Conscience and the Economic Crisis

All across the nation a silent tragedy is taking place among blue-collar workers and their families: the tragedy of closing factories and lost jobs. But it is not just factory workers who are suffering. There is a ripple effect all through the economy. Mom-and-pop stores are being forced to close. Service workers are being fired. Whole neighborhoods are going downhill. Today more Americans are unemployed than at any time since the Great Depression. Some jobs will come back when the economy turns around, but many are gone forever -- shipped overseas to lower-wage countries, having become casualties of a new technology that replaces men and women with machines.

Sustained high unemployment is a tragedy for the individual worker, for his or her family, and for their community and region. Unemployment can devastate a worker’s physical and mental health. Harvey Brenner of Johns Hopkins University has shown that for every 1 per cent increase in sustained unemployment there will be a 6 per cent rise in the national suicide rate, and a 7 per cent increase in homicides among young men between the ages of 15 and 24. Admissions to mental hospitals will increase by 3 per cent for women and 5 per cent for men. In addition, alcohol and drug abuse, as well as deaths caused by heart attacks and other stress-related ailments, mount during times when many are out of work.

The tragedy of unemployment can devastate families. Wife and child abuse increase. Divorce rates go up. Patterns of family authority break down. Watching their unemployed fathers or mothers, children give up on their own futures. The work ethic and its hope are crushed, and street crime flourishes. Listen to these words of Tony Galvin, a 52-year-old worker at the Eaton Corporation’s forklift truck plant in Philadelphia. He talks about the neighborhood where he grew up, a neighborhood that sustained the work ethic and produced employees who, like himself, worked for the same company for 30 years. He describes that neighborhood today:

It looks like . . . ah, hornets -- like you see in the movies -- have just gone and devastated that particular area, leaving behind people that are unemployed, that can’t get jobs. The kids are all drinking beer. I guess it’s due to the fact that the father can’t provide. And they look at their father and say, “Well, who the hell are you?” -- you know. “You’re a bum in the park.” Consequently, the kids just have no respect. The father can’t hold his head with some sort of dignity and say, “Hey, I’m the breadwinner -- you do whatever I say.”

Tony Galvin has reason to protest. The Eaton plant where he has worked for 30 years is closing permanently. Eaton will continue to make forklift trucks, but now in Mexico and Japan.

If high unemployment is a tragedy for workers, their families and their neighborhoods, it is also a tragedy for the city and region. In the past ten years Philadelphia, where I live, has lost 140,000 manufacturing jobs, nearly half the industrial jobs of the city. Some of those jobs went to nearby suburbs; most left the region altogether. During that decade the state of Pennsylvania lost more than 200,000 blue-collar jobs. The same thing was happening in New York, in Michigan, in Ohio and in Wisconsin. Not only the frostbelt states suffered. In North and South Carolina thousands of textile workers lost their jobs, and in Oregon and Washington half of the lumber workers became unemployed because of the slump in new housing starts. In the past year the United States lost 1.2 million industrial jobs.

This kind of deterioration of whole regions means that the tax base for city and state budgets is suddenly and severely eroded. Police and firemen struggle with teachers and social workers over who will get the layoffs. Just when there are soaring needs for social services, budgets for those services are slashed. White-collar unemployed join blue-collar unemployed in a common disaster.

Massive though it is, high unemployment is often a silent tragedy. Plants close one by one. Families lose their principal source of income one by one. Neighborhoods deteriorate one by one. Because unemployment for those grown used to steady work is often felt as a personal failure, they hide their embarrassment in silence. Like workers, union officials are often confused and do not know what to say in the face of the immense forces that they see arrayed against them. Dan Hardy, a 35-year-old shipfitter for the Sun Ship Company in Chester, Pennsylvania, is concerned about the quiescence of the union. The work force at Sun Ship dropped in just one year from over 4,000 workers to 1,000. Comments Hardy:

The most common experience Sun Ship workers feel is a sense of powerlessness . . . a sense that there’s no institution in this society that really cares -- or is able to do much about the situation we are in. The politicians have come up empty. And the company, for all its talk about its concerns for its employees, is really concerned about getting the work Out and closing down their operation. And the union seems unable to come up with anything. So the institutions that workers have had some degree of faith in over the past number of years have basically come up empty.

Politicians, of course, cannot stay silent. But many of them pretend to have answers which turn out to be no real answers at all. They talk, for example, about the new “service city.” They fail to talk about how a 48-year-old car welder is supposed to become a computer programmer. They fail to talk about the income loss represented in statistics which show that in December 1979 the average wage in southeastern Pennsylvania for factory work was $295 a week while the average service wage was $170. This difference between average wage rates for factory and service work is true throughout the country.

The service city serves well only those prepared for professional or high-technology work. And that is the distinct minority of those presently living and working in our older industrial cities. Economist Barry Bluestone of Boston College has done extensive research on plant closings. He concludes: “There’s a whole missing middle. Few industrial workers can make the job transition from middle to high technology. Most become downwardly mobile into lower-paid jobs.”

Other public officials, President Reagan among them, tell workers “to vote with their feet” -- to leave the north and follow the jobs south. But such advice ignores the fact that blue-collar workers have values and meanings that do not travel well. They are attached to extended families and to neighborhoods where several generations live near and can depend upon each other. They are attached to lifelong friends and to churches and parish schools tested and made familiar over the years. When their factory closes, most of these workers -- as statistics show -- stay and take less secure jobs at lower wages. (Bluestone’s research shows an average loss of 20 per cent in wages.)

At the heart of our national confusion and silence concerning the problem of unemployment is not an economic failure or a political failure, but a moral failure -- a failure of moral vision and will. The evidence of this failure is everywhere to be seen, but almost nowhere recognized or talked about. It is embodied in our attempt to run our economy by keeping two sets of books. One of those books is called capital; the other, community. One is called profits and the other, people. Because there are two sets of books, what registers as costs in one does not even get counted in the other. Costs of high unemployment there are -- severe costs. But because they are costs to community, they are not considered when corporations make decisions concerning the use of their investment capital.

Why do we have this separation of capital from community, of profits from people? For a very long time now we have been willing to tell ourselves that there are two moralities: one for the private world of family and community, where people share common interests, and another for the public world, the world of economics and politics, where power, greed and self-interest hold sway. We have been willing to divide our moral lives this way because we thought it was the only realistic thing to do. And we hoped rapid economic growth would not so much solve our moral problems as make them irrelevant. Capital and community, we thought, could keep two separate sets of books and still be all right so long as each set looked a little more affluent year after year.

The idea that economic growth can take the place of moral responsibility goes back a long way in our society. In fact, it is the foundation of the concept of the free market. In 1776 Adam Smith wrote his famous Wealth of Nations in order, as he said, to provide “hope for the poor of London.” Charity and shared interests might be fine for family and friends, Smith argued. But a stronger medicine was needed to combat mass poverty. For that Smith looked, of all places, to the free operation of individual self-interest. The free market would transform private vice into public good, taking greed and turning it into economic productivity. True, some might get more of this new affluence, and others a good deal less. But still, all would have more than they had in the beginning. By following only the logic of profits, those controlling capital would help at last even “the poor of London.”

How was such a marvelous reversal of intentions supposed to take place? It was quite simple, Smith thought. The one thing you can depend on is that people will be very rational and calculating when it comes to their own self-interest. Let these self-interested, calculating consumers be associated by the free market with competing producers, and soon you will have products of high quality at the lowest possible price. Self-interest among consumers, Smith argued, combined with competition among producers will transform individual greed into the fuel of an efficient economy. Moreover, as producers look for ways of competing successfully, they will seek efficiencies of scale by using larger and larger units of production. This, in turn, will increase the demand for labor and will give workers sufficient wages to develop their needs beyond mere subsistence, thus ensuring ever-rising consumer demand.

Note that, paradoxically, all this social benefit is rooted squarely in individual self-interest, or so Smith thought. For the life hereafter one may need the grace of human charity. But for the good life here on earth human charity can be done without -- indeed, can be better done without. The free market, he argued, permits a beneficial moral modesty that trusts people acting in pursuit of their own self-interest far more than it trusts avowals of disinterested benevolence or claims to morally superior rights.

Thus, from the beginning of free-market thought, a wedge was driven between public and private morality. A curtain of silence was drawn between capital, which calculates profits, and community, where human benefits and injuries are tallied. Conscience is replaced for Smith by the supposedly automatic, morally unintended, beneficent results of the free market.

Now the devastating truth is that behind this so-called realism is quite another reality. It is the reality that once human greed is set loose without conscious moral limit and social control, it will use its power to gain special concessions in market competition -- concessions leading to monopoly capitalism. A further reality is that capital in search of profits may abandon an established workforce and so increase short-term profits while undermining long-term consumer capacity to buy its products.

What is at stake here is the truth that deeper in us than selfishness is our vulnerability and need for community. Our private good derives ultimately from a shared or common good. For example, we depend upon those who live near us. What makes a neighborhood decent is the shared activities of people who seek a common end. A livable block is produced and maintained when people find they have a common interest, a good which is good not as they own it individually but as they share and enjoy it with others. In our everyday life we know that greed does not generate public good; quite the opposite: greed unhindered by social constraint encourages cynicism and undermines concern and care for others.

The moral separation between capital and community encouraged by free-market thinking actually undermines long-range social health. Glenn Schreffler, a 38-year-old worker at the Eaton forklift plant closing in Philadelphia, talks about this:

It’s not just 420 workers they’re hurting. You have people there who are community oriented; they participate in their community. Once the plant closes, they lose all faith in everything. They stop attending VFW meetings. They stop attending CYO organization meetings, where they can help the children on the track team or a basketball team, or a football team. They figure, “Let somebody else do it!”

Capital, undisciplined by moral vision, inflicts costs upon community which it does not even count as costs.

There is a further price. This severing of public and private morality, of capital and community, generates new costs of its own unrelated to unemployment -- costs to human conscience. There are costs to the consciences of well-meaning Christian and Jewish businessmen and women who say, in all sincerity, “Business decisions have nothing to do with morality.” There are costs to the consciences of executives who come to see workers not as human persons, indeed fellow workers, but as abstract figures in computer printouts -- mere mathematical entities subject to cool-eyed managerial restructuring.

At the other end, there are costs to the consciences of workers who come to see themselves as passive consumers of paychecks and workplace orders given by others, rather than as active participants in the common enterprise of productive effort. Indeed, the price here is not just to conscience but to long-range economic efficiency. When capital decision-makers view the workplace as a location for piling up short-term, bottom-line profits and then abandoning the scene, there are costs. Says David Joys of the Russell Reynolds Consulting Firm in New York City:

I know -- we all know -- of people all over this town who are running their companies into the ground, taking huge, quick profits and leaving them a shell. And when you look at their contracts it’s easy to see why. What does it matter to them what happens ten years from now? They’re building giant personal fortunes, and appear to be running their companies terrifically, and in ten years, when there’s nothing left, they’ll be long gone.

What we have never learned in this country, and what we must now learn, is that community and capital are joint partners. If capital abandons community, it is in the long run abandoning itself. A conscience divided into public and private domains becomes an inaccurate conscience, and therefore dangerous. Obviously family and business corporations are different sorts of social entities. Still, they are not so different but that business efficiency increases when workers and managers have a sense of common purpose and shared responsibility.

The direction in which the United States needs to travel has already been charted by other nations which have found more humane, and therefore more productive, ways to plan their economies. Today, West Germany and Japan are more productive and efficient than we are. In both countries there is more job security, more worker say-so and more stay-put, lifetime commitment among managers. In Sweden, a worker who loses his or her job for economic reasons, including the introduction of new technology, is entitled to up to two years of government-paid education and retraining. West Germany has developed a system of codetermination in which, in companies of more than 2,000 employees, half the board of directors is appointed by the workers. This means that workers and managers share real decision-making power. Risk and authority are borne by both. Business enterprise is seen as a joint partnership, not just as a boss and those who are bossed.

The severing of the moral relationship between managers and workers in our society is clearly not working. We have heard and we will hear many excellent suggestions for correcting this problem. Let me add one of my own.

What we need today is national legislation to establish what I will call a “social costs impact statement.” We already require companies that want to build a new plant to formulate an environmental impact statement. The potential costs to the environment are then included in the company’s estimate of its own capital efficiencies. They are no longer left -- at least not all of them -- on a separate set of books.

The same thing is now needed for social costs. We need to mandate that the costs to community be borne in part by capital if it decides to disinvest and leave a locality. Such a law would simply recognize the truth of an already existing relationship -- that community has invested itself in capital and not just capital in community. If the potential social costs of capital disinvestment were calculated into the readouts of capital efficiencies, greater job security would result because it would be far more expensive for companies just to pick up and walk away.

This job security would encourage workers to see technology not as an enemy which threatens jobs but as a potential ally. Technological advance could be deployed in such a way and introduced at such a pace as to combine increased productivity with increased job satisfaction. A social costs impact statement would mean that companies would find it cheaper not to abandon an established workforce but to enter seriously into lifelong retraining and updating of the skills of its already employed workers. This kind of federal law would start us keeping one set of books in our society, not two. It would establish in law what the ethical relationship of capital and community should be -- namely, a relationship of shared effort and shared moral choice.

That conscience is unified and that the individual good is inseparable from the common good is a moral truth we have known since the founding of our nation but have never acted on. Said John Winthrop, first governor of the Massachusetts Bay colony, as he sailed to America in 1630:

Now the only way to avoid shipwreck and to provide for our posterity is to follow the counsel of Micah: to do justly, to love mercy, to walk humbly with our God. For this end, we must be knit together in this work as one man. We must entertain each other in brotherly affection; we must be willing to abridge ourselves of our superfluities, for the supply of others’ necessities; we must uphold a familiar commerce together. We must delight in each other, make others’ conditions our own, rejoice together, mourn together, labor and suffer together.

There is now set before us life and good, death and evil, in that we are commanded this day to love the Lord our God, to walk in His ways and to keep His laws and the articles of our covenant with Him, that we may live and be multiplied, and that the Lord our God may bless us in the land whither we go to possess it: but if our hearts shall turn away so that we will not obey, but shall be seduced and worship . . . other gods, our pleasures and profits, and serve them, it is propounded unto us this day, we shall surely perish out of the good land whither we pass over this vast sea to possess it.

Today our nation is again at sea. We have a new land ahead of us to share and shape together. And we are beginning to learn what we must do to prosper there rather than perish.