Revised Introduction: The Invisible Handcuffs

I very much appreciated the comments from my first posting of the introduction. Please indulge me for posting another version. I have changed it radically, especially after the first paragaphs. Any more comments would be appreciated:

The Invisible Handcuffs of Capitalism:

How Market Control Undermines the Economy by Stunting Workers

Setting the Stage

The Invisible Handcuffs makes the case that the modern economy has matured to the point where markets do not and cannot harness anything near the full productive potential of society; and even more seriously, that markets significantly undermine economic performance. Even though purely monetary incentives may appear to work effectively when one takes a narrow view of their operation, from a larger perspective, the invisible hand turns out to be akin to invisible handcuffs for the economy, as well as for society as a whole.



Other books address the cultural, social, and ethical shortcomings of markets. But The Invisible Handcuffs is unique because it will emphasize the way that markets affect people in their lives as workers in contrast to the usual perspective that judges an economy by how well it serves people as consumers.

Certainly, the current U.S. economy falls short on a maddening array of counts. Here is the most powerful economy in the world, yet it seems powerless to meet the most pressing needs of society. The list of pervasive problems includes excessive poverty, inadequate health care, environmental damage, pervasive toxins, just to name a few. Although the United States policymakers pay insufficient attention to such problems in order to nurture the market, the relative economic strength of its economy still seems to be eroding.

The contradictory nature of the U.S. economy raises a host of relatively obvious consumer oriented questions: Surely, an economy with a communication system that would have been unimaginable only a few years earlier should be able to foster a sense of community or at least create a satisfying culture. Why has a widening circle of poverty begun to engulf more and more people, even after the pace of technological change began to accelerate in the late twentieth century?

Although the majority of the population may have access to considerable material goods, the current economic system fails miserably in creating a satisfying quality of life. For example, social scientists have found that happiness in the United States has not increased since the 1950s, despite enormous economic growth (Layard 2005, p. 29).

This book will argue that the producer oriented perspective suggests promising answers to such problems. For example, a major cause of the lack of satisfaction is an inattention to the quality of people's working lives. Most of all, The Invisible Handcuffs emphasizes that even though the rationale of the market system is to create an efficient economy, market control undermines the economy by stunting workers and ignoring their potential.

The stakes are far higher than just the ability to supply consumers with more commodities the purported purpose of the economy. At a time when the world faces difficult threats, such as global warming and scarcity of vital materials including water and petroleum society cannot afford to waste a resource as valuable as human potential. In this sense, the importance of looking at the economy from the perspective of workers becomes undeniable.

Overview

The first chapter begins with the theological defense of markets, by people as far apart in time and in stature as Edmund Burke and George W. Bush. According to such people market relations ensure not only efficiency, but higher qualities, such as freedom and justice. Questioning markets become akin to blasphemy. The Invisible Handcuffs suggests that a more appropriate theology of markets might come from Greek mythology in particular, the legend of the sadistic Procrustus, whose story is introduced in this chapter.

The second chapter introduces the subject of labor, both direct discipline in the workplace and macroeconomic discipline by creating unemployment, what Alan Greenspan referred to as the traumatization of labor. Ironically, policy makers pretend that all other objectives whether higher wages, better working conditions, environmental protections, or the quality of life must give way to the creation of jobs, at the same time as the maintenance of unemployment is necessary to sustain labor discipline. The two concluding sections of the chapter offer quantitative estimates of some of the human and economic costs of labor discipline and a brief discussion of the path that led economists to adopt the narrow perspective that makes them uncritical of the present form of labor discipline.

The third chapter turns to the motives for why economic theory pays no attention to working conditions. Instead, work becomes nothing more than the absence of leisure. In addition, relations between workers disappear from consideration in economic theory. Perhaps, the greatest defect of all is the reduction of workers into a factor of production, comparable to coal or steel.

Even when economists treat workers' skills, they do so by conceptualizing abilities as "human capital." This perspective is especially destructive because it blocks economists (and those whose vision is shaped by economists) from seeing people as anything more than a commodity.

The fourth chapter discusses what policy based on the narrow market perspective means for everyday life, including the amount of time that jobs consume as well as the extension of controls on people's behavior outside of the workplace. At the same time, these controls interfere with people's opportunity to improve their own capacities.

The fifth chapter briefly extends the subjects treated earlier to the international economy.

The sixth chapter puts the subject in historical perspective by looking back at the economic perspective bequeathed by Adam Smith. The chapter emphasizes Smith as a harsh disciplinarian. It shows how Smith eliminated any discussion of modern industry in order to allow him to offer a vision of freedom and liberty.

Smith realized that the harmonious society he advocated depended upon a prior coercion of labor to accept the discipline of the workplace. At that time, violent measures were often required to leave people with no option but to accept the new conditions of wage labor. Even after people became corralled into wage labor, Smith realized that controls had to go deeper into people's lives, including state regulation of religion. In short, for all his positive rhetoric about freedom, Smith's concern was to control people in order to make them obedient workers.

The seventh chapter analyzes the consequences of Smith's work. It describes how later economists simplified Smith's writings and removed its uncomfortable ideological implications. The result was an effective, but unrealistic, propagandistic shell.

The eighth chapter looks at the concept of the Gross Domestic Product, a seemingly straightforward measure of the success of an economy. The chapter reviews the evolution of this highly political concept, showing how, just like with Adam Smith's theory, the Gross Domestic Product focused on convenient matters that put the market in the best possible light.

The chapter ends by contrasting the Gross Domestic Product with the results of a recent field of "happiness studies," in which social scientists, including economists, recognize the disconnect between the Gross Domestic Product and a satisfying quality of life.

Chapter 9 surveys some of the innumerable ways in which capitalism even fails in its narrowly conceived objective of increasing the Gross Domestic Product. In keeping with the theme of this book, this chapter only looks at ways in which the control of labor is self defeating. For example, unwieldy bureaucracies driven by purely financial motives are incapable of efficiently organizing and inspiring people.

These shortcomings fall into two classes. In the first one, efforts to control labor are wasteful, even though they seem necessary given the present capitalist system. The more interesting second class emphasizes the way that the present this organization of production stunts workers potential.

The final chapter offers some hints about the future possibilities of people working together to create a better life.