◄ GREED BOOK
Book contains two essays, Greed and Greed II. Click on cover.
- Essay -
Is exploitation wrong?
by Julian Edney
This is not the first time the nation has produced dramatic economic inequalities. What are very wealthy people like? The everyday world of work vs. values of democracy. How assumption of self-interest leads to fear in the workplace. Freedom, the illusion of freedom, coercion. Exploitation. Credit cards. Meritocracy. Sociopaths. Corporations and the economic justification for the damage they do. Historically we are emerging from an era with no clear ideology, but an era in which materialism and business has expanded powerfully and internationally, and out of the vacuum two old, discredited ideologies, laissez-faire and Social Darwinism appear to be rising again in modern guise. These ideologies are still flawed; the first (contained in modern Libertarianism) vigorously promotes freedom but ignores justice and is indifferent toward democracy. The second is supported by science, is disinterested in humane values and accommodates exploitation as part of the nature of things. The search for a modern economic theory closer to reality. Is this a society of individuals rationally maximizing happiness? Andrews’s view: at least among the disadvantaged, it is a political economy of hope and fear. (1)
Looking for morning news, I click on my computer. My internet service flashes with color, the biggest houses, the biggest jewelry, the most expensive toys.
The internet’s financial press waxes muscular.
Television is the same. The media are a river of adulation for all this glitter and the people who own it.
School textbooks carry a similar message. Despite setbacks, the economy is ever expanding, its power is unparalleled, we are now spreading free market capitalism around the globe, bringing unimagined wealth and improvement to mud-level nations and countries sucked out by socialism, raising everybody, because that’s what capitalism does.
Has everybody been raised here?
Actually, with talk of equality written into this nation’s founding papers, the scenery never looks right. The contrast between rich and poor grows, and this year has been no exception. As an acquaintance on the street puts it: every year there are more homeless people and every year the limousines get longer.
If the stated goal of the system was to gradually create inequality, it might also claim success.
We barely notice because we are adjusted. But if you are a foreign visitor, how does this nation show? A svelte Scottsdale, of course. Disneyland, of course. The flamboyant homes of the film stars. Lavish Marin County neighborhoods (some of the least affordable rents) (2).
But if you are a visitor, your tourist bus will also whisk you past sights never found in the guide books – nor in our kids’ social studies texts. Neighborhoods awash in shootings (1,200 gun injuries in South Los Angels alone last year (3)); square miles of city filled with houses with barred windows, chaotic schools, downtown blocks of sweatshops; whole neighborhoods sunk in semi-literacy, drugs, gangs, fear; and our nightmarish jails (4). Not everybody looks like they have been raised.
The numbers show a radically skewed society. Rather than pages of numbing statistics, I’ll sketch a couple of facts, the first from sociologist Steven Rose. If you drew a line on a building three stories high to represent the distance between the lowest and the highest family income, the average (median) income sits at only 10.5 inches off the ground and half the nation is clumped below that (5). Second, despite the prodigious numbers of poor, housing for them is so scarce that of the 3,141 counties in the United States, in only 4 can a person making minimum wage afford a one-bedroom apartment (6).
I believe this imbalance mauls the national psyche because the media repeatedly show us images of people and places from the beautiful upper stretches of that vertical line. In the comparison, thrown at us daily, most of us lose.
This nation equates decency with wealth and indecency with poverty. These media images also create floods of anxiety. Being “less than,” being poor, carries a stigma. Another sociologist thinks we are so materialistic, poverty now actually carries the shame that cowardice carried in earlier, warrior times (7).
And actually if the economy is on fire, we have some funny facts.
The dollar has dropped to a fraction of what it was worth thirty years ago. No amount of policy tinkering has been able to stop manufacturing’s chronic decline. The national trade deficit is at an all time high (meaning roughly, if it’s foreign made we want to own it). Personal debt has reached swaggering amounts. And bankruptcies have ballooned, now running 1.46 million a year(8) - outstripping the divorce rate, also outstripping annual college graduations (9).
Defenders say, “but compared with dusty nation X or backward country Y - it’s so much worse elsewhere. We are the envy of the world.”
When we compare nations, we should keep in mind who we are comparing. Every third world nation has a middle class, no matter how small, with houses, and those folks are still better off than our hordes of homeless. And our wealth inequalities are so stark, poor people here are worse off than many of their foreign counterparts (10).
And if you start comparing nations, what about the quality of life? Are our 30 million citizens on antidepressants also the envy of the world? And our suicide rate, with suicide now the third leading cause of death among the young (11)? Here lurks the question of how much life is worth living.
I wish I could get away from these inequalities, but I cannot. Fly away from it all? Board a plane, and we take off. Having settled in at cruising altitude on a flight, surrounded by other passengers, I look out the sun-filled window and we float among the iridescent clouds and for a moment it seems we are transcending the world's concerns. Then the stewardess carefully draws the cabin curtain across the aisle between us and the passengers in first class section. This act is noiseless and delicate. All passengers’ eyes are riveted on it.
Nowadays, nobody seriously criticizes the rich. Criticizing the rich doesn’t make much sense if you think you’re going to be one. But it wasn’t always that way.
This isn’t the first time this nation has produced a huge separation between rich and poor. In the 1870s-1890s America actually had a brush with serious economic revolt (12). The trouble was started by common farmers in the hinterland - stake holders in the new frontier - dismayed that all their hard work didn’t deliver.
The Civil War’s aftermath was a time of immense capital growth for some and hopeless drudgery for others. Chicago and New York contained both wealth-aristocrats in frivolously decorated mansions that mocked European aristocratic manors, and on the other side, smoke-stained factories with legions of ragged workers. In the rural South rich plantation owners lived in white-columned country homes while paying barefoot field workers scrip they could only spend at the owner’s store – contract labor working in endless debt. This was the era of flamboyant corporation owners in top hats chomping on outsize cigars, also the era of steep child mortality rates, pestilences that swept the streets, misery and short life expectancies for the poor.
It was an era of unrestrained markets, the era of monopolists who collaborated with each other in setting prices; little was illegal.
Following the Civil War, there were a couple of different currencies in circulation, one sinking in value and less reliable.
City banks peddled mortgages widely on new farmland they had never seen. A new farmer could sign on in either currency. Then a national money contraction occurred, consolidating the two issues. Farmers took the fall. They were left owing the banks up to twice what they had signed for. Believing in the national promise that hard work brings wealth, they found they only worked and lost money on their slow-producing farms, then worked harder and lost more. Meanwhile, the banks flourished. They grew spectacularly. They argued they were only being patriotic.
Bewildered, farmers actually started trying to understand what was wrong by reading books on economics. The result was a bitter understanding of ‘the money power,’ of lenders rights, of monopolistic control, and of American credit corporations as fortresses of wealth.
In desperation, farmers’ cooperatives started up. They aimed for debtors’ independence. They were made up of plain people seeking self expression. First in the South, this movement swept across Texas, then the Western plains states, attracting farmers by the thousand. Then they joined up with railroad workers who were desperate over low wages and ruinous equipment and who were striking. Eventually the National Farmers Alliance and Industrial Union spread far west and north, and at its peak had over a million members. The Populist Party was started. This new party was virulently anti-monopoly, and its hero was the opposite, the poor-but-good worker. It successfully ran candidates for local government, and then William Jennings Bryan, a Populist, actually won the Democratic nomination for President. Bryan had risen from stump-speeches in open fields to the political crest with firebrand oratory telling farmers and workers they were “crucified on a cross of gold,” nailed to the impossible demands of credit merchants, and the victims of a monied tyranny (13).
The poor have always been demonized. But for the first time, in the 1890s, the rich were being demonized.
Bryan lost the election to McKinley in 1896. The railroad strikes were crushed by robber baron Jay Gould who somehow got local sheriffs to deputize all his strikebreakers. Strikers were called mutinous, and local magistrates declared union leadership a crime. Without Bryan rising, the Populist movement suddenly faded. There was capitulation and disgust. People muttered ‘you can’t fight the nation’s banks.’ Some farmers even left the country and moved to Canada. Corporate power rose everywhere again. Sentiment changed. In memory, words like ‘the people’s’, and ‘progressive’, became tainted with the shadow of socialism.
That era is remembered in history books. But it has been so diluted that Populism is described as an agrarian movement, a protest. Omitted are the rage, the oratory, the fires, the marches, the riots, the militia shooting strikers.
I believe some of the early conditions of that movement are reappearing. But today we are mute. We are back to the dogma that whatever the wealthy do is good for the poor. Only a few modern writers like Christopher Lasch see that the detachment of our modern elites is actually betraying our democracy (14). Fewer writers, like Charles Derber, are saying the moral decay in this country starts at the top (15).
We live in a peculiar era. There is said to be no ideology.
What is ideology? It is a visionary assertion of values, goals and aims. It ties a people together, explaining what is bigger and more important than each of us. It is part theory, part speculation. It urges loyalty. Ideologies can be national, grand and visionary, or subdued and local. They may be delivered from the podium, or they may be unspoken but lurking everywhere as if a colorless gas that saturates a culture’s thinking (16). An ideology can move a community to prepare for war, or it can move a nation to peace; but it gives motivation and meaning, it states the common good, and explains why the people must work together. Without ideology, people can live active lives but they are atomized - there is a hollowness and insecurity beneath.
Daniel Bell wrote a book The End of Ideology which says that in the United States, ideology has dissolved (17).
Bell: Through the last century - at least through the belligerent period of the two World Wars and the 1950s Cold War - the United States had plenty to say about what it stood for, also what it hated. Ideology was sharp and it was national. But with the advent of peace, and especially with the decline of communism, there was suddenly less reason to deliver thunderous speeches about why we are here, what we are ready to die for - the speeches that bring urgency and purpose and meaning to people.
We have drifted since the Vietnam era without an ideological rudder. We exist in a kind of void, in which individualism flourishes, and narcissism, ego, materialism, the pursuit of self, wealth, status and greed - but nothing that moves the masses together.
Predicting the future may best be left to crystal-gazers, but we can always take hints from newly published books because they contain ideas that may be influential for years.
Some new publications are unsettling. Into this void, I’ll argue, are creeping two quasi-ideologies. Actually they are not new. They are two old ideologies, mutated, which are rising again.
First a popular book which appeared in 2002. It describes a part of this society. The way the author works is a new fashion and it is revealing.
Beyond that Curtain
Very rich people are hidden from us because they want it that way.
Naturalist Richard Conniff uses sociobiology to describe the upper class. He has patiently followed the superrich around (and these folks are above 'junior wealth' which is about $5-10 million) and has interviewed them in their natural environment.
This is the new fashion, to explain what humans do because of their genes and their evolution. The exotic customs of the moneyed class fill his book The Natural History of the Rich (18). Because he is a naturalist, he unflinchingly compares the people at the top with the alphas (top members) of other animal species.
Conniff says the superrich are an intensely narcissistic and competitive small group. They arrange their lives so that wherever they go (Aspen, Monaco, Paris) they see the same few hundred people. They are self-encapsulated. They regard the rest of us as "irrelevant, uninformed, even subhuman," and they don't like to talk to us. (One fabulously wealthy lady used her cell phone to call her chief-of-staff who was in another country to call her maid to tell the maid what to do next. The maid had a cell phone and was on the opposite side of the room from the lady).
Conniff reports that just like other top animals, the superrich are driven by the quest for status, mating opportunities and dominance - except that the human version constantly denies it.
Waste to Impress
Top-rungers also flout the basic rules of economics. While average folks purchase more stuff when it becomes less expensive (supply and demand), the leisure class prefers to buy stuff that is more expensive, even when comparable stuff is available for less. The object is to dazzle. Sociologist Thorstein Veblen identified that odd habit back in 1899 and termed it ‘conspicuous consumption.’ It’s waste in order to impress (19, 20). Conniff points out animals do this too. The cascading tail feathers of alpha male peacocks have no useful function. They are there to impress other peacocks - in fact they are so conspicuous they practically prevent the bird from flying.
More biology: the way the superrich have isolated themselves for centuries now qualifies them as a "pseudospecies". By hanging out and mating only with their own kind, over many generations, they have effectively removed themselves from the gene pool.
Sociobiology is a fairly new division of biology. It’s been around since the 1970s. It holds that human behavior is genetically shaped, like animals which run largely on instinct. It says our behavior is evolved. Sociobiology has a younger sister, evolutionary psychology, which talks more about humans than animals, but in the same way. Evolutionary psychology holds that our daily routines and our choices are not nearly as spontaneous as we think because our behavior and our emotions are determined by the long tracks of natural selection. Both these disciplines are in their infancy. Both are busily looking for parallels between animal behavior and our behavior to show we are more instinct than we think.
So what Conniff does is to illustrate the dominant posturing of top rats versus the belly-crawling of their subordinates, and the bluster of top baboons versus the rump-presenting submissiveness of subordinates - and compares it to the obsequious behavior of human underlings who attend to our superrich. Dominance patterns in this species fit dominance patterns in that. So for instance in both human and walrus communities, the top elite have more. They copulate more, they get more of what they want, and they guard more resources than they need. Conniff states: "Humans seem to be 'ethologically despotic,' like chimpanzees; that is, we have a natural predisposition to hammering other people into submission." Except that in human males this is expressed as a "single-minded determination to impose their vision on the world" (21).
Why do the rest of us go along with this? We can’t help it. A stare from high authority throws us into rabbit-panic. Lower ranking humans throw themselves into submission, even sacrificing themselves for their high superiors. It’s all biologically evolved behavior.
Inequality is everywhere in the animal kingdom - even animals that can’t do much else, such as chickens, are expert at knowing the ranks of all other chickens. And a low ranking wolf will fight to the death for its pack even while its daily life is made miserable by cruel tormenting from the animals above it because belonging to a hierarchy is everything. According to sociobiologists, hierarchy chains us humans too. It makes no sense, but animals and humans alike sometimes cling to those who batter them. It's in the genes.
Along the way, it would be heartening to learn from sociobiologists that our top people are good people. That part is missing. The ultra rich are likely to have serious mayhem in the family history. Conniff traces this old saying to Balzac: ‘Behind every fortune there’s an undiscovered crime.’ Generations ago, many alpha families originally ascended by force and illegal conquest - and, in his interviews, often show themselves proud of it.
And what of our popular belief the wealthy are that way because they work very hard? Do they? Well, maybe. Conniff interviewed one extremely wealthy woman who told him, "I'm the most normal, normal person, I'm not like most rich people. I work really hard. Most rich people I know don't do anything but eat, drink, sleep, pardon the term, fuck, and have a good time" (22).
Genius and Alcoholism
If our behaviors are genetic, it means we don’t have much control over them. Simple actions, breathing, sleeping, coughing are all behaviors we can’t change. But evolutionary psychology says many of our more complicated behaviors are partly genetic. We have a ‘genetic predisposition’ towards overeating or dominance or addiction or depression, musical genius, alcoholism, and possibly some criminal behaviors too - because these things have been found to run in families. Today’s cutting edge research is looking for behaviors that are controlled by genes, and how much. There is a scale called a ‘heritability index’ that runs from 0.0 to 1.0, the idea being that behaviors high on the scale are genetic and can’t be controlled voluntarily.
The implications ripple across our legal system. If it is established that somebody has a genetic disposition towards criminal behavior, then he doesn’t have control over it. Think of the possibilities: imagine a criminal lawyer putting on the following defense, “…Your Honor my client is not to blame - he couldn’t control his thieving - he was just fulfilling his genetic destiny…” In fact, these legal defenses may become more common as evolutionary psychologist are now arguing that using pornography (23), not paying child support (24) and rape (25 ) are in the genes.
Evolutionary psychology is deliberately pushing into public policy. The appearance of a new book Evolutionary Psychology, Public Policy and Personal Decisions shows its intended scope (26).
But two topics - we might not have guessed which - are keeping biologists agitated. Are we run by selfishness? And how important is the individual, as opposed to the group?
This is the way it’s coming down:
1. Selfishness. Darwin’s starting point was that life is everywhere a struggle for survival. If you want to survive, you can’t waste time helping others. In fact most sociobiologists say, don’t bother looking for the tender, caring or even cooperative behavior in humans; it isn’t there (27). But the central issue being kicked around: is selfishness by itself sufficient to keep a group surviving? Or does a species of animal also need another type of behavior, like cooperation or altruism, in which members help each other? One camp, the hard-nosed Darwinists, says yes to selfishness – that also means genes-powered greed, genes-powered waste-to-impress (28) – and no to altruism.
2. Selection between whole groups. Darwin said natural selection happens between individuals. But what about selection between communities (and herds and flocks)? This issue is so hot, arguments between sober academics almost read like kids having tantrums. The point is this: if there is competition between groups (communities) for survival, the winning group will be stronger because of teamwork, which takes something like cooperation or altruism between members. A group of only selfish individuals is weakened from within.
And these two issues go hand-in-hand. Orthodox Darwinists say, you don’t need to think about altruism because there is no group-level selection.
Daniel Batson writes on this debate. At this point, sociobiology is new and unsure. It keeps issuing statements then correcting itself. Does natural selection exclude group selection? Yes; correct that, no. Does natural selection produce only selfishness? Yes; correct that, no (29). Actually this is not just a scuffle under the stairs among academics. Because of Darwin’s assumptions, all this threatens the very planks on which the theory of evolution rests. So a lot of people are watching this fight (30).
When these infant disciplines finally get their sea legs, they will bring home the bogeyman of all questions, because selfishness and altruism are not just behaviors, they are moral values. What’s really lurking behind all this work: is our morality controlled by our genes?(31)
And who Cares?
Adam Smith cares. Recall that Adam Smith’s Wealth of Nations tell us all people act in their own interest (selfishly) - and that is fine, according to him since the whole community eventually benefits. Who does this sound like? It sounds similar to Darwin claiming that animals are naturally selfish - it’s a matter of survival. Both Smith, in Wealth of Nations, and Darwin don’t truck with altruism. It would change the basic assumptions of both of their whole theories. And we get the hint that Charles Darwin and Adam Smith were singing off the same sheet of music.
So the appearance of Conniff’s book waves a flag. Any alliance between biology and big money should keep us nervous. This alliance has a scurrilous history.
A contemporary of Darwin’s was English philosopher Herbert Spencer. Spencer was not only thinking on the same tracks, it was Spencer who invented the term “survival of the fittest.” Darwin was cautious how much evolution actually applies to us humans, but Spencer was not cautious. Spencer applied “the fittest” to the wealthy (32).
Spencer became very popular with the monied classes towards the end of the nineteen century. On the lecture circuit in America he said humans, like the animals described by Darwin, are all in a competition for survival. This was normal. For wealthy industrialists to exploit and discard hordes of the poor in their factories was also understandable. The poor were the unfit. Nature was ‘red in tooth and claw.’ The industrialist was just hastening nature’s way of weeding out the weak members. Spencer also said welfare - even charity - was a bad idea. It encouraged the poor, who would multiply and spread their unfitness. Overall, did the rich prosper at the expense of the poor? Of course - and in the long run, Spencer said, this was good for a nation.
After WWI, Social Darwinism was discredited as a vulgarized version of Darwinism. At the time, communist ideology was flourishing in Europe, and the argument that the workers were going to control everything was turning Russia inside out like a glove. Socialism was on the rise in Europe, and America decided to keep one eye on its poor. Pro-worker feeling grew and between the World Wars, President Roosevelt built a more poor-friendly, worker-friendly atmosphere, and started Social Security.
But it is now sixty years since WWII, and times have changed again.
Won’t Sit Down
During this last century, of course, many things changed. Science itself made vast progress, reaching peaks, so that at 2000 it could point back at a moon walk, the atom opened, the defeat of plagues as points on its startling ascent.
Today science has tectonic credibility. It is unimpeachable. If a layman attacks science, nobody listens.
But this topic, Darwinism, will not sit down.
Among the few with credibility to question science are philosophers. Philosophers are carefully trained in logic.
Philosopher Richard Perry, in the staid journal Ethics, quietly walks up and kicks the struts out from under sociobiology.
Is it really science? Or is it a con?
Perry shows the logic under all sociobiology to be not the grid of deductive logic you would expect in science, but only a patchwork of analogies.
Now there is a certain use for analogies, but analogies do not prove anything, they only show likenesses. The best use of analogies is in the persuasive arts, oratory and poetry.
Analogy is the warp-and-woof of sociobiology. That’s what they do, says Perry. If you want to say humans are aggressive, describe the aggressiveness in rats – show the similarities. If you want to prove humans territorial, talk about the territoriality of mockingbirds - invite the similarities. And so on.
Perry says, but wait. Why these analogies in the first place? - There’s something odd about circling around one species to make pronouncements about another. Why are we studying animals to understand humans? Would you investigate houseflies by studying blue herons? Wouldn’t that distort what we already know about flies?
His article “Sociobiology: Science in the service of ideology” warns us the logic is so bad, sociobiology should be embarrassed. It is more like weaving a net with the study of animals and throwing it over humans. And it should tip us off to ulterior purposes. We should look for what else it does.
Perry urges us to decline trust in sociobiology. It is engaging reading. But it does what Herbert Spencer did. It tells us we don’t have to feel guilty if we are brutal with each other - animals do it. It gives comfort to perpetrators of social injustice (33 ).
The next point in this essay is that Social Darwinism, or some modernized variation, is rising again.
Supported as a science, our neo-Darwinism is fed by hours of exquisite photography on Discovery Channel where we repeatedly watch hungry leopards stalk innocent deer, fell them and gorge on their entrails hour after hour. (What car salesman hasn’t watched, and said to himself, that animal lives in me, I can use any method to drag down fleeing customers?)
Darwinism has a dangerous ally. Another twist in logic, which always gate-crashes the party and says, if it happens in nature, it must be right.
But the problem is, you cannot logically convert a fact into a right. (Example: it’s a fact some kids beat up other kids on the playground, therefore they have a right to do it).
Morality should step in.
It took a long time to get that right in western civilization. Because it’s a fact Charles Darwin reported on a species of slave-making ants, humans do not have a right to make slaves.
Then as now, using analogy as a justification for ignoring human pain and fear, or creating it, is a perversion.
Place your Bets
Social Darwinism will be much harder to get rid of this time. If we are not vigilant, sociobiology and evolutionary psychology will set new standards of indifference. The implications are stirring. What if our politicians and policy makers, administrative agencies and bureaucracies, our military, our justice system, our legislators, watching, all believe that rich and poor, good and bad, winning and losing are in the genes? Place your bets, because depending on the way a couple of these controversies turn out (especially selfishness) we may have biologists telling us what is right and wrong, that democracy is unnatural, and that inequality and injustice are in the nature of things.
Laissez-faire was the table-thumping cry of monopolistic big business in the 1860s through the 1920s – overlapping the Populist era, but on the capitalist side. From the businessman’s point of view, this was the Gilded Age. Will power was a virtue, expansion always seemed the way to go, and everything was believed to be better if it was bigger. (The Crystal Palace, the Eiffel tower, and the Titanic were industrial symbols). The concept traces back to 1825, and it means government abstention from interference with individual action, especially commercial action.
But it was found that if business was not restrained at all, the economy rose and fell in a cycle of peaks and destructive crashes. Second, it produced monsters that worked people to disease or death. During the laissez-faire era, people died or got maimed on the job in perilous mines, foundries and rail yards, getting no compensation (because, it was argued, they worked there by choice). This is what the Populists battled. The battle was rough and long, with repeated strike actions, and poverty and despair for workers.
Laissez-faire, the philosophy of robber barons, was eventually collared and muzzled, notably in Supreme Court decisions headed by Justice Brandeis who saw unfettered business practices as an eventual threat to democracy. It took many years to produce a real turn. The Seattle General Strike of 1919 was another attempt to break through.
Eventually both Social Darwinism and laissez-faire were abandoned.
Laissez-faire is rising again.
The Libertarian Party, formed in 1972, looks New Age-ish. Libertarians promises a bright new beginning, the kind of thing that always attracts young people with spirited talk about freedom from authority. In fact libertarians almost never stop talking about freedom.
Libertarians believe this: Individualism is what a society is all about. The promotion of self, and self-interest, life, liberty and property rights are important. Businesses and markets should also be free from restraint. Libertarianism hates constraint. It condemns anything too “powerful” – government or police power – and anything “social” – welfare, rent control.
Here are its founding assumptions. At heart, libertarians believe that all human relationships should be voluntary. They think there is a natural harmony of interests among people, and any society works by a sort of spontaneous order.
In politics, libertarianism claims to be against both the left wing and the right. It states opposition to fundamentalist religion as much as against any state agency - both threaten individual freedom.
How do we know the old ideology of laissez-faire is in here? Because a 1997 book which explains the basics, by David Boaz (executive vice president of the Cato Institute) called Libertarianism: A Primer, says so. It states that laissez-faire capitalism is the answer to everything because it brings incredible wealth to all. And it proudly champions Adam Smith’s ideas as its heritage (34).
Justice in Two Pages
Those founding assumptions are nonsense. First it’s obvious not all people are interested in harmony. Some are excessively greedy. Some people prefer power, which tends to corrupt. Second, world history books have shown few human societies working smoothly by spontaneous order.
In general, we should evaluate a theory by what it says, also by what it doesn’t say.
What does libertarianism say about exploitation? Nothing. The word isn’t even in the index.
Next, its treatment of justice is negligible. And what does it say about equality? - Almost nothing. It is hard to convey libertarianism’s disinterest in equality. Or perhaps this: Boaz’s book has 314 pages. Just over one page is given to equality. Equity? - nothing. Justice? - under two pages.
Consider a modern concern. What about big-business abuse of the environment? Among other points in the book - to give environmentalists nightmares - is that libertarians see no contradiction between industry expansion and the environment. Quote: “Economic growth helps to produce environmental quality.”(35)
Reading Libertarianism reveals something much more troubling. The book explains that freedom is so prime, it is more important than democracy.
Libertarianism is disinterested in democracy. Rather, libertarians believe in Natural Law, laws seated in ancient, even tribal, crude customs, which are hardly enlightened ways. There is actually a fringe element among libertarians, gaining momentum, which seriously wants to dismantle democracy in America (36) which it interprets as mob rule.
While this style of business in the 1890s, for profits, freely harnessed uneducated millions of the poor into sweatshops and mills, at wages that always seemed to keep them frightened and hungry, all those problems are now forgotten by libertarians - as if the century had no shadow.
And without a twitch of embarrassment, a Chicago Tribune review on the dustcover of Boaz’s book Libertarianism explains that “these are ideas that are coming to dominate the thinking of government all over the world.”
But laissez-faire is critical for today’s aggressive corporations because they cannot operate at their gargantuan level without almost total freedom. Corporate businessmen cite as their biggest enemy, government. They see greed as a solution rather than a problem. They despise the push for equality as a death-knell. They refer to justice as something the envious dreamed up (37). For them, democracy is no more than a bright tinsel wrapping to be torn off the moment it poses any real constraint to their freedom.
Despite these concerns, our market economy is not weakening in any way.
The reverse. At this point in history, capitalism is just getting started on a second Big Bang. We are recently launched into another expand-or-die wave that dates back approximately to the fall of the Berlin Wall and is already showing geometric power. It’s being promoted by our massive gifts and loans to foreign countries and by our placing key capitalists in international banking. And, less benevolently, by the starting of foreign wars, which require repairs, for which we provide contractors, whose profits return to us.
This new wave is not powered by any single ideology. But this odd combination of Social Darwinism and laissez-faire is a soil mixture that produced the explosive capitalism and empire-building at the turn of the last century, and it will work again.
I say odd combination because these two theories are actually contradictory. Libertarians should look over their shoulders. Biology promotes the opposite point, that we humans don’t have much freedom because our behavior is controlled by our genes. Sociobiologists say even the functioning of our societies is constrained by our genes, so the idea of us choosing to expand our liberties is hilarious to them.
These two theories were also contradictory a hundred years ago. That didn’t stop monopolists then and it will not stop the high-octane business leaders of today - none of whom are exactly intellectuals.
Turn on the television and watch our national leaders talk policy. They explain we are bringing our way of doing business to foreign lands because capitalism brings democracy. We are the bringers of fortune, uplift, goodness, opportunity and freedom for all - the best destiny humanity has to offer.
Just because this argument is delivered from a podium bathed in rotating lights does not make it true. It is also broken logic.
One of the main events in capitalism is the creation of inequality.
We recall that the two basic values of democracy are freedom and equality. They are the two wings on which that exalted bird flies.
And we notice these official speeches on foreign policy promise freedom, but they never promise equality. We cannot export equality. You cannot give away what you haven’t got.
Second, a point always omitted from these speeches is that capitalism comes in different species. One type is authoritarian capitalism and it is decidedly undemocratic. A governing power, sometimes a military dictator, promises businessmen they will make astonishing profits if they just follow his orders. This - the melding of business and state - happens to be one of the elements of fascism. Another defining element of fascism is that inequality is a virtue.
But free market economics are being built everywhere. This is so powerful, it has the face of a titan.
So we cannot do it any harm, analyzing it. We have plenty of time to pull up our chairs, and at our leisure examine its beating heart.
The major musculature of our modern free markets is corporations. They deserve attention.
Corporations are collections of people doing business. Other types of business entities exist, sole proprietorships and partnerships, but corporations are surely the largest. (Some corporations are more wealthy than some countries). They inspire joy in some people, fear in others.
Corporations have been harshly attacked in several books by investigative reporters. For example, Mokhiber and Weissman’s Corporate Predators and Court’s Corporateering warn of the way corporations influence politics (by shifting massive capital around) as well as the way they take away our personal privacy and security. As a rule, they lack transparency. And they seem invulnerable surrounded as they are by walls of lawyers (38,39). Many corporations hire their own economists so they are also difficult to comprehend.
These books are a good and healthy part of the public’s reading. But these attacks have made no difference.
One book, however, written by a lawyer, may make a difference. It translates the stygian legalese and economics into common language. The book is no less frightening.
The author reveals the corporate Achilles heel.
Bodies in Two Parts
Law professor Joel Bakan’s The Corporation explains that corporations date back to the 1690s in Britain.
From the start corporations were peculiarities, being bodies that are split into two parts. Directors and managers run the firms, but stockholders own them. And the stockholders are an ever shifting bunch, being owners today, sellers tomorrow.
Most stockholders have no interest in how the firm does business. They only look at the daily value of the stock. Since the only business of a corporation is to make profit, this is a recipe for corruption, because the stock's value can fluctuate on rumor and reputation, and a firm might grow wealthy on lies, or by overcharging, or by selling a dangerous product, or by not doing anything except issuing promises, and the stockholders are just as delighted. Stockholders don’t ask questions.
Second, the corporation has “a legal mandate to pursue, relentlessly and without exception its own self interest” and this “regardless of the harmful consequences it might cause others.” If along the way they have to pay some fines for damage they have done, this is calculated into business expenses. It’s all numbers. And since some corporations make massive profits, they don’t flinch at paying out very large sums to people and environments they have damaged very badly. And then return to do it again.
Anything that is an unfortunate byproduct of making profit, such as stress, lives lost, disease, broken laws, pollution, immorality, ‘collateral damage,’ grief, disruption, riots, is called an ‘externality’ - because it is outside the crisp equation for calculation profit and loss. Most of what we know as morality and humanity are externalities.
This breakage can have enormous effects on the world. Corporations are externalizing machines, says Bakan. Bulldozing through to more profits, they routinely break stuff wherever they go and this single-mindedness has produced what we have today, colossuses of indifference “of such power as to weaken government’s ability to control them,” so that “corporations now govern society perhaps more than governments do.”
Yes, there are some corporation CEOs who exercise morality and judgment. But they are not supported by Nobel Prize winning economist Milton Friedman, who believes the only moral duty of the corporation is to put profit over social and environmental goals (and business guru Peter Drucker thinks likewise).
Bakan goes further. He likens corporations to psychopaths (sociopaths). For his book he interviewed Dr. Robert Hare, a psychologist and expert on psychopathy, to get a list of personality traits that psychopaths exhibit (no empathy, asocial behaviors, manipulativeness, no conscience, no remorse) and then tries those out on corporations. They fit. For instance corporations return repeatedly to make profits from things they know are lethal and that strew grief - cigarettes, cars that catch fire in crashes, drugs with devastating side effects - because the money is there. Enough money gives them a “psychopathic contempt for legal constraint.” Or any constraint. Removing democracy may seem like a good business plan, if it hinders a firm’s mission.
In corporate culture there is an emerging social order that is wide and dangerous, as dangerous as any fundamentalism, Bakan states. “For in a world where anything or anyone can be owned, manipulated, and exploited for profit, everything and everyone will eventually be.”
Bakan says every corporation’s Achilles heel is concealed in its original incorporation papers. I will return to this point in the later section on remedies (40).
If corporations are really like that, we might wonder about the people who work in them. Tens of millions of regular folks work in corporations, of course, which gives them the surface look of well fed averageness. But because of their aggressive business agenda, they also attract some odd personalities.
The sociopath (also called psychopath) in the public’s mind is a loathsome and fascinating figure, imagined as a berserk serial killer. Actually, most sociopaths couldn’t be more different. Suave and charming, manicured starters of conversations, many look like they come from the pages of GQ. (There are plenty of lissome women sociopaths too.) Consummate actors, you melt when they talk to you. They are smooth as glass. They exhibit a tapered arrogance. They are also “persistent, repetitive, remorseless violators of the rights of others, and the rules of society” (41).
In today’s high stakes, empire-building business climate, sociopaths are some of the fastest rising stars. In corporate maneuvering they have no loyalty, virtually no emotion, and no conscience. Promiscuous in friendships as in sex, they start instantly and leave an alliance instantly it creates advantage. Their specialty is stirring and steering feelings in others without being touched themselves. Usually the epitome of self control, they are capable if cornered of sudden viciousness. Few will challenge them, sensing that underneath is their calculated enjoyment of the destruction and humiliation of others.
This is not a new type of personality. But in modern culture, where success has become separated from honor, they thrive. The sole passion they have is to win. The particular combination of sociopathy and high intelligence is a prototype for business success.
Harvard’s psychopathy expert Martha Stout estimates about 1 in 25 people are these indifferent, charismatic liars and the proportion is growing. You may have one at your picnic; there was one in your classroom at school; at one time you probably tried to date one.
Stout sketches a prototype sociopath growing up. He came from a privileged city family and stole from his parents. He enjoyed stuffing live firecrackers down frogs’ throats. He was so intelligent he cruised through college almost without studying and, graduating with an MBA, he was quickly hired by a large corporation, where he proved he could sell anything. “Lying comes as easily as breathing,” and despite subordinates complaining that he is insulting and vicious he starts on a meteoric ascent, marries a sweet, quiet woman, and before middle age is given a division presidency. He makes many millions of dollars for the company and enjoys his female subordinates as sexual plunder.
Stout explains that the brains of sociopaths work differently. Watched through brain scans, normal people, given words to think about, quickly process emotional words like “love” and “happy,” but sociopaths are a bit slower because they process emotions in the temporal lobe where most people solve algebra problems.
High Mating Effort
Stout also says there is a genetic base. Sociopathy runs in families and is partly hereditary – she estimates about 50 percent of it is inborn (42).
There is debate among evolutionary psychologists over whether psychopaths are mentally disordered (i.e. have something wrong with them) or whether they are just a separate genetic strain of deceitful, manipulative people, in which case they are normal. If it is a disorder, psychopaths are notoriously difficult to treat (they don’t voluntarily come in for psychotherapy, and if required to, they don’t change). Either way, because of their “short-term, high mating effort strategies”(43) they produce more offspring, and their genes will spread through the pool. From an evolutionary point of view, this type is becoming more common.
Our culture is unwilling to stop them. We furiously promote these smooth surfaced, antisocial people when they turn their talents to making money for the company. Then as CEOs and CFOs we give them extraordinary business power. In that position, the law supports them, because (as above) current law says the corporation has “the legal mandate to pursue, relentlessly and without exception, self interest, regardless of the often harmful consequences”(44).
Wrap this all around in the ruthless ideology of Social Darwinism, and nobody is safe. Democracy itself is not safe.
Democracy is something a sociopath loathes, because it represents public constraint by ‘little people’ on his autocratic power. And he doesn’t practice democracy inside corporate walls. What he often practices in the corridors and boardrooms is coercion and intimidation. Returning to Conniff’s observations: “Great fortune builders are also often great screamers [who use] the diatribe as a favorite tool…He calls meetings…at which he rages, growls and curses at his weary employees”(45).
Why is this type so successful? One possibility: because these malignant personalities are at home in the system. And the reason for that is that the system is malignant.
History contains several examples of sociopaths who have flattened democracies.
Here are some other odd personalities who appear in corporations, as described by Jean Hollands, a business consultant who can calculate the dollar loss due to a valuable employee’s bad behavior.
Large corporations sometimes hire high-ranking specialists and managers who come with personal problems which wear everyone down. These people are not just occasional curiosities; they can be found in every large organization. Company owners are aware of these scabrous personalities under the roof, but are startled to find out just how much they are draining the company since their styles affect many other people.
Hollands shows the owners the company they could be making hundreds of thousands of dollars more profit if they got rid of these misfits, but they don’t, partly because of the expense of firing and rehiring.
In her book Red Ink Behaviors she gives illustrations. The Intimidator (loud, domineering, abusive, throws tantrums, but somehow thinks he is funny), the Stressor (severe workaholic, spills her chronic frustration over coworkers in sarcasm and unending interruptions), the Micromanager (requires written reports at every turn which he examines line by line, is chronically overwhelmed by all this work), the Withholder (has data necessary for operations which she will not share, chronically late to meetings or absent), the Inconsistent (thin skinned, high drama, unpredictable hysteric, lapses into stream-of-consciousness communications) and the Techno-specialist (brilliant but won’t talk to anyone who’s not a technician).
These personalities are not easy to confront. They are extremely judgmental, to the point of mild paranoia, and if confronted they turn rabid or wall themselves up in their offices which is devastating to company morale, creating ripples of anxiety across the cubicles. And because coworkers usually back away from them, the offenders interpret this as a win, and they do it again. Hollands points out that this event, “winning,” is highly valued in high-stakes businesses (sales, legal, brokerage) where competitive individualism is prized, so nobody is sure what to do. So the toxic atmosphere spread by these bullies is borne, and everybody dreads going to work (46).
Adam Smith never talked about these odd personalities. Adams Smith’s main point is that humans are naturally self-centered, and if you allow all people to work in their self-interest, the nation will benefit.
But individual self-interest will not explain everything. You cannot build a successful economy with something like self-interest any more than you can toss a bunch of boards in the air and expect them to come down in the shape of a house. Much is missing.
Which means a search. Requiring a long journey through rarified concepts? No, I believe the search will take us places we already know. And I am swayed by Nietzsche and his habit of scorning academics who want to make things complicated. The great problems of this world, he said, are not in misty metaphysics. They are in the street. Particularly they are in places we don't expect.
We don't care to look down. Is it because that direction is filled with nothing interesting?
The media seems to affirm that. Apparently, time spent on the lives of workers would be gilding a vacuum. If we follow the media, we will always look up.
That is why we are missing answers.
A tree’s height and its depth are connected. Everybody accepts that because the tree is an organic whole. A building is another kind of organic whole, and if the building is built taller, its foundation must go down. But libertarian economists refuse the heights and depths of our own society to be connected – yes, the rich get richer and the poor get poorer, but that is somehow a coincidence because everybody is free.
In the life of a tree, what happens below determines what happens above. And I believe if we want to understand how an economy creates such high levels of wealth, we will need to look at its soil, and below, even if it is not pretty where the roots are coiling and clenching the rubble.
What do we hear when we hold our ear to the soil?
We can start with the broad question. Why do we work? It is a fair question.
We want to jump in: “To earn a living,” “To support the family,” “To get ahead.” - All partly true, or true for some people.
Actually the broader question stumps professional analysts. The cover story of a 2003 issue of US News and World Report titled “Why we work” wanders around for several pages and is simply evasive, but says: “Some do it for love. Others do it for money. But most of us do it because we have no other choice.” (47)
That doesn’t sound like the freedom shouted up by libertarians.
The goal of businesses is product and profit. If American all produced something new in their work, we would be a prodigious and much happier society. In fact, worksites are often not what we would expect. Huge amounts of work effort are spent overcoming inefficiencies. What inefficiencies? Workers often spend hours trying to find, cleaning up, checking, losing, leaving messages, not connecting with, misunderstanding, delivering to the wrong place, catching up, waiting, repairing, clarifying miscommunications, correcting mistakes - myriad forms of blather and delay – and all exhausted at the end of the day.
So answers to the question “why do we work?” like, to make, or to produce, are part of the myth of work, but to get a little more reality we need to look at things the textbooks don’t talk about.
A part of the answer is supplied by what happens at work.
One thing that never fails to happen on the job is hierarchy. Hierarchy is ever present in manufacturing, service, private, government, military, civilian, inside-work, outside-work, unsuccessful, successful, full time, part time, day, night, sea, land, intense and indifferent jobs. It is much more predictable than - much more reliable across worksites of different kinds than - money, motivation, service, satisfaction, effort, efficiency, profit or product, which vary.
What hierarchy ensures is control. (The US News article does point out that although more workers are using their homes, it is no escape from hierarchy - and the phone and emails don’t stop after 5:00 p.m.)
So if I go to work for someone, I will enter some sort of hierarchy. And if I go to work for someone, somewhere, I am also selling my personal freedom for a wage.
So most work sites create the opposite of the two basic values of democracy, which are freedom and equality.
This is a dark pond into which nobody ever tosses a stone.
Should we say, the more people working, the more satisfied the nation? That would be nice. But realistically, the more people work, the more people are enmeshed in a system of control which is nondemocratic. That’s not such a cheery thing to say, but we are tired of having the world made cheery by the method of painting our windows blue. If we want to see better, we will have to scrape it off.
And these topics do not make easy conversation with our co-workers. At this point in our search we’ll meet with a lot of silences. We verge on taboo.
Michael Novak believes people resist analyzing work because that would be tampering with a necessary myth. We might find contradictions. Any contradiction would threaten society’s foundations. The value of hard, competitive work is our society, Novak says. It is painstakingly reinforced from birth and “without that myth our society is inconceivable.”(48)
The origins? Generation after generation of young persons are taught that work is the route to personal dignity and worth. For each child this is repeated in one form or another through school and a light is turned on. Success and failure is everything; no ambition is too high. These myths take a deep hold; they have the spiritual power of hope, and by the time a school graduate enters the workforce he is ready for something momentous to happen.
So each worker starts out on a personal quest. If he talks to other workers about his dreams of growth and expansion, they smile, and later he notices old workers at his job doing much the same work and he starts to think, and to keep his inner visions quiet. Gradually he sinks into routines. He dodges the inanities and politics of the workplace. After many years, that inner light, once supple and strong, is changed. Work doesn’t change much. If the child originally dreamed of being in the NBA or being an explorer, working in an office will feel like a cul-de-sac. But he does the work. He becomes a watcher-of-others. Later perhaps he still has hope, but it is in a different form: now he is darkly working on a distant hope of vindication. Even later he changes again. Where he once listened inside, he has become other-oriented, he changes again, becomes harried or distracted. He works because of obligations, or for security, or for the company. If the light goes out, this is the way he will finish his days, in routines, swimming with all the others, in these vast pools of irrelevant direction. (49)
He was from the start harnessed to somebody else’s dream.
Nonetheless, as this person grows up he will stir the same myth in his own children.
This wreckage of myths is where we do not want to look.
Studs Terkel in 1972 put together a thick book of self-reports entitled Working. He interviewed workers of all kinds, from proofreaders to nurses, to stockbrokers, to hookers, to jockeys, to welders, to executives, to stone cutters, to accountants, to dentists. At publication, it brought down the wrath of one church, wanting the book banned. Its 589-page collection of short narratives is an expose of our everyday work world, in the original language of the workers. This is the introductory paragraph:
This doesn’t match Adam Smith’s snappy view of the workaday world as busy pin factory workers and energetic vendors hauling goods to market, like bees in a hive. So is it lies?
If Terkel was the only writer, we might come away thinking he's a hothead. But he’s not the only one. More recently a woman from the academic elite used a different method.
In 1999 Barbara Ehrenreich, who holds a Ph.D. in Biology, tried an experiment. She changed her clothes and climbed down the social ladder to be a person living on minimum wage. This level of society is called the working poor. Being trained as a scientist, she took careful notes. She detailed her experiences in the book Nickel and Dimed. One after another she took six jobs, for a minimum of a month each, including waitress, hotel maid, house cleaner, nursing home aide, and WalMart salesperson. She drove a car, but made herself live each month only on what she could earn – mostly at $6 and $7 an hour. This meant living in the cheapest lodgings (trailer parks, motels, downtown hotels) and eating on a narrow, bland diet.
The jobs were available. Once on the job she was an exemplary worker. But her first finding was that it is almost impossible to work for those wages and survive. For instance, monthly earnings as a waitress in Florida were $1,039. The cheapest rental she could find was a $500 efficiency, and food, gas, laundry, utilities and phone and toiletries came to another $517, leaving her $22 for everything else. She moved to Maine, hired out as a house cleaner, scrubbing young yuppies’ houses, making $6.65, and paying $480 rent for a room, and so on.
Her second finding was that the jobs often involved exhausting effort, and overtime, and in some jobs she literally worked by the sweat of her brow so that all she wanted to do at night was watch TV over her dinner and then fall asleep.
She became socially invisible - interacting with nobody except her immediate supervisors and coworkers; she felt ‘disappeared’ from society. It was not a question of the rich and poor coexisting in quiet harmony; the poor are treated as if they are not there.
She endured humiliation, abuse, and routine violation of privacy, and sometimes had to surrender basic civil rights. As a waitress she was told that her purse could be searched at any time by management. There were rules against talking on the job. Constant surveillance, being written up by the shift supervisor, and being ‘reamed out’ by managers were all customary parts of the job, also being subjected to drug tests (which in some cases included stripping to underwear and urinating in presence of a specimen collector.) After a while, she felt she was not just selling her labor but her life.
Ehrenreich muses that since the people she was around were all hard workers, there seemed no purpose to the authoritarianism of managers except to create a culture of extreme inequality. Demeaning employees sometimes seemed attractive for employers. The repressive management style also produced the feeling of failure and shame, which, she suspects, keeps down wages because eventually workers think so little of their own worth that they accept the low pay.
Ehrenreich is one writer who has paused by this thought. We have a massive cultural contradiction. "We can hardly pride ourselves on being the world’s preeminent democracy, after all, if large numbers of citizens spend half their waking hours in what amounts, in plain terms, to a dictatorship.”(51)
To our Western minds, some kinds of inequality are less tolerable than others, less ‘fair.’
Actually there is no human society with perfect equality. All cultures contain some inequality and the big question is the criterion, because some reasons for inequality are seen as unjust. For instance America thinks monarchy and inherited aristocracy are wrong, but in neighboring Canada they are accepted. In some communities, rank is based on brute strength, in others, pureness-of-heart. Nobody likes to be low in any hierarchy.
Societies with inherited rank also find it’s inefficient. The British, for instance, used to give all their top government jobs and high offices to relatives of nobles. The problem was a lot of the nobility and their relatives are not very bright. As a society grows more technological it needs more pure intelligence to run it. So a century ago, the British started awarding important positions by qualifying exams and educational achievement, open to anybody.
But there’s a benefit to being in a hierarchy by birth: being low is not your fault, and it’s not a moral problem.
In America the idea that anybody should be able to rise is old, and a person’s position has always depended more on ability and accomplishments. This is meritocracy. Meritocracy seems more democratic. It is appealing because it seems to be all about self-steered destiny.
But by the same token, meritocracy introduces blame for low rank. If you haven’t accumulated accomplishments during your life, your low rank is a moral problem because you were free and you had the chance.
In America, therefore, the rich are better, the poor should be ashamed.
All this creates a special set of fears called “status anxiety” by de Botton (52) and “fear of sinking” by Kilmer (53), an obsessive concern with social status.
After all that work at minimum wage, Ehrenreich experienced how it was easy to spend your working life sinking deeper into debt.
Economic indebtedness takes away some of your freedom, but many people who are affluent don’t understand money traps, so here I’ll spend a few words on a topic that is technically on the consumer side.
Perhaps this will all fall into focus leaf by leaf.
After decades of aggressively distributing credit cards to virtually anyone who can sign, lenders have worked themselves into a paramount position of power. Now the average person is obligated at about $8,500 in debt. Lenders can charge interest up to 30%. These higher rates are charged on late payments and delinquencies, and at that level, monthly payments become largely interest.
Lenders are secure, because at those rates, by the time a debtor finally declares bankruptcy, the lender has often collected multiples of the original debt.
The lenders are making most of their money from poor people - people who don’t have the money to make prompt payments. Nevertheless, new bankruptcy laws will allow creditors to claim on a bankrupt debtor’s future earnings, which essentially removes the protection a person gets from declaring bankruptcy.
Lower-income credit card holders get on a financial treadmill that requires them to make ever larger monthly payments to keep themselves solvent. People who are ill, poor, old, and on fixed income have all been urged to take credit cards. Then they are largely sealed onto a wheel which never pauses.
Debt payments are the scourge of the poor but this is a spreading problem and it now includes the middle class.
Many countries have usury laws that control predatory interest rates. In Europe these laws date back centuries. In the United States the laws vary from state to state. Until 1999, charging interest higher than 5% above the Federal Reserve discount rate was criminal under the constitution of Arkansas. But some states have no usury laws, which is why powerhouse Citibank relocated its credit card division from New York (interest cap 12%) to South Dakota, and from there works an interstate credit card business charging as high as the market will bear. Today’s trend is for states to loosen their usury laws to attract more banks.
Public opinion is gathering against these lenders. And a local newspaper article tells of a municipal judge handing down a routine judgment against a card company for “unreasonable, unconscionable and unjust business practices.”(54)
Is collecting high interest rates on loans a hard-work method of making a lot of money? Hardly. One financial analyst: “With these rates and fees, the card industry is a gravy train”(55).
What about the people who declare bankruptcy? Aren’t they gamblers, system tweakers, profligate spenders? Rarely. People usually go bankrupt because of severe misfortune. Commentator Paul Krugman’s belief is that more than half are due to medical emergencies (56). Actually a Harvard-based study by Warren and Tyagi, the ongoing Consumer Bankruptcy Project, shows only 13% of bankruptcies stem from credit card overspending or from covering bad investments, or the like. Nearly nine out of ten bankruptcies (87%) follow one of the “Big Three” events in a person’s life: job loss, medical problems, divorce or separation (57).
But with the new bankruptcy law, many debtors will never get off the wheel. Krugman fears America is gradually returning to a “debt peonage” society, after a practice in the post-Civil War South, in which debtors were forced to work for creditors.
For the past few years our national leaders have encouraged us to believe our national destruction is imminent at the hands of an evil foreign enemy. Possibly before that, legal loan sharks will eat us out from within.
Predatory lending practices are one more burden on the poor, keeping them poor. It is very hard for the exploited to escape shame and inescapable debt is one reason for the melancholy that haunts the lowest regions of this society.
Credit companies look resplendent in media commercials, situated high in wind-brushed, glass buildings with whispering elevators, manicured executives, and elegant beauties for receptionists.
This industry is banditry.
Is Exploitation Wrong?
If you can make wealth through hard work, you can also make it by getting others to do the work for you – even children get this insight.
Getting other people to work for you is using them. Whether using people is immoral is a debatable question.
If somebody is willing to change a flat tire for me, I am using that person. Nobody sees anything wrong. But isn’t that exploitation?
Actually, says ethicist R. J. Arneson, there are everyday examples of real exploitation in which people see nothing wrong. Children exploit their parents for trips to the mall and money to spend. Parents exploit their children getting them to do household chores. So it seems exploitation is not always bad. Arneson says the word exploitation has two meanings (1) simply to use somebody – no problem, but (2) if you use them and mistreat them in the process, there may be a moral problem (58).
Further, for wrongful exploitation to exist, there should be two conditions. First, the mistreatment (an injustice); second, the person cannot leave. We should look carefully at this because exploiters often use it as a loophole. But together, mistreatment plus no freedom to leave amounts to oppression.
Again, history is replete. No culture has been free of it, and the revolts, revolutions, mutinies and reformations found in the pages of history books are all accounts of oppression and its overthrow.
But whether exploitation is wrong continues to be argued. Sometimes exploited humans do nothing but adjust. What if the oppression is accepted? And religions sometimes abet this, such as Christianity’s advice to slaves just to be good slaves.
Karl Marx was the first to open exploitation for economic debate (59). After a brief summary of Marx’s points, I’ll touch on some modern theories.
Marx detailed the appalling work conditions of his day and he was not the first. Ferguson (60) Ruskin (61) and Dickens in his classics also portrayed workers at mind-destroying work in thundering foundries, weather-torn fields, slippery meat houses, 14 hours a day, six days a week, and forced overtime; all for trickle-thin wages, and all accompanied by routine abuse from foul overseers, capricious fines, and often, at these wages, only floor space to sleep and bread and soup to eat and ragged clothes – in all a bestial lifestyle; but in all the same, across cities and farms, workers were paid just enough to survive. (Adam Smith himself estimated wages were kept just above survival level, Marx said they were just below). And since the employers also owned the rentals and the stores, the money workers made frequently went back into the same pockets it came from and the laborers found themselves in a trap from which they could never rise.
Here’s the way it goes, Marx said. Laborers produce things. Being poor they can only rent out their labor. They have to use their employer’s tools or land or raw materials. The product of their toil is taken from them by the employer who then sells it for as much as he can, and turns round and pays the employee as little as he can in wages, because the difference is profit and the mission of capitalists is to maximize profits. Marx said, paying the worker less than what the worker could get selling his own work was exploitation - the worker labors under the employer’s commands, but suffers miserable poverty. This, Marx goes on, is not an aberration. It is a routine part of capitalist operations (62).
Marx could discuss everything capitalists talk about; profit margins, the utilitarian greatest good, risk, stockholders, overhead, economies of scale and the expansion of industry. But he picked up the whole situation by a different handle. He said, exploitation is immoral.
Capitalists protested, work is a free exchange. The workers are in our factories by choice - so where’s the oppression?
Marx said in practice the workers are not so free to leave because the wealthy owners of factories and farms across the land roughly match each others’ wages and rents. So in practice the worker can do no better by moving. In all, labor is sealed into a large closed system. The system is oppressive. It is also to the benefit of the employer class, who do very well.
If you are forced to work, that is called coercion. Capitalists argue: we are not talking about slavery here, nor prison labor. Signing on to work with us is a consensual act. Marxists throw back: but these workers are constantly in debt due to your starvation wages, and this amounts to economic coercion because each person is obliged to try to clear his debts. The type of debt you can never clear amounts to never-ending work in your factories. Where’s the freedom?
And another thing, Marx went on. Notice how property ownership is connected. The exploiters have the factories and the tools, the exploited don’t. Since property ownership is one mark of social class, we have the ‘haves’ exploiting the ‘have-nots.’ Marx asserted this: property itself is a moral problem. And since the property-ownership system is wholly supported by the law it’s not going to be easy to change.
Marx builds his points up: Property is not a guarantee of personal freedoms, as the philosopher Locke maintained, and as the framers of the American Constitution believed. Property is a legal instrument of oppression. And there is class warfare.
Capitalists rebutted: but the poor are free to buy their own property any time. Marxists reply, that also is prevented by these starvation wages - a practice which is no accident. It is deliberately in the capitalists’ interest to keep a large supply of people poor, desperate and willing to work dirt cheap. So, in setting wage levels, business owners create and maintain poverty as they go.
Poverty is also powerlessness. Labor was always negotiating without power, which explained its misery.
Marx was an energetic writer and he used words like “theft” and “embezzlement” to describe employers taking what their employees made. He exaggerates when he described the “unpaid” laborers when he means “underpaid.” But Marx also said: all this has got to change. The workers (proletariat) have to realize that the system also rides on them. Without the workers it collapses. So the workers should seize power.
Which led to revolutions. Last century, entire national social structures were overturned. Because Marx’s points were clear. They show that the less the workers are paid, the greater the success of business owners. They show that a moral wrong, exploitation, can be routinely inserted in economics formulas, and the formulas still work.
Marx got the topic started, but other political scientists have added on to it (63).
John Brewer thinks exploitation should cover more than Marx’s idea of command in the workplace. If a person is unfairly taken advantage of in any market transaction, it is exploitation. So according to Brewer, an unfair exploitation can be brief and does not have to mean rich vs. poor. Exploitation involves a person receiving lack of just deserts (64).
R. J. van der Veen adds that exploitation is not just a feature of capitalism. It is just as possible for exploitation to occur under socialism and communism if the state commands the individual which work to do, pays him what the state thinks he needs, and if he winds up mistreated and not free to exit (65).
Robert Goodin states that behind the whole notion of exploitation is the expectation in a civilized society that we practice fair play. It’s alright to go for advantage against others who are roughly equal. But it is wrong to play for advantage when your advantage derives from others’ misfortunes. Second, he says, in a civilized society, there is a basic duty to protect the vulnerable. Exploitation is violating this duty (66).
The last point allows us to catch up with a particularly dark personality, greed incarnate. This employer thinks he is his money. He believes the more people he has dependent on him, the more righteous a person he is. So he employs a lot of people and wants to hear all their gratitude. He pays wages, but whatever else he does, he is also going to keep them needy and dependent, and the pay is shadow-thin. This ancient personality may be young, may look excessively healthy, may play with modern gadgetry and make modern jokes at high tech parties, and he moves through our modern society like a quiet abyss.
Varieties of Fear
Most people think there is no fear in the contemporary workplace. Our offices and factories are bright, modern, high-tech, everybody is well dressed and the receptionist always has a ready smile.
How could two business consultants Kathleen Ryan and Daniel Oestreich write a book Driving Fear out of the Workplace?(67). Because the authors have interviews and survey data from their work in 22 modern business organizations showing fear is common. True, American employees are not afraid of being slugged, ambushed in the restroom or assaulted in the parking lot unless they work as teachers in inner city schools. But in the nation’s factories and office buildings there is fear of other varieties. And most workers are not afraid of the customers or clients. The source of their fear is supervisors and managers.
Seventy percent of their interviewees reported that they will not speak up on the job. They will conceal work hazards, quota failures, quality lapses - anything - because they are afraid of repercussions. What kind of repercussions? Depending on the firm and the manager, anything from refusal to answer and glaring eye-contact (“the look”), to public criticisms, to yelling, insults, threats, tantrums, demotion, being written up as a whiner or troublemaker, to loss of the job. The result is that when managers call workers in to meetings to ask for feedback, or reports, or policy sessions, the workers sit around the table in frigid silence - pure anxiety.
Ryan and Oestreich’s analysis shows the more fear there is in a company, the less it is talked about. In Chris Argyris’s words, fear seems to be self-sealing. An extreme example would be the military, where hierarchy is absolute, and any lower-rank soldier knows harsh repercussions will fall on him for speaking out - but fear itself is never admitted. Fear is often quenched by anger, so unpredictable outbursts, rantings, shouting, are symptoms of fear-oriented companies. Third, they say, the more fear-based an organization, the more it will make claims to be efficient, systematic and rational - it defines any emotion as irrelevant, so fear is denied or ignored. Still other companies treat fear as an externality. (Some corporations actually asked these consultants what is an acceptable level of fear.)
Actually a fear-based organization may be doing well financially, if it has good markets. But other things being equal, these authors say, fear loses you profits. Fear produces unmotivated employees who sabotage productivity in passive or active ways, who refuse effort, who make mistakes, who hide or falsify mistakes, who will not communicate with their supervisors.
Other symptoms are slow to appear. Some effects of fear are gradually accumulating. Threats and insults may make employees work harder in the short run but in the long run will produce absenteeism, loss of creativity, depression, sleeplessness, crying, tension, ulcers and illness. These are very difficult to reverse. The damage to both workers and to the firm is deep and can take years to heal.
Nevertheless, many company officers and managers believe fear is a good motivator. Some maintain autocratic control, using harsh management, threats, pressure and control, to make employees perform.
How does this all start? Ryan and Oestreich’s theory says in the beginning management assumes that workers operate from a philosophy of self-interest. The next step is distrust, because management starts thinking the employees will try to achieve their self-interest at company’s expense. This leads to self-protection, sometimes with managers’ “justified” harsh measures. Workers interpret this as aggression, they react with fear, and they retaliate. A cycle is started. It will escalate.
The basic formula is that assumptions of self-interest eventually lead to fear.
Naturally in fear-based groups, there is no trust. Instead, owners and managers aggressively demand loyalty.
The therapeutic goal is to reestablish trust in the organization. This is not easy. Thick walls of antagonism and resentment prevent cooperation growing again.
Ryan and Oestreich’s points are clear enough. But they are naïve when they saying that management starts out by “adopting” this assumption of self-interest. Actually, management has little choice. Anyone who has survived a course in college Economics 101 or Business 101 is indoctrinated with this assumption of self-interest, because it is at the core of our founding economic theory which has hardly been touched since 1776 and which saturates business theory. Any manager who has been to school considers it straight thinking.
Which puts a new contour on things.
If the assumption of self-interest leads to fear, then Adam Smith’s theory, which rests on self-interest, is responsible for spreading vast amounts of fear, for eons, for miles, and into the depths of the spirit of the workaday world. And the many-footed formulas of economists do not change that. Anyone who employs other people and uses these assumptions to maximize profits is a promoter of these vile “externalities.” Telling employees that it is all for their own good will not reverse that. The employer protesting that he is uplifting the community by bringing in business, manufacturing and sales does not reverse it. If we believed those protests, we would have to believe that fear is uplifting for business and uplifting for everybody’s life, and so, ultimately is patriotic.
In these worksite descriptions democracy looks remote.
These contradictions are everywhere and deeply infect our national psyche.
If you want to remove all the fear, you’ll first have to change the overarching Adam Smith theory.
I have readers here who do not believe there is fear in the workplace. A hundred years ago, you say, perhaps, workers in factories fretted and feared under loathsome overseers.
The following description is from last year’s newspaper. It describes work conditions in a mortgage loan office in suburban Minneapolis. Sales employees work the phones hour after hour. They sit in rows of cubicles. They are cold-calling, trying to find house-buyers to sign up for mortgages. The company owner is a billionaire. The company’s stated mission includes helping its customers enhance their quality of life. And what is it like working inside the walls of the company’s offices? – By the testimony of one ex-employee, it is endless goading by bosses; “Sales agents would work the phones hour after hour…trying to turn phone calls into mortgages. The demands were relentless: one manager prowled the aisles between decks like ‘a little Hitler,’ hounding agents to make more calls and push more loans, bragging that he hired and fired people so fast that one worker would be cleaning out his desk as his replacement came through the door.” Another employee from the same office: “[Its managers] really are all about making the dollar and dealing with the consequences later.” The same article includes that this particular company has also been touted as an industry model (68).
These managers aren’t waiting for the theories of Darwin to explain that injustice is in the nature of things. They are taking things into their own hands.
Of course, the workers are always free to leave.
But what if we don’t have the money to pay our debts? We are legally obliged to pay our debts. So that freedom fades.
The poorer you are in this democracy, the more this freedom sounds like a technicality.
Or perhaps we self-delude. Our desire for freedom sometimes leads us to see things the way we want, somewhat along these lines by poet Fernando Pessoa: “Inside the coop where he’ll stay until he’s killed, the rooster sings anthems to liberty because he was given two roosts.”(69)
If Adam Smith was right, then all the people in this nation who don’t like their work are maximizing their happiness by choosing between the dread of no income or the dread of endlessly going in to work they despise. This is a slender improvement in happiness. Both choices inhabit the region of fear. It is a strange political economy we have that stands on this slender ledge and yells, “freedom!”
Millions of the undereducated, poor, or vulnerable do unending menial jobs, and are told they can follow their life dreams, and told they can rise, when they never have the power. Millions of Americans struggle and suffer trying to make ends meet and find themselves diverted for life, paying debts.
And will abused workers leave?
This psychological research is haunting.
Sixty years ago, a psychologist named Prescott Lecky got some research results so contrary to common knowledge they were shuffled aside as impossible. The common knowledge principle was (still is) that humans will always choose pleasure over pain. Lecky found people suffering with low self-concepts are the exception; they seek confirmation of their low belief in themselves - which is to say, given a choice, they will rather be in the company of a person who puts them down.
In 1945 this little bit of heresy expired quickly and psychology pushed ahead believing people with low self-concepts should all the more hungrily seek reward and pleasure. Lecky’s findings were junked.
But fifteen years ago William Swann and his colleagues decided to give the idea another shot. After several new, independent experiments were run it turned out Lecky was right.
A typical experiment goes like this (they vary in detail). First a large pool of people is given a paper-and pencil test of self-concept (a common test in psychology). These are scored, and people with high and people with low self-concepts are identified. Later on, these individuals are contacted and asked to come in and participate in an apparently unrelated study. When each one comes in, he is asked to sit down and write a personal essay about himself, about a page. Next, a person he’s never seen before comes in the room. He comes over, picks up the essay. He reads it, and either exclaims (depending on the flip of a coin just before he came in the door), Well I can see from your essay you’ve got a great personality, honest, intelligent, popular – or – Well I can see from your essay you’re not so great, not very bright, unpopular, also a phony. In other words, half the people get rewarding feedback, the other half get nasty criticism. Now comes the main point in the experiment. All of the essay writers are asked how much more time they would like to spend with the person who read their essay. Results? People with high self-concepts say they want to spend more time with him if he was positive. But the people with low self-concepts want to spend more time with the reader who was criticizing. It appears they choose more pain over pleasure. Apparently, more important than pleasure is to be with somebody who verifies the way you see yourself. “Yeah, that’s pretty close to the way I am,” and “He sums up pretty close to the way I feel,” were typical explanation for the choices of people who felt low about themselves. This effect is especially marked in depressed people (70,71,72 ).
Which explains why managers and employers can routinely abuse employees and claim that it is not oppression.
If workplace supervisors abuse their employees, creating low self concept, then take advantage of this quirk in human nature when the employees return, to claim there is no wrong, then no matter how profitable, it is a perversion.
I’ve avoided the topic of race. Race has been, and still is, a chronic source of debilitating problems. But we are conditioned to think about social problems in terms of race, so for instance, when we read “underclass” we reflexively think, inner city blacks. Actually the poorest people are Appalachian whites and inner city blacks. They are the lowest class, but Americans have been discouraged from using class to understand anything (Noam Chomsky says if you talk about social class they label you a conspiracy theorist (73)).
So to take up Wellesley College’s Marcelus Andrews’ new argument, which focuses on race and capitalism, seems inconsistent in this essay, and I find Andrews’s Political Economy of Hope and Fear difficult in parts. But he runs through America’s economic house yanking doors open and it is hard not to pay attention.
Andrews: For hundreds of years we have assumed race and poverty go together (poor equates with ‘other races’) so we may be surprised to learn that today, the largest group of very poor people in America are whites; and their numbers are increasing. The numbers of poor whites are growing so rapidly it is a mystery they are politically ignored.
Poor people of all races now have little chance of ever making it up to the middle class - for a complex of reasons including economic: the loss of jobs as capitalism goes global; technological: the sudden demands of computer skills at work; and attitude: Americans are really unsure if they want to provide equality of opportunity, because they believe a market economy thrives better on inequality.
Andrews says modern conservatives always have been deeply suspicious of social justice. They are openly opposed to welfare programs. They are going to let poverty be a goad.
Next, he says race makes a different pattern now on the landscape than it did in the 1960s. Blacks have more than proved themselves capable, as many, released from the old Jim Crow laws, have climbed and 75% of black families are not poor any more, but the lagging 25% are in a predicament shared by very poor whites. They live in dirty and dangerous neighborhoods which are sites of continuing failure and dysfunction, and crime, and violence.
Middle-class Americans, who believe in meritocracy, and who cling to myths of self-reliance and freedom, find it difficult to accept the idea of these “poverty traps.” Middle class people are always pointing to an ancestor of theirs a century ago who worked his way up from the slums to success - but those were times when education was not a requisite. With today’s technology, a poor education really is a suffocating disability. And that is what the poor get in these neighborhoods. But that is interpreted as the free market.
With selling drugs and selling sex always an alternative, the poor inhabit the underside of the same free market where there is misery and death. The rest of America, believing its system of meritocracy should be universally applied, accepts that fate as the penalty for lack of ability, education and willingness to work.
Andrews continues. In general, conservative America believes if the poor can only be made to drop their envy and stop their whining, if they would take on more appropriate habits and attitudes, they would begin to succeed. They believe the poor are behaving badly.
Hearing that feelings of despair and inferiority are unequally distributed does not move conservatives. Under meritocracy, it is just deserts. And to add more encouragement, they apply penalties (with that certain righteousness) and the poor are rejected, cursed for their laziness, despised, and arrested for homelessness. That creates fear, because in fact they cannot leave - first because the poor are discriminated against, just as blacks are - and second, they are not all free to leave their failure behind because of the nature of meritocracy. Meritocracy is a system in which some must fail.
Resentment and hostility boil in the underclass, which the rest of society dreads and sends in police with nightsticks (“punishment is by its very nature the deliberate use of public power to inflict pain on offenders”) and the feelings and the alienation only grow worse.
Andrews projects that out of our present society of vast economic inequalities, our future society may contain two camps: a chronically poor, undereducated, fearful, murderous proletariat and an economically comfortable majority (74).
I could use the milder word and say anxiety is a persistent part of the lower reaches of the economy. It is better to be honest and call it by its real name: fear.
I am not arguing the poor are colonized by wealthy employers and lenders in the market system of work-and-debt, but if I wanted to make that argument, there is plenty of ammunition. Our economy runs on a good deal of fear, including fear-of-consequences, which is missing from current economic theory. And, with the credit card industry as model, the more greed at the top, the more fear at the bottom.
Some people turn their eyes. Others actually prefer it that way.
It is in the interest of our economy, at least of the top rungs of business, to maintain this anxiety.
Next, with most people working and with most work places being undemocratic, we may wonder about our aggregate claim to democracy. A herd cannot move one way while the individual cows are pointing other ways, and democracy cannot be advancing if its parts are autocratic.
We don’t have equality. Preserving what freedom and what justice we have will take eternal vigilance.
Fear does to a nation what it does to a business. It may be a short term motivator. But in the long run, fear is debilitating. It is an enzyme of decomposition and dissolution.
Even when Darwinists say fear and hierarchy are unavoidable parts of a dog-eat-dog world, we can press for justice. We always have. We have been fighting injustice, and winning sometimes, as long as we’ve existed and we should not let the authority of science shut us up.
We want our morality back.
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