Since studying economics in college eons ago I have from time to time written about what I call “capitalism’s flaw.” In our free enterprise, market economy one’s position in society is largely determined by his job and wealth. The result is that we have one of the most flexible and mobile societies, that is at the same time crass in that lucre is the test for moving up or down.
Having lived in many other cultures I find it amusing to find in any gathering of people from many lands, e.g. a diplomatic cocktail party, how easy it is to spot the Americans. While most on introduction to a new person ask “what is your name, where are you from, where do you live, who is your family,” the first thing an American asks is, “What do you do?” The reply immediately classifies the person in the American’s mind. My reply to the question, “What do you do?” is always, “Anyone I can,” or, “As little as possible.”
Our job based society is all well and good while we have a growing economy that steadily creates sufficient jobs for new comers to the social race. However, the flaw lies in the steadily declining need for new workers. At the beginning of the 20th Century over half the US work force was in agriculture. By the end of the century less than 4% was in agriculture. The slack was taken up by massive shifts of workers to the manufacturing sector. However, manufacturing peaked with some 25% of the work force and has since that high point steadily declined to maybe 13% today.
The point here is that less than 20% of the work force provides a surplus of food to eat and manufactured products. That would leave 80% without a means to enter the society in which your job defines your status in the society. As it now stands, agriculture and manufacturing cannot and will not provide enough jobs for everyone.
Thank God the service sector has managed to keep creating new jobs to fill the gap and today over 80% of our work force is in the service sector. However, now that unemployment has reached over 9%, which is rapidly becoming the “new normal,” the service sector may not be able to take up all the slack and we will have many that will be left out of our society based on “what you do” and not “who you are.”
And while your job determines your social status, it also determines your share of the output of our economy. Socialism had an answer for this since it said you would receive according to what you needed. Capitalism says your share of output is based on your input, thus no job, no input, no share of output.
I guess this all of this is reflected in a sign I saw held by one of the “Occupy Wall Street” crowd. The sign said, “I have a degree that put me deeply in debt, where is my job?” The easy answer is the old maxim, “The world does not owe you a living.” But the question is not just about making a living, but, more importantly, about how one enters society. Not having a job does not just mean having to rely on others to stay alive, but meaning you have no place in our society. We lessen this angst by extending school years and retiring earlier, but it is still a flaw in our economy and society.
Time to reconsider our whole approach to our economy, society and way of life.
Comments are closed or deactivated
I wish I had a new approach to reconsider!
I do recall being put into my place by the American ambassador upon being introduced to him when I first arrived in the Philippines as a Peace Corps staff member. He asked what had I been doing before coming to the Philippines. I answered proudly “a high school history teacher.” (Two years earlier I had left international business to teach.) His distainful response was enough for me to stop saying ‘high school teacher’ and reply ‘international businessman.” Yes, we do tend to pigeon hole people based on job and salary.
By the way, I’m sure that the use of ‘his’ in line three was unintentional.
I liked this. Down to brass tacks. No abstractions but commonsense. However, how can America generate the jobs that are needed? Stop allowing China’s cheap manufactures goods from entering America, maybe? What’s your recipe?
When last in NYC I went into Macy’s and bought a shiort. Later I realised it was ‘made in China’. It is not so good, by the way.
The people at Time magazine must be reading my blogs as well. The latest issue leads with, “Can You Still Move Up in America?” I have not read the article but did hear a summary from their chief editior. They use historial data to show that it is harder to move up the social ladder now than before. The main danger lies in coming to a point where we no longer believe that we have the opportunity to move up.
My piece addresses a basic problem for social mobility in the USA. Our mobility is based on income and job. We have a problem in that our economy does not create enough jobs for all who seek them. No job, no income, no status in the society. My answer is, not to create more jobs, but to seek a new base for social mobility.
Frank We must compete for exports in services, not in manufactured goods. In short, do American parents want their children to be doctors or assembly line workers?