Robert Reich’s article Work and Worth presents a ‘what’s it worth to society’ argument regarding what various people get paid for what they do. Reich’s argument centers on the societal value derived from the actual service provided. In short, the services provided by social workers who “ put in long and difficult hours dealing with patients suffering from mental illness or substance abuse” or “from personal-care aides who assist the elderly, convalescents, and persons with disabilities” or from kindergarten teachers who (as studies show) can increase the likelihood of children going to college and decrease the likelihood of them becoming single parents. These services while ever so essential to the viability of a society are remunerated well below the value they provide.
At the other end of the remuneration scale are people whose work involves making money with money—those owning or responsible for administering over capital such as bank and private equity managers or corporate CEOs—who receive enormous (even obscene) amounts of money for what they do. So the question is what do they do? What do they do that is so essential to society? What value to society is derived from what they do? Reich argued “I don’t mean to sound unduly harsh, but I’ve never heard of a hedge-fund manager whose jobs entails attending to basic human needs (unless you consider having more money as basic human need) or enriching our culture (except through the myriad novels, exposes, and movies made about greedy hedge-fund managers and investment bankers).”
Well I imagine some would say that Reich is against those individuals who have made it on their own—ya know those self-made wealthy folks who have all by themselves succeeded through hard work. In other words some might conclude that Reich is simply engaging in class warfare against the successful. Such arguments are essentially saying that teachers, social workers, nurses, healthcare aids, writers, artist—in short those who actually work in a job for a living making products and providing much needed services—don’t work hard at doing what they do? Perhaps the difference is that this latter group works hard in service to others while the former group works hard in service to themselves.
The Cause of the Inequality
This phenomenon of those who own or manage capital making excessively more than others who don’t is inherent in the very system of egoistic materialist economics: A system of economics wherein the purpose is to maximize one’s own material gain—without regard for one’s effect upon others now or in the future—rather than provide a valued service to people and society. The primary intent is acquiring profit for me, not providing quality products and services to we the people of society. As noted by R. H. Tawney (an economic historian and expert on modern capitalism) in his seminal work The Acquisitive Society “it [capitalism] divorces gain from service, and justifies rewards for which no function is performed or which are out of all proportion to it. Wealth in modern societies is distributed according to opportunity; and while opportunity depends partly upon talent and energy, it depends still more upon birth, social position, access to education and inherited wealth; in a word, upon property.” I must clarify that by function Tawney means “an activity which embodies and expresses the idea of social purpose.” In other words, when the work that one performs is done with the primary intent of meeting people’s needs in a sustainable way—that is without the prospect of diminishing our ability to provide to the needs for future generations—then the work represents function, making a valued contribution in support of the viability of society. What could be more important to society than products and services supporting our ability to continue to exist! Yet we esteem those who have managed to accumulate great sums of money through self-interest maximizing economic behavior that is often detrimental to, or at best minimal in support of, our viability.
In an egoistic materialist economic system such as ours according to Tawney “wealth becomes the foundation of public esteem, and the mass of men who labor, but who do not acquire wealth, are thought to be vulgar and meaningless and insignificant compared with the few who acquire wealth by good fortune, or by the skilful use of economic opportunities.” This statement applies without modification to American society in the 21st century. Worth in capitalist society has come to mean material wealth and those absent of material wealth are worthless earning society’s disdain.
In light of this, the increasing inequality resulting from material gains going quite disproportionately to the 1% (the capitalist class), and all the associated adverse effects to others, is not a chance occurrence but an inherent result of the system. With capital employing labor, with capital having power over labor then of course most if not all gains and benefits will go to those in the capital class and to the rest the burdens.
This is not uniquely American, though those in authority in the United States have taken it to a level not quite seen before. In fact the phenomenon addressed by Reich was fully described and analyzed about 100-years ago by Tawney. Although the society he addressed was not American society but rather that of the United Kingdom—the very economic power that preceded the U.S. in dominance—it is remarkably accurate and applicable.
Most assuredly history repeats itself when those in authority don’t heed its lessons as they adhere to the same worldview using the same way of thinking. But then again, in an egoistic materialist economic system such as we have why should those who benefit change anything?
I believe Adam Smith was right on at least one point when he stated, “where there is inequality a pattern of subordination and authority must be generated as a result.” In this system individuals become powerless as they are related to as objects—as labor and consumers—having only instrumental value in service to the system. I suspect many experience this quite regularly, if not daily.
For most, work has supplanted life since building a career has come to supersede developing one’s self more fully as a human being. Instead of being an activity that enables each of us to actualize our unique human potential, work has become an activity that sucks the life out of us. Adam Smith (in The Wealth of Nations) acknowledged that most would not gain in this system but the promise of such gain would sustain the industriousness of labor—the offer of the unreachable carrot that is in and of itself a stick. What a great system for those owning capital—one that requires people serving it and not it serving people!
A transmutation of the system at its root is what is needed, not mere trimming of a few leaves and branches. While legislating such things as a higher minimum wage, and forgiving student loan debt and/or more equitable tax laws will provide symptomatic relief for sure, the dis-ease generated by the system itself will continue to adversely effect the vast majority of those who don’t own or manage capital even though they labor, working very hard to sustain a living.
So when will change happen? It is pure folly to expect and thus wait for those at the top to envision and lead the change. The change, if it is to happen at all, will only happen when the work-a-day everyday people demand it and thus bring it about. In other words the change must be an organic change emerging up from the masses.
When a critical mass of people cease being apathetic and stop competing in the rat race then change will be probable. When people end their addiction to stuff, the very thing that is keeping the current system’s cycle turning—a vicious cycle that is the key component in the system’s design then the energy for change will emerge. When the materialistic value system ceases to be the system of orientation that guides people in their decisions and actions then the energy for change will emerge. When the nature of demand changes then a better future will be probable.
When Change is Probable
Change won’t be probable, and nothing will fundamentally change for the better for everyone in society, unless and until the intent of business (and of the economic system) significantly changes. Change will happen when business owners refuse to sell their soul to Wall Street and instead commit to a purpose of providing quality products and services that meet people’s needs in a sustainable way. When those in authority within in new business enterprises reject the materialistic worldview as the paradigm informing their decisions and actions and embrace a living systems worldview then the viability of future generations will be ensured. When managers provide the space for people to be humanly productive—not just materially productive—thus facilitating the unfolding into our life our very unique human potential. When the work of managers and employees alike involves the integration of meaning and means—when organizations come alive—then the needs that support our wellbeing and development, as human beings, will be served.
Because the conduct of business—economic theory and practice—touches much of life in society, if we continue with a materialistic worldview–if we continue to follow the maxims of egoistic materialistic capitalism–we will diminish our viability as a society, and even as a species. We will destroy the life supporting capabilities of Nature and of our selves. We cannot possibly progress as a society and as a species when we are increasing our ego-strength and, correspondingly, relinquishing our uniquely human powers all in service to the authority of the economic system. An egoistic economy, by definition, is self-serving: It serves, but only itself. Cooperating with and maintaining this system to make it work, in the end we all lose.
But when value comes to mean human value and all people are worthy then change will have happened and we all win! What’s this worth?