John Milton said, “They also serve who only stand and wait.”

Here’s another problem with job creation. Advances in technology. We have a gross incompatibility between the cultural imperative of gainful employment and the reality that businesses operate to turn a profit and part of turning a profit is lowering production costs. Remember McDonald’s National Hiring Day? Well, while McDonald’s was hiring in the US, they were experimenting with a way to cut back their work force in Europe. On May 16, 2011, a website called Investor Place published an article by Cynthia Wilson, based in information from the Financial Times of London, England’s equivalent of the Wall St. Journal. Wilson’s article was titled “McDonald’s Replaces Cashiers with Touch-Screens: European restaurants test self-checkout model”

Let me quote from the article:

“The move at McDonald’s is similar to what many consumers experience in supermarkets, retailers and gasoline stations that have opted for self-checkout to save on labor costs.”

But suppose everyone who wants a job gets one? I am going to show you now where socialism goes off track. I have heard socialists say that a job should be a human right. I admire the intent of socialists to see that everyone has income in this money-based world. But if everyone had a job, eventually they would overproduce and then what? Ship overseas? What about other countries that are making stuff? They could ship stuff to us and that is done, at a great waste of energy, because someone can profit from the deal.

But eventually people slow down or stop their buying for a while because they don’t need or want any more. Inventories pile up. Businesses lay off workers when inventories build up and they wait until consumers want to buy again in order to hire again. We see this most prominently in durable goods like automobiles. This is your familiar boom and bust cycle. It’s built into the system, even when there is none of the Wall Street chicanery we have been victimized by over the years. We only need so many things at a time. Most of us think it’s crazy that Imelda Marcos had over 3,000 pairs of shoes.

But the biggest long-term problem in creating more jobs is the drain on the world’s resources, especially considering our numbers. We are supposed to reach 7 billion this October. We do need to rein in our numbers but that won’t solve our economic problems. According to the search engine Wolfram Alpha, there were just over 2 billion people in the world in 1930. But given the size of our population now, it behooves us to use our resources wisely.

Money does not allow that. We waste resources fueling markets, so that we make money. We’re told in the US that consumer demand is responsible for anywhere from 2/3s to 70% of our economic activity. We are supposed to buy stuff so that other people have jobs and make money so that they can buy stuff so that other people have jobs and make money so that they can buy stuff and on and on. In the process of keeping people buying stuff, we have fad, fashion, planned obsolescence, and the disposable society. Did we really need the Pet Rock, the Flat Cat or New Coke? Do we need new models of cars every year? How many smartphone upgrades represent genuine innovations or are just an extra bell or whistle put in to maintain a price point?  iPhone 5 comes out next week. Iphone 4 is only 15 months old.

The worst is planned obsolescence and the disposable society. The idea is that goods can be cheaply made and they function well but they have a relatively short life span and it is cheaper to buy a new one than to repair the broken one. How many resources are wasted because we keep making new things to replace the broken stuff instead of making the item sturdier to begin with and cost efficient to repair? With 7 billion people on the planet, we cannot afford a disposable society any more. We have to make less stuff, so that’s fewer jobs.

You cannot have infinite growth on a finite planet!

Writer Edward Abbey said “Growth for the sake of growth is the ideology of the cancer cell.”

The world’s monetary systems are indeed a cancer on the planet.

We have developed whole industries dedicated, not to producing useful things, but to making money from money. We have deskilled and debased real work for the sake of lowering costs to help turn a profit. We have replaced people with technology, not for safety, but to make money. We have stinted on safety standards so that we could save money. We have turned work, which is all around us, into a limited number of jobs. Then we’ve invented more and more ways to eliminate people from consideration for jobs, and hence for money. The latest is that there are employers who are discriminating in recruitment against… the unemployed. There are bills in Congress now to outlaw the placement of these discriminatory job ads. But you know that if employers can’t openly discriminate in that way, they will just ignore the applications of the unemployed. All this while we maintain the cultural imperative of gainful employment. Why?

And last but not least, we have this unsustainable system of compound interest that demands that economies grow and grow to keep up with interest payments that benefit a tiny minority in the world at the expense of everyone else. Interest payments are the real reason the world is in a debt crisis. The higher the interest rate the more money is put into paying for past economic activity over time, making less available for present and future economic activity because you are paying interest to the financiers.

Matthew Vadum said “It is profoundly antisocial and un-American to empower the nonproductive segments of the population to destroy the country.” He’s right. But the non productive segments of society are not the welfare recipients. They are the damned financiers who not only fail to produce anything of real value for the country, but they inhibit the productivity of others and destroy the country for their own gain. How many good companies delivering real products were hurt because their suppliers would no longer accept letters of credit from their banks during the “Credit Crunch”? Do you know that the banks still aren’t making enough business loans because the Federal Reserve, which is as Federal as Federal Express and needs to be tossed into the dustbin of history, the Federal Reserve pays interest on excess reserves, and the banks would rather take these risk-free interest payments than take the risk of making a loan. Who is non-productive now?

So how do we totally dismantle the financial industry worldwide and build the truly free world? Peaceful revolution. I would like to see American students lead a peaceful revolution against finance capitalism by organizing a mass simultaneous default on student loans. Student debt has become a larger bubble that the mortgage bubble of 2007. Their mass default done as a deliberate political action, would be the clarion call for the rest of us to rip up those predatory mortgages, and usurious credit cards and, render those vile credit scoring agencies redundant, as the Brits would say. We’ll all have bad credit scores, but on our terms. Then let’s see employers and landlords try to use credit ratings as the basis for a hiring or renting decision as they are doing now. Destroy the financial industry in the US and the rest of the world will follow.

But tearing down the old system in not enough. What do we build in its place? How about lives and societies centered on personal relationships with other human beings and with nature, not on employment and consumption. Work done because of the need for the goods or services produced and not merely to keep markets active and people busy. We must respect the diversity of humanity. That diversity will provide a variety of goods and services to choose from.

People sometimes criticize my vision for the world by saying that if everything were free only a few people will work. And they think that taking something that someone else has made without paying would be theft. How do you steal something that is free? Let’s make a world where work is a gift, not a duty.

The critics are worrying about the wrong thing. Most people want to be useful in some way. They will want to do things because it would be boring otherwise. When we are left out of the employment system against our will we start to feel useless and depressed even if we have money. That’s why some people get depressed when they retire. The problem now is that the system demands that nearly everyone work while simultaneously making us ask permission to do what the system requires. Because that is what a job application really is, a request for permission to work.

Economic activities should be peripheral and helpful to our lives, not the essence of life, not the highest expression of what it is to be human. No one, upon receiving a terminal diagnosis, ever says, “I wish I had spent more time at the office.”

We must also honor leisure. Leisure has had a bad reputation since the days of the Puritans. Idle hands are the devil’s workshop and such. But today we have many illnesses due to stress from overwork, We don’t have enough time for our family and friends, our bodies, minds and souls.

I used to have a poster that said “It is not enough to be busy. The question is what are we busy about?” Are you proud of what you do? Would you do it even if you didn’t need the money, or are you working a job because you gotta pay the bills? If your answer is the latter, I hope that as of tonight, you’ll start asking, “Why must we pay to live on the planet we’re born on?” All change begins by questioning the status quo. Thank you.

cc 2011, Kellia Ramares-Watson

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Kellia Ramares-Watson

Kellia Ramares-Watson