Monday, April 14, 2014

The Alienation of Work

The emerging economy is opening up new ways to reconnect workers to their work and the profits from their work.

One of the most striking blind spots in our collective angst over the lack of jobs is our apparent disinterest in the nature of work and how work creates value. This disinterest is reflected in a number of conventional assumptions.

One is the constant shedding of tears over the loss of mind-numbing manufacturing jobs. I doubt a single one of the innumerable pundits decrying the loss of "good manufacturing jobs" spent even one shift in an actual assembly line. There is a reason Henry Ford had to pay the then-astronomical salary of $5 per day to his assembly-line workers: the work was so physically demanding and boring that workers quit after a single shift. The only incentive that would keep people doing such hellish work day in, day out, was a big paycheck.

Henry Ford's $5-a-Day Revolution

After the success of the moving assembly line, Henry Ford had another transformative idea: in January 1914, he startled the world by announcing that Ford Motor Company would pay $5 a day to its workers. The pay increase would also be accompanied by a shorter workday (from nine to eight hours). While this rate didn't automatically apply to every worker, it more than doubled the average autoworker's wage. 
While Henry's primary objective was to reduce worker attrition--labor turnover from monotonous assembly line work was high--newspapers from all over the world reported the story as an extraordinary gesture of goodwill.

Another is the confusion over what constitutes the means of production in a knowledge economy. The term means of production has its origins in Marx's analysis of capitalism, but the means of production change along with the processes of creating value.


As a result, Peter Drucker identified the worker's knowledge (human capital) as the means of production in a knowledge economy in his book Post-Capitalist Society.

Many readers have misunderstood Drucker's point; their objections include 1) the software workers use is essentially owned by Microsoft and other corporations; 2) only corporations have the means to use workers' knowledge and 3) means of production is an outdated Marxist term that is being mis-used by Drucker.

These objections miss the point. A skilled knowledge-worker can create $100,000 of value with a $500 PC and $300 of software. What percentage does the software represent of the output ($100,000)? Not even 1%.

As for corporations being the only owners of capital who can deploy workers' knowledge, millions of self-employed people suggest that this blanket statement is not entirely true. Yes, enterprises that deploy billions of dollars in material capital (oil drilling rigs, shipyards, etc.) cannot be replaced by the self-employed, but what percentage of the economy requires billions of dollars in capital to operate? In a service-dominated economy, capital-intensive industries are a shrinking slice of the pie.

Rather than focus on employment, why don't we examine the nature of work? Why don't we ask how work creates value in a knowledge economy that is commoditizing/automating whatever labor can be commoditized/automated? How about asking if work can be re-shaped to become meaningful beyond the paycheck being earned?

Let's review the idea that work that isn't controlled and owned by the workers is inherently alienating.

In Marx’s view, workers were alienated from the product of their work because they did not own the product or control the means of production. Marx argued that the absence of ownership and control was also an absence of agency (control of one’s destiny) and meaning. Workers were estranged from the product of their work, from other workers and from themselves, as the natural order of the product of work belonging to the one who produced it was upended by capitalism.

Marx characterized this separation of work from ownership of the work and its output as social alienation from human nature. Capitalism, in his view, did not just reorder production into enterprises whose sole goal was profit and accumulating more capital; it destroyed the natural connection between the worker, the processes of work and the product of his work.

Marx was thus one of the first to analyze work not just in terms of economic output but in social and psychological terms.

This tradition was carried on by writers such as Eric Hoffer, who saw work as the source of life’s meaning, and Christopher Lasch, who saw the rise of consumerism as the basis of meaning and the rootless cosmopolitanism of the modern economy as the source of a culture of narcissism. For Lasch, the relentless commoditization of life disrupted the natural social relations of family, social reciprocity and the workplace, depriving individuals of these sources of meaning and replacing them with an empty consumerism that worshipped fame and celebrity.

Lasch explained these dynamics in his landmark book The Culture of Narcissism: American Life in an Age of Diminishing Expectations.


The marketplace's commoditization of everyday life--both parents working all day for corporations so they could afford corporate childcare, for example--created two alienating dynamics: a narcissistic personality crippled by a fragile sense of self that sought solace in consumerist identifiers ( wearing the right brands, etc.) and a therapeutic mindset that saw alienation not as the consequence of large-scale, centralized commoditization and financialization but as individual issues to be addressed with self-help and pop psychology.

In Lasch’s view, both of these dynamics ignored the loss of authenticity that resulted from the commoditization not just of production but of every aspect of everyday life. In this sense, Lasch’s social analysis is an extension of Marx’s original insight into the alienating dynamics of commoditized wage-work, in which workers and their work were both interchangeable.

Lasch’s analysis brings us to the source of modern alienation: it’s not just employees who are interchangeable--employers are equally interchangeable. The interchangeability of work, employees, employers, products and services is the key characteristic of commoditization.

What is the takeaway for those seeking a job or career? There are several takeaways.

One is that the sources of value creation are linked to the level of agency (control of one’s work) and ownership of the work: work that is not process-based (i.e. that cannot be commoditized) and that is experientially sensitive to mastery enables a higher level of agency and ownership because the worker owns the means of production--his human and social capital.

The second is that the dramatic lowering of barriers to education and the ownership of tools powered by the Internet has greatly expanded the opportunities to escape an alienating dependence on the state and cartels for employment and on superficial consumerism for meaning.

If we trust networks rather than states or corporations for our security, we automatically gain agency (control of our work and lives) and an authentic sense of self gained from owning our work and the results of our work.

It is important to understand that corporations exist to make a profit and accumulate capital, for if they do not make a profit and accumulate capital they will bleed capital and disappear. To believe that organizations dedicated to making a profit could magically organize society in ways that benefit every participant is nonsense. Corporations organize labor and capital to accumulate capital. It is absurd to expect that such organized self-interest magically optimizes the social order.

This is not to blame all the ills of society on corporations; it is simply to note that corporations are limited by their limited purpose. Their purpose is not to organize a healthy, sustainable economy; it is to organize labor and capital in such a way that the corporation can accumulate capital in a marketplace controlled by supply and demand.

Corporations have profited greatly from the alienation of work and the social order, as narcissistic debt-based consumerism is a highly profitable economic order, even if it is socially dysfunctional, unsustainable and destructive to individual agency and meaning.

The expansion of decentralized, distributed networks, the near-zero cost of knowledge and the declining cost of the means of production (digital memory and processors, software, 3-D fabrication machines, robotics and tools) offer newfound opportunities for workers to reclaim their agency and ownership of their work and output.

Rather than rely on centralized states and corporations to organize labor and capital, collaborative networks can do so without alienating workers from their work and disrupting the sources of meaning.

The emerging economy is opening up new ways to reconnect workers to their work and the profits from their work. These include traditional models such as self-employment and worker-owned cooperatives and new models of collaborative project-based work.

How do we change a dysfunctional, unsustainable and alienating system? By investing in new ways of creating value and alternative models of cooperative work and ownership.

This essay was excerpted from my new book Get a Job, Build a Real Career and Defy a Bewildering Economy which is on sale through Tuesday evening (Pacific Standard time) at a 20% discount for my regular readers ($7.95 for the Kindle edition, 20% off of the list price of $9.95. The print edition is $20).

You can read the introduction and first section of the book here.



Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle edition
Are you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.

And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.
It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

You can test drive the first section and see for yourself.     Kindle, $9.95     print, $20 






Thank you, Willard S. ($100), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership. Thank you, Gary R. ($100), for your extraordinarily generous contribution to this site -- I am greatly honored by your support and readership.

Read more...

Sunday, April 13, 2014

How To Get a Job Despite the Economy

An entire new feedback loop of accreditation is necessary in the economy we have, and fortunately that feedback is within our individual control.

To paraphrase Donald Rumsfeld, we work in the economy we have, not the economy we might want or wish to have at a later time. And what characterizes the economy we have?

It's bewildering because nothing works like it's supposed to. For example, getting a college degree was supposed to guarantee a good job and an 80% lifetime wage premium over people without college degrees.

But in the economy we have, getting a college degree no longer guarantees a good job, or indeed, a job of any kind: 53% of recent college graduates under the age of 25 are unemployed or doing work they could have done without going to college.

The payoff for getting a college degree is declining while the risks of becoming a debt-serf due to crushing student loans is rising. The big premium that once accrued to college graduates is eroding for reasons of basic supply and demand: there are far more people with college degrees than there are high-paying jobs for people with degrees--even law degrees, MBAs and PhDs.



The entire notion that a college degree "signals" something valuable to employers is breaking down. In the good old days, earning a college degree proved that a student was hard-working and conformist--just what hierarchical corporations and government agencies want in employees. (The "signaling" value of a diploma is based on work by economist Michael Spence in the 1970s. In general, the signal indicates an attribute whose value is correlated with the difficulty and cost of the signal: the harder it is to get a degree, the greater the value of the signal it sends.)

But in an economy in which education credentials are in over-supply, that signaling mechanism is running up against a basic reality: a degree accredits very little about the student's knowledge, problem-solving skills or professionalism. A degree is simply a proxy of knowledge, not evidence of knowledge or useful skills.

Indeed, the study Academically Adrift: Limited Learning on College Campuses concluded that "American higher education is characterized by limited or no learning for a large proportion of students."

Signaling an ability to grind though four or five years of institutional coursework is no longer enough; the signaling needed to indicate an ability to create value must be much richer in information density and more persuasive than a factory model diploma.

A resume is equally thin on information that accredits a worker's knowledge, useful skills and professionalism. A resume is a public-relations summary that everyone knows has been tailored to present the candidate in the best possible light. And precisely how useful and trustworthy is PR in any setting?

Put yourself in the shoes of a hiring manager or potential collaborator: there is precious little useful information in either a diploma or a resume. As a result, human resources departments have been tuned to eliminate as many candidates as possible by signal-based winnowing rather than by the collection of useful information on the skills, knowledge and professionalism of the potential employee/collaborator.

Conforming to social behavioral norms and being able to grind through mind-numbing work used to be enough to create value in the economy--but this is no longer the case for high-value (i.e. well-paid) work. The "signaling" camp holds that a degree showing the student sat through four or five years of classes is sufficient to justify hiring the person. That the student learned essentially nothing useful doesn't matter; the entire value of college is in the last class needed to get the diploma.

This was true in the long postwar boom when the number of well-paid jobs expanded at a faster rate than the number of college graduates. This is simply no longer true.

In contrast to the "signaling" theory of value, the "human capital" camp holds that working knowledge is what creates value. If the student learns little critical thinking, real skills or practical knowledge, then a college degree has little value.

What if conformity and being able to navigate formal systems/bureaucracies no longer creates value or helps people solve real-world problems? In the economy we have, the "signal" value of a college degree has sharply declined. This is why college graduates can send out hundreds of resumes and not even receive a single reply, much less an interview or job offer.

Systems analysis teaches us that changing the parameters of a system (for example, adding another line to your resume or getting another degree) does not change the system; only adding a new feedback loop can change the system.

Clearly, an entire new feedback loop of accreditation is necessary in the economy we have, and fortunately that feedback is within our individual control: it's a process I call accredit yourself. The most powerful feature of accredit yourself is the process is open to anyone: recent college graduates, those without degrees, those re-entering the workforce, those seeking to launch their own enterprises--everyone who wants an income stream in the economy we have.

I outline the process of accrediting yourself in my new book Get a Job, Build a Real Career and Defy a Bewildering Economy which is on sale through Tuesday evening (Pacific Standard time) at a 20% discount for my regular readers ($7.95 for the Kindle edition, 20% off of the list price of $9.95. The print edition is $20).

Anyone can read a Kindle ebook on any digital device: PC, laptop, tablet or smart phone. Just download the free Kindle reader app:
Kindle for PC     Macintosh     iPhone     iPad     Android


I explain why the economy no longer responds as conventional commentators expect, and why it will remain in a state of rapid transformation for decades to come.

The book makes a useful gift for high school and college graduates; if you give a Kindle ebook as a gift (the gift button is in the right sidebar), you can schedule delivery of the gift to coincide with a graduation date.

You can read the introduction and first section of the book here.



Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle edition
Are you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.

And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.
Test-drive the first chapter and see for yourself.     Kindle, $9.95     print, $20 






Thank you, William K. ($10/month), for your magnificently generous subscription to this site -- I am greatly honored by your steadfast support and readership.Thank you, Steve S. ($25), for your extremely generous contribution to this site -- I am greatly honored by your support and readership.

Read more...

Friday, April 11, 2014

What's Cooking at our House: Appam and Sambar

Unlike a regular wheat pancake, appam is covered and left to cook for 3-5 minutes before turning.

Those of us who don't have time to cook every night rely on stews, soups, chili and other one-pot meals that will last a few days. One standard in our house is sambar, a spicy lentil-vegetable stew from south India. This is a vegetarian dish that offers a spectrum of spiciness, and uses readily available ingredents: potatoes, tomatoes, onions and green beans. Some of the spices will likely only be available in specialty ethnic markets (fenugreek seeds, tamarind) or online.

We use the recipe in Curried Favors: Family Recipes from South India (page 68), though there are many similar recipes online and in other cookbooks.

Curried Favors also has a classic recipe for Appam (page 34), a rice-flour pancake similar to hoppers in Sri Lanka.

The batter is left out to ferment (this is a yeast flat bread) for about 24 hours, and is poured into a well-oiled hot pan like a pancake. Unlike wheat-based yeast flatbreads, rice-flour batter becomes frothy rather than rising like a dough.



Unlike a regular wheat pancake, appam is covered and left to cook for 3-5 minutes before turning. This creates a lacy, crispy edge and a wonderful texture.



Here is a bowl of the sambar garnished with fresh cilantro and the warm appam.



Each of these dishes takes time to prep, but the sambar will feed the crew for a few days and the appam batter can also be refrigerated and cooked over several nights.

Both of these dishes happen to suit a gluten-free, meat-free diet, but the wealth of tastes and textures will appeal to a broad range of palates.

"A healthy homecooked family meal and a home garden are revolutionary acts."



The Nearly Free University and The Emerging Economy:
The Revolution in Higher Education

Reconnecting higher education, livelihoods and the economyWith the soaring cost of higher education, has the value a college degree been turned upside down? College tuition and fees are up 1000% since 1980. Half of all recent college graduates are jobless or underemployed, revealing a deep disconnect between higher education and the job market.

It is no surprise everyone is asking: Where is the return on investment? Is the assumption that higher education returns greater prosperity no longer true? And if this is the case, how does this impact you, your children and grandchildren?

go to Kindle edition
We must thoroughly understand the twin revolutions now fundamentally changing our world: The true cost of higher education and an economy that seems to re-shape itself minute to minute.

The Nearly Free University and the Emerging Economy clearly describes the underlying dynamics at work - and, more importantly, lays out a new low-cost model for higher education: how digital technology is enabling a revolution in higher education that dramatically lowers costs while expanding the opportunities for students of all ages.

The Nearly Free University and the Emerging Economy provides clarity and optimism in a period of the greatest change our educational systems and society have seen, and offers everyone the tools needed to prosper in the Emerging Economy.

Read Chapter 1/Table of Contents

print ($20)       Kindle ($9.95) 



Things are falling apart--that is obvious. But why are they falling apart? The reasons are complex and global. Our economy and society have structural problems that cannot be solved by adding debt to debt. We are becoming poorer, not just from financial over-reach, but from fundamental forces that are not easy to identify. We will cover the five core reasons why things are falling apart:

go to print edition1. Debt and financialization
2. Crony capitalism
3. Diminishing returns
4. Centralization
5. Technological, financial and demographic changes in our economy

Complex systems weakened by diminishing returns collapse under their own weight and are replaced by systems that are simpler, faster and affordable. If we cling to the old ways, our system will disintegrate. If we want sustainable prosperity rather than collapse, we must embrace a new model that is Decentralized, Adaptive, Transparent and Accountable (DATA).

We are not powerless. Once we accept responsibility, we become powerful.

Read the Introduction/Table of Contents
Kindle: $9.95       print: $24 


Thank you, Robert B. ($72), for your magnificently generous contribution to this site -- I am greatly honored by your steadfast support and readership. Thank you, Robert S. ($50), for your astonishingly generous contribution to this site -- I am greatly honored by your support and readership.

Read more...

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