Machine Age Liberals

I am having a perplexing conversation about values in another posting. Liberals favor top down, rules-based programs that apply to groups. I prefer a more fluid society based on individuals with shifting relationships. Their dominant paradigm is the machine; mine is the relationship. It is the past versus the future. Old style Social Security versus entitlement reform provides an excellent example.

Most of our social programs were created in the machine age and are run by machine bureaucracies in the traditions of scientific management. Social Security, which traces it lineage to 1935 and before that to Otto Von Bismarck’s Germany, is certainly that sort of paradigm. People pay in according to their classification and receive payments according to their classification. Everything goes up through a bureaucracy and then down to the recipients. There is no interaction among the recipients and no account is taken of their differing behaviors, attitudes or requirements. If they meet the broad classification of the class, they are included. The only way to opt out is to die, which triggers exactly the same response in the machine bureaucracy no matter who you were or what you did. Everybody gets that $255 death payment, whether you need it or not.

The machine bureaucracy and the organization that they support can be very good. They are phenomenally efficient in doing the task they were created to perform. But they do not adapt well to changing conditions. Again, Social Security is a good example. It was created as a supplement to people in old age. It set the retirement age at 65, at a time when life expectancy was less than 63 and it presupposed that there would always be lots of workers to support each retiree. In order to sell the program to the public, FDR called it an insurance system. It was never that. It was always a sort of Ponzi scheme, but the massive influx of young workers resulting from the baby boom swelled its revenues beyond FDR’s wildest dreams. Talk about good luck. With all that money available, “generous” citizens anticipating retirement voted themselves and their parents greater and greater benefits.

The baby boom stopped abruptly in 1962. Demographics is as close to destiny as is possible in society. Everybody could do the math, but nobody liked the answers. They just kept fueling the machine and the machine kept running. It can run for a few more years before it needs a new engine.

Franklin Roosevelt and Otto Von Bismarck were children of the machine age. The structures they faced were machine age structures. Masses of low or semi skilled workers labored in large organizations. They had few options and society had few options. Societies of the 1930s were much poorer than ours. Workers could rarely accumulate enough wealth to withstand the vicissitudes of fortune. Most families did not have bank accounts, much less own stocks. They did not own cars. Homes were small.

Things have changed some. Since the 1930s our per capita wealth has grown by about 250% (adjusted for inflation). Most adult workers in 1935 has less than an 8th grade education and only 5% were college graduates, compared with today when nearly 90% of the workers are HS graduates, more than half have attended college or technical school and nearly 30% are college grads.

What do we have? We have systems and machine bureaucracies designed for the American past tasked with solving the problems of the American future.

More and more a relational paradigm is supplanting the machine bureaucracy in our society. Instead of top down rules based organizations, we work in networks. Instead of hierarchy, we have relationships. Instead of standardization, we have mass customization. There are relationships among the parts and responses are different depending on the conditions. Our organizations are more adaptive to change and so are they people in them.

We have this everywhere except government. The “conservatives” are firmly in charge in most governmental organizations. But what they are conserving are the traditions and forms of the machine age welfare state. It is like the 1935 Ford. As much as we might love that old machine, we have to admit it is really not well suited to satisfying today’s requirements. It won’t run well on unleaded gas, the tires wear out really fast and you need to fix or repair it daily.

We need a more nimble system, one that better harnesses the skills, energy and intelligence of the participants, one that is more in tune with the new competitive world economy. In the machine age, the boss made the policy and everybody followed the rules. The company took care of the workers (or not) but it rarely asked their opinion. The workers carried out tasks. They were the hands not the head. You cannot run a successful organization like that anymore. A workforce with less than an 8th grade education responds differently and has different needs than one where most people have attended college or technical school.

The machine age structures served us well in many cases. We will still want to maintain some of them. No change should sweep away all the old structures. But we do need to recognize the changed nature of our society and adapt to it. It is not 1935 anymore. We need a new deal if we are going to achieve the great society we are capable of building on the new frontier. We need the flexibility of an ownership society.

Posted by Jack at November 13, 2006 8:12 PM
Comments
Comment #194923


From under the bridge: Jack: You are right, this is not 1935 and hopefully my kind will not allow your kind to do it to us again. Now, 1929 that was a good year. What are the odds that 1929 will happen again if we privatize S.S.?

Posted by: jlw at November 13, 2006 9:19 PM
Comment #194925

jlw

W/o the extreme tightening by the Fed & the restrictive Smoot-Hawley tariff the depression would not have been so deep. Beyond that, the New Deal never did end the Depression. WWII was required. I am not sure a world war was part of the recovery plan.

All that said, my point is that in 1929 they were both your kind. They all believed in those machine age nostrums. I have moved on. You might consider it.

BTW - I can guess what kind you think I am (of course you are wrong) but what kind do you think you are? Just guessing on that, all in all, I would rather be the kind you think I am than the kind you think you are.

Posted by: Jack at November 13, 2006 9:37 PM
Comment #194928

Jack, Ownership society, isnt that just another name for “winner take all” society? What is the difference in the the Ownership society you recommend and the old gilded age society?
The fact is in order to be a winner in the consumer driven ownership society we must all continue down the same path of over comsumption of energy and resources.
In a time of such rapid changes and the accompanying upheavals perhaps we should look at a much more substainabile economic model and throw out the consumer driven model with the other remenants of the machine aqe.

Posted by: j2t2 at November 13, 2006 10:26 PM
Comment #194931

Our social programs are broken and have a date with self destruction. And our political parties are demagoguing the issue and refusing to fix them.

What is the democratic parties plan for fixing social security? None. They are opposed to a fix and they wrap that in the words they will “protect it”. As we move toward 2 payers for each user, there is no “protecting” it. It has promised more than it can deliver, now it needs to be fixed.

As I listen to the socialist board liberals I’m coming to realize that the dmocrats will not be balancing any budgets, not be fixing social security, nor medicare. Oh yes, they are all for creating another huge, budget breaking social health care program…and are refusing to fix the existing budget breaking programs that need to be fixed.

Lets get first things first. Lets FIX social secruity, fix Medicare. Then and only then determine what a national health care plan for those without would look like. First, SAVE OUR NATIONS ECONOMY by fixing the existing programs that are going to strangle it.

Will this happen in Nancy’s first 100 hours? First 100 days? First two years? I’m afraid not. Nancy is about spending and taxing not fixing.

Posted by: Stephen at November 13, 2006 10:43 PM
Comment #194932

j2t2

You also are the victim of machine age thinking. The Gilded Age was 100 years ago. The conditions that created & the society around it are changed. Read about the workforces of the 1930s. It was even less wealthy and less educated in the Guilded Age.

Financial markets have been revolutionized. Ownership is widespread and so is access to wealth. The government is a bigger part of the economy. Communications have changed.

The ownership society means that most people have wealth. The government helps individuals gain wealth. The winner does not take all. All are winners.

I am not advocating zero government. But if government is to “help” people, it should be to help them help themselves.

Think of the failed government policies of the Great Society. They destroyed wealth. They made government help contingent upon people NOT having wealth. An ownership society helps build it.

A good and old example is deductions for home ownership. Renters complain that it is unfair andd if you mean unequal it is that. But it encourages good behavior by the government in effect matching some individual thrift.

The same can be said of TSP type savings accounts. The individual saves X% and the employer (or tax credit) matches y%. This is like teaching the man to fish.

Protecting income feeds a man for a day. Protecting wealth can feed him for a lifetime.

Wealth, BTW, is physical and human. Education and skills are human captial and a type of wealth we should also develop.

Posted by: Jack at November 13, 2006 10:49 PM
Comment #194935

Jack: My kind are the blue collar workers that built the highways, the bridges, the powerplants, the factories and the products that made this nation the greatest and most admired nation on Earth. We did this despite the blood sucking leaches that have done nothing but grab as much of the wealth, that we helped created, for themselves and their offspring. If I had my way, I would shut down the stock market, take the leeches money away from them and tell them to get a job. If the unpatriotic capitalists have their way, the American Workers will be raking leaves, washing dishes and flipping hamburgers if they are willing to work for less than the illegal immigrants. Our troops will be using M1 Mao tanks and Gong Dong multiwarhead Peace Maker Nuclear missles.

Posted by: jlw at November 13, 2006 11:17 PM
Comment #194936

SS is nothing more than a means for democrats to gather more money for entitlement programs.

Railroad retirement is very similar to SS, except for the fact that a two tier payment is taken out of employees payroll, instead of one. The difference is (even though the feds have control of RR), the money has actually been invested over the years and the fund is very solvent. In fact, if no more money was paid into the fund, it is solvent for the next 75 years. The other difference is that the dems have not been able to raid the fund, at least not since the days of JFK. Of course, the money taken out was never repaid.

It is interesting that Al Gore always spoke of a SS locked box, as if the money taken in was actually in a fund. Of course this was nothing more than a lie and scare tactics against those on SS. I’m sure that most baby boomer americans would be excited at the amount saved if all the money they had given SS had been invested into a 401K. Just think of how soon they could have retired.

Of course this is one person’s opinion.

Posted by: BP at November 13, 2006 11:24 PM
Comment #194939

Jack, yes I still think machine age, because I am not sold on the Ownership society of which you speak. Why, because I have a strong distrust in the repubs being able to do anything positive, based upon their record of late. The ownership society is still suspect as just another gilded age to us working class types.

I agree with you that the machine age, at least in this Country is rapidly disappearing and the Information age is upon us. That being said it still appears that most people do not have wealth, in fact wealth is concentrated at the very top of our society financially speaking.

As part of the Ownership society universal health care, social security insurance, and other safety nets should remain in place. Change them to suit the times only after much thought and debate, not for ideological purposes.

If all Americans are to participate in the Ownership society the playing field will need to be levelled somewhat. Why dont we add to the social security program by giving a stake to those newborns coming into the world, say 100k in the bank to start on the right track. Give em a chance to own something. Or maybe 200k at the time of completion of high school and 2 years of service to the country. And please at least start educating our children on financial matters early on.

Posted by: j2t2 at November 13, 2006 11:42 PM
Comment #194951

Jlw

Blue collar. Like the kind of work my father did. Like my wife’s father did on his dairy farm. Like the kind of work I did when I was younger. In fact I loaded cement cars that built some of those highways. Sometimes I put in 82 hours a week. I still do some of that physical work. I spent the last weekend digging out drainage ditches on my tree farm and I bet I can shovel more dirt in a day even at age 51 years old than you can. I built my share of the county and my trees will be building it after I am gone. Don’t try to give me working class line. I know what work is. I also know what management is.

If you closed down the stock market, you would no longer have the kind of country you would like to live in. Hard work alone does not lead to wealth. There is no doubt that Americans of past generations did harder work than we do today or that workers in poor countries today have a harder physical lot than we do. What made America great is our ability to work smarter and allocate our resources. You may not understand it, but that is what financial markets do. You evidently look at Wall Street and see a casino. It has that aspect. But the most important thing financial markets do is allocate scarce resources among differing projects.

J2t2

You don’t have to believe the Republicans. Look at the policies. Do you want to put in place polices that encourage wealth creation or ones that encourage dependency? I have thought about your idea of just giving everyone 100K (or some amount) but I do not think it will work. Unearned wealth is difficult. Many young people would find ways to waste it before they were 30. It is a problem for rich kids, as a matter of fact. Many wealthy parents wrestle with the problem and often lose the fight.

Wealth is useful and appreciated when it is earned. A government program can make it easier to earn and accumulate wealth. That is not the same as giving it away. I mentioned the TSP that has a matching payment. You could just give a person x amount of money, but it is much better for him if you require him to earn some amount and then you match it. The same is true of tax credits for earned income or college tuition.

Re health care, health saving accounts are good ideas. These include a fairly high deductible and a tax favored savings component. Health care should not be free. Like anything else, it will be abused if it is free. The challenge is making people aware of the costs w/o making them scrimp on what they really need. Much of today’s bad health is to some extent voluntary, resulting from inactivity, obesity or substance abuse. I am not sure what to do about that, but it clearly involves some combination of incentives and penalties. Simply extending free health care will not solve and may exacerbate these problems.

Re distribution of wealth - I would prefer rock stars, sport figures and CEOs make less money, but it doesn’t make a practical difference if some people are super rich if wealth is available to large numbers of people and it is. Our goal should be to make it possible for most people to aquire wealth.

Is it better to get a pension of $25,000 a year or to have $500,000 in your own IRA? I would rather have the money. Maybe you feel differently.

Posted by: Jack at November 14, 2006 1:55 AM
Comment #194956


Jack: 51 year old men shouldn’t make stupid boasts about their physical prowess. You should leave that kind of boasting to us 57 year olds.

Come on Jack, $100,000 for each new born citizen, that’s only 400 billion a year. Surely they can invest that money as well as they can invest their social security money.

Posted by: jlw at November 14, 2006 2:59 AM
Comment #194971

jlw

Glad we are back on the civil track.

I believe wealth should be acquired incrementally. I do not favor giving kids (or anybody else) money all at once. It requires some getting used to and practice in order to use it correctly.

That is why I favor the programs that help and encourage people to build wealth. This IS a role for government, but it is a partnership. It requires good behavior by both parties but does not have a hard and fast definition of what that good behavior is.

For example, the earned income credit. You get it if you work and do not earn much. That is the extent of the requirement. But it encourages positive behavior and makes working worthwhile. As I said, I like the TSP model. I was reading in the paper this morning that 300,000 Federal workers do NOT contribute 5% to TSP. They are behaving very stupidly, since this is like giving up a 4% raise (in matching money) but it is their business. They should, however, suffer the consequences. It would not be fair or smart policy to “make them whole” 20 years down the road. Incentives need to have both rewards and stings. Ove the course of a person’s lifetime, government help could well be MORE than that $100,000, but it would be properly delivered.

BTW - I can move dirt and stone faster than most people, young or old, but I admit that I am low tech. I am sure a guy with a steam drill could beat me down.

Posted by: Jack at November 14, 2006 9:11 AM
Comment #195001

Jack,
Besides getting a little too John Henry, you’ve over sold the ideas of Taylor as a machine age relic. The jist of his methods were scientific analysis of work. That idea hasn’t left the market place, nor is it about rote, machine like thinking and classification. The use of human relations, as noted in your link, replaced this idea in business schools in the 30’s and since has returned to more firm and fewer soft ideas, as supported by Taylorism.

The problem with your analysis of Social Security is you fail to note the fraud and unequal levels in wihich people participate in privatized ideas. But then that is the game of “privateers”. To date few of the privatized government systems have proven to be either cost saving or more efficient. The Republican party continues to try to sell this snake oil as do you.

Posted by: gergle at November 14, 2006 12:49 PM
Comment #195005

Gergle

You are an engineer, right? All engineers like Taylor. His ideas work well in machine processes. They are not how you would want to organize a whole economy.

Posted by: Jack at November 14, 2006 12:59 PM
Comment #195121

Good post Jack. I think you’re right on the money as far as demographics go. The entire SS model is failed for our modern world. SS relied on robust population growth coupled with a relatively low average lifespan. Average lifespans have gone up by over a decade since SS was established while our population is growing more slowly than the rate of people retiring. SS cannot be “fixed” without massively increasing taxes, cutting benefits, or a combination of both. It is my belief that we need to set up a roling date system that says if you are born after this date, you get 90% of the benefits you would get from SS, if after this date 80% and so on until you reach a date where you will recieve no SS at all. You’ll still pay, but when the last person eligible to receive SS dies, the system dies with her.

If the SS taken from my paycheck was mine, I could invest it and would do so. It would be a substantial increase to what I already put away. Instead, I won’t see a dime of this money. To make it worse, by the time I am ready to retire, I’ll be one of these rich assholes whose wealth, that I will have spent a lifetime of prudent investment to acquire, should be confiscated to support the proles who didn’t feel the need to invest.

As far as taking the wealth of the rich and repossessing it to keep it from their kids goes, consider this. The Bush tax cuts that lowered the tax rate for capital gains resulted in a huge windfall of tax revenues. I think anyone with sense will realize that the rich will always find ways, legal or illegal, to conceal their wealth. Higher tax rates do nothing but give them more reason and motivation to do just that. By keeping taxes low, you increase revenues as the rich are no longer so hell bent on concealing their wealth. I would rather take a smaller percentage of acknowledged wealth in as tax revenues than take in nothing because the rich are determined not to get hosed, which is precisely what some in this thread call for. Paying your fair share is one thing, taking a sump pump hose up your 5th point of contact by tax investigators is another.

As far as I am concerned, how I raise my children is my own business, as is whether or not they inherit a dime from me. It is the height of the paternalist, ivory-tower brand of liberal elitism to assume that some desk jockey in DC knows how to spend my money better than I do. If my kids turn out to be idiots, I can will that money to somebody else, or perhaps a charity. What I do with my money, which represents my time, my labor, and all of the choices I’ve made in my life, is my business, not a politician’s, not some do-gooder, mine and mine alone.

Posted by: 1LT B at November 15, 2006 6:26 AM
Comment #195148

1LT B,

Your post assumes that all men are islands, that we are all now in it only for ourselves.

That seems to be the theocon way.


Jack,

Social Security was/is a ponzi scheme only in the sense that politicians can’t seem to keep their fingers off of someone else’s pie.
The question should be how much should be in the fund, and when will we wake up and realize our shared responsibility to put it back.

Wall Street IS a casino, some people make it big, and others take it in the shorts, and the odds aren’t that good for the small fry that can’t afford to pay someone else to make their investments or don’t have the time to watch their investments themselves.
To make big money in the stock market, you must have big money to invest, and the where-with-all to lose all of it.
Most people in this country don’t have that luxury.

Posted by: Rocky at November 15, 2006 11:26 AM
Comment #195156

Rocky,

No, my post assumes that people have responsibilities to themselves to see to it that the choices they make are thoughtfully considered with regards to their impact on the future and that these choices take priority over responsibility to others.

You seem to assume that my responsibilities to everybody who is too lazy or stupid to put away for thier own retirement outweighs their own responsibility to themselves.

That seems to be the paternalist, Ivory Tower liberal way.

Posted by: 1LT B at November 15, 2006 12:31 PM
Comment #195189

1LT B,

“You seem to assume that my responsibilities to everybody who is too lazy or stupid to put away for thier own retirement outweighs their own responsibility to themselves.”
“That seems to be the paternalist, Ivory Tower liberal way.”

While stupidity isn’t a sin, you can’t fix stupid.

Too lazy is another thing entirely.

We are all in this together, or we’re not.
I assume nothing.
Yes there are people too stupid to save for the future. That is how it always has been.

Statistically people are taking more money out of their savings than they are putting in.
That to me shows that either people can’t afford their lifestyles, or they are barely making ends meet.
If it is the latter, then there are big problems in this country.

Many people gambled with ARMs and refinanced their debt with their homes. When those ARMs come due the shit is going to hit the fan.

We, as a country, will either help those foolish enough to mortgage their lives away, or we will all suffer.
Obviously, some more than others.

I am willing to help those that are unable to help themselves.

That has nothing to do with Liberal Ivory tower thinking.
That is just the right thing to do.

Posted by: Rocky at November 15, 2006 2:54 PM
Comment #195194

Rocky

The politicians take the money, which they use for spending. Cut spending and you get rid of the problem. Spending is the problem. Where the money comes from in the government is a mere IOU matter.

Re Wall Street and Casinos

In a Casino the odds are against the players. If you picked a sample of players, some would have made money and some lost, but the total amount of money they took home would be less than the total amount of money they brought in. It is a negative sum game.

The stock market is a positive sum game. We have winners and losers, but more total money comes out than goes in. A person with $1000 in 1986 who threw darts and the WSJ jounal thirty times and then bought whatever he hit would have around $7200 today. A diversified stock portfolio has returned more than 11% a year. So unless you are unlucky enough to buy on the peak just before every crash or you are so greedy you jump into the risky investments that promise you unreal payoffs, you do all right.

If you took that $1000 to Vegas, and kept it in that “market” for 20 years, how much do you think you would have?

Posted by: Jack at November 15, 2006 3:24 PM
Comment #195212

Jack,

“A person with $1000 in 1986 who threw darts and the WSJ jounal thirty times and then bought whatever he hit would have around $7200 today”

Most of the people I knew in 1986 didn’t have even $1,000 in a savings account let alone have that much to invest in the stock market.

My Dad, who spent 20 years working for the same company, and was in upper management in electronic design, never made as much as I do now. He “played” the market, and when he died in 89’ I think the market was between 2,500 and 3,000.
Even if he had lived to see the 90’s, the gains in the market alone probably would have killed him.

My point is that there are a vast number of folks in this country that don’t have $1,000 to invest even now.
If you went door to door here in Phoenix (neighborhood dependent, of course), and asked how much money people have invested or saved for their retirement, I think you would be amazed at the answers you get.

And it ain’t because they are all looking forward to start cashing those Social Security checks.

Posted by: Rocky at November 15, 2006 4:53 PM
Comment #195230

Rocky

That is precisely why I want programs to help the poor create wealth. The person w/o the $1000 is the one who could most use the boost.

Posted by: Jack at November 15, 2006 6:14 PM
Comment #195235

Jack,

“That is precisely why I want programs to help the poor create wealth. The person w/o the $1000 is the one who could most use the boost.”

Let’s hope that your programs have lots of funding.

IMHO, there are a lot more folks out there that can use the help than I think you think.

Posted by: Rocky at November 15, 2006 6:32 PM
Comment #195240

I don’t think that I can match Jack in the shoveling category, although I can cut,lug, split, and stack firewood for a few hours at a time. I’m pushing 61, but have a ways to go before I can match a local man, who was cutting by hand 10 cords a year, until he was 90, as the machine age began to swirl around him.
I guess the machine age is gone, to the extent that vey few things are manufactured here these days and most jobs are in service, health care, education, etc. Still, I’m not sure how “machine age” models, are, or are not, relevant. The population demographics are more erratic now, but I sure do appreciate my comfortable teacher’s pension, after 36 years of teaching. I can see that the state’s pension plan could get into trouble over time, but right now, their investments, an Enron fiasco notwithstanding, seem to be working out. I worked consistently, for moderate , at best pay, but had good health care and now a decent retirement. Worked for me.
I agree that we need to give people a fair amount of leeway to create wealth, but also that we should also get a lot back from them in taxes, not that their lawyers and hedges won’t always be a step ahead of the guvments.
Let’s assume that we are all gathered around our laptoops here in the information age. Have bread, guns, and butter issues changed? What then must we do?

Dwight

Posted by: Dwight at November 15, 2006 6:55 PM
Comment #195297

Rocky,

You said that you are willing to help people. Me too, I’m a charitable man. What I don’t like is the assumption that government, not me, is not only better able to determine how to spend my money for me, but they also want to impose their beiefs on me through spending programs that I don’t think are effective and tell me I’m a greedy ass for not wanting to support such a program. If we focused a little more time on asking people how they can help themselves rather than how they can screw society, we might get somewhere.

Posted by: 1LT B at November 16, 2006 12:15 AM
Comment #195300

1LT B,

I wasn’t trying too impune your charitable inclinations.

My point is that Americans together can do better than each of us separately.

I voted for Reagan, but the dumbest thing he ever did was to stop funding psychiatric programs and the result at the time was the masses of homeless we see on our streets now.
I’m not a religious guy, and I’m sure these folks are tired of the “sermon and soup” routine.

Let’s take care of those that need it.

Posted by: Rocky at November 16, 2006 12:29 AM
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