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Keith and Ray,
I can't buy the Economist article entirely. It seems to me that
but a year or so back, the issue of mega-corps' pension funds
being scammed and bankrupted by the mega-corps was to
become apparent. General Motors admitted to a 3.6 billion
deficit in it's fixed pension. Ford, Chrysler, & G.E.--all have
multi-billion fixed deficits. Now, I suspect that the corporations are
pressuring the government to spew out the message that it is all of
us
who have been in error, and will be punished. Billions were lost within
Enron, WorldCom, and Global Crossings, not to mention their bad
bank debts of half a trillion. Governments have been dipping into
many
departments' sacred savings. A few years ago Canada had a huge
surplus
in the Unemployment Ins.Fund. It was quickly commandeered for a
snowstorm disaster. It's OK for Vancouver Island Ferries to buy up
480 million dollars of ferries, then turn around and sell them a year
later
for a mere 19 million to the same company that built them. And, my
personal favourite, the 3.3 trillion the U.S. defence department
misplaced
due to a management crisis related to 9-11. How is the defence dept.
even allowed to accumulate that much money? Somehow, they know how
to accumulate it, but not put it somewhere safe. Still no proper
investigation.
I'm ranting on with these examples of corporate and government waste
to point out that as long as unaccountability is rampant, we
will pay in
countless ways. The Economist can be the government spokespiece
to frighten us into believing that the government has no alternative
but
to force more people into the work place. It's like the pending draft
for the U.S., except that in fact by forcing the elderly, the
handicapped,
the countless self supporting individuals who are not working, back to
or newly into work, the result will be a five-ten year money grab much
like gun registration--it will cost government much more to implement the
program than any long term benefits could possibly prevail.
There would be even more people to take care of because of the
stressors
to a fairly large, sensitive group. Many will just die off, and perhaps
that's the
idea. One can only guess these days. AIDS, SARS, cancers, and
pollution, not to mention bio-weapons accidents or what have you will
help the government out far faster in the long run. No worries for
babyboomers,
but for how much more stupid legislation they'll put up with before
they demand accountability. It's how the money is wasted, not that we
need more next generation drones. We need fewer people until we solve
some
really major environmental, economic and most of all humanitarian
issues.
Ray is forever reminding us we must invest in
people/culture/education
to create a good economy. Education that is not just English, Math and
computer skills. Though that worked before to help the multicorps gain
profits,
we can see that we're economically stagnant from too much linear
thought.
Investing in people & human dignity creates economy that is
self-sustaining.
Women having to spend half of their day searching for food and water is not
economic for the individual, for society or the nation, nor for humankind.
All the money that went into Bush's wars, along with the projected
related
spending could have been invested in education and alternative energy
research, and the new energy technologies the market place has been hoping
for would by now have infrastructure. But it's not about efficiency, it's
about
greed. It's not about human dignity, it's about slavery and genocide to
serve
greed.
Free trade develops out of investment in human dignity and
freedom.
Natalia
----- Original Message -----
Sent: Monday, September 22, 2003 5:57
AM
Subject: Re: [Futurework] 099. The
looming dilemma of the welfare state
But what kind of jobs? The kind of
"make work" jobs that exist in so many companies where when the times get
rough and business culture has stimulated over production the
companies can afford to dump people and keep going? This
already exists in America where the term "lean" means simply that they dump
the "make-work" and get on with life. Such "make-work"
constitutes a "tax" on corporations if the government insists on the
"jobs". What do they need all of those workers for?
You can't blame the workers if the jobs are not available.
The Economist and other magazines avoid
discussing this little "cul-de-sac" because they are caught in the
"values" trap that only rewards Utilitarian descriptions of work as meaningful
for a society. Your discussion of China avoids the fact that it is
"State Planning" and when the English do "State Planning" they are a bust at
it as is America. I believe your emphasis on Chinese Culture and
History is accurate but avoids the cultural implications
for Anglo conventional culture.
From what you describe, the Chinese are beginning
to raise expectations about quality of life and they are meeting those
expectations through intelligent planning without worrying about such liberal
values as individual freedom ala English culture. Until you
deal with those issues of what it is in the English conventional character
that cannot imagine successful State Planning the Chinese solution will not be
available.
Another solution is NOT to do all of those jobs
but to raise technology and industrial efficiency thus creating more
capital and taxing it sufficiently to give the individual the freedom to
survive and build in incentives for fulfillment that quality work can
bring. If you accept the realization that work is not bad but
necessary for growth and the enjoyment of life then you will have an active
work force. The problem for that work force will be Capital to
make the development of the work possible. When you begin to
attack that problem then people will develop their own work.
It would take an understanding that most welfare systems that encourage
getting off welfare create a job of the "welfare game" that is as much "work"
as real work. I've seen it many times here in the US where welfare
mothers who are single and need to be with their children spend all of their
time negotiating the system and feel that their payment is "earned" by their
effort. They do the same with Artists in the "Grant" culture
and Artists are no more appreciative than "welfare mothers" when they get
their pennies from the wealthy and the corporations. When we
don't get it after all of those "grant" hours we get more surly than
welfare mothers because we have invested all of that capital in
developing the product before we could even apply for the grant. It
would take a change in values about what constitutes valuable work and that
would mean giving up the 18th-19th century concept of Utility.
The current system from the 18th &
19th century Utilitarians is culture busting, society fragmenting
and personal development stunting. As a result you get all
of the societal education problems you describe and an unnatural definition of
work that more resembles the oppression of slavery.
That is what I see and would argue from the
perspective of a compulsive worker who has developed many companies and
activities and paid my own way almost from childhood with enough success
for sustainability but never having had enough capital to really make it
beyond sustainability. Where I am different is
my profession has no sustainable success but a 60% productivity lag out
in the world and thus the need for the "patronage/grant"
trap. That is the reason that we are convening our Florentine
Symposium conference in our Nation's Capital. The purpose is to
develop a model that begins with sustainability and that can even develop
prosperity to the cultural good of the nation. "Capital" is the
issue of work not whether jobs are set for people who have been deliberately
stunted by the system. You have to stop the philosophy that
deliberately stunts them in the first place before any progress is
possible.
Ray Evans Harrell
----- Original Message -----
Sent: Monday, September 22, 2003 3:41
AM
Subject: [Futurework] 099. The looming
dilemma of the welfare state
Now that larger numbers of people are living
into old age, developed countries are facing horrendous problems of paying
for their pensions and health care in the coming years. Whereas 30 or 40
years ago, when many European countries instituted state schemes that were
paid for by those at work, there were anything between eight and ten workers
for every old age pensioner. Today, the ratio is four, and by 2035 the ratio
will be two. Clearly, there is a financial, as well as a population, dilemma
looming. There is no way that ordinary workers in the coming years will be
able to afford the standard of life that they expect and to afford to
raise enough children to replace themselves (2.2 children per family)
and to pay for the pensions and health care of the growing numbers of
the old. Similar circumstances affect Japan, America and the other white
developed countries, formerly of the British Empire.
The Chinese,
being intelligent people, are aware of the inevitable catastrophe that faces
us and are intent on not falling into the same trap while they still have
time to avoid it. They are now reducing state social security. They
are insisting that those who are now working save enough for their own old
age. The Chinese people, normally high savers, are being enouraged -- if not
forced -- to save at an even higher rate instead of being tempted to spend
their way into high levels of debt as consumers do now in western nations in
the expectation that the state will look after them when they get too old to
earn an income. Furthermore, the Chinese Poliburo is also insisting that
pension funds invest the premiums they receive in far higher quality
investments than pension funds in the west have done hitherto -- those that
have cost British pensioners at least £20 billion in bad investments in
speculative equities in the last ten years.
A recent OECD report
suggests that western governments will have to think hard about this
problem. (One of the few politicians in England who did so, Frank Field, got
sacked by Tony Blair for doing so.) In the immediate future,
governments will have to start to encourage -- if not force -- many more
people to enter the work force -- that is, those who are of working age but
decline to make themselves available for employment. This growing segment of
the population is in addition to those who are unemployed but are willing to
work and help pay for welfare benefits and pensions for the
old.
Keith Hudson
<<<<
WORKING
CAPITAL
A manifesto to raise employment
As developed
economies emerged from their last deep recession in the early 1990s, there
was high anxiety about high unemployment. Thus in 1994 the OECD set out a
programme of labour-market reforms through which its member governments
might cut the jobless count. A decade on, rich economies are recovering from
another slowdown and unemployment is on the rise once again. On September
17th, in its annual Employment Outlook, the OECD issued a new
manifesto that reflects the anxieties of western governments about jobs. But
the aim this time is not just to reduce unemployment but to raise
employment.
Eh? What's the difference? Plenty, in fact. To be counted
as unemployed, people usually have to be part of the labour force: they must
be available to work and actively looking for a job. But there are many
other people of working age -- housewives, students, lone parents, disabled
people and early retirees -- who neither have work nor seek it. These are
termed the "economically inactive". Policies to cut unemployment aim to
lower it as a share of the labour force. Policies to raise employment aim to
raise the proportion of the whole working-age population with jobs, not just
by getting the unemployed into work but also by mobilising the economically
inactive.
One reason for setting the new goal is that OECD
governments have had some success in bringing down unemployment during the
past decade. Generally, jobless rates have fallen; in some countries,
notably Ireland, spectacularly. Some of the gains have been lost during the
recent global slowdown, but the setback has been less severe than in
previous downturns. Much of the long-term improvement will therefore prove
sustainable, argues the OECD.
However, the emphasis on raising the
employment rate also reflects new concerns, especially in Europe. A
particular worry in the early 1990s was that too many young people were
unemployed -- ie, looking for work but unable to find it. Now, governments
are concerned that there are too few young people in the labour market
overall. In the European Union, there are now four people of working age for
every person aged 65 or over. By 2035, this ratio will have fallen almost to
two-to-one. As it falls, the burden on workers of tax-financed pension
schemes will rise and public budgets will come under ever greater stress.
One remedy is to raise the employment rate and so increase the number of
people contributing to public pension schemes.
The rationale for
cutting unemployment is straightforward. If people who want to work cannot
find jobs, then potential labour resources are being wasted and taxpayers
are having to support the involuntarily idle. The rationale for raising
employment is less obvious. There are good reasons why students, for
example, are not employed. If people choose not to work and can support
themselves, what business is it of the state -- however cash-strapped -- to
try to push them into work?
One answer is that inactivity costs
taxpayers money, over and above what they must pay to support the
unemployed. Besides unemployment payments, there is a wide range of other
benefits, including support for early retirement, disability and lone
parenthood. In the EU, there is now one person of working age receiving a
benefit for every three people in employment. In America and Japan the
figure is one in five. In many countries a majority of people who are
neither employed nor in education get some form of income
support.
Springing the trap
This benefit culture is not
just a burden on the working taxpayer. It also generates incentives for
people not to work. In the early 1990s, the talk was of unemployment traps,
where high, long-lasting benefits dull the spur to find work. Now the OECD
highlights inactivity traps where people outside the labour force face
little financial incentive to seek work.
The substantial variation in
employment rates between broadly similar economies suggests that in some
countries there is plenty of scope for getting more inactive people into
work. In Iceland, for instance, 80% of working-age women are employed; in
Italy, the figure is a mere 42%. The report estimates that a convergence in
working patterns would raise the average employment rate (for women and men)
in OECD countries from 65% to 77%. Based on what the economically inactive
say about their willingness to work, the increase would be less, to
72%.
It is easier to identify the potential gain than to realise it.
The OECD sets out three main policies. The first is to make work pay for the
low-skilled. To encourage more of them into the labour market, more use
could be made of top-up benefits for those on low wages. Reduced payroll
taxes on low-paid jobs would enhance employers' demand for such labour. The
second is to remove other barriers to joining the workforce such as the
difficulties women find in juggling families and jobs; for example, through
subsidising child-care services. The third is to restrict the flow of people
on to out-of-work benefits and to encourage those already getting them to
look for jobs.
The main question is whether governments will have the
courage to implement the more unpopular reforms. By extending in-work
benefits, they will offer people a carrot to join the labour force; but as
long as people can draw welfare payments when out of work, there will be no
accompanying stick. The OECD calls for the removal of incentives to early
retirement, but this requires unpopular reforms, not just to pensions but
also to other benefits that allow older people to quit the
workplace.
Some increase in employment rates will occur anyway as a
younger generation of working women replaces an older generation that
largely stayed out of the labour force. But most countries will struggle to
raise the employment rate without harsh reforms. The OECD'S manifesto sets a
daunting challenge.
Economist 20 September
2003
>>>>
Keith Hudson, 6 Upper Camden Place,
Bath, England, <www.evolutionary-economics.org>
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