The New Statesman Essay - How to make a humane market

Quality of life or economic success? Amitai Etzionitries to have it both ways

This is a true account. It would take a Bertolt Brecht to improve on this ultimate analogue for the dehumanisation of the social market. Rod Grimm (his real name) is an American truck driver who delivers loads from coast to coast, specifically from Los Angeles to Maine. He is part of the "just in time" system. If his load of frozen shrimp is not delivered on schedule, restaurants will be forced to shut down. He is on the road 340 days a year, so his wife moved in with him and they now practically live in the cabin of the truck. Meals are taken at truck stops, or eaten while driving. Friendships are reduced largely to casual encounters with other truckers at gas pumps. Rod's only child has been left with a succession of babysitters since she was six years old; birthdays are marked by calls on Grimm's cell phone.

This story, which comes to us courtesy of the Wall Street Journal, reminds me of Jules Verne's Around the World in 80 Days. As the racing train "Henrietta" reaches the last stretch, it starts to run out of coal so the hero uses the furnishings instead. Then, to continue feeding the engine, he tears down the walls, the roof and most of the floor. Nothing is to stand in the way of competitiveness, even if winning means that damn little is left.

The US is now widely acclaimed for having developed a winning engine in the new global economy. Most admirers seem unaware of the extent and nature of the sacrifices it has entailed. I am not referring to beating up on the poor or to the rise in economic inequality, very important but often noted topics. What Europeans do not understand are the effects on the lives of most members of American society, on those like Rod Grimm who, financially speaking, are quite well off.

American families, for example, work much more to maintain their standard of living than they did a generation ago. True, the length of the working week has barely budged. But instead of one breadwinner per family, most American families now have two, with the majority of mothers working outside the household. Individual workers do not work many more hours - the members of any one family do. The result has been an enormous decrease in the quality of life. People have much less time for their children, for one another, for community life and voluntary work, and for practically everything else that is not work-related.

How will Americans keep revving up their standard of living now that most adults are already in gainful employment? The answer is through increased labour among children and old people. I am not being overdramatic. Of high school seniors (aged 17-18), 75 per cent of boys and 38 per cent of girls work more than 20 hours a week during the school year, in fast food restaurants, record stores, ice-cream parlours and other such places. Fifty-two per cent of all high school students had a part-time job during the 1996-97 school year, averaging 18 hours a week. While upper-middle-class youngsters use the income mainly to buy trinkets (and cars) for themselves, lower-class ones help to keep up the family's income. Many schools consider it impossible or "unfair" to expect students to do homework. Some educators believe that work teaches students the importance of discipline and responsibility. Those who find their students asleep at their desks, after they worked past 11pm the previous night, may question this assumption.

And millions of elderly Americans, theoretically retired, work to help take care of themselves and their families. Much has been made in recent years about the growing burden the old are putting on the young. But in the US - if wealth and not merely income transfers are taken into account - the elderly contribute to the young roughly two dollars for every one they get from them. Next time you see a widow in her eighties dragging her feet to serve customers in an American restaurant or drug store chain, note that she is not alone. True, Americans between the ages of 65 and 85 are often healthy and able to work. But it is hard to see taking them off the golf carts and away from their bridge games as anything but a decline in their quality of life.

All said and done, the US is heading back towards an earlier age, that of rawer capitalism, when people laboured longer and harder and the whole family worked outside the home, leaving little time or energy for other pursuits.

At the same time, healthcare benefits, usually provided by employers in the US, have been diluted, diminished and hollowed. A rapidly growing number of Americans - now 20 per cent, likely to increase to 50 per cent in the near future - are working part-time or on temporary contracts. Unlike, for example, their French counterparts, they receive no benefits at all or only minimal ones. Given that benefits can amount to between 25 and 33 per cent of remuneration, that entails a very significant loss. Fewer small businesses are providing health insurance: 39 per cent offer health benefits in 1998, down from 46 per cent in 1996.

Other workers may keep their benefits but find that they have been grossly thinned out. Hospital stays have been sharply curtailed. The first cuts did little harm, and perhaps even benefited health; the newer cuts are a different matter. For instance, hospital stay after childbirth was cut from five days to one but, following reports of serious ill-effects, was increased back to two days. Above all, to gain treatment most patients now face bureaucratic hurdles that de facto limit what they can gain even if a wide array of benefits are still on the books. The defenders of the changes argue that healthcare costs were spiralling out of control. Fair enough; maybe the belt tightening was needed. It still leaves people's lives tighter.

Retirement benefits have also been dialled down. Americans must rely now more and more for their retirement, beyond whatever social security has to offer, on private saving rather than pension funds to which their corporations contribute. And a sizeable number of the corporate pension funds have made their terms less favourable to the elderly or even retroactively cut back the benefits to those already retired. Social security, the rough equivalent of the British old-age state pension and the one assured benefit American society does provide to one and all, is taxed more and starts at an older age.

Job security in the US has always been much lower than in western Europe. Severance pay to sacked workers is rare. Globalism has further reduced job security; there is an ever-present threat to move plants out of the country, even when it remains unspoken. The few American companies that used to provide lifelong guaranteed employment, such as Delta Airlines, have announced that all bets are off.

So are Americans better off as consumers and citizens than as employees or welfare recipients? They are not. Inspection of anything, from food (for E coli, for instance) to quality of care in nursing homes, weak to begin with, has been cut back by diluting government regulations and reducing the budgets of the enforcement staff. In the name of efficiency, speed limits on highways have been scaled down or eliminated, with the expected increase in fatalities. Federal testing of drugs, thought to be too long and complicated, is now being excessively hurried. For instance, Viagra has recently been approved for marketing before its interaction effects with several other drugs, which are often taken by the same people, have been studied. In the nine months since Congress cut the approval time for drugs by half, five drugs (including a painkiller, diet pills and a blood pressure medication) have had to be recalled, each after causing several fatalities. Opening hours, staffing and services have been cut in practically all institutions from public libraries to museums. Public television and radio have had their budgets cut and forced to become more commercial.

All these examples concern most Americans. The debate about the poor and the merits of cutting the programmes that help them is a familiar one and needs no repeating other than to note that they raise the question: when do these cuts turn from a cure for overdependency and budget deficits to abuse of the most vulnerable members of society? At least two developments seem to me to cross the line between a sound social market and a dehumanising one: cutting mothers of young infants off all public support (not merely in cash but also in kind) and pursuing policies that end up swelling the numbers of people who live in the streets.

The social element of the social market has not disappeared in America, but it has been thinned out (and was rather dilapidated to begin with). Even the Wall Street Journal asked recently: "Is the market penetrating too deeply into American life?" Yet we must ask, if the enhanced competitiveness of America causes such grief, why are people not up in arms, or at least much more disaffected?

In part, Americans continue to blame themselves (or bad luck) for whatever befalls them, a political acquiescence European governments who rush to adopt the American model cannot count on. In part, the recent upward jump of financial assets has half the country speculating in the stock market, feeling richer for the moment. The other half believes that it could hit the jackpot next year. But above all, the American experiment in restructuring the social market has had two very important pay-offs.

First, the US has been much more successful than other western democracies in distributing the work that is to be had. Real pay may have increased little and benefits may have been lowered but, instead of protecting the well-heeled jobs of some workers while tolerating high unemployment, the restructured American economy has made it much easier for industry to hire one and a half workers where it used to employ one. As a result, unemployment has practically disappeared, at least for the short run.

At issue here is the regard in which one holds work. Some see it as drudgery. But in my view work is a place (not the only place) where a person contributes to the community's well-being, a way to prove her or his worth and find a wholesome identity. It has a compelling moral worth. A great achievement of the restructured American market, one that must be measured against the suffering that results from extensive restructuring, arises out of making work for all.

Second, from l 994-98 the American economy grew at 2 per cent or so above what used to be considered the level at which intolerable inflation would take off. Two per cent does not sound like much, but it entails huge amounts of goods and services, significantly higher tax revenues - without raising the levels of taxation - lower deficits, or even surpluses, and much else.

In the last few years, the US has experienced significant declines in crime, including violent crime, and in teenage pregnancies. According to pollsters, the high level of anger previously expressed by about two-thirds of citizens has been replaced by a widespread sense of optimism and approval. We do not know how far the high level of employment and production of goods and services has caused these social gains, but they do seem to play a role.

But what of the human costs? Do all societies, if they are to hold their own in the world market, have to make the same trade-off, or can some restructure their social markets in ways that keep the "social" more robust? How far is a society willing to go to gain a few extra percentage points of economic growth and 4 per cent less unemployment?

For ethical as well as political reasons, other societies that seek to enhance their competitiveness by unleashing the market would be well served if they had a grand public dialogue - a megalogue - that would lead to a shared moral understanding of which social arrangements are to be considered inviolate, which may be weakened but not gutted, and which may be sacrificed on the altar of competitiveness. To put it in the most general terms, the question is how to protect human dignity and a humane society in the face of rising global economic pressures.

An analogy might help to capture the basic approach. Rather than allowing the market free range or seeking to suppress it, one may view it like nuclear fission. If well contained, it can be of much human service. If allowed to escape from its vessel, it can be a very destructive force. The challenge is to decide on a societal capsule which, if well maintained, can contain the market without significantly inhibiting the good it can produce.

Many areas should be taboo zones, out of bounds to the market. For example, neither human organs nor children available for adoption should be tradeable. Privatisation of those functions that involve the legitimacy of the state should not be allowed. No profit-making hangmen or, for that matter, prisons.

Other areas may be "drive slow" zones for market forces. A society may tolerate the lowering of some social safety nets, such as unemployment benefit, but the removal of none. The level of the minimum wage may be a source of argument, but not its abolition. Welfare payments may be too high but all people (even affluent ones) should be able to rest assured that, whatever misfortune befalls them, they and their children will not end up in the street, without food and healthcare, provided in kind if not in cash.

Again, some new intrusion of the market into the social realm might be tolerated but it must be carefully circumscribed and supervised. For instance, youngsters under the age of 16 should not be allowed to work during the school week and those 16 to 18 for only a fixed number of hours. Industries and professions should be allowed, indeed encouraged to self-regulate, but government inspections should verify that these self-regulations are effective.

Last but not least, economic and humane considerations do not always have to be faced as a trade-off. When people live in communities, and help one another, their lives become less costly and more humane. Cynics often scoff at the many hundred thousands of self-help groups; but millions of cancer patients, former alcoholics, drug addicts, HIV-infected and others involved in them help one another in powerful and effective ways, which enrich their lives, while also reducing public costs and so enhancing economic competitiveness.

Above all, a society needs a better vision than that thousands of little cuts in social services and the amenities of life, with no defined end or limiting principles, will lead to economic well-being. A social market may be reconstructed but it needs some kind of vision, beyond efficiency, of the qualities of the new society.

Amitai Etzioni (e-mail: etzioni@gwu.edu), director of the Communitarian Network, is the author of "The New Golden Rule" (Profile, 1997)