December 14, 2006: An Economist for the Age of the Service Economy

As we continue to debate the question of whether or not service is a "science" and what sort of academic curriculum (if any) provides the necessary foundations for study we would do well to check out the resume of Deirdre McCloskey in Alan Ryan's New York Review article about her recent epic volume, The Bourgeois Virtues. McCloskey is, in Ryan's words, "a professional economist, trained in the Chicago School;" and, back when she was Donald McCloskey, he was one of the key economic advisers to the Reagan administration. (The "pronoun shift" was documented in her book Crossings, briefly cited by Ryan and excellently reviewed by Maxine Kumin in the November 14, 1999 New York Times Book Review.) With both Ronald Reagan and a sex-change operation behind her, McCloskey is now a distinguished professor of economics at both Erasmus University in Rotterdam and the University of Illinois at Chicago. She is also a professor of rhetoric and English and has published knowledgeably in the areas of history of ideas, social theory, and philosophy. Given that both the theory and the practice of economics now has to contend with the rise of the service economy (not to mention globalization), I can think of no better combination of academic disciplines to meet this challenge!

October 30, 2006 (1): The Final Steingart Installment

Today's SPIEGEL ONLINE provided the final installment in the translations of excerpts from Gabor Steingart's Weltkrieg um Wohlstand ("war for wealth") book. Once again the title is as provocative as it is relevant: "Twisting the Knife: Consumers Are Killing the Welfare State." This one actually makes an excellent companion piece to the Book TV broadcast of a lecture that Joseph Stiglitz recently gave to the World Bank to discuss his new book, Making Globalization Work. Stiglitz is the perfect antidote to anyone who has had too much over Tom Friedman's cheerleading, and he even took Friedman on by using the guy's own language. I cannot duplicate the words exactly; but what Stiglitz said went something like "Not only is the world not flat, but it is getting less flatter every day." This then gave him an opportunity to discuss the unpleasant consequences that may ensue from a Digital Divide which is growing larger, rather than smaller.

Unlike Friedman, Steingart is not concerned with the mission of making us feel good. He writes about German consumers; but he could just as well be writing about consumers in any industrialized and Internet-rich country:

The normal shopper at a German department store like Karstadt, wholesale retailer Metro or grocery discounter Lidl is a downright globalization fanatic. He compares prices and services but not nationalities or their social security systems. He wants his rebates and does not want additional charges. He is interested in the good deal, not in the dirty business already going on elsewhere in the world.

Even if he considers himself a romantic, he is actually a materialist by the book. It is only outside of business hours that he occasionally entertains idealistic doubts. And only then does he start to ask himself how it can be that he can obtain such large carpets so cheaply or why the prices on computers and mobile phones these days are so low.

This eventually leads him to a punch line that is not unfamiliar but still bears repeating at every opportunity:

What is important at this juncture is simply the realization that the global labor market, as we have invented it up to now, has created a unified sovereign territory for goods producers. The demand for labor now moves from one land to another, and naturally prefers those states with the lowest possible supplementary social costs.

Many who considered the social market economy to be the final stage of history are now being forced to admit they made a colossal error. Capitalism has, thanks to a global labor and finance market, increased its range, while the social safety net has lost ground. The market has gained power, speed and apparently also inevitability. But the social triumph of yesteryear has faded. Indeed, capitalism is going back to its roots.

I suppose I have enjoyed reading these essays because Steingart follows a path that I have tried to advocate for some time, the path of reasoning about consequences. In all fairness to the average consumer, it is not easy to reason about consequences when your finances demand that you get the best price for every purchase you make. So perhaps Steingart has been a bit extreme in picking on those consumers, but whom should he target? It is all very well and good to say that governments ought to deal with long-term questions of economic viability; but what are any of us to do when a government shirks that responsibility? Passionate talk of revolution is no solution, since the odds are not good that the resulting system will be any more conducive to long-term thinking. Unpleasant as it may sound, we may all have to face up to being responsible for our own assets and apply those assets towards building a safety net that can withstand future abuses from the movers and shakers of the global economy.

October 26, 2006 (1): White Trash Comes to Europe

SPIEGEL ONLINE is continuing to run English-language excerpts from Gabor Steingart's Weltkrieg um Wohlstand ("war for wealth") book. The title of today's essay is "White Trash, Fast Food: How Globalization Is Creating a New European Underclass." This is a must-read for all zealots who see globalization as the instrument of spreading the American value system around the world. If ever there were a be-careful-what-you-wish-for story, this is it!

As others have pointed out, there is not questioning the ways in which things have gotten better. Where the questions arise concerns the consequences of those improvements and whether or not things are getting worse at the same time they are getting better (and we simply choose not to look in the places where they are getting worse). Here is an excerpt from the argument of this particular essay:

We know, for example, that today's proletariat is richer than the worker of generations past. Indeed, with a little skill, he can tap into the coffers of the state's social safety net, which provides him with access to an income comparable to those of police officers, warehouse workers and taxi drivers. Thus, it is not material poverty that separates him from others.

Rather, what stand out are the symptoms of intellectual neglect. The poor of today watch television for half the day. These days, television producers even refer to what they call "Underclass TV." The new proletariat eats a lot of fatty foods and he enjoys smoking and drinking -- a lot. About 8 percent of Germans consume 40 percent of all the alcohol sold in the country. While he may be a family man, his families are often broken. And on Election Day, he casts a protest vote for the extreme left or right wing party, sometimes switching quickly from one to the other.

But the main thing that sets the modern poor apart from the industrial age pauper is a sheer lack of interest in education. Today's proletariat has little education and no interest in obtaining more. Back in the early days of industrialization, the poor joined worker associations that often doubled as educational associations. The modern member of the underclass, by contrast, has completely shunned personal betterment.

He likewise makes little effort to open the door to the future for his own children. Their language skills are as bad as their ability to concentrate. The rising rate of illiteracy is matched by the shrinking opportunities to integrate the underclass. The Americans, not ones to mince words, call them "white trash."

So, once again, the story comes down to education, this time in the setting of that condition of anomie that so occupied Émile Durkheim. Now the debate has to move beyond the question of whether or not we are teaching things of lasting value. Now we have to address whether we are succeeding in teaching anything at all. Look on our works, ye mighty, and despair!

September 01, 2006 (2): Hope Needs More than Help

There was interesting discrepancy today between what one saw on BBC World Service Television News and what appeared on the BBC NEWS Web site. The headline on the Web site was "Donors pledge Palestinians $500m." On the television the story began with a clip of Jan Egeland addressing a gathering of donors in Stockholm, trying eloquently to get across the message that "the Palestinians need hope." The BBC announcer cut it at this point saying, "and they got help" following through with most of the Web site story on the impressive amount of money raised.

With my passion for analyzing text, I found this an interesting shift of priorities that seems to have gotten swept under the carpet. Neither A9 (Microsoft search) nor Google was any help in recovering Egeland's words. I really do not think I imagined them. Quite the contrary, my guess is that Egeland appropriated them from a speech given by the late King Hussein of Jordan in May of 1985:

The Lebanese tragedy has caused both Israelis and Palestinians to reassess the validity of their previous policies. Both are now considering, simultaneously, the need for a negotiated peace. Each is skeptical. The Palestinians need hope. The Israelis need trust. It is important for all of us to provide hope and trust they need. If we fail to do so, hope will surely turn to deeper despair and trust to invincible suspicion. The dangers for all of us, including them, will be much worse than before.

It is, to say the least, to see how little progress has been made in Lebanon since 1985; but it is equally depressing to think that, as far as the news media is concerned, the plight of the Palestinians will be solved by donors from around the world opening their checkbooks. This is not to say that the Palestinians do not need that $500 million (and we have to hope with all sincerity that every donor who made a pledge will make good on that pledge "with all deliberate speed"); but it is still important to recognize that, to paraphrase the Beatles, "money can't buy me hope." In this case the reconstruction of Gaza is ultimately only as good as the hope that it will not get blown up again (a very weak hope to anyone with a historical sense of what has happened in Lebanon).

So whence hope? By coincidence, this morning, while I was doing my weekly backup, I happened to be reading the original Foreign Affairs edition of the essay "Has Democracy a Future?," by Arthur Schlesinger, Jr. (This essay is now Chapter 6 of Schlesinger's book, War and the American Presidency. That is definitely the right place for it today. The original article was published in 1997, but Schlesinger predicted the unfolding of events in the first five years of the current decade with frightening accuracy.) Schlesinger is perhaps the perfect stick for bashing Thomas Friedman. He takes all of the exuberant cheerleading for globalization that has become Friedman's stock-in-trade and dismantles it down to the claptrap it really is, and does so with an eloquence that is probably far beyond Friedman's capacity to dream. However, the aggravation of global tensions by "unbridled capitalism" is only part of his story; the other key part is the problem of race relations that still lingers on American soil.

Tension will be mitigated even more by intermarriage. Sex—and love—between people of different creeds and colors can probably be counted on to arrest the disuniting of America.

This must have raised eyebrows when it first appears and probably continues to do so. However, Schlesinger may have been thinking about Romeo and Juliet, who united first in marriage and then in death and whose acts ultimately let to the reconciliation of the Montague and Capulet families. Is it such an absurd modest proposal to consider that intermarriage could address the respective needs of Palestinians for hope and Israelis for trust or the irreconcilable differences between Shiite and Sunni or [fill in your own favorite examples here]?

It may not be absurd, but it is pretty damned unlikely. Unfortunately, I would suggest that it is unlikely for a rather depressing reason. It has struck me that one thing that fundamentalists have in common, regardless of what they happen to view so "fundamentally," is a set of extremely strong (violent?) opinions about "correct sex." We see it in the United States, not only over issues such as same-sex marriage but even over contraception. Presumably Islamic fundamentalism is equally rigid over rules that amount to "keeping it in the clan." So, while Schlesinger may have hit on one way to get at hope in the Middle East that goes beyond financial aid, I doubt that he or anyone who sees the point he has been trying to make will get taken very seriously.

July 22, 2006: The Classroom of the Future

Things have been quiet here because this past week I had the opportunity to sit in on a workshop being conducted for the benefit of about half a dozen principals from the California public education system. The purpose of the workshop was basically to let them know what was out there on the "bleeding edge" of new technologies, particularly information technologies, as a way of getting them to offer their own visions of the classroom of the future. Listening to their presentations on the final day, I was struck by a distinction that I first raised in discussing the opposition of lexis and praxis: While most technical presentations I attend are heavily noun-based (usually concentrating on features and their attributes), the grammatical foundations of all the presentations the principals gave were heavily (and refreshingly) rooted in verbs. Given my preoccupation with this need to give "equal time" to both nouns and verbs, I was very glad to see that attention reflected in the way in which these representatives of the educational community expressed themselves.

However, following the presentations, the discussion took a twist that was also very interesting. Whenever the conversation turns to any form of change management in an educational system, whether or not it involves new technology, the question that always arises involves what it will take to make the change happen in a setting that is painfully strapped for resources and always seems to be the victim of prevailing political trends. One suggestion that was raised was that we could not count on change management coming from the government; so it would have to come from the commercial sector, which, after all had the most to gain (or lose) from the quality (or lack thereof) of public education. At this point I realized that one of the principals had invoked the language of scientific management on one of his slides, although, to his benefit, he realized that one had to think beyond questions of "productivity" to questions of "customer satisfaction." Nevertheless, it made me think about the cultural context in which we think of the stakeholders in our educational system as "customers."

This then reminded me of a book that I read with great relish at the beginning of this year: Education and the Cult of Efficiency: A Study of the Social Forces that have Shaped the Administration of Public Schools, by Raymond E. Callahan. Never mind that this book was published in 1962; the extent that it was still relevant today was, to say the least, chilling. In a nutshell this book provided an excellent review of the principles of "scientific management," which basically originated from the work of Charles Taylor, and then discussed the ways in which public school systems tried to embrace those principles to the general detriment of the quality of education. Callahan recognized that the overall goal of scientific management is efficiency of production and that this goal is, at the very least, at cross-purposes (if not fundamentally opposed) to goals of education, which, to invoke terminology I raised on June 13, have more to do with effectiveness than efficiency. Then I realized that, for all the lip service that has been paid to getting beyond the narrow view of scientific management in the enterprise, whether it involves "total quality," "knowledge management," or rhetoric about "customer relationships," most enterprises are still locked into that goal of efficiency of production, even if, in the Brave New World of services and globalization, they do not always have a clear idea of what it is they actually produce! Consequently, it may be a vain hope to expect that change in the educational establishment will come from a private sector that may be willing to talk about the value of effectiveness "in theory" but, when it comes to practice, it still locked into thinking about efficiency of production.