Social Concerns

To avoid depreciation of the human condition we are learning that the economic system must respect and account for its impact on ecological systems. We also threaten ourselves when the economic system fails to recognize its impacts on social systems.

Lack of Opportunities to Participate:

Humankind has survived because we are able to cooperate. We are not particularly fast or strong, our teeth are short and our claws are dull, yet, we work together and so have endured. For hundreds of thousands of years the communities where individuals looked after each other prospered. We hold this experience in our genetic cores as this simple experiment can demonstrate: do something for someone else with no thought of personal return and see how you feel about yourself and consequently about the world.

Without an opportunity to contribute to society, people are at risk. Not being needed or wanted is disturbing enough. Not being able to purchase essential food, clothing and shelter can be deadly.

Few people just roll over and die when there is no place for them to make a contribution and no income with which to pay for necessities. Economic stress leads to domestic tension and the temptation to break laws. Family violence, broken homes, alienation and despair present immediate difficulties as well as delayed reactions. The costs of delinquency, drug abuse, illness, crime, legal and correctional actions eventually have to be paid.

It would be far less expensive to acknowledge that people need an opportunity to participate so that they have the dignity of paying their own way. Actions and policies which diminish the possibilities for everyone to participate have to be recognized for the costs they incur. It may well have been efficient to have a machine do the work of two people when it freed those people to work on other things that needed doing, but when a new machine leaves people with nothing to do we become less efficient.

Our measure of well-being will not lead us to better times until it reflects the costs of unemployment. It is a sign of dysfunction when commentators celebrate stock market gains resulting from increased unemployment. Without counting the impacts on the jobless, the market says that when unemployment increases, people are willing to work for less, companies make greater profits and the stock market rises. Mistaking the tragedy of unemployment as good news is a recipe for trouble.

In What Determines Health?, a publication of Health Canada's National Forum on Health, Dr. William Avison states that "Unemployment has a pervasive and pernicious impact on health." Their survey of related literature confirms that "job loss is a significant factor in physical and mental health problems" and that "spouses of unemployed workers experience increased emotional problems. . . . children, especially teens, whose parents are unemployed appear to be at higher risk of emotional and behavioral problems." Furthermore the literature suggests that "recovery after re-employment is neither immediate nor complete."

Other studies link unemployment to family violence and other crimes.

A study done for the Joint Economic Committee of the US Congress in 1976 found that a 1 point rise in the unemployment rate-from, say, 5% to 6%-leads to, on average:

495 deaths from cirrhosis of the liver

648 homicides

920 suicides

3,349 admissions to state prisons

4,227 admissions to mental hospitals

20,240 fatal heart attacks or strokes

These are not statistics of well-being. If we are to avoid destroying ourselves, we have to distinguish between good and bad. Economic expansion which causes such suffering is not good.

As with the costs of material waste disposal, this human waste is expensive. If we open our eyes and acknowledge these problems, we would find considerable resources available to address them before damage is done.

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Sharing work and increasing the creative component of work are two ways to increase work opportunities.

Sharing Work:

Initially mechanization was tremendous. By harnessing the energy of falling water, wind, and eventually fossil fuels to power tools and do repetitive tasks, the amount of available goods mushroomed. This meant shoes, clothing, cooking utensils, and more and better tools for everyone.

Once the idea caught on, the innovations were endless. It was just a matter of time before industrialized nations were able to produce more than everyone needed. In the early 1900's this fulfilment of human need had already arrived. In the interest of spreading the available work around, the work week was reduced from 70 to 60 to 50 to 40 hours.

In the latter part of the 1920's even though the work week had reached 40 hours, increasing mechanization had again made unemployment a problem. It was proposed by the labour movement that the work week should be further reduced to 30 hours. The same arguments about sharing available work were used, but a new element entered the discussion: the benefits shorter hours provided to life outside of work. Free time was valuable in its own right: time to fix up the house, play with the children, picnic by the river and develop some personal qualities which never saw the light of day when all one's energy went into wage labour. The resolution brought about strong opposition from the managers of industry and of public opinion who launched a media campaign to discredit the movement toward shorter hours. The decision was made to address the problem of satiated human need by creating desire and encouraging waste. Instead of material security and leisure time we got advertising and obsolescence.

Shortly after the Second World War, retail analyst Victor Lebow wrote in the Retailing Journal:

"Our enormously productive economy . . . demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction, in consumption. . . We need things consumed, burned up, worn out, replaced and discarded at an ever increasing rate."

After fifty years of boldly treading the path of expanding consumption, we have discovered ecological limits. We endanger ourselves and the life around us with consumption and waste. Automation is again causing unemployment problems. Effective solutions will not be found in expanding consumption.

If we acknowledge that it is a basic human need to contribute to society through some sort of work, it becomes a responsibility not to take more than one's share. National accounts need to include measures of how much productive activity is available and how thoroughly it is distributed. Anders Hayden from 32 Hours for Full Employment reports that: France has introduced legislation for a 35-hour work week by January 1, 2000 along with significant financial incentives for firms that reach 35 or 32 hours. Italy is planning to make 35 hours the standard week by 2001. The Netherlands, although it hasn't legislated shorter hours, has since the early 1980s achieved a commitment by business, labour and government to negotiate gradual reductions of hours. Thirty eight hours has been achieved in all sectors, 15% of full-time workers are down to 36 hours, and some firms are down to 34. Average annual hours per worker are now the lowest in the industrial world, and unemployment has fallen from nearly 13% in the 1980s to below 5% today.

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Taking the time to do a good job and
enjoy the work we have:

Back in 1972 E. F. Schumacher wrote in his classic text Small Is Beautiful that we should be aiming to reduce the efficiency with which we produce goods. After showing how less than 4% of our collective time as a society is actually spent at materially productive work, Schumacher argues that if we increased this six-fold there would be . . .

" enough time to make a really good job of [one's work], to enjoy oneself, to produce real quality, even to make things beautiful. . . . No one would want to raise the school leaving age or to lower the retirement age, so as to keep people off the labour market. Everybody would be admitted to what is now the rarest privilege, the opportunity of working usefully, creatively, with his own hands and brains in his own time, at his own pace - and with excellent tools."

Schumacher's call for reduced productive efficiency is even more urgent today as the process of automation proceeds at an accelerating rate.

An employment efficiency tax would be another way to address the problem. Enterprises which produce X% of goods and services, but employ less than X% of the workforce to do so would be liable to compensate for the difference. The amount of the tax should be sufficient to provide for the needs of as many people as the enterprise displaces. Credit would be given for investing in ways that expanded durable employment opportunities.

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Failure to account for non-monetary
contributions to well-being:

Much of what makes communities successful is done by people for each other at no cost. This is sometimes called the informal economy. Raising families, caring for elders, voluntary community work, and much of the art and culture which put quality into everyday life don't involve money. Money, however, is the only measure of well-being recognized by conventional economics. By not recognizing the above activities, we invalidate them and this leads to negative consequences.

Many people talk about mistrusting authority, but in practice almost everyone has a profound respect for the legitimacy it bestows. As the prominence of market economics has grown, its measure of well-being has gained increasing legitimacy. Because voluntary activities do not register on the GDP scale, their value is doubted. People increasingly choose paid activities over voluntary ones, causing negative impacts on the well-being of families and communities.

The price of things has not always been the only measure of value, but over the centuries, this one-dimensional morality has grown out of proportion and now overwhelms all other values. (See The Evolution of Market Values.) As a result, the quality of our lives is reduced.

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Revaluing the Informal economy.

Sally Learner, from the University of Waterloo, has observed: "If there are going to be fewer secure, full-time, adequately-waged jobs in the future, justice dictates that we should not continue to penalize and stigmatize people who cannot find such positions. We must examine other mechanisms for allocating work and distributing income."

"Take care first of the least among you." Mahatma Gandhi

The idea of a guaranteed annual income has existed for some time. It would provide a minimum level of support for all members of society. Some studies suggest that if one counts all the expenses of welfare, health care, policing, courts and corrections that it would be considerably less expensive to ensure that no one ever reaches a state of desperation. The guaranteed income would make subsistence a right and remove the expense and degradation of a welfare system that tries to discourage people from applying.

Witnesses for a Sustainable Economy (WISE) is an organization dedicated to decoupling work and income. They would like to see us move from work based on fear to work based on caring.

In the present system, one either has a paying job or a marginalized existence. This creates a culture of fear: fear of losing one's job; fear of doing jobs so well that they don't need to be done any more; fear of not being able to work because of illness, accident or old age. Fear is an effective motive, but as a primary stimulus in our massively productive society, it is unnecessary and often counter-productive. Not only are there the dangerous consequences of unemployment which generate the fear, those who do have work are also affected. They often take on more work than they need, just in case; technical innovations are metered out a little bit at a time causing earlier versions to become obsolete, rather than just providing the best possible service. Durability and easy repair are avoided. And there are innumerable scams ranging from trickery to outright crime which are devised for fear of not being able to pay the bills.

In contrast, if the basic cost of living was one's birthright, we could all relax a little. When fear is no longer motivating us, the desire to be useful and needed would emerge from the shadows. People could offer their work as gifts. They could develop their unique talents, follow their inspirations and respond to the needs of the community around them.

The main objections to such an arrangement focus on motivation. Many people are so accustomed to living by fear and coercion that they cannot imagine people working without it. Who would collect the garbage or dig in the mines? If some jobs don't have anyone to do them, we would soon see if they were really needed or not. If they were needed, the prestige and other returns* for doing them would rise until someone filled the role. Rather than forcing the work on disadvantaged persons we would have to acknowledge the importance of the work and compensate for it, or find ways of doing what has to be done in a less distasteful way.

In a broader context, a guaranteed income could solve one of the most complicated problems on Earth. No matter how efficient we become we will never be free of ecological danger as long as our population continues to expand. In every case where population has stabilized, security in old age has played a prominent role. Without the fear of destitution, people no longer need to seek their security in having many children.

* Although it is not a part of the WISE vision, monetary compensation for work could still be a part of the system.

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Genuine Progress Indicator

It is cause for concern when we have to increase spending on security equipment, divorce lawyers and cleaning up toxic spills. Yet the present system adds all expenditures together to give us the measure of GDP. Having to defend ourselves against crime, the breakdown of families and environmental pollution indicate trouble, not well-being. The costs involved need to be subtracted from our measure of well-being if we expect an accurate indication of how we are doing.

The classic example of the difference between good expenditures and bad is the Exxon Valdez oil spill on the Alaskan coast. Two billion dollars were spent trying to clean up and minimize the environmental consequences. The money was spent in Alaska and circulated through its economy, showing up as a significant increase in their GDP. It would be wrong, however, to recommend breaking up an oil tanker off the coast of every community with economic problems. We must acknowledge for example that the well-being derived fromspending money on prisons is less than that derived from educational spending.

When trying to introduce values other than monetary prices into our accounting system, it can be difficult to produce numbers with which to work. Some things, like the cost of garbage, can be represented by associated costs. It is more complicated with unemployment. Figures can be derived by assessing the costs of increased health care, crime and other related problems, but how do we put a price on the emotional disruption of a child's development brought on by a parent's unemployment and consequent family strife? Some things, like the visual landscape, friendship and sense of community cannot and should not be reduced to monetary numbers; yet they have real value and warrant consideration in our assessment of well-being.

For the morally challenged, there have been concerted efforts to apply dollar values where none existed before. An approximation of value provides a more accurate view of reality than assigning anything without a price the value of nothing.

The Genuine Progress Indicator (GPI) is a measuring process developed by an organization called Redefining Progress. It accounts for unpaid work, adds constructive expenditures and subtracts destructive ones. The factors around which values are assessed in the GPI are: Crime and Family breakdown, Household and Volunteer Work, Income Distribution, Resource Depletion, Pollution, Long-term Environmental Damage, Changes in Leisure Time, Defensive Expenditures, Life span of Consumer Durables and Public Infrastructure, and Dependence on Foreign Assets.

According to the GPI, our quality of life has deteriorated at an accelerating rate since 1970. This measurement suggests that we are not making the best use of the knowledge and skill at our disposal and need to reconsider our management practices.

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The Evolution of Market Values:

In 1776, Adam Smith published The Wealth of Nations. It was the first clear explanation of capitalist thought and is the foundation of market economics. Monetary values were present before Smith's time, but they were moderated by traditional values. Smith himself was known in his own day for his book on moral philosophy: The Theory of Moral Sentiment. It was from his astute observations of human behaviour that Smith identified how markets and pricing work.

By clearly describing the market phenomena, Smith was midwife to its birth as an intentional process.

One key element was how, through the market, self-interest can benefit society. Smith suggested that a person interested only in personal gain can do more good for society than if he or she intentionally sets out to do good "..as if guided by an invisible hand." There is a fundamental truth in this. Two hundred years ago, there was little one could do to enrich oneself that did not benefit the whole by providing an increase of goods or services. The process proved extremely powerful. Not only were people pleased with the goods and services they could now afford, but those becoming rich from the process were extremely pleased and worked hard to press the values of self-interest and the market to ever greater heights. Selfishness went from a merely tolerated behaviour to become the foundation of economic thought and planning. Greed and covetous behaviour are now handsomely rewarded for stimulating economic growth. The greedier people are, the more they will do to make money and activate the economy.

In Smith's day, the population was familiar with the traditional mix of values that gave order to society. Self-interest was tempered by other values. As market values were adopted by wider and wider circles, the older values faded. Each generation has been a little more familiar with prices and a little less familiar with fairness and compassion. Two centuries later, the dominance of market economics is heralded as "The New World Order". Traditional values have all but disappeared in public life with the majority of decisions being based on nothing but monetary costs and returns. This one-sided assessment by business and government with the support of mass media influences what individuals value. It is not unusual for parents today, faced with the work of caring for their children, to be unsure if it is worthwhile. If it costs X dollars to pay for child care and one can make 3 X dollars working, market logic holds that it is better to job out the child care.

To compound the loss in quality of life that materialism has brought about, the invisible hand of the market has changed its nature. Personal gain no longer requires providing things people need. With the advent of mass advertising, fortunes are made creating demands for things which people would never have thought they wanted. And speculative financial trading enables enormous profit while providing little or nothing in return. In economic language, the invisible hand is maximizing its competitive advantage by capitalizing on its unique invisibility and picking pockets. The Genie of self-interest has been released from the confines of traditional social order. We are challenged to return some balance between it and other aspects of human nature.

To return value to voluntary work, the workers must feel that their efforts are appreciated. In earlier times those who raised children, provided entertainment, and otherwise served the well-being of their communities, were provided with food and shelter by those in the family, tribe or clan who produced such goods. Today, most goods are produced by industrial processes. Few of us know the people who produce what we need to live. What is needed in order to re-integrate voluntary activities is recognition in the currency of our times ­p; money.