Peter Drucker has been known as the “father of management.”  Drucker’s management strategies recognized talent and rewarded it.  He saw workers as assets and as part of a workplace community that deserved capital resources in order to accomplish ambitious goals that would reward employees and the company that they worked for with bigger profits that would enable bigger outcomes for everyone.  The company could win and so could the worker.  In The Practice of Management, Drucker wrote, “professional people should be given the incentive and recognition of professional status.” (1)

Drucker (1909-2005) lived a long life and in the 1990’s he noticed the importance of knowledge workers in a technology influenced economy.  The idea of the knowledge worker went along with his earlier appreciation for talented workers.  They were more specialized workers as technologies came to be a larger part of innovation in an information economy.  He imagined that knowledge workers would gain more influence in the workplace in deciding how work would be done.  They would gain more influence because only a knowledge worker would have the training, experience and know-how to accomplish the company’s goals.  But in the twenty-first century, as production has been eclipsed by speculation in the financialized economy, knowledge workers have lost professional influence.

Jobs in America have been deskilling since the 1980’s.  And many knowledge workers have lost their professional influence.  There’s been deskilling in a variety of professions.  For example, mandatory testing in public schools has led to deskilling in the profession of teaching.  Instead of teachers structuring their curriculum to empower knowledge workers of the future in analysis and independent thinking, teachers have been expected to teach for tests that demonstrate proficiency in producing good test results.  Students are supposed to excel in test taking (conforming to an external standard) instead of independent thinking.  Doctors are expected to follow a diagnosis tree that proves that they follow along with standards of care set by diagnostic trees (or risk a mal-practice lawsuit) instead of basing their diagnosis on their own experience with patients.  This can increase the number of billable tests and it can decrease the amount of time doctors spend with patients.  Linking patient care with more federal programs may lead to further reduction of a doctor’s opportunity to act professionally by using his/her own judgement.

According to one source, deskilling has happened because of a surplus of workers and also because of new technologies.  And deskilling shows a lack of coordination and cooperation between managers, workers and owners.  Some industries with less cooperation between owners and workers have included jobs in public education, the Postal Service, the insurance industry, jobs in air traffic control, longshoring, and newspaper printing.  Mobile capital also played a role, “The absence of national legislation which regulates capital mobility within and out of the United States has led to plant shutdowns and union membership losses.”(2)

“Golden handcuffs” express the idea that a person can get trapped in a job because starting over has too high a penalty.  For example, too high a cost in retraining education or in health insurance fees or in the loss of pay, all happening under an economic system with high taxes.  Economic instability can also make starting over too risky because demand can fall in any profession which was recently in greater demand.  A small capital holder has finite resources for educational retraining.

Yet according to Peter Drucker, “You are responsible for allocating your life.  Nobody else will do it for you….Effective self development must proceed along two parallel streams.  One is improvement–to do better what you already do reasonably well.  The second is change–to do something different.  Both are essential.”(3)  And the idea of “golden handcuffs,” doesn’t leave much room for doing something different.  According to Hannah Arendt in The Human Condition, people’s jobs are an opportunity for self discovery.  Inside our skills and accomplishments we discover new abilities and demonstrate our competency.  We as doers are delighted by what we can achieve (4).  Delighted accomplishment and self discovery are far from the idea of “golden handcuffs”!  The recent increase in U.S. worker non-participation and recent losses in productivity may indicate too little incentive in the workplace to retain workers and incentivize the best work.  Drucker would probably agree with the idea that a person’s delight in their work combined with capital rewards for excellence provide workers with performance incentives which can lead to better outcomes for everyone.  And “golden handcuffs” just aren’t any kind of incentive that can encourage good work and the best outcomes.

(1)  Peter F. Drucker, The Practice of Management, (Harper and Row, Publishers, U.S.A., 1954, first copyright), 154.

(2) Daniel B. Cornfield, ed., Workers, Managers, and Technological Change: Emerging Patterns of Labor Relations, (Plenum Press, New York, 1987), 346, 352.

(3)  Peter F. Drucker, Managing the Non-Profit Organization: Principles and Practices, (Harper Business, Harper Collins Publishers, New York, 1990, 222, 223.

(4)  Hannah Arendt, The Human Condition, (The University of Chicago Press, Chicago, 1958), 175 translation from Latin: “For in every action what is primarily intended by the doer, whether he acts from natural necessity or out of free will, is the disclosure of his own image.  Hence it comes about that every doer, in so far as he does, takes delight in doing…”

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Here’s a link to another person’s commentary regarding her job (an open letter she wrote to her CEO).  It got her fired.  It shows that the price structures in her life are completely out of line with what she can afford.  It also shows an economy out of balance with supply and demand market forces.  Zerohedge criticizes her for being unsympathetic to the corporation’s need to make a profit.  When I read the letter it sounds to me like an episode from the Twilight Zone.  But instead of the Twilight Zone, its just another day in the real American economy.  I invite you to read Talia Jane’s open letter to her CEO.  Here’s the Zerohedge link where I found the letter.

Money has three different purposes according to Barron’s Dictionary of Banking Terms:  (1) as a unit of exchange between government, businesses and people (2) as a unit of account that allows you to compare the value of different things and (3) as a store of value that lets you compare the value of an asset over time:  “Did it gain or lose value?”

There are three different groups that use money in three different ways: (1) governments use money as influence both abroad in diplomacy and at home to influence your vote or the outcome of an election; governments always want more money to give them greater influence (2) banks use money to make a profit on money exchanges that they facilitate; banks like an active money system with lots of kinds of money exchanges that happen all the time in ever greater quantities (3) individuals and small businesses use money to capture the value of their labor and production in the productive stream; these money users are the most vulnerable.  The purpose of banking regulations is to balance these three money interests; all three groups benefit from keeping a solvent banking system.

Monetary systems are the set of policies that establish the volatility or stability of currency and commodity values;  some examples include the U.K. sponsored strict gold standard (1819-1919), the U.S. sponsored Bretton Woods managed gold system (from 1944-1971), and the U.S. sponsored fiat monetary system (from 1971-present).  Imagine that all possible monetary systems utilize policies that create a continuum of risk and volatility.  On one end of the risk continuum is the least volatile and most stable monetary system that has sound money and stable currency and commodity values (like the strict gold standard); on the other end is the most volatile and least stable monetary system that has high government and private debt, and unstable currency and commodity values (like the current system).

Fiscal policy is how much debt the government carries and whether it tries to pay down the debt; also known as “tax and spend” policies.  During the classical liberal period (1776-1861) the U.S. federal government paid debts for the Revolutionary War by contibuting to the founding of the First Bank of the United States; to pay war debts from the War of 1812, the federal government helped to establish the Second Bank of the United States.  Both banks were dissolved after their charters expired.  During the modern liberal period (1861-1944), the Union side used income taxes to help pay for the Civil War (and the Sixteenth Amendment, ratified on Feb 3, 1913, established income taxes across the whole nation) and the Federal Reserve was established to oversee the banking system but it failed to prevent the Great Depression; Keynesian policies encouraged greater government debt without a formal plan for paying off the debt.  During the neoliberal period (1944-present), the monetarists imagined an infinite timeline for paying off debt by constantly increasing the money supply; monetarist economists encouraged an era of high government debt and high private debt.  The current national debt according to the debt clock at http://www.debtclock.org, is greater than 19 trillion dollars (thanks to Keynesian policies, that’s more than $57,000 per U.S. citizen) and the current private debt is close to 17 trillion dollars (thanks to the Monetarism, and that’s close to $52,000 per person).

Sources: Thomas Fitch, ed., Barrons Dictionary of Banking Terms, (Barron’s Educational Series, Inc. Huappauge, NY, 1990), 391.

Anat Admati and Martin Hellwig, The Banker’s New Clothes: What’s Wrong with Banking and What to Do About It, (Princeton University Press, New Jersey, 2013).

The Debt Clock, http://www.debtclock.org, accessed Sept 2015 and Feb 2016.

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It turns out that I have a different view of American exceptionalism as compared with some other reliable sources.  I went to Wikipedia.org to look at their entry on American exceptionalism.  And I looked at Andrew Bacevich’s book, The Limits of Power: The End of American Exceptionalism.  I also pulled up a variety of quotes about “American exceptionalism” which probably added extra flavor to this essay.

Wikipedia sees American exceptionalism as erupting from three attitudes.  The first attitude is about “Americanism,” and that comes from “liberty, egalitarianism, individualism, republicanism, democracy and laissez-faire for business.”  The second and third attitudes imagine a providential role for the United States.  The U.S. is to act both as a beacon and a leader of other nations.  The U.S. will be a political force that can transform other nations into the American ideal of government.  American exceptionalism also means having faith that the American system can withstand the erosion of power that has happened throughout history to other nations.

Both Bacevich and Wikipedia mention Alexis de Tocqueville in their discussion of American exceptionalism because de Tocqueville noticed the American preoccupation with “purely practical objects” and “commercial habits.”   He considered the American example to be unlike that of other democratic nations because even though each person was trying to get more economic success, they remained civilized.  He said that “the position of Americans is therefore quite exceptional.”  It may be that de Tocqueville invented the term American exceptionalism or that he used a term that was already familiar.

Andrew Bacevich believed that the American preoccupation with getting and having has become an obsession centered upon maintaining material wealth.  And the desire to always have “more” has caused harms.  He traced the expansion of the American military with the consumer culture of the twentieth century.  He noticed that CIA operations weren’t about setting a moral example but about obtaining a strategic or a material advantage.  Bacevich believes that American exceptionalism now has led America to political and economic profligacy.  It has led us into unjust wars, into enormous sacrifices of wealth and human lives.  “Cheap oil and cheap credit” have sustained a consumer economy that has led us into political entanglements in the Middle East.

I didn’t always give much credence to the idea of American exceptionalism.  But when I researched my book, Political Catsup with Economy Fries, I eventually found a political and economic relationship that was exceptional in the early Republic.  Here’s the arc of my reasoning:

No one knows the future.  History is made up of a series of contingent events that no one could have predicted.  Sometimes a new idea that seems insignificant at first can make a huge difference over time.  The invention of double entry bookkeeping in Italy in the thirteenth century was an idea like that because it was a crucial step in the birth of capitalism.  And the invention of capitalism and its combination with liberalism changed European economic fortunes away from feudalism.  As feudalism was displaced, a dynamic new relationship between the power of politics and the power of economics was born from fractional lending and capital investments.  The political dynamic of city states was swept away and nation states grew into something that the world had never seen before through improved diplomacy and banking.

Classical liberalism (1776-1861) was the first American political ideology.  And the other American political ideologies, modern liberalism (1861-1944) and neoliberalism (1944-present) weren’t really liberal at all.  Classical liberalism had roots in the Enlightenment and respected both rationalism and humanism.  Modern liberalism was pragmatic instead of rational and it was a mild form of socialism that used income taxation and regulation but didn’t nationalize industries.  Neoliberalism wasn’t rational either but opportunistic instead; it has been government sponsored corporatism and it has expanded taxation and regulation on small capital holders to provide advantages to global industries that cross national boundaries.

The origin of American exceptionalism comes from the classical liberal idea that political freedom requires economic freedom.  By doing that–keeping government from stealing the economy’s power, a revolution in the relationship between politics and economics occurs such that each becomes an independent center of power.  And that power creates a synergistic partnership that fueled American invention during the first and second half of the Industrial Revolution.  Allowing people to keep their economic wealth fuels innovation and spreads prosperity.  And that’s where American exceptionalism comes from–it comes from freedom.  Freedom from taxes and freedom from regulation under a limited government.  Unfortunately, in the twentieth and twenty-first century, neoliberals have been taxing and regulating small capital holders like crazy.  They want to destroy American exceptionalism and reduce the perturbations of technological change in markets.  For neoliberals, only the largest corporations should be free from taxation and regulation.

Wikipedia and I both put the origin of American exceptionalism in the early Republic.  But I emphasize free markets differently than the idea of laissez-faire which is sometimes interpreted to mean economic freedom for business only instead of for individuals and businesses.  Like Bacevich, I think that Middle East military operations have been a failure.  And I don’t believe that the U.S. should expect other nations to be like us.  But unlike Bacevich, I put little credence in the idea that ordinary Americans who wanted economic prosperity led us down the path of financialization.  Financialization probably got going in order to stimulate an economy harmed by fiscal debt in a political atmosphere that permitted even more fiscal debt.  People outside of government and banking didn’t have the power to influence Federal Reserve policies that led to financialization.

I don’t believe that heavy taxation and more than a million regulations are good for America in an atmosphere of unlimited fiscal debt.  And I believe that national debt approaching 19 trillion dollars harms the nation’s political and economic security.  And I don’t think that the neoliberal plan for expanding corporations across national borders is working to increase prosperity.  Foreign operations have increased global financial instability because of hot money flows.  There’s a lot of capital growth but declining wealth in the easy credit system of debt and malinvestment.  Isn’t it time to reconsider the ill-conceived neoliberal plan to globalize, financialize and neoliberalize the whole world?  What is the incentive to continue?

Sources: Andrew Bacevich, The Limits of Power: The End of American Exceptionalism, (Metropolitan Books, Henry Holt and Co., New York, 2008) 15-66.

Wikipedia, “American Exceptionalism,” enwikipedia.org/wiki/ American_exceptionalism, accessed 11 Feb 2016.

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