Saturday, August 29, 2015

The Productivity Paradox – a Possible Solution?

There is a great debate over whether computers have made us more efficient and how much (Paul Krugman, Noah Smith). I don’t propose to resolve that, but I do have some pertinent questions about it.

The first and most obvious one is, how is productivity measured? It seems like a holdover from the Fordist model where we can precisely determine how many widgets we can crank out with how many people. That’s an easy and straightforward calculation. But what is the “product” when most of our jobs are useless paper pushing? Most jobs in post-Fordism don’t make anything – they are service jobs or “supervisory” jobs (a euphemism for middle management). It’s easy to measure productivity in an industrial economy making widgets. But how do you do it in our economy? What is the “output?” If there is no output, then how do you measure it? I’m sure they’re using some sort of method, but I’ve never seen what it is in any article I’ve ever read on productivity. Maybe it makes sense, I just don’t know.

Most of our time is useless meetings. I had lunch with a friend of mine not long ago. He worked his way up into high-level IT without a degree. He now works for a medium-size insurance company (1,000 employees or so). He usually expresses shock that despite technically being an IT expert, all he does is “talk.” That is, he just attends meeting all day, because he is now high enough to be “management.” He has told me that he has been in meetings where the only goal is to schedule more meetings (seriously – I’m not making that up). But, as he acknowledges, he doesn’t really “do” much of anything.

That doesn’t sound very “productive” to me. Despite this, he makes a salary well over six figures. By his own acknowledgement, and to his unending bemusement, he really produces nothing at all! And this is someone in IT working directly with computers! Could this play a role? So how do you measure his “productivity?” Seriously, I would like to know. Without knowing how it is measured, how can we determine if it is accurate?

How do you measure the productivity of scientists doing research. Many of these scientists are engaged in “unproductive” activity. They must follow where the information leads them which might lead them down unproductive avenues or  to dead-ends. Yet it is extremely important. Just a few discoveries will enhance our lives tremendously. But you cannot tell that from being in the middle of the research. So how do you measure it? How about a novelist or film director? Is more output necessarily better? Roger Corman is productive, but could he produce a single Godfather film? Are all the works of Danielle Steel and Patricia Cornwell better than seven Harry Potter books?

It’s also worth noting that self-service is not counted. If a cashier can check out twenty people and hour and that goes to 25 people, the cashier is more productive. If 25 people use self-checkout in an hour, no increase in productivity is measured to my knowledge. Since our "job" is not being a cashier (or a travel agent, or an investment adviser, or a bookseller, or...), the productivity of increasing self service is not measured.

Is it possible the sheer volume of something like email engendered by ubiquitous computers is actually making us less productive? That is, we spend so much time answering emails that we don’t get anything done? If so, the efficiencies created by the computer have made us less productive. I don’t know if that’s true or not, but is anyone considering this? I have a hard time going through my email, but I know people who literally spend half their day doing nothing but answering emails. I suspect many of us know people like this. In the olden days, these same people would have spent their day not answering emails, (since it didn’t exist), but doing productive tasks such as drafting, calculating, etc. Thus it seems to me they are less productive thanks to the computer. The sheer ease of what the computer allows us to do overwhelms us and makes us spend our time in less productive tasks.

I wonder if computers have increased the amount of useless and needless work. We seem to have a need to create jobs just to employ people, rather than to do any useful work. As David Graeber points out, because we cannot reduce the amount of hours across the economy for political reasons, and because people must work a certain amount of hours to afford the standard living which is set be the amount of hours worked by the longest-working people, you get situation where people do 10-15 hours of work in 40-hour a week jobs. That is extremely inefficient, which as Graeber points out, was not supposed to happen under capitalism, only under socialism where full employment was a higher priority than efficiency. Yet it is happening.

If I got a bunch of computer programs and automated my job so that I could do my work in half the time, I wouldn't be able to come in 20 hours a week at the same pay, even though the same amount of work is getting done. I might be able to come in 20 hours with half my old pay, and with no benefits. Neither would I get a raise, since my pay is determined mainly by personality politics. So, no matter how "efficient" I get, it doesn't benefit me at all.

Have the complexity increases eaten up any benefit from automation? Just as work expands to fill the time allotted to it, complexity expands to maximally utilize the tools available to it. Often times when we work on existing buildings, we look at construction sets from the past few decades. A set of construction documents from the '50s through the '70s might consist of twenty sheets or less from each discipline. No telecommunications, no auto-operated doors, straightforward structural design of beams and columns, not many “custom” details. Today, it’s not uncommon to send out monster construction sets of over a 1,000 pages produced by dozens of specialists to document a single building. Moving columns around, which would have engendered a long series of recalculations, is done willy-nilly now thanks to computers. Design is done at the last minute. To coordinate this complexity, you need a lot more people, hence all the “supervisory” jobs that do nothing but go to meetings and answer emails. If our buildings were as simple as they were in the 1960’s, for example, we could produce those documents in a matter of weeks or months. Instead, these hyper-complex buildings take us years to design and document, even with 3-D BIM modelling. So if you measure, you would see no productivity gain at all, despite all the people working.

I think there is another important explanation. We know that Neoliberalism’s chief job creation engine is low-wage service occupations. See this: Technology has created more jobs than it has destroyed, says 140 years of data (The Guardian). But if you read the fine print, you’ll see why:
The report cites a “profound shift”, with labour switching from its historic role, as a source of raw power, to the care, education and provision of services to others. For example, the 1871 census records that there were 9,832 accountants in England and Wales and that has risen twentyfold in the last 140 years to 215,678. Technological progress has cut the prices of essentials, such as food, and the price of bigger household items such as TVs and kitchen appliances. The real price of cars in the UK has halved in the last 25 years, notes Stewart. That leaves more money to spend on leisure, and creates new demand and new jobs, perhaps explaining the big rise in bar staff, he adds. Concluding that “the stock of work in the economy is not fixed”, the report cites the surge in hairdressers as evidence that where one avenue closes in the jobs market, others open. The Deloitte economists believe that rising incomes have allowed consumers to spend more on personal services, such as grooming. That in turn has driven employment of hairdressers. So while in 1871, there was one hairdresser or barber for every 1,793 citizens of England and Wales; today there is one for every 287 people.
So, is it possible that the efficiency of computers has led to less people doing the same job. The wealth captured therein is channeled into the creation of a vast array of low-wage service occupations (i.e. McJobs) But it is impossible to raise the productivity of service occupations much by definition. Baumol’s cost disease explains why:
To understand the cost disease, start with a simple observation: whatever the economy’s average rate of productivity growth, some industries outpace others. Take car manufacturing. In 1913 Ford introduced assembly lines to move cars between workstations. This allowed workers, and their tools, to stay in one place, which cut the time to build a Model T car from 12 hours to less than two. As output per worker grows in such “progressive” sectors, firms can afford to increase wages.
In some sectors of the economy, however, such productivity gains are much harder to come by—if not impossible. Performing a Mozart quartet takes just as long in 2012 as it did in the late 18th century. Mr Baumol calls industries in which productivity growth is low or even non-existent “stagnant”.

Employers in such sectors face a problem: they also need to increase their wages so workers don’t defect. The result is that, although output per worker rises only slowly or not at all, wages go up as fast as they do in the rest of the economy. As the costs of production in stagnant sectors rise, firms are forced to raise prices. These increases are faster than those in sectors where productivity is improving, and faster than inflation (which blends together all the prices in the economy). So prices of goods from stagnant sectors must rise in real terms. Hence “cost disease”.

The disease is most virulent in industries where standardisation and automation are hard. The best examples are goods tailored to meet customer-specific demands, such as bespoke suits and haircuts…

But according to Deloitte, bespoke suits and haircuts are exactly what has absorbed the displaced workers!

The other problem is diminishing marginal returns. This is particularly pronounced in service industries, since their customer base is inherently limited, and expansion is difficult:
To illustrate this important law [of diminishing marginal returns], consider the production of Super Deluxe TexMex Gargantuan Tacos (with sour cream and jalapeno peppers). The table to the right presents the hourly production of Gargantuan Tacos as Waldo's TexMex Taco World employs different quantities of labor, the key variable input for short-run taco production. The first column is the number of workers, the second is the total hourly production of Gargantuan Tacos and the third column is the marginal product generated by each additional worker.
For the first two workers marginal product actually increases. This reflects increasing marginal returns and commonly results when the variable input is able to make increasingly effective use of a given fixed input.

For the third worker on, however, marginal product decreases. This reflects decreasing marginal returns and the law of diminishing marginal returns. The marginal product of the third worker is 25 tacos, compared to 30 tacos for the second worker. The marginal product of the fourth worker then declines to 20 tacos. For the fifth worker, the marginal product falls to 15. For each subsequent worker, the marginal product declines. Marginal product eventually reaches zero for the eighth worker and even declines for the ninth and tenth workers.

The decreasing values of marginal product exhibited for taco production by Waldo's TexMex Taco World reflect the law of diminishing marginal returns.

Computers aren’t going to increase the efficiency of taco makers, sales associates, sandwich artists or bedpan washers very much.

So if the Deloitte report is correct, and the new jobs being created by computers and automation are predominantly service jobs—like those at Waldo’s Tex-Mex World--then it is no surprise that the productivity is decreasing. It is possible that these types of jobs are eating up any productivity gains we get from computers and automation. So the growing unproductive industries would cancel out the growing productive industries, especially when we shift employees from one to the other, which we are doing and have done (manufacturing to service).

The mechanism is this – efficiency gains in manufacturing means less and less people involved in manufacturing. Computers mean more efficiency in “professional/technical” services pushing much of the workforce into the service economy and expanding that sector. Because that sector is vulnerable to Baumol’s cost disease and diminishing marginal returns, when productivity is measured as a whole across the entire economy, it appears to diminish, even where we can define what efficiency is (Sandwiches made? Bedpans changed?). If you measured it in just certain areas, we might see an increase, keeping in mind the caveats above (determining what output is, increasing complexity, useless busywork that is brought about because of the computer, etc.).

I think those might explain why, despite the fact that we all have computers on our desks more powerful than NASA used to get us to the moon, the measurements show relatively few productivity gains. This a problem primarily of economic organization. Paul Mason in Postcapitalism makes this point:
“By smashing the organized working class in the late twentieth century in all the centers starting with Japan, then Britain, then the United States then Northern Europe, what happened is that capitalism removed the impetus for a high wage, high technology solution to the problems of the late twentieth century and instead what we got was Neoliberalism. So Neoliberalism is not a new system, it is a cul-de-sac, and I argue it is a new kind of cul-de-sac which does not have a way out. And that is why we are living at a time when the fifth long wave of capitalism wishes to take off, there is a real rollout of technology going on, information technology is at the heart of it. You could look at collapsing prices of real technology, of sequencing DNA—the price of DNA sequencing falls in the exact same curve as the price of Wi-Fi or silicon chips. That’s the revolution. That’s the technological revolution. What should it lead to? Mass automation and the rapid reduction of the necessary work in society. But it’s not. Because Neoliberalism has no impetus to do that. It has only impetus to take people like you and put them in coffee bars to earn minimum wages and stay there forever. That’s the problem.”

Hence the low productivity, since productivity numbers are measured across all sectors of the economy, not just the ones that are becoming more efficient.

Note also that in the extremely productive sectors of the economy, people are being worked like dogs, which was the point of all the talk about So you have a vast, expanding sector of the economy of service jobs which are subject to Baumol’s cost disease and diminishing marginal returns. Then you’ve got a high-paid sector of people in upper management who produce nothing and go to meetings all day, but are working extreme hours to the point of burnout. Here’s the thing – overwork actually reduces productivity! See this:

Moreover, all studies of actual workers indicate that while working more might produce an initial boost, we burn out pretty quickly and don’t recover until we take a break. One study found that those who put in 55 hours a week performed worse at cognitive functions than those who worked 40 hours. Another found that workers can achieve a small boost by putting in more than 60 hours, but that it only lasts three to four weeks and then falls off. Putting in weeks of overtime eventually reduces productivity, which doesn’t bounce back. After eight 60-hour weeks, productivity is hurt so badly that it would’ve been better simply to stay with a 40-hour week the whole time. One woman who spoke anonymously about her time at Amazon described being forced to leave work by her fiancé every evening at 10 pm and doing work every day of her vacation. “That’s when the ulcer started,” she said. She no longer works there.

Sadly, Americans aren’t benefiting from all that research. Our average workweek is nearly a whole workday longer than the 40-hour one that researchers say is most beneficial. Ninety-four percent of professional workers log 50 hours a week or more.

So if Mason’s right, Neoliberalism is hitting us from both ends. A small sliver of prosperous, high-tech workers are being ground down into a sleep-deprived, low productivity psychosis, while the rest of us are stuck in low wage, low productivity McJob ghettos of diminishing marginal returns like slinging coffee and changing bedpans. I was once told by a worker at Target that she needed more hours and asked for them (she was only allowed 30), but instead Target kept hiring more people! This is extremely inefficient. It's all done so Target can avoid paying benefits. As Mason contends above, Neoliberalism is all about "getting tough" with labor, but this actually hurts productivity across the economy.

Meanwhile, with actually making stuff including the computers themselves, productivity gains are spectacular. The problem is, it just doesn’t employ that many people anymore, certainly not in the U.S. Note above that economies that still do employ their workforce in making stuff, like Germany, are the most productive, and prosperous. I’m guessing there are less Waldos Tex-Mex Taco Worlds in Germany as well.

No wonder productivity has crapped out in the U.S.

Now, if we had instead used productivity gains to reduce working hours, we would actually see those gains reflected in leisure hours. Instead we have chosen a path of ratcheting up complexity, creating bullshit jobs, and partaking of services that we could more efficiently do for ourselves (e.g. make our own coffee and drink beer at home). We would also see additional gains from, say, not spending as much time in traffic and lowered resource use (less electricity to keep office lights on, less pollution emissions to commute to jobs, etc). If we ate at home more, we’d probably be healthier, saving in health care costs. Instead we have plowed the gains into job creation in low-wage inefficient industries, destroying any productivity gains from computers. We did this to avoid mass unemployment. Do you want fries with that?

This wouldn’t be such a surprise to economists if they actually left their cloisters and spent any time in the real economy that human beings actually inhabit every day (like my IT friend). Instead they sit in their Ivory Towers and scratch their heads over the desiccated numbers and statistics, without asking how those numbers were arrived at, and without venturing outside and interacting with the ignorant, unwashed masses. Institutional economics, which describes how actual human interactions take place sans mathematical equations could provide an answer, but since it is an answer the people who employ  economists don’t want to hear, economists will most likely remain blissfully ignorant, since that appears to be their job nowadays.

Also, there was an article recently about awarding a contract to Oshkosh to build the Humvees (only 400,000 a pop) for America’s perma-wars across the globe (and probably domestic insurgency). Now this may not mean much to you, but if you’re from Wisconsin and lived here in the nineties, you remember that any cutback in the military budget, the so-called “peace dividend,” was accompanied by local reporters rushing off to Oshkosh and interviewing all the people who stood to lose their jobs. The employees would parade before the camera and lament how they would be unemployed and unable to find work, and what a horrible tragedy this would be if the military budget were cut. Somehow, all the private sector industries moving jobs overseas didn’t engender the same amount of consternation.

This is to say that one of the reasons American unemployment is so much lower than Europe’s is almost entirely due to the military!

A lot of people wanted the government to stimulate the economy building train cars and solar panels, and insulating old buildings. We didn’t do that. But we are building plenty of Humvees and jet fighters, including ones that don’t work and serve no purpose. This has sometimes been dubbed military Keynesianism. In other words, just like the military is somehow exempt from government bashing engaged in by Republicans, the amounts spent to employ Americans producing weapons is okey-dokey, but any money spent to employ Americans to do literally anything else is “waste.”


Consider how many Americans owe their jobs directly or indirectly to America’s global military. It’s a jobs program for poor rural Americans from Middle America’s ghost towns. But aside from the active-duty soldiers themselves, there are all sorts of ancillary industries, from the industries building weapons, to the contractors constructing the bases, to serving the food in the mess halls, to processing the payrolls, to providing health care, to the refineries providing the fuel for the Humvees and jets, the engineers who design the weapons, and so on.

I don’t know enough to calculate it all, but if you subtract all that economic activity out, what do you get? Considering that European defense budgets are minimal, would you have a similar unemployment rate, including youth unemployment rate (since the military disproportionately employs younger people), as Europe? My guess is the answers is yes, despite the higher minimum wages and evil welfare state.

Conservatives claim that the welfare state is why European unemployment is high. But isn’t it more accurate to say that government spending, which is allowed via military but nothing else, is why it is low here?

A final irony is that the Fox Valley where Oshkosh is located is a hotbed of far-right wing anti-government Tea Party sentiment. Joe McCarthy was from there, and the John Birch society is headquartered there.

Thursday, August 27, 2015

Growth for Growth's Sake

“Growth purely for its own sake is the philosophy of cancer.”
Jasper Fforde

If there’s ever any doubt that economists desire growth for its own sake, rather than for any tangible benefits delivered to the general population in a “growing” economy, check out this post.
From the 4th quarter of 2013 to the 2nd quarter of 2015 the Japanese economy grew by a grand total of 0.1%.  And the unemployment rate continued to fall, from 3.7% to 3.4%.  That’s right, over the past 6 quarters the Japanese economy has been growing at above trend.  But that blistering pace can’t go on forever.  The unemployment rate is down to 3.4%, and unless I’m mistaken there is a theoretical “zero lower bound” on unemployment that is even more certain than interest rates. The Japanese economy is like a Galapagos tortoise that has just sprinted 20 meters, and needs a long rest.

So, the population is shrinking, the unemployment rate is falling, the living standards are high. And yet it’s not growing! And that’s a problem because…? Well, we need growth. We just do! Because growth means low unemployment and high living standards, which they already have. And it must grow at a certain rate, even if the working age population is shrinking.

In a world that is being utterly gutted by human numbers, this is utterly insane. Unlike climate change, ocean acifdification, or the sixth extinction, shrinking population growth rates are a crisis:
MENTION “demographic crisis”, and most people think of countries where women each have six children and struggle to feed them. Much of Asia has the opposite problem: low fertility and an upside-down family structure (four grandparents, two parents, one child). Three-quarters of all the people in countries with exceptionally low fertility live in East and South-East Asia. Prosperous Japan, South Korea and Taiwan have fertility rates of 1.4 or below. The fertility rate is the number of children a woman can expect to have during her lifetime. A rate of 2.1 implies stability: the population is replacing itself. Demographers refer to rates of 1.4 or less as “ultra low”.

The difference between 2.1 and 1.4 may not sound like much. But consider what it has meant for Japan. In the early 1970s the country had a fertility rate of 2.1, with 2m children born every year. Four decades later the number of births has halved, with the fertility rate down to 1.4. Or take an even more dramatic example, China. In 1995 some 245m Chinese were in their 20s. By 2025, on current trends, there will be only 159m, a decline within a single generation of 86m. This will reduce by more than a third the segment of the population that is best educated, most technologically astute and most open to new ideas.
Asia's new family values (The Economist)

Clearly East Asia needs to start reproducing so that they can have more growth. More people means a growing economy, and that’s just better, right? Look how well Africa’s doing. After all, East Asia is dangerously underpopulated:

So what’s the benefit of growth again?

There’s also an odd paradox. Environmentalists always tout industrialization as the solution the world’s environmental crisis because it slows down fertility rates. But when it works as intended, for example In the East Asia example above, the forces of economics cry that we must start producing more people or else! In other words, both the Ecomodernists and the Neoliberals want to go full steam ahead on economic growth and technoutopianism, but the Ecomodernists are dependent on the same thing happening (population stabilization) that the neoliberals believe is a total disaster. One’s head explodes.

The real reason for wanting population growth is the same reason as open borders is encouraged--it keeps the labor supply high and hence wages low. History has shown conclusively that increasing labor supply leads to lower wages, while decreasing supply of labor leads to higher wages. When industrialism happened, real wages fell, as there were more workers than there were jobs, a good position for the owners of the factories. They started to rise after 1850, exactly when massive outmigration (U.S., Australia, Canada, Mexico, Australia, New Zealand, Argentina, etc.) began to occur. Wage growth in the U.S. from 1940-1977 were driven by high unionization and low immigration. No more.

As people pointed out in the comments, the per capita growth factoring in the lower population has actually been higher for the Japanese than for Americans. In other words, our growth has been eaten up by population growth such that we are actually worse off than the average Japanese person (even before factoring in the extreme inequality of the U.S. where the benefits of growth accrue only to the top 0.1). And even the horrible government debt caused by this is hardly a problem – Japanese debt is mostly domestic held by retirees (meaning their children will be the beneficiaries) and interest rates are low. Meaning that in extremis the Japanese can always write off the debt they owe themselves to pay off the Gaijin. From the comments:
“According to the world bank over the last 5 years Japanese per capita real GDP growth has averaged 1.66%. When you population is actually falling, standard economic data analysis can be very misleading.”
“We sure get a lot of Japan-pessimism in the US media, but they have significantly better quality of life than Americans or Europeans by any metrics that matter: job security, health, life-expectancy, crime rates, unemployment, obesity, etc. Japan was more orderly and stable post-Tohoku than the USA is on any given day. “
“Japan hasn’t made much money for Wall Street over the last quarter century so we constantly hear about how horrible Japan is.”
“...The U.S. relies on population growth for GDP growth to a startling extent. I believe Japan’s per capita GDP growth outstripped or at least matched the U.S.’s during the 1990’s as well, but I can’t find anything on that after a quick google.”
And here's a fitting quote from Albert Bartlett:
"We in the United States are in a culture that worships growth. Steady growth of populations of our towns and cities is the goal toward which the powerful promotional groups in our communities continuously aspire. If a town's population is growing, the town is said to be "healthy," or "vibrant," and if the population is not growing the town is said to be "stagnant." Something that is not growing should properly be called "stable." Yet, the promoters of growth universally use the word "stagnant" to describe the condition of stability, because "stagnant" suggests something unpleasant. Since continued growth is the goal of the promoters in our communities, we should understand the arithmetic of steady growth."

Tuesday, August 25, 2015

Origins of the Cult of Overwork

Steven M. Johnson solves the Amazon office bathroom problem (Treehugger)
I don't often repost stories I've posted previously, but considering the attention being paid to the transformation of the workplace into the digital dystopian nightmare of constant stress and sleep deprivation (both of which are used in cult indoctrination BTW), I thought it important to revisit these.

This article related where the idea that you must be obsessively passionate about your work to the point of forgoing eating and sleeping came from - the autistic employees of early Silicon Valley. So really, that ideal came out of that industry, and then came to be popularized to the wider workplace by the business/management cult literature. How convenient that "passionate" people will work themselves to death without being paid:
How did this knowledge, which was so deeply embedded in three generations of American business management that it was utterly taken for granted, come to be so lost to us now? There are probably several answers to that, but there are three factors in particular that stand out.

The first is the emergence of Silicon Valley as an economic powerhouse in the late 1970s. Since WWII, the valley had attracted a unique breed of worker — scientists and technologists who carried with them a singular passion for research and innovation. Asperger’s Syndrome wasn’t named and identified until 1994, but by the 1950s, the defense industries in California’s Santa Clara Valley were already drawing in brilliant young men and women who fit the profile: single-minded, socially awkward, emotionally detached and blessed (or cursed) with a singular, unique, laser-like focus on some particular area of obsessive interest. For these people, work wasn’t just work; it was their life’s passion, and they devoted every waking hour to it, usually to the exclusion of non-work relationships, exercise, sleep, food and sometimes even personal care. The popular stereotype of the geek was born in some real truths about the specific kinds of people who were drawn to tech in those early years.

The culture that grew up in the valley over the next few decades reflected and valorized the peculiarities of what Lockheed’s company psychologists were calling by the late ’50s “the sci-tech personality.” Companies broadened their working hours, so programmers who came in at noon and worked through till midnight could make their own schedules. Dress codes were loosened; personal eccentricities were celebrated. HP famously brought in breakfast every morning so its engineers would remember to eat. The local 24-hour supermarket carried microchips alongside the potato chips, so techies working in their garages could stop in at 2am for snacks and parts.

And then, in the early ‘80s, Tom Peters came along, and promoted the Silicon Valley work ethic to the rest of the country in the name of “excellence.” He extolled tech giants like HP and Apple for the “passion” of their workers, and told old-industry employers that they could move into the new age by seeking out and rewarding that kind of passion in their employees, too. Though Peters didn’t advocate this explicitly, it was implicitly understood that to “passionate” people, 40-hour weeks were old-fashioned and boring. In the new workplace, people would find their ultimate meaning and happiness in the sheer unrivaled joy of work. They wouldn’t want to be anywhere else.

There were two problems with this. The first is that this “passion” ideal didn’t recognize that the vast majority of people have legitimate physical, emotional and psychological needs — things like sleep, exercise, relaxation and the maintenance of strong family and social support bonds — that these engineers didn’t have to nearly the same degree. The second was that most managers, lacking windows into their workers’ souls, decided to cut corners and measure passion with one easy-to-chart metric: “willingness to spend your entire life at the office.” (It was about this time, with gourmet company cafeterias and in-house fitness centers and on-site child care sprouting up in high-tech campuses all over town, that I realized if a company is working that hard to make the workplace feel like home, it’s a strong suggestion that their employees risk sanction if they ever attempt to visit their actual homes again.)

These were the early morning-in-America Reagan years. The unions — for 150 years, the guardians of the 40-hour week — were falling under a conservative onslaught; and in their place, the new cult of the entrepreneur was ascendant. All the old paternalistic contracts between employers and employees were torn up. Where companies once hoped to hire people young and nurture their careers through to a pensioned retirement — a lifelong relationship that required managers to take the long view about how to keep their workforces sustainably healthy and happy — young Gen Xers were being given a 401k and told to expect to change jobs every three to five years. Even while employers were demanding new levels of “passion” and commitment, they were also abdicating their old obligation to look after the long-term well-being of their employees.

The rapacious new corporate ethic was summarized by two phrases: “churn ‘em and burn ‘em” (a term that described Microsoft’s habit of hiring young programmers fresh out of school and working them 70 hours a week until they dropped, and then firing them and hiring more), and “working 90 hours a week and loving it!” (an actual T-shirt worn with pride by the original Macintosh team. (Productivity experts estimate that we’d have probably had the Mac a year sooner if they’d worked half as many hours per week instead.) And this mentality soon spread from the technology sector to every industry in every corner of the country.

The new ideal was to unleash “internal entrepreneurs” — Randian übermenschen who would devote all their energies to the corporation’s success, in expectation of great reward — and who were willing to assume all the risks themselves. In this brave new world, the real go-getters were the ones who were willing to put in weekends and Saturdays, who put their families on hold, who ate at their desks and slept in their cubicles. Forty-hour weeks were for losers and slackers, who began to vanish from America’s business landscape. And with their passing, we all but forgot all the very good reasons that we used to have those limits.

Within 15 years, everything America’s managers used to know about sustaining worker productivity was forgotten. Now, 30 years and a few economic meltdowns on, the cafeterias and child-care centers and gyms are mostly gone, along with the stock options and bonuses that were once held out as the potential reward for the long hours. All that remains of those heady, optimistic days is the mandatory 60-hour work-week. And, unless you’re an hourly worker — still entitled to time and a half by law — the only inducement employers currently offer in exchange for submitting yourself to this abuse is that you get to keep your job.
Bring Back the 40-Hour Work Week (Salon) The original article describes the extensive research that shows how crushing overwork leads to diminishing productivity, sloppy work, increased errors, and a sicker workforce, erasing any of the supposed"gains" from working people like a mule. Related: How Autistic People Helped Shape the Modern World (Wired):
One way to understand it is to think of human operating systems. Just because a computer is not running Windows does not mean it’s broken. It’s doing things in different ways. Autistic people are bad at reading social signals but good at detecting flaws in visual patterns. They have a hard time coping with surprise, but they’re good at pursuing a personal interest with great focus and intensity. So instead of diseases and cures and causations, we should think of autism as a different way of being that deserves respect and accommodation in society.
But it goes back even further than that:
It’s fitting that Thomas Edison, the father of artificial light, was also a staunch opponent of sleep. As Derickson writes in his book Dangerously Sleepy: Overworked Americans and the Cult of Manly Wakefulness, “Edison spent considerable amounts of his own and his staff’s energy on in publicizing the idea that success depended in no small part in staying awake to stay ahead of the technological and economic competition.”

No one, Derickson argues, “did more to frame the issue as a simple choice between productive work and unproductive rest.”

Early newspaper accounts touted Edison’s willingness to work “at all hours, night or day,” to frequently rack up more than a hundred hours of work in a week, and his tendency to select his subordinates based largely on their physical endurance.

In an 1889 interview with Scientific American, Edison claimed he slept no more than four hours a day, and he apparently enforced the same vigilance among his employees.

“At first the boys had some difficulty in keeping awake, and would go to sleep under stairways and in corners,” Edison said. “We employed watchers to bring them out, and in time they got used to it.”

Edison’s assistants were “expected to keep pace with him,” John Hubert Greusel wrote in 1913. “When they fell from sheer exhaustion he seemed to begrudge the brief hours they were sleeping.”

Over time, children’s books and magazines began to promote this type of Edisonian asceticism. “One juvenile motivational text featured a photo of Edison with a group of workers identified as his Insomnia Squad,” Derickson writes. Early 20th century biographies of Edison featured him interviewing job candidates at 4 a.m. and cat-napping on lab benches between marathon work sessions.

Some short-sleepers might have shrugged and said they were simply biologically lucky. But Edison encouraged all Americans to follow his lead, claiming that sleeping eight hours a night was a waste and even harmful.

“There is really no reason why men should go to bed at all,” he said in 1914.
Thomas Edison and the Cult of Sleep Deprivation (The Atlantic)

Think it's only white-collar workers who live that reality? Think again:
Every Monday, I worked a double, arriving around 6 a.m. to prep the entire station from scratch, worked lunch service, broke down the station, prepped for dinner, set up, then worked until midnight. At most, I took one 15-minute break to shovel food into my mouth. When the night was over, I would take the subway home, arriving home around 2:30 a.m., sleep until 6 a.m., wake up, and go back to work. That's how my team and I started every single week. The constant pressure to perform drives cooks to work at a level most people would consider insane. Showing up hours before schedule to prep—unpaid of course—just to handle the work load. Or clock out, pretend to go home with the team, walk around the block then go back in the kitchen and work for free for hours....Can't handle it? I'm sure the guy over there would love the opportunity to do the job just a little better than you. That attitude was pervasive, so cooks would form miniature alliances and networks of teams to help each other succeed while making sure certain people had no shot.
What Is It Like to Be a Chef at an Expensive Restaurant? (Slate)To be not busy is to be unimportant:
For upper-middle class men, notes sociologist Michèle Lamont, ambition and a strong work ethic are “doubly sacred. . . as signals of both moral and socioeconomic purity.” Elite men’s jobs revolve around the work devotion schema, which communicates that high-level professionals should “demonstrate commitment by making work the central focus of their lives” and “manifest singular ‘devotion to work,’ unencumbered with family responsibilities,” to quote sociologist Mary Blair-Loy. This ideal has roots in the 17th century Protestant work ethic, in which work was viewed as a “calling” to serve God and society. The religious connection has vanished….or has it?

Blair-Loy draws parallels between the words bankers used to describe their work — “complete euphoria” or “being totally consumed” — and Emile Durkheim’s classic account of a religion ceremony among Australian natives. “I worshipped my mentor,” said one woman. Work becomes a totalizing experience. “Holidays are a nuisance because you have to stop working,” said one banker interviewed by Blair-Loy. “I remember being really annoyed when it was Thanksgiving. Damn, why did I have to stop working to go eat turkey? I missed my favorite uncle’s funeral, because I had a deposition scheduled that was too important.”

Work devotion marries moral purity with elite status. Way back when I was a visiting professor at Harvard Law School, I used to call it the cult of busy smartness. How do the elite signal to each other how important they are? “I am slammed” is a socially acceptable way of saying “I am important.” Fifty years ago, Americans signaled class by displaying their leisure: think banker’s hours (9 to 3). Today, the elite — journalist Chrystia Freeland calls them “the working rich” — display their extreme schedules.

Not only is work devotion a “class act” — a way of enacting class status — it’s also a certain way of being a “real” man. Working long hours is seen as a “heroic activity,” noted Cynthia Fuchs Epstein and her co-authors in their 1999 study of lawyers. Marianne Cooper’s study of engineers in Silicon Valley closely observes how working long hours turns pencil pushing or computer keyboarding into a manly test of physical endurance. “There’s a kind of machismo culture that you don’t sleep,” one father told her. “Successful enactment of this masculinity,” Cooper concludes, “involves displaying one’s exhaustion, physically and verbally, in order to convey the depth of one’s commitment, stamina, and virility.”
Why Men So Many Hours (Harvard Business Review)

It wasn't supposed to be this way:
It took labor unions hundreds of years to get workers nights and weekends off; smartphones have taken them away in less than a decade.

There are hundreds of studies describing America’s epidemic of overwork, the end of free nights and weekends, the constant stress brought on by digital umbilical cords, the constant interruptions from email, voicemail, instant messages, tweets, Snapchats.   Smartphone users check their e-mail 150 times every day, according to industry research. Workers recently told researchers that 50 percent are expected to check their e-mail on weekends, and 34 percent while on vacation. No matter on that last point: Most Americans fail to take their meager allotment of vacation anyway.

Meanwhile, Americans seem to think they like this. A Gallup poll released this month found that employees who check email outside of work are 25 percent more likely to say they experienced a lot of stress yesterday, yet by about the same margin, they are likely to describe themselves as “thriving.” Yep – many Americans seem to think stress is good for them.

Even if overwork isn’t killing you, it’s almost certainly hurting you. The American Journal of Epidemiology summarized work and health risk research recently and published this list of horribles: “Long working hours have been found to be associated with cardiovascular and immunologic reactions, reduced sleep duration, unhealthy lifestyle, and adverse health outcomes, such as cardiovascular disease, diabetes, subjective health complaints, fatigue, and depression.”
50 years ago, the World's Fair promised a life of leisure. We're still waiting (BoingBoing)

Aren't you glad modern conveniences have given us so much leisure and made us all healthier?

Saturday, August 22, 2015

Fun Facts

"CEO pay over the last 35 years grew by ONE THOUSAND percent while worker pay increased by...ten. CEO pay also increased at 2x stocks. Nonsensical. Even if CEOs were responsible for 100% of share price gains (no), still hugely overvalued."

A typical worker today is almost 60 percent more productive than a worker was 25 years ago but has seen only half of that productivity growth translate into higher compensation.

Only 15% of 18-29-year-olds believe that America is the "greatest country in the world", according to Pew, down from 27% in 2011.

[T]he CEO of Walmart earns more in an hour than his employees will earn in a year.

Bay Area residents earn less, pay lots more for homes & have fewer jobs vs [the] dot-com boom.

Across the United States, hospital shootings are now a monthly occurrence.

The US Averages One Mass Shooting Per Day in 2015.

Someone's gotten shot in [Rochester, New York] every 32 hours this summer.

Nearly $1 in every $5 spent in the United States by 2024 will be on health care.

No other country [besides the United States] has 14 healthcare professionals in the top 20 of highest paying occupations.

[Five percent] of the US population will be imprisoned at some point.

[B]reathing Beijing’s air is the equivalent of smoking almost 40 cigarettes a day.

The top 1% of America owns 50% of investment assets (stocks, bonds, mutual funds). The poorest half of America owns just [0].5% of the investments.The poorest Americans do come out ahead in one statistic: the bottom 90% of America owns 73% of the debt.

More than half of Americans have gone 12 months without a vacation.

In 2010, enough prescription painkillers were prescribed to medicate every [A]merican adult every 4 hours for 1 month.

The United States has 5% of the world’s population & consumes 75% of the world’s prescription drugs.

The New York metropolis has 12 million fewer people than Tokyo, yet it uses more energy in total: the equivalent of one oil supertanker every 1.5 days

In June China sold $1 billion per day more to the U.S. than it purchased.

Hustling ain't easy: 30% of entrepreneurs are depressed v. 7% of the general population.

...[T]here are five times as many empty homes as there are homeless people.

An estimated 250 million preschool children are vitamin A deficient, and it is likely that in vitamin A deficient areas a substantial proportion of pregnant women [are] vitamin A deficient.

About 2.3 billion people have been hooked up to reliable water supplies since 1990, but 748 million still live without access. At the same time, water tables are drying up in many places.

In 2013, euthanasia accounted for one of every 28 deaths in the Netherlands.

More people will be killed in traffic accidents involving large trucks this year than have died in all of the domestic commercial airline crashes over the past 45 years...The death toll in truck-involved crashes rose 17 percent from 2009 to 2013.

By the time the first European university was established in Bologna in 1088, Nalanda [University in India] had been providing higher education to thousands of students from Asian countries for more than six hundred years.
[F]or every grain of sand on every beach on Earth, there are 10,000 stars out there.

Friday, August 21, 2015

The Greek Debt Crisis

There’s a great explanation of the Greek debt crisis by the authors of the excellent book Economix by Michael Goodwin and Dan Burr. Check it out:

I learned something too. I was unaware that the payout of bonds always remains the same. Thus, if the interest rate declines, the price changes to maintain the same rate of payout. High interest rates reflect a high risk of default, hence high interest rates = low price and vice versa. Greek debt was sold at a much higher price than it should have been, reflecting an unreasonably low default risk (paid in Euros), and the buyers did not take into account the default risk. Now they are insisting on getting paid every cent they are owed rather than accept a writeoff. This just reinforces my view that the medieval system of the buying and selling of debt is a ridiculous way to run a global technology-based economy and is responsible for most of the lack of progress and suffering as a species (including our inability to get our numbers and resource use under control). Can’t we do better? If only economists put their allegedly big grains to use doing that instead of analyzing and rationalizing the current clusterfuck of a system.

Another note on the crisis – in case you didn’t know, Germany received a substantial debt writeoff in 1953 at the London conference. Over half their debt was eliminated. And these were the Nazis! The very incarnation of evil. Just ten years earlier they were shoving people into incinerators at Dachau, and yet they get a break that the Greeks apparently don’t deserve.

Of course we know why. Germany was cleaved in two. The eastern half was run by Communism. It wouldn’t look too good to have the “free” Germans in the West living impoverished in a hollowed-out economy while their compatriots in the East had higher living standards, would it? It wouldn’t be good for propaganda to have people climbing over the Berlin Wall to get into EAST Germany. It wouldn’t make capitalism look good to have lower living standards than the Communist regimes of eastern Europe in Europe’s biggest industrial economy.

Today, of course, no one cares what happens to the Greeks. In this almost comically sociopathic post, the author explains why the Greeks don’t deserve debt repayment: Germany Deserved Debt Relief, Greece Doesn't (Bloomberg) Unfortunately for the Greeks, there is no Communism for them to appeal to. And that's the problem. The author frankly acknowledges that Germany needed to be saved from debt servitude to provide a "bulwark" against Communism by upholding the free market (although the author speaks disapprovingly of all the "illiberal" social welfare programs).
As for the post-war debt, here's what Frankfurt, Germany's current financial center and seat of the European Central Bank, looked like in 1953...There are ruins at the center of Athens, too, but they are rather more ancient.
Not that ancient - only from 2004.
...after Germany was split in two by the World War II allies, 10 million refugees from the Soviet-controlled eastern part of the country -- about as many people as there are in Greece now -- flooded the west, creating a humanitarian catastrophe of major proportions. 
Too bad for the author that Greece is also suffering a major humanitarian crisis being flooded with refugees from Syria and Iraq trying to get into Europe. Greece has to deal with being the front line of "Fortress Europe." without any help from those cowering farther north, who instead want them to suffer. Also, Greece, unlike Germany, did nothing to bring this situation upon itself.
The circumstances under which Greece accumulated its debt are strikingly different. After restoring democracy in 1974 after seven years of military rule, the Greek government splurged on a full range of socialist benefits, including higher pensions and universally accessible health care, as well as on a big government. It financed a railroad that had more employees than passengers; even before the military coup, it started paying salaries to Orthodox priests, and it still does so, though there has been a pay cut after international creditors demanded it.
So let me get this straight. Germany borrows money to start a massive war on the continent that kills millions of people and to build concentration camps to mass murder entire ethnic groups. Greece borrows money to pay for free education, universal healthcare, pensions for the elderly, a railroad, and paying a salary for Orthodox priests (who are not known for lavish living). Clearly, Germany deserves forgiveness and the Greece must suffer!
Part of the reason West Germany was granted debt relief lay in the Federal Republic's importance as a Western bulwark in the fight against Communism.... It was less economically liberal than it is now, and it built a sizable welfare state over the years, but it was still a center-right, capitalist force that believed that only private initiative could lead to more or less universal prosperity.
Yes, too bad we had to put up that unfortunate welfare state and all that, but they were still "center-right," and thus acceptable. And we needed them on our side to fight the Commies. But Greece, we have to make them suffer for daring to elect a "far-left" government:
The far-left political forces were outside the London process in 1953; they were in the GDR. Now, far-left Syriza wants to be on the inside, with its plans to nationalize banks and utilities and its costly promises to voters. It will use the debt relief to provide free electricity to households, subsidize rents, restore Christmas bonuses to pensioners, raise minimum salaries -- that is, to return to the practices that led to the accumulation of Greece's debt.
That's right, unlike Germany's war debt, the Greeks want to do horrible things like give people money at Christmas and stop them from losing their apartments. What a bunch of monsters! We need to teach these "leftists" a lesson! One's jaw had to drop at the awesome sociopathy and rationalization of this author.What's the real agenda here?

Yes, circumstances are entirely different. Germany benefits from an artificially cheap currency. If a country's economy is doing well, their currency's value rises and their exports are less competitive. If a country's economy is doing poorly, their currency's value falls, and exports become cheaper, boosting their economy. Germany's currency is yoked to the poorer countries of Southern Europe making its exports artificially cheap, and it cannot be adjusted because of the yoke! Thus Germany is a massive exporter, meaning it can undercut other economies who do not benefit from that situation (Japan, Britain, U.S), and gains from a massive inflow of currency. Rather than acknowledge this situation, Germans prefer to fall back on racist stereotypes of "lazy Greeks." Also, Germany's generous social benefits allow them to hold down wages and prevent prices from rising to further give them an advantage. Germany also absorbed millions of highly skilled workers from the East who worked for far less than average Western wages.
China is widely accused of “currency manipulation,” keeping the renminbi weak to boost its exports. But few see that the eurozone—the now 19- country bloc sharing the euro as its common currency—has functioned for Germany as a built-in currency manipulation system. And much like China, Germany used a lethal combination of wage repression and an undervalued currency to boost its exports and output at the expense of its trading partners...Germany’s reliance on foreign demand for its exports drained spending from elsewhere in the eurozone and slowed growth in those countries. That, in turn, made it less likely that German banks and elites would recover their loans and investments in southern Europe.
German Wage Repression: Getting to the Roots of the Eurozone Crisis (Naked Capitalism)

You cannot have a monetary union without a political union. In the U.S., the richer states subsidize poorer states. California, Texas and New York subsidize Mississippi, Alabama and Kansas. Their economies and corporations receive benefits from those states such as plentiful commodities (no tarrifs, etc.) and cheap labor (why your catalog orders get filled in Middle America and your credit card bills go there too). But Germany does not want to subsidize weaker economies despite being monetarily yoked to them and enjoying the benefits of that. So yeah, circumstances are totally different.

Too bad Greece doesn't have war debt and an alternate economic system just over the border.

RELATED: Did socialism keep capitalism equal? (Branko Milanovic). yes.

Thursday, August 20, 2015

The White-Collar Sweatshop Redux

The only photo I could find of the reclusive Mr. Bozo.
Several outlets have pointed out that the conditions at Amazon are hardly unique to that business. Others have pointed out that it's coming for all of us:

I worked at Microsoft and I doubt that Amazon is much worse (Slate)
"______ is built, quite deliberately, to be Darwinian. The strong survive and the weak perish (metaphorically speaking) and the 'bar' is constantly increasing. The level of performance that would have been acceptable five years ago will get you canned today. It's a kind of crucible that'll help you develop a harder edge, if you can survive, that can serve you well in your career and in life, but it's often not a pleasant experience. I wouldn't recommend it as a place to work for just anyone."
Match the Employee Rant with the Tech Giant (Vocativ)
...The industry’s professed idealism is fading, and the distinction between Silicon Valley and the rest of American business has collapsed. So now the big public questions about Silicon Valley look pretty familiar because they are extensions of questions that have long existed around American corporations: of how much power one company should be allowed to have, of how much influence a company ought to have over individual choices, of how we weigh the magnificent efficiencies capitalism brings against its human brutalities. ..

The Amazon story has now already been through a couple of media cycles, and the presiding mood is calmer, less outraged than it was in the hours after it went live over the weekend. You could probably find “similar anecdotes coming from ex-employees at Goldman, Skadden, Bain, or various fast-growing startups in Silicon Valley,” wrote Alison Griswold at Slate, “and they would probably be non-stories.” (It isn’t surprising that the Amazon story would arouse vastly differing opinions within the media — a field which maybe more dramatically than any other has transitioned from a system in which prestige was a matter of craft and jobs were protected by unions, to one under which everyone’s productivity was immediately knowable in the form of clicks.) Matt Yglesias pointed out that unlike Amazon’s blue-collar workers, the executives whose abuses were detailed in the story were likely well-paid and had the option of leaving for another good job. On Twitter, Josh Barro, of the Times’ own Upshot, compared Amazon employees to triathletes: “Triathlons are, objectively, awful. And yet some people derive perverse joy from them. Who are we to argue with their life choices?” Plenty of people pointed out that working at Apple doesn’t seem like a real picnic either.

...Most people know what they think about mean bosses, and misogynistic ones. They even might know what they think about the suggestion, made by the LinkedIn founder Reid Hoffman, that we ought to see our relationship with our employer not as a permanent state but as a “tour of duty,” lasting a few years. But I don’t think many professionals really know what they think about the experience of a company as an aggressively monitored internal market for productivity, or how to know whether such an experience is necessary to deliver the signal corporate triumph of the Times story, in which Amazon delivers an Elsa doll to the door of a customer who could not find one anywhere in New York City in exactly 23 minutes. Which is to say, they don't know what to make of a rising vision of work in which, as Louis C.K. once put it, “everything’s amazing and nobody’s happy.”
The Real Reason People Find the Times’ Amazon Story So Upsetting (New York Magazine)
The most horrifying moment of my employment at Amazon was the time I was using the toilet and a coworker began talking from the stall next to me. He asked me why I had not responded to his very pressing email. I closed my eyes and pretended this wasn’t happening. What email could be so important that it could not wait five minutes for me to use the bathroom? He began tapping on the wall between our stalls, asking why I wouldn’t respond, as if inter-stall conversation should be a totally normal, not disgusting means of communication....

From then on, whenever I needed to go to the bathroom, I went to the floors occupied by the rare teams that had more women than men. Amazon Apparel, Amazon Mom, Amazon Baby—these were the places where you had a better shot of getting a free stall in the men’s room. If you were really lucky, and your timing was right, you might even get the bathroom to yourself for a moment. It was a relief from the craziness of Amazon’s corporate culture. These were the best floors.

The worst floors were the ones dominated by engineers. I regularly saw people bring their laptops into the bathroom, where they would sit on the toilet and write code. (I’ve never seen anyone clean their laptop after leaving the bathroom.) Engineers would talk to each other through stalls. On many occasions, I heard people take phone calls while mid-business. It was hard to tell if someone was groaning because it was difficult to code or difficult to poop. Another Amazon colleague once joked that this gave new meaning to the word “deploy.”
At Amazon, employees use the bathroom as an extension of the office (Vice)
One former female employee told us she got only two or three hours of sleep each night for nearly a year while working at Amazon and eventually took a stress-induced medical leave. When she returned, feeling guilty about the time away, she said human resources told her not to worry because “almost all medical leave from Amazon was for the same reason.”

Eventually she was fired from her job, and told us she sunk into depression for 18 months.

“My time after Amazon was the only time in my life I have ever suffered from depression,” she said.

The former AWS engineer suggested that stress and overwork was not an unintentional byproduct of the company culture.

“I do know people who were edged out because of their families or health needs or simply because they expressed a desire to work less overtime,” she said. “And it is deliberate: I overheard a senior manager bragging to a visitor that Amazon deliberately starves people of resources, including money and headcount, in order to force creative solutions.”
Amazon Employees React to New York Times Story (Vice)
“As someone who worked at Amazon headquarters in Seattle for over 5 years I can tell you that it is an obscenely stressful place to work. I wouldn’t wish a job at Amazon on my worst enemy. Everyone I knew was on drugs for depression, drank too much and had severe sleeping problems — forget about having any life outside of Amazon, 75-plus hour work weeks are the norm. It’s absolutely brutal. I didn’t even realize how disgustingly abusive it was until I left.” — Frmr Amzn
Amazon Workplace: Reactions (New York Times)
Amazon provides a good example of how the New Economy really works. To most of its customers, myself included, it is a wonderfully convenient Web site. But behind the New Economy front end lies a huge old-economy network of warehouses, trucks, and modestly paid workers. Amazon now employs about a hundred and fifty thousand people around the world, many of whom are temporary employees who don’t receive medical benefits or paid leave, according to media reports and the A.F.L.-C.I.O. (Full-time employees do receive benefits.) Amazon’s nickel-and-diming is hardly surprising. Its real competitor isn’t Apple or Google, or any Silicon Valley company: it is Walmart and other retailers that compete on price, have small profit margins, and pay low wages...

I don’t recall the word “exploited” being bandied about much in the dot-com era. Today, though, it crops up quite a lot. In a stinging response to the Times article, Larry Elliott, the Guardian’s economics editor, reminded his readers that American private-sector unions “were originally formed as a response to exploitation by 19th century mill owners.” He added that, by “keeping a cowed workforce under the lash with non-stop pressure, bullying and psychological warfare, Bezos is the 21st century equivalent.”
Amazon and the Realities of the New Economy (The New Yorker)
In his new book, The Everything Store: Jeff Bezos and the Age of Amazon, which came out last week, business journalist Brad Stone traces the connection between Bezos’ distinctive personality traits and Amazon’s work culture and organizational ethos, which he describes as “gladiatorial” and “notoriously confrontational”.

He cites Amazon employees who “advance the theory that Bezos, like Jobs, Gates, and Oracle co-founder Larry Ellison, lacks empathy. As a result, he treats workers as expendable resources without taking into account their contributions. That in turn allows him to coldly allocate capital and manpower and make hyper-rational business decisions, where another executive might let emotion and personal relationships figure into the equation.”

The theory advanced by Amazon employees is borne out by data. Amazon fares the worst among global IT firms in the most important human resource metric: employee retention. The median employee tenure at Amazon is just one year—poorer than that of nearly every other big IT company, with Google, EBay, Yahoo!, Microsoft, Intel, HP and IBM all faring better.

Amazon is not an easy place to work in, and Bezos clearly doesn’t care much about personnel issues. According to Amazon employees, Stone writes, “Bezos is primarily consumed with improving the company’s performance and customer service and that personnel issues are secondary.” In this regard, Bezos is hardly exceptional as a CEO. What is worth noting is that sidelining personnel issues only becomes more difficult the greater your capacity for empathy.

I have engaged—as an employee—with half a dozen CEOs so far, spanning four different sectors. Barring one, who was also the owner of the company and not a professional CEO, I wouldn’t say any of them distinguished themselves by their empathy or great rapport with employees. They preferred to be feared and respected than to be understood or appreciated, let alone loved. Their very management style was predicated on not understanding and a reputation for being unreasonable, an approach that must be familiar to anyone who has worked closely with top management.

[Jon] Ronson argues that many of the psychopathic traits are conducive for success as a CEO. Besides lack of empathy, which is crucial, “other positive traits for psychopaths in business is need for stimulation, proneness to boredom. You want somebody who can’t sit still, who’s constantly thinking about how to better things”. He cites the famous example of ‘Chainsaw’ Al Dunlap, the former CEO of Sunbeam, the American home appliances company, who is described by Wikipedia as “a professional downsizer” and Ronson says “seemed to enjoy firing people”.

But can one really blame individual CEOs if the economic system is rigged in a way that incentivizes psychopathic traits and rewards professionals for de-prioritizing the social dimension of doing business? In the words of the Israeli-American behavioral economist Dan Ariely, “once market norms enter, social norms leave.”

According to Ronson, “the way capitalism is structured really is a physical manifestation of the brain anomaly known as psychopathy.”
Is the capacity for empathy a weakness in a CEO? (Live Mint)
“What the New York Times reports about Amazon seems generally consistent with the ways in which institutionalized work is being reorganized all over the planet,” Jonathan Crary, a Columbia professor and author of 24/7: Late Capitalism and the Ends of Sleep, told me. He notes that “in corporations everywhere now, it is imperative that one fully internalize the demand for maximum performance regardless of the toll it might take on one’s health, family or sanity.”

That means, first and foremost, blurring the lines between work and not-work; being constantly available. As Crary tells me, “One is expected to fashion one’s existence as something perpetually flexible and adaptable to the changing and always intensifying requirements of the enterprise.” It’s why we’re waking up in the middle of the night to check work emails. It’s why Jason Merkoski, a 42-year-old Amazon engineer told the Times that “It’s as if you’ve got the C.E.O. of the company in bed with you at 3 a.m. breathing down your neck.”

Work is monopolizing our time, in part because digitization has, as has been much remarked, broken down the boundaries between the personal and professional. And it's a lot of time. “Not only are Americans working longer hours than at any time since statistics have been kept, but now they are also working longer than anyone else in the industrialized world,” a 2014 ABC report explained. According to BLS statistics, the average American now works 49 hours a week. Last year, Tony Schwartz, the founder of the business consulting firm the Energy Project, and Christina Porath, a professor for Georgetown’s Business School, wrote a piece for the New York Times sharing the results of their research into modern working conditions. Only 37 percent of 12,115 workers polled said they were able to balance work and home life at their current jobs.

“Demand for our time is increasingly exceeding our capacity—draining us of the energy we need to bring our skill and talent fully to life,” they wrote. “Increased competitiveness and a leaner, post-recession workforce add to the pressures. The rise of digital technology is perhaps the biggest influence, exposing us to an unprecedented flood of information and requests that we feel compelled to read and respond to at all hours of the day and night.”
Amazon’s 24/7 Hell Is the Future of Work (Vice)

It's rather sad that this is the requirement just to have a decent job in America. It's a sign of the hardening of America's heart - you make six figures, so you should just expect to work crazy hours and burnout (despite assurances that we are actually experiencing a utopia of leisure). Meanwhile we are told that it would be a grave error to raise the national minimum wage because it would cost jobs or spur automation (despite the same economists insisting that automation creates jobs). So the only way to stave off automation is to pay people low enough wages that they can't even survive? And this in a country that expects workers to pay for their health care, education and retirement out of their own pockets. The degree-ocracy, gauntlet interviews, algorithms choosing who gets hired and fired, purple squirrel candidates, refusing to hire people who've been out of work a certain length of time -- welcome to the the new normal of the wonderful world of Average Is Over.

But at least we have smart phones, huh?

Amazon Chief Says Employees Lacking Empathy Will Be Instantly Purged (New Yorker)

Jeff Bezos Assures Amazon Employees That HR Working 100 Hours A Week To Address Their Complaints


I haven't seen mentioned in any of these articles that Amazon's orginal name was intended to be "Relentless." Telling, isn't it?

I'm interested to hear from Nick Hanauer. Whenever I see an article arguing that oligarchs actually need to share their bountry with workers and capitalism needs to be more compassionate, it's usually by him. He made his fortune by being one of Amazon's orginal investors. I wonder how Amazon's culture squares with that notion.

If you haven't heard KMO's personal account of working at Amazon in the late nineties in response to my question, you should definitely check it out.

Tuesday, August 18, 2015

The White-Collar Gulag (semi-rant)

So the New York Times article on what it’s like to work at Amazon has apparently struck a nerve. On Sunday, the New York Times published a massive exposé of Amazon's "punishing" work culture. The company, the Times alleged, "is conducting a little-known experiment in how far it can push white-collar workers, redrawing the boundaries of what is acceptable."

Of course, Amazon is only the most extreme case, working in any “professional” job today is pretty much the same drill anywhere you go now, albeit at a lower level of abuse (and pay). You’re constantly watched, constantly assessed, constantly harassed, constantly browbeaten, constantly under pressure, and constantly under review by your “peers,” You have to show up bright and bushy-tailed every single day and display the right “attitude” or else be castigated for your “morale.” You have to look a certain way (white, upper-class), act a certain way (cheery, upbeat, outgoing, backslapping, glad-handing), dress a certain way (office casual), have the appropriate lifestyle (2.5 kids, minivan, suburban white picket fence), have the appropriate hobbies (golf, skiing, lawn care, spectator sports) and the right beliefs (Republican) to advance. You must constantly be on guard for what you say and what you do. It’s a high-tension atmosphere of paranoia and fear that only Stalin’s inner-circle would have had to deal with sixty years ago, and now it’s the new workplace normal. Working brutal hours is required unless you want to be “let go” in the next “redundancy.” You’ve got to love those corporate terms. Orwell was off; private industries are far closer to his dystopia than any government (Newspeak, Big Brother, two-minute hates), and it’s there that we spend most of our time. Like everything else, even despotism has been privatized. And all this just to work!

Welcome to work in the twenty-first century. Here’s what our sociopathic masters in Wall Street and Silicon Valley have in store for all of us. It’s a culture specifically designed to promote monsters in the name of “efficiency.”

Now, no longer can you just show up and get the paycheck that you need to live, you must show “enthusiasm” in order to get a job “opportunity” and then display the proper “attitude.” It’s like training a dog.

Employees are expected to have an overweening, Messianic sense of “mission,” no matter how mundane their job, heroically sacrificing everything in the service of…what exactly? No wonder the “human resources” in these corporations are soulless, dull, one-dimensional idiot-savants who think of nothing but staying on the gravy train and climbing the corporate ladder and making sure their immediate genetic offspring are positioned to remain in the appropriate social stratum (the right school district, music lessons, sports, helicopter parenting, tiger moms, etc.). It’s like they’re not even human. It’s a fair bet that the next generation of “high achievers” will be even more sociopathic.

And thanks to being instutionalized from birth, the “successful” are carefully selected for their devotion to overwork, blind enthusiasm, and hoop-jumping, while the skeptical and critical thinkers are weeded out and cast aside, no matter their innate intelligence or talent. That explains everything from the early start times (which make no logical sense), to the crushing amounts of homework, to the constant assessment exams, to the extracurricular activities as a sign of “leadership,” to the obsession with GPA, to the “pep rallies” in dystopian American schools. The sheep are weeded from the goats early on, and all the goats can look forward to is a jail sentence, or maybe earning just enough to have a studio apartment and a meal at Little Caesars. It’s social engineering on a massive scale. Of course, you can always be drugged into submission. This probably explains the inability of our clueless, cloistered leaders inside the bubble to see the collapse coming; after all the “best and brightest” are promoted to be meritocratic technocrats, and the rest of society who can’t keep up will just roll over and die, right?

The psychological damage done to workers and students is immense. Now, instead of breaking their bodies, capitalists are determined to break workers’ souls.

Of course, apologists will say that since we no longer die of black lung in the mines anymore or crush children between the gears of machinery, we have nothing to complain about. That is, only corporal pain and punishment matter. But any psychologist will tell you that mental suffering and anguish is far, far worse than physical pain. And for what? Remember, Amazon is the company that stationed ambulances outside its warehouses to treat heatstroke instead of paying for air conditioning. And we should be thankful for it because otherwise they will just buy robots and kick us out on the street. “Any labor that competes with slave labor must accept the conditions of slave labor.” Don’t worry, I’m sure Amazon is doing their best to get a few laws repealed so that they won’t need the ambulances anymore, just shovels.

Work must consume your entire life, both inside and outside of work. I call it “the cult model of the corporation,” and I’ll use my own workplace as an example. Once a month on Monday we have these Nuremberg-like rallies meetings, where we must line up and cheer or suffer obloquy if you’re not there showing sufficient enthusiasm for our quarterly profits and our high birthrates (I don’t know if this obsession with natalism is a Midwestern “culture of life” thing or if every company is obsessed with their employees’ breeding habits and reproductive potency). We’re supposed to “live our mission” and memorize our mission statement and strategic plan and recite it like an oath (thankfully we don’t have to salute yet). We’re feted for our “years of service” (service – don’t we get paid? Is this the army???)

Extracurricular activities are almost constant – last week it was the company golf outing, this week the it’s company picnic. Then there are the alcohol fueled “social “events” practically every other week. Eager beavers sign up for the softball league, the bowling team, the paintball outing, and anyything else they can get their hands on. Now that the football season is starting, ”fantasy football” will become the (sole) daily topic of obsessive conversation (followed up in spring by “March Madness”). Soon will come the pumpkin decorating contests and Halloween costumes, potlucks, bake sales, and the execrable “holiday party” (which I’ve never attended). The golf-obsessed got to take clients to the PGA tour, a sure sign of being “chosen.” At our annual “performance reviews” we are forced to come up with feedback and goals, like some sort of self-criticism session from Mao’s China. People even walk around dressed in clothing “branded” (like a steer)  with the company logo.

One company I worked for wanted us all to be walking unpaid  salesmen for the company in our off-hours by memorizing an “elevator speech.” In another, the owners would menacingly walk past the desks at 8:00AM sharp to make sure everyone was there and working (the office was in a distant exurb in the middle of a cornfield – literally. Most workers were there by 7AM). At my company they’re even doing “biometric testing,” supposedly so we can “take change” of our health, and hectored to hit the gym and eat the right foods, despite the fact that we’re chained to a desk eight fucking hours a day and served high-carbohydrate processed crap at work lunches. We even have blood drives. If you’re blue-collar, expect to be drug tested. So your company will even monitor your blood pressure and precious bodily fluids, something even the most despotic dictators of the twentieth century would never even contemplate.

I did not expect any of this just to have a fucking job. I was naively oblivious to the fact that my political skills, “personality” and Stakhanovite work ethic mattered far more than any ability or talent. It’s a tough lesson to learn. I feel sorry for the feckless youth taking on college debt burdens who will learn this the hard way Such is life in a country where most people are ground up and spit out in the service of hard men’s profits. That’s the real  “American Way™,” and the only thing this country has consistently stood for since its inception. Let’s face it, we’re practically cattle at this point.

I’m not kidding. Often times when I go out for lunch and walk around, I will see the pale (unless they’re Indian), sallow, sunken-eyed IT workers in their khakis and button downs on temporary furlough from their windowless, fluorescent cubicles roaming around freely downtown during the lunch hour with RFID tags hung around their necks or clipped to their belts. And every single time what am I reminded of?

I believe Dilbert originated the term cow-worker
Soon, everyplace will be Amazon and it will no longer shock. This dystopian workplace is our future. Outplay, Outwit, Outlast. And anyone who doesn’t want to live like that will be berated as “lazy” and blamed for their plight when they are rummaging through dumpsters for food, sleeping in bedbug-ridden shelters and dying of treatable pneumonia. That’s the endgame. It also explains the recrudescence of Social Darwinism as a popular philosophy among the ruling class (now called “human biodiversity”). It’s “survival of the fittest”in the name of progress. Welcome back to the nineteenth century.

Of course, the corporations can only fire you, they cannot kill you, but the politicians and businesspeople are doing their best to shape society such that it is a distinction without a difference. Hence the shredding of the social safety net, asset stripping, automation of work, outsourcing, tying health care to your job, elimination of workplace regulations and minimum wages, temporary contracts, “right to work” laws, and demonization of the unemployed as “scroungers” and “parasites” (when they’re not murdering them outright). Any rat who refuses to run the maze will be fed to the biodigester by the research scientists. You’ll forgive me if I don’t buy the rhetoric about how now is “the best time ever to be alive!!!!” and skeptical that capitalism has made us so much more moral and less violent. You can keep your cell phones.

No wonder people want the whole fucking system to burn down. As I’ve often heard, it is the pessimistic view that see this system continuing and continuing to ratchet up, collapse is actually the optimistic outcome.

But what do I know? I’m just a loser.

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