William Greider Article in The Nation - May 25 Issue

[johnkarls]

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The Nation – May 25, 2009
The Future of the American Dream
By William Greider

As Franklin Roosevelt understood, Americans will postpone immediate gratification and endure hard sacrifices--if they must--so long as they are convinced the future can be better than the past. But we face a far more difficult problem at our moment in history. What do you promise people who have been told they can have anything they want, who are repeatedly congratulated for living in the best of all possible circumstances? How do you tell them "the good times," as we have known them, are not coming back? Americans need a new vision that helps them deal with reality, a promising story of the future that helps them let go of the past.

Here is the grand vision I suggest Americans can pursue: the right of all citizens to larger lives. Not to get richer than the next guy or necessarily to accumulate more and more stuff but the right to live life more fully and engage more expansively the elemental possibilities of human existence. That is the essence of what so many now seem to yearn for in their lives. People--even successful and affluent people--are frustrated because the intangible dimensions of life have been held back or displaced in large and small ways, pushed aside by the economic system's relentless demands to maximize yields of profit and wealth. Our common moral verities have been trashed in the name of greater returns. The softer aspects of mortal experience are diminished because life itself is not tabulated in the economic system's accounting.

The political order mistakenly accepts these life-limiting trade-offs as normal, as necessary to achieve "good times." At earlier periods of our history, the sacrifices demanded by the engine of American capitalism were widely tolerated because the nation was young and underdeveloped. The engine promised to generate higher levels of abundance, and it did. But what is the justification now, when the nation is already quite rich and the engine keeps demanding larger chunks of our lives?

What families, even those who are prosperous, typically lose in the exchange are the small grace notes of everyday life, like the ritual of having a daily dinner with everyone present. The more substantial thing we sacrifice is time to experience the joys and mysteries of nurturing the children, the small pleasures of idle curiosity, of learning to craft things by one's own hand, and the satisfactions of friendships and social cooperation.

These are made to seem trivial alongside wealth accumulation, but many people know they have given up something more important and mourn the loss. Some decide they will make up for it later in life, after they are financially stable. Still others dream of dropping out of the system. If we could somehow add up all the private pain and loss caused by the pursuit of unbounded material prosperity, the result might look like a major political grievance of our time.

More important than all the other losses is that people are also denied another great intangible--the dignity of self-directed lives. At work, at home and in the public sphere, most people lack the right to exercise much of a voice in the decisions governing their daily lives. Most people (not all) are subject to a system of command and control over their destinies. They know the risks of ignoring the orders from above. Not surprisingly, many citizens are resigned to this condition and accept subservience as "the way things are," and their lives are smaller as a result. Many find it hard to imagine that these confinements could be lessened, even substantially removed, if economic organizations were informed by democratic principles.

What's needed in American life is a redefinition of "life, liberty and the pursuit of happiness." Given the nation's great wealth, the ancient threats of scarcity and deprivation have been eliminated. Yet people remain yoked to economic demands despite wanting something more from life--freedom to explore the mysteries and bring forth all that is within them. Collectively, Americans need to take a deep breath and reconsider what it means to be rich.

The challenge, as John Maynard Keynes wrote long ago, is how "to live wisely and agreeably and well" once desperation and deprivation are no longer the driving forces of our existence. As the British economist predicted, the old economic problems of scarcity and survival have been solved, at least for developed nations. People should put aside the old fears, Keynes suggested, and learn how to enjoy life. Free of want and worry, we face a new challenge: to discover what it means to be truly human.

That wondrous pursuit is what I recommend as the alternative to our old definition of progress. In the years ahead, Americans will suffer unavoidable losses of familiar pleasures and be compelled to alter some deeply ingrained habits of material consumption. These painful adjustments can be endured if the people are confident the country is progressing toward a more fulfilling transformation. The essential trade-off could be expressed on a bumper sticker: Smaller Cars for Larger Lives.

To accomplish this sweeping change, people need power--more power to say what they think without getting fired and to make choices that are more in line with their values and aspirations. They need more security--which would give them the self-confidence to explore new options without dooming their families to poverty. People need more philosophical space--the room to decide what "success" is in their own terms and to make their own "mistakes."

We should start thinking of living larger lives as a fundamental human right and begin throwing off the confinements imposed on us by the old order. Since scarcity has been vanquished, the collateral suffering manufactured by the economic system should also be declared unnecessary--even immoral--in a healthy and wealthy society. A minority of Americans, people blessed with special talents, wealth or status, may already enjoy this level of freedom. But as rich people can attest, wealth does not exempt one from the human struggle, the search to find one's groove in life, to draw forth one's unique purpose and strengths. That treasure cannot be bought. It has to be earned.

Government can do many things, but it cannot transform the society. Only the people can accomplish that. They change the fabric of society gradually and in unannounced ways with their behavior and creativity, guided roughly by their enduring moral values. If government set out to impose transformed values on the rest of us, the results would be oppressive and wrong. During the last generation, the coarsening pressures of the market system did a lot of damage to our society, but they did not succeed in stripping Americans of what they believe. Most people still know the difference between right and wrong, and despite the obstacles, they struggle to live accordingly.

What government can do is construct the rules, legal premises and supportive platform that enable people to pursue social transformation more aggressively. Our inventive popular culture--the marvel of the world--does this in freewheeling ways. With a little help and less interference from Washington, Americans can similarly reinvent the society. An era of innovation and random experimentation would draw upon this same spirit, the life force of Americans, the people who are practical and idealistic.

One important condition government can provide is the platform of "essential needs" that will give everyone more security and therefore more confidence to explore new and different choices. We could dust off Roosevelt's "second Bill of Rights" and address its unmet goals. FDR recognized in early 1944 that Americans were weary of the sacrifices imposed by World War II and so he announced a broadly conceived promise. After the war is won, he said, the country must construct a new set of meaningful "rights" for all, everything from health and education to work with remunerative wages. His vision of the future became the postwar political agenda of the Democrats, and in large measure the promises were kept. I think Barack Obama may eventually face a similar necessity to spell out the vision of what a transformed America can become on the other side of the ditch we are in. Some goals are already well understood. The thick backlog of legislative proposals that have been repeatedly blocked by powerful interests during the last generation should be revisited in order to establish concrete rights and protections for families and children, workers and employees. The extensive family-centered social systems in Europe suggest opportunities for US reforms. Reversing national economic policy on work and wages is, likewise, a necessary step toward healing the society. If government constructs a rising floor under wage incomes, starting from the bottom up, people at every level will be liberated to pursue creative social invention. In the face of deep recession and rising unemployment, there is not much anyone can do at present to boost wages. But government can make this promise for the future. When the economy recovers and unemployment declines, the minimum-wage floor will rise in step, and other work-improvement rules will kick in. Congress can enact the laws in advance and time their effective date to economic conditions.

Beyond these essential steps, there are taller mountains to climb. We can envision loftier goals that require social imagination and then practical testing before gaining broad agreement and implementation. This is where we get to dream a little. Can we imagine, for instance, a country that is virtually without poor children? A nation in which every child grows up entitled to explore life's possibilities, free to go anywhere in this diverse country and feel at home? Can we imagine an economic system that is not organized on the principle of command and control, on the few giving orders to the many? Can we envision an economy designed to serve the society, rather than the other way around? Some will say this is an idle daydream. I say it is our birthright, our inherited privilege. We are Americans. We get to think larger thoughts about our country and ourselves. Daydreams are a seedbed for the possible. We can argue later about how to achieve them.

To encourage people to free up their imaginations, I add a radical proposition: instead of asking what will be good for the economy, government should start by asking what will be good for our people and society. Instead of thinking first about how to help businesses flourish, ask what people need in order to flourish in American life. Essentially, I am suggesting a reversal of the usual process employed by the system. In its efforts to take care of business, the social question is often never asked. Here are three big ideas--favorite daydreams of mine--to illustrate what it means to put the people first.

First, every American who is willing and able ought to have the right to a job that pays a livable wage. If the private sector will not provide these jobs, then the public sector should be the employer of last resort. Franklin Roosevelt described the goal--the practical equivalent of full employment--in his "second Bill of Rights," and the public has overwhelmingly endorsed the principle ever since. In recent decades, the economy has drifted even further from the promise, creating in its place a broad labor market of the underclass--temporary jobs paying unlivable wages and often filled by undocumented immigrants. Guaranteed public jobs paying more than the minimum wage would permanently and automatically stabilize the economy, swelling the ranks of public workers in recessions and shrinking them when private jobs become more abundant. Instead of punishing the working poor most severely in downturns, as the system does now, the government would redistribute the costs of recession so that all taxpayers would share the burden as a public obligation.

The social consequences of a change like this could be profound: it would be a direct assault on the poverty and hopelessness of inner-city precincts and decaying rural towns where the same pathologies ravage families and young people without regard to race or ethnicity. Real jobs would mean that reliable incomes would flow into those communities, providing a concrete basis for economic development and neighborhood restoration as well as the redemption of damaged lives, especially the prospects for young people.

Obviously, permanent public employment--jobs for all who need them--would be enormously expensive, but the fulfillment of large goals can begin with smaller steps. The government might set some guidelines, then sponsor 100 or 200 projects sited around the country and invite impoverished communities to compete for those in their area. What work needs to be done? What skills and equipment are required? People can answer those local questions for themselves. Some initial efforts will fail, but the country will learn from the mistakes and from the successes.

The second idea is that everyone who works, whether in the front office or on the assembly line, deserves to "own their work"--that is, the right to exercise personal responsibility for what they do and enjoy mutual respect and the capacity to contribute and collaborate in important decision-making within the firm. These elements of individual voice and status are critical to satisfaction in one's work, but democratic qualities are largely missing from American workplaces. When most people go to work, they submit to a master-servant relationship in which a few people determine everyone else's behavior and most employees are denied a voice in the matter and have no right to object or criticize. These confinements are especially strict for lower-wage workers but often extend far up the occupational ladder to include middle managers and professionals.

Breaking free of this rigid top-down system and liberating workers to enjoy the freedom (and responsibility) of being human would represent a profound change for our society, a great leap forward in our social development as a people. As it happens, the shift to more cooperative and respectful workplaces can also yield economic gain for the nation. As numerous academic studies have shown and outstanding companies already understand, collaborative relationships between top management and the workforce are more productive and profitable. Instead of being ruled by fierce conflicts, the different elements within these companies share information constantly and steadily improve by learning from their mistakes. The profits are shared because the workers are also the owners.

This reorganization of employment and ownership cannot be commanded from afar, because it requires everyone--workers and bosses--to change, to put aside old hostilities and begin trusting in more open communication. That change is very difficult for people to achieve in any setting. Government can encourage the pursuit, however, by setting out some incentives and loose guidelines for reforming work. One of the most promising routes to change is the employee stock ownership plan that invests everyone as co-owners with the same economic incentive--sharing the returns from self-improvement. Some 11,000 companies--mostly smaller businesses--are organized this way, and workers accumulate capital savings in addition to their pensions. Employee-owned companies, however, must also make internal reforms to establish mutual accountability and honest communication if they want to gain the full benefits of having worker-owners. The concept may seem alien to many, but its core assumptions are very American: a practical belief that equality and liberty can be present in our daily lives.

The third idea is that to lead the way for social values, the economy needs a new, reform-minded business organization--call it a social corporation--that competes with old-line corporations adhering to their narrower values that enforce the supremacy of profit over society. The social corporations could be chartered by government and given certain benefits. To pursue a different set of values, they may need some protections in their infancy and perhaps modest start-up subsidies, and exemptions from the usual rules, but most of them would be independent and privately owned. They would produce needed goods or services that the private sector won't provide and sell them at a price most people could afford. They might, for instance, fulfill the market for very cheap computers and other high-tech devices that are stripped of the bells and whistles that run up the prices. The social corporation would be a working model for how the social imperatives--environmental values and equitable relations with workers and communities--can be integrated into firms and efficient production processes. Business lore and economic dogma say this is impossible. Social corporations would set out to prove them wrong. The purpose of this competition is not to replace orthodox companies but to put real market pressures on them to change. Creating social enterprises, including nonprofit cooperatives, can liberate us from the political vetoes business interests exert over promising new ideas.


Another crucial objective is to limit the size of business organizations, including social corporations, in line with E.F. Schumacher's famous dictum "Small is beautiful." The bloated scale of America's leading corporations has become a major impediment to innovation and experimental reforms, not to mention a corrupting influence in politics. Americans are learning anew from the financial crisis why it is a mistake to let private firms concentrate more and more power under one management. The failure of megabanks that the government helped create threatens our general well-being, and then government bails them out with taxpayer money because they are "too big to fail." Revived antitrust laws could simply prohibit the concentration of economic power as a threat to social values as well as to healthy competition.

Economic power must be dispersed in this broad nation, especially in banking and finance. We need many more financial intermediaries to allocate capital and credit and demonstrate more respect for society's needs. That includes regional banks, which are naturally closer to the customers. It means supporting and protecting the small and adventurous financial firms founded on commitments to social responsibility. They put capital into companies that have embraced environmental concerns, have equitable dealings with workers and communities and practice high-road behavior. On many fronts one can see the gradual advance of "social responsibility" in US capitalism. The pace is too slow to attract much political respect, but the current crumbling of the old order will clear the way for more dramatic progress.

These ideas may seem distant from the usual chatter of policy thinkers, but they offer alternatives to an economic system that has abused rather than served American life. I know a lot of smart people across the country who are pursuing these ideas in different ways--they constitute the beginnings of formations of citizens that can disrupt inert politics and overcome the timidity of incumbent politicians. These agitators are engaging in action for the long run, and the fainthearted need not apply.