This Week:

Quotes of the Week

Democracy and the Free Market

A Poem by Nygaard

Greetings,

This is a highly unusual issue of Nygaard Notes. This week my time had to be spent dealing with an unexpected medical emergency of someone very close to me. I don't mean to be mysterious; I will say more about this in a future issue of Nygaard Notes. The point is that I have had no time to do the hours of research that goes into a "typical" Nygaard Notes, whatever that is.

What you will see this week, instead, is a reprint of an essay that I have previously published, and a poem that I wrote some years ago which seems appropriate for the pages of Nygaard Notes. Both the essay and the poem are relevant to the issues about which I have been writing for the past four weeks.

I must beg your forgiveness if you are one of the people who have written me over the past few days. I will respond to your notes; I just don't know exactly when.

In solidarity,

Nygaard

"Quotes" of the Week:

"Quote" # 1: From the New York Times ("All the News That's Fit to Print") of Friday, April 20th, in an article entitled "Schools Are Now Marketers Where Choice Is Taking Hold," commenting on what they call "the new school consumers" who are "no longer assigned a school based on where they live but are instead facing an education marketplace:"

"But if parents are clamoring for choice, those who already have it say they sometimes feel more confused than empowered. Many lack the time to research options, or the expertise to evaluate them, and are instead swayed by a principal's greeting or a building's facade." "‘I think all schools should be equal,' lamented Dick Hanley, whose youngest child is in eighth grade. ‘Then you wouldn't have to pick.'"

"Quote" #2: Here's a headline from the March 2nd edition of the Star Tribune (Newspaper of the Twin Cities!):

"U.S. Antidrug Efforts Haven't Stemmed Increase in Coca Growth."

The article commented on a pair of human-rights nightmares, Colombia and Afghanistan. Colombia, with an 11 percent increase in coca production last year, has just been "certified" by our drug-hating government as a U.S. partner in the war on drugs. It also pointed out that Afghanistan, in the same report, was "de-certified" as a drug-fighting ally, despite the fact that the ruling Taliban has "virtually wiped out opium production" in that country. Draw your own conclusions about that.

"Quote" #3: From the March 14th Times, in an article on health care in China in the era of "successful market-oriented changes":

"As central government planners have withdrawn from people's lives, they have taken with them most subsidies for social services (sic) like health and education, hoping that local coffers and initiatives would fill the gap. They have not."

"Quote" #4: An article on telephone competition in the February 12th Star Trib commented on the fact that the federal Telecommunications Act of 1996 has not brought choice to most telephone users. Remarking that local phone monopoly Qwest retains "about a 99 percent market share among Twin Cities residential customers," the article points out that most of Qwest's competitors

"don't want residential customers because they aren't as profitable as business customers."

Democracy and the Free Market

(The following article is a reprint from Nygaard Notes #24 of April 9, 1999)

Last week I pointed out that a money-based Market excludes those with no money. This is a not-insignificant point since, in the dry language of a 1998 Report from the United Nations Development Programme, "well over a billion people [worldwide] are deprived of basic consumption needs." I argued that this is neither an accident nor a conspiracy; it's just built into the nature of the Free Market.

Increasingly, the values of the Free Market are becoming the values of our society as a whole, with frightening implications.In a marketplace, the primary relationship is between buyers and sellers. It's so primary, in fact, that it becomes just about the only relationship there is. This is a very dangerous and corrupting model upon which to build a society.

As the ideology of the Free Market spreads, all sorts of things must be adapted to fit into the framework of that Market. That is, everything must be made into something that can be bought or sold. This process is called commodification. That is, everything must become a commodity, or a thing, so that it can be sold.

Here's what this means in the real world: Unless you have recently won the lottery or have the right kind of parents (i.e. the wealthy kind), you spend most of your time neither buying nor selling. You spend most of your time working. You work to produce something, or you work to make something happen. But you don't get to sell it.

In the world of the Free Market, your work is not seen as an expression of your creativity, nor as your contribution to the common welfare, nor as your ethical response to living, although you may see it as all of this and more. No, the Market sees your work as a cost, as an expense. And expenses must be kept low so that prices can be kept low. Consumers demand it.

When the world is seen as a giant Marketplace and nothing more, the primary goal for everyone is to get more for less. The Market takes for granted that buyers are seeking, and will buy, the cheapest possible goods and services. Sellers (that is, the owners of goods and services) are assumed to be trying to increase the difference between what it costs to produce something and what it can be sold for, as this means higher profits. The missing link? Workers.

Although everybody is both a producer and a consumer, the Market responds primarily to you as a consumer. As far as your life and my life are concerned, what this means is that we will end up working for less.

Let's look at three very current items in the news:

1. The globalized economy. We have to be "competitive," which means we have to pay our workers as little as the next country.
2. Privatization. The pitch here is that private business does things more "efficiently." This means cheaper, which means lower taxes, which ultimately means fewer people working for lower wages.
3. Health care. Competition is held out as the way to reduce spiraling costs. HMOs have been doing this by reducing the numbers and the wages of nurses, doctors, and staff at clinics and hospitals.

In each case, workers take the hit. Profits go up, wages go down, and we read in the papers that this is the "dream economy." But whose dream is it?

A fourth item in the news illustrates the point even more vividly. If Social Security were to be transformed into a system in which all of us were holders of individual accounts, as is proposed by Senator Rod Grams and many others, then our welfare in retirement would depend to a large extent on the performance of our stock market holdings. Readers may recall that the last decade has seen numerous announcements of massive layoffs by Fortune 500 companies, always for reasons of "increased competitiveness." Almost invariably, the value of a company's stock goes up when such layoffs are announced.

Now, suppose that a good share of your retirement funds are invested in General Motors. And suppose, further, that your sister works for General Motors. General Motors announces layoffs. The value of your stock, and thus the comfort of your retirement, goes up. You cheer. Then your sister calls. She will be among those laid off. She's not cheering.

The marketplace serves consumers and owners. Consumers need to earn wages to use for buying. Those same wages, however, are costing the owners money. Owners want people to have money to spend, but they also want to pay their workers as little as possible. This is a very fundamental contradiction within capitalism, and the system can basically resolve this contradiction in one of two ways.

One way is to "race to the top." In a system like this, the welfare of workers is primary, meaning that wages are high and consumption levels are consequently also high. Often quality is elevated, as well, since well-paid workers tend to make high-quality things, plus they make enough money to actually buy those things. The economy of post-War Europe was like this relative to the United States. When I was a kid, Italian shoes, Danish furniture, and German cars were all understood to be of high quality, but we couldn't afford them. How did the Italians, Danish, and Germans manage to afford them? We never knew.

The other way to orient a capitalist economy is engage in a "race to the bottom." This is the American way, and increasingly the global way, the way that I have been describing. Prices must be kept low, so wages must be kept low, so prices must be still lower, and so it goes. Again, this is not a conspiracy. We all participate in it. As people get paid less, they must demand ever-cheaper stuff. Eventually, we have a situation in which we have to get 12-year-old kids in Indonesia to make stuff for us. It shouldn't surprise anyone. It's a totally predictable outcome of the Free Market.

The Marketplace puts a premium on things, on property. People are valuable because of what they buy. A democratic society puts a premium on people. People are valuable because of what they are. Democracy and Free Markets? If you are working for one, you are working against the other. You can't have both.

A poem by Nygaard

GOODBYE, EDWARD L. BERNAYS

The Father of Public Relations is dead.
Did you know him?
He was the nephew of Sigmund Freud.
Before his death at age one hundred and three
Edward L. Bernays could look back
and see a long career.

Longer than I've been alive.

When you worked for Proctor and Gamble, Edward L. Bernays,
Did you know that every day they were dumping
Poison into the Fenholloway River in Florida?

He started out in World War I
doing war propaganda.
(They called it "propaganda" then.)
After the war he realized that, as he put it,
"If this can be used for war,
it can be used for peace."

That's what he said.

When you worked for General Electric, Edward L. Bernays,
did you think that their nuclear weapons would help to bring peace?

So he translated his selling of war into the business of selling anything,
anything at all.
But mostly he sold people
the idea of buying.
And people bought the idea of buying

from the Father of Public Relations.

When you worked for General Motors, Edward L. Bernays
did you help them to destroy the country's street car lines so they could sell more buses?

As the price tags spread out into the world,
this child of his went to work, turning cities
into markets, and citizens into consumers.
Edward L. Bernays believed that ideas could be
disguised as commodities, and emotions as things.
Nothing has been the same since.

He never questioned his right to do this.

When you worked for United Fruit, Edward L. Bernays
did you ponder how to sell people the idea of a "banana republic?"

During his long career, which was
longer than I've been alive,
the Father of Public Relations worked
for many different corporations.
Now the Father of Public Relations is dead.

How will we live with his child?