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Work Creates Wealth

As Democrats contemplate holding the minority position in Congress yet again, there are many ways we can handle it.  We could all sit in the back and throw stuff, much as the Republicans did for the last few years.  We could turn on each other and rip our own guts out in a festival of shame and blame.  Or, if we’re intent on really standing up to our principles, we can use this time away from being the responsible ones and understand what it is that we, as a party really stand for.

We have a lot to offer if we can only get it together for once.  But I, for one, think it’s going to take a much deeper understanding of our core values and what is really happening around us before we can make it happen.

The last three decades have produced a remarkable Republican victory in one very critical sense – it has become universally accepted that wealth is created by investment.  This view is not entirely wrong, but it has created a dark shadow in our politics – a blindside which has made it impossible for us to get a handle on this Depression.  The current argument about what government should do boils down to either get out of the way of naked capitalism or spend money like crazy to “prime the pump” and encourage consumption.  Everyone, on both sides in both parties, is focused on the money.

Yet it is work that creates all wealth in the end.  Investment is only the tool that makes it possible.

The Tech Bubble of the 1990s, which rolled forward into the Housing Bubble, is the source of this problem.  Dramatic improvements in communication naturally made nearly all businesses more efficient through what are called “Productivity Gains”.  The processes of setting up contracts, billing, paying, and all the other stuff that used to be managed entirely by people pushing paper were all automated so that they could be handled by far fewer people.  Markets in distant cities could be managed from afar and great economies of scale in distribution were realized.   What few people cared about at the time was that this meant there were fewer jobs to go around.

The “Productivity Gains” of the 1990s are the “Unemployment” of today.

This is a historically typical response to a big leap in technology.  The Industrial Revolution put many small craftsman out of work, creating a backlash against technology known as “The Followers of Ludd” or “Luddites”.  Cheap internal combustion engines mechanized travel and farming in the 1920s, increasing production and distribution of nearly everything right up until the Great Depression hit.  In all of these cases, sudden and dramatic increases in efficiency created genuine wealth – but also made a tremendous number of people redundant.  That leaves fewer people with the scratch to take full advantage of the new economy a mere one generation later.

Every time this has gone down, the easy money made by the industrialists and investors has been dazzling enough to distract everyone away from the shadows of these great leaps.  Cast into that shadow are the people whose skills are no longer needed and whose careers simply no longer exist.

Politically speaking there is only one answer, and that is a renewed emphasis on the role of work in creating sustainable, lasting wealth.  A flexible workforce is essential to the Restructuring that has to take place, yet labor markets are terribly inflexible for many good reasons.  That is the origin of this particular kind of boom-and-bust cycle.

It’s not that we are lacking in capital, especially when the Federal Reserve can create money out of thin air if necessary.  Nor are we lacking in good ideas that can be rendered into new technologies.  What we lack is the ability to manage risks that threaten our ability to pay the mortgage on the roof over our heads, the health care for our families, and our ability to put food on the table for our kids.

That’s a political change because it is a cultural mindset.  “Too big to fail” has become “Too big to understand”, but it has to move on to become “Too little to fail”.  That’s what Democrats have to stand for in order to be successful.

A flexible workforce thinks on its feet, grounded in a solid education.  It has information on tomorrow’s opportunities and the ability to change jobs without worrying about starving today.  It doesn’t have to fret about what will happen if the kids get sick or how to manage small crises on a daily basis.

In a world awash with wealth and new ideas the Depression that we find ourselves in is lacking only one thing to move ahead – an emphasis on people and their work.  Democrats may be about to find themselves a step back from the power and responsibility of government, and that new perspective should be put to work understanding what is missing in the Economy of People.  It’s a tall order, but one that is essential to being relevant in today’s politics and economy.

Wealth isn’t created by investment alone.  It takes work.  It takes people, with their heart and arm and brain fully engaged.  We Democrats can change the entire debate if they take some time to understand exactly what that means.

This post is, in many ways, a summary of the central perspective of Barataria.  If some of the issues raised seem to demand more discussion, please follow the links provided and if that doesn’t satisfy you, leave a comment below.  Thank you.

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26 thoughts on “Work Creates Wealth

  1. The base of all of this is the flexibility of our workforce to be able to go down different career paths at any given time without huge amounts of new education. I believe that this is based in our education system and our incredible ability not to have it function correctly. The students today learn the same exact leasons that I had more than a decade ago. The highschool system is just a reminder course (a very long one) to prep our kids for college. What would happen if we taught our kids new things every year, new items, new concepts, and focused on showing them how to teach themselves something new when they are interested in such subject, and perhaps be able to look up and remind themselves of things that they learned but forgot in later life. Instead, we drill into them the same trivia-like questions so that they can pass the ACT/SAT.

    This should be Democrats/DFLers goal as the minority. We should continue to “harp” about how the education is the basis of wealth, because it will allow you to work no matter what bubbles burst. We need a complete overhaul which will streamline, improve, and, I believe, cut the cost of education, if it is done correctly.

  2. Hit the nail on the head. I don’t know what this has to do with losing the House because we should have been doing this all along. But if that’s the kick in the head we need to get ourselves together then we should do it.

    It would be too easy to read this as Marxist and playing right into the hands of the republican line right now. I don’t see that as a problem though because it really is true. Labor is the source of all wealth. We do seem to have forgotten that and I know you could go on about that longer than you did here.

    Brilliant piece and I hope all Democrats read it.

  3. YES!

    I have nothing to add. We’ve been Republican-Lite for far too long and it’s time we got back to what we really stand for. If we can’t do this we don’t have any reason to be in charge anyway.

  4. LZ, you’re very much right that we aren’t training kids in the skills necessary to be flexible and “keep their eyes open” to take advantage of new opportunities in a changing world. Learning how you learn is probably the one thing that is the most critical for any kid, but we always favor a “system” that keeps chugging along no matter what. The kids I’ve seen do like to learn when they get that spark in their minds, but everyone learns differently.

    You are right that education is, ultimately, the basis of everything. It’s the difference between a “Brave New World” of appliance users who don’t understand jack about what’s going down around them and fully engaged citizens of a Democratic Republic who can make things happen.

    If I could sum it up, I’d say that Education is the ultimate investment in people. If we can’t do that well the human side – the work – really is lost. Thanks for the addition.

  5. Nice work, Eric.

    Speaking from somewhere to the right of you, I don’t find your comments Marxist at all. For the average man or woman, all they have is the work of their hands or their minds over time. With the productivity tools available to us presently, nearly everyone should be able to produce a surplus beyond their own needs, which translates to savings, which translates to investment. One always has the option of reinvesting surplus back into his own enterprise, or to make it available for others to employ at some acceptable rate of return.

    We can see that our present structure elevates consumerism and speculative investing over saving. We are ceaselessly prodded to upgrade, move up, acquire more things. Savings are actually punished right now at insultingly low interest rates that do not even keep pace with inflation. This is not an accident. It is by design. There are powerful interests manipulating public policy to favor consumption/speculation over restraint and saving. They want all the money in their game.

    On the topic of education, I am a champion of Richard Mitchell(deceased) who was an English professor and authored several fine and very witty books on the state of edumacation(sic) in the U.S.. “Less Than Words Can Say”, “The Graves of Academe”, and “The Leaning Tower of Babel” are each well worth a read. All his work is available free online at: http://www.sourcetext.com/grammarian/

    Keep up the good work!

  6. To put things in a fuller context the phrase “labor creates all wealth” may have come about in the late 1700’s to early 1800’s when tennant farmers on the far western territorial borders (in New York) sued for compensation when the landlords reclaimed their land and all improvements upon it (think cleared land, small dams, fences for grazing, outbuildings etc).
    You can know I read this in some old musty book squirreled away in a library someday past. Soon it will probably be available on the internet (I’ll do a google books search) . Anyways you know the Republicans are going to try to impeach president Obama. All the best to you.

  7. Dave: We agree on all of these things, but the Democrats have to realize that in order to remain irrelevant they at least have try to get beyond the consumer frenzy. The Republicans just have a better series of talking, er, screaming points right now.

    Dan: Yup, “Labor Creates All Wealth” is what I started from. I decided to avoid the word “Labor” because it’s taken on a different meaning than it once did. I didn’t realize that phrase was over 200 years old, so thanks!

  8. Ran across an article in the new yorker that might be up your alley. All Together Now! Britian’s Big Society.

  9. I feel as though I should admit this now that the day is over.

    I was going to post about how much I miss Sen. Paul Wellstone on this, the 8th anniversary of his death. I decided instead that he would want us all to focus on what’s important moving forward with courage and dignity. So that’s what I wrote about instead.

    I especially appreciate talking about the importance of education and reforming it so that everyone has what they really need because that’s what Paul and Sheila would always say was the most important thing.

    I miss you, Paul and Sheila.

  10. Hey the day is never over. About this Big Society thing which sounds a bit like Reagan’s federalism of the early 80’s. Friday I noticed a 8 lb. tree limb hanging over a sidewalk at the nearby campus. Today it was still there so I let the foreman know. Tonight it is still there. Should I do an Edward Abbey and monkeywrench the thing?

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