The US Census Bureau published a study in 2000 tracking voting behavior in non-presidential election years from 1966 to 1998. The percentage of the population voting was:
1966...55.4%
1970...54.6
1974...44.7
1978...45.9
1982...48.5
1986...46.9
1990...45.0
1994...45.0
1998...41.9
Whites voted more than Blacks, but in 1998 the difference was only 43.3% versus 39.6%. In the highest year of voting, 1966, 57.0% of Whites and 41.7% of Blacks voted. A greater percentage of Blacks than Hispanics and Asians vote.
There is a non-linear correlation between age and voting. The data show four age categories. The peak age for voting in every year is 45 to 64. Above 65, voting turns down by a few percent because of health factors. However, those over 65 are two to three times more likely to vote than those 18 to 24. Voting increases with age until age 65.
In 1998, a slightly higher percentage of females was registered and voted (44.9 percent versus 45.7 percent).
That year, there was a direct correlation between family income and voting. 25.4% of people with family incomes below $5,000 voted, 44.2% of people with incomes from $25,000 to $35,000 voted, 59.6% of people with incomes over $75,000 voted, etc. Also consistent with the income correlation, 51.4% of homeowners voted, while 28.4% of renters voted. People who lived in the same place for at least five years had the highest voting rate, 57.9%, and there was a linear correlation between length of residence and voting. Only 21.3% of the people who lived in their residence for less than one month had voted (presumably they could have voted elsewhere).
The Census Bureau concludes that "people with more education, higher incomes, and employment are more likely to vote":
"In 1998, citizens who had bachelor’s degrees were nearly twice as likely (58 percent)to report that they voted as those who had not completed high school (30 percent). At each level of educational attainment from high school completion and above, voting rates increase significantly. People with bachelor’s and advanced degrees made up 31 percent for those who reported voting in the election, compared with just 10 percent for those who did not graduate from high school. The greater the income of an individual, the higher the propensity to vote. Over 50 percent of citizens living in families whose total income was $50,000 or more reported voting in the election, compared with less than 28 percent of those with a family income of under $10,000. All together, about one-half of those living in families who voted in the November 1998 election had family incomes over $50,000."
This suggests why the Democrats, who favor the more affluent workers and homeowners, have triumphed. The poor simply do not vote, and so inflationist Federal Reserve Bank policies that hurt low-wage workers are simply not debated. For whites, 32.2% of those with under a ninth grade education voted (the percentage for Blacks with less than a ninth grade education was 41.4%), while 70.2% of Whites with advanced degrees voted.
In an opinion survey, the census bureau asks non-voters why they did not vote. 34.9% of voters say that they are too busy, 12.7% say that they are not interested, 11.1% say that they are disabled or ill, 5.5% say that they don't like the candidates, 8.3% say that they are out of town, and 5.3% say that they forgot.
No wonder Ph.D. holders like Peter Levine, Ronald Hayduk and Kevin Mattson favor the "new progressivism" and "deliberative democracy". A more interventionist system would serve their specific interests well, because the political vote weights the opinions of the highly educated much more heavily than does the economic vote. Although the economic vote favors the wealthy over the educated to a greater degree than does the political vote, the political arena is the one where the highly educated professional has the greatest opportunity to wrest benefits from the public. In the end, deliberative democracy is just another special interest pleading. 40.2% of those over 65 say that they were ill or disabled, which explains the higher rate for that age group's not voting. The percentage saying that they are not interested declines by about one third for education, from 15.3% for those without a high school diploma to 10.3% of those with a college degree. 5.7% of those without a high school diploma said that they did not like the candidates while 4.5% of those with a college degree said that they did not like the candidates. 37.6% of college grads said that they were too busy while 21.5% of high school dropouts said that they were too busy.
Saturday, January 26, 2008
The Worst Kind of Tyranny
Pam Meister of Blogmeister USA posts a classic quote from CS Lewis:>"Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." ~ CS Lewis
Moralists or Pragmatists: The Mugwumps 1884-1900
Mugwump Seth Low, last Mayor of Brooklyn, Mayor of New York City and President of Columbia UniversityGerald W. McFarland, editor. Moralists or Pragmatists? The Mugwumps, 1884-1900: A Penetrating Study of This Political Reform Movement. Articles by Robert L. Beisner, Goeffrey T. Blodgett, Ari Hoogenboom, Michael G. Kammen, Gerald W. McFarland, Gordon S. Wood. New York: Simon and Schuster, 1975. 152 pages.
This a good book. When read in combination with Gerald W. McFarland's Mugwumps, Morals and Politics one gets a good appreciation for McFarland's sound scholarship as well as the mugwumps. All of the essays are good and several are excellent.
McFarland notes (p. 2-3) that:
"Modern stereotypes of liberalism scarcely fit the Mugwumps...In economics they adopted the classical nineteenth-century liberal position that the greatest good would be served when the supposedly 'natural' laws of competition and of supply and demand were allowed to work without interruption. On these grounds they denounced most proposals for federal social and economic legislation. Inflationary financial schemes--advocated by Greenbackers and Populists--would simply create 'dishonest' dollars, the Mugwumps charged. Similarly, they condemned the protective tariff as government paternalism on behalf of special interests...
"Implicit in the Mugwumps' careers are three subjects--corruption, motivation and political strategy--which have particular relevance to us..."
McFarland raises the question of what the Mugwumps' motivations were: simple interest in reform, economic self-interests, or psycho-social feelings arising from loss of social status (Hofstadter's thesis in Age of Reform).
McFarland also points out that the Mugwumps' history is suggestive as to the kind of strategy that political minorities should follow. "Are political minorities better off staying in the party and hoping to have some influence within it? Or should dissenters leave the party in an effort to purify it?" There is no satisfactory answer in McFarland's view.
He also notes that "the pressure group ethic" of emerging industrial America was distasteful to the Mugwumps. However, somewhat contradictorily, the Mugwumps were leaders in the movement to rationalize the professions. During the first two decades of the American Bar Association's existence (1878-1898) three Mugwumps served as its president, and Mugwumps were involved with early learned societies like the Modern Language Association.
The Mugwumps' interest in civil service reform was as much an interest in "purifying" government (p.10) as in providing better management. The editor of the Nation, EL Godkin, one of the most famous Mugwumps, called the election of New York City Mayor William L. Strong (sponsored by the Committee of Seventy, which included many Mugwumps) the "Triumph of Reform". You get a feel for the Mugwumps' cultural orientation in that Strong appointed Theodore Roosevelt police commissioner, and Roosevelt rigorously enforced Sunday blue laws prohibiting liquor sales, which enraged German immigrants and caused Strong to lose the next election. The Committee of 70's successor, the Citizens' Union, won the 1901 election when Seth Low, former mayor of Brooklyn and president of Columbia University, was elected New York City mayor.
The Mugwumps realized that the Citizens' Union could not defeat the Tammany Hall machine without the lower East Side ethnic vote. One can really see the origins of progressivism in this paragraph (p.12):
"With 'The City for the People!' as its slogan, the Union endorsed a wide range of measures on behalf of lower-class constituents: public baths and lavatories, improved tenement housing, more small parks in tenement districts and increased social services for the sick, destitute and aged. 'Mismanagement, favoritism and dishonesty must go," the Union's election handouts insisted. 'But this is not enough. We must have positive benefits for the people.' Sincere though it was, this bid for support from 'other' New Yorkers gave the gentlemen-led Union a mild case of campaign schizophrenia--Citizens' Union speakers promising downtown slum residents more services and uptown middle-class voters more economy. Yet the fusion of these two voting blocs was one of the Union's foremost goals and a crucial factor in Seth Low's 1901 victory."
The Mugwumps were the first limousine liberals! Some of the Mugwumps went on to become progressives, although I believe that McFarland overstates the percentage because he includes government reforms in the issues that he indexes to determine whether Mugwumps later became progressives. I think that he underestimates the power and importance of the Mugwumps' laissez faire philosophy. McFarland adds (p.14):
"The political and social reforms of the Cleveland Democrats in New England and the municipal reform programs of the Strong administration and the Citizens' Union campaigns in New York City were the chief signs that the Mugwumps were making practical concessions to urban-industrial conditions. The tools the genteel progressives applied were modernized ones, such as expert administration, centralized control and scientific investigation of social problems. Instead of morality, the new reform generation made progress its creed. Experts were its chief priesthood. There were orthodox underpinnings to these innovations, however, as reform still had a strong vein of old-fashioned elitism. Earlier the community's elite had reserved to itself the role of determining what was moral. Similarly, the new elite of experts claimed to have special credentials for interpreting what constituted progress. Granted, the progressive liberals actively sought to ameliorate the harsh impact of industrialism on lower-class Americans, but the reformers retained for themselves primary responsibility for deciding what the people needed.
"From a critical perspective today many aspects of both preindustrial Mugwump ideas and modern American liberalism are troubling. In pre-industrial United States the ranks of the 'best men' were restricted by class status and family connections. After modernization, limited access to high status was sustained by new, 'objectified', devices--intelligence tests, civil service examinations and educational credentials. Neither the old nor the new pattern was an absolutely closed system, but both, as is obvious now, seriously discriminated against Americans who started behind in the race for wealth and status."
Geoffrey T. Blodgett's contribution to the book, "The Mind of the Boston Mugwump" (p. 18) is a rich description of the Mugwumps' cultural and social world. Blodgett argues that in 1884 the Mugwumps' "dominating motive for their behavior was a desire to escape the status fitted for them by indulgent families, an eagerness to break loose from their role as passive heirs. This did not make them rebels against the New England past."
"Boston Mugwumps maintained a notably more genial temper than did their contemporaries in New York...The Bostonians looked to New York for inspiration...Godkin's Nation was their Bible...But years of dismal experience with Grant, Conkiling and Tammany Hall had played out the resilience in the New Yorkers..." (P.25)
"Immigration, urbanized politics and the rushing growth of protected industry had by the 1880s made town-meeting democracy almost a rural relic...Democracy had broken out of the stable framework in which New England had contained it. Now, to the Mugwump eye, it ran through her cities, crude, impetuous, without a memory. Unbridled democracy seemed to threaten not only private property but personal liberty and all the subtle authority which the town meeting had once assured the educated man of substance"(p.27).
Blodgett is a bit hard on the Mugwumps, though. No broad movement, even of educated people, is mostly composed of economics scholars or original thinkers. Somewhat condescendingly, Blodgett writes (p. 32):
"The Mugwumps looked on the economic and social problems of their era with well-meaning but uncreative conservatism. Their prime assumptions were absorbed at second-hand from the texts of Harvard's Francis Bowen, the pages of Godkin's Nation, the essays of William Graham Summer...Imprecise notions from Adam Smith, John Stuart Mill and Herbert Spencer mingled in shadowy fashion in their minds."
but (p.33)
"The Mugwumps staked little claim to economic authority. Their main concern was with party politics...Mugwumpery was above all an escape from party. By breaking fixed rules of political behavior, the Mugwumps hoped to change them..."
and (p.36)
"the driving impetus toward civil service reform was the Mugwump desire to slash through the tangle of personal influence and responsibility that tied public office to the party system. The more exuberant theorists envisioned an ideal future government run by administrative technicians whose only loyalty was patriotism"
and (p. 36)
"their muddling confirmed them as political amateurs."
Ari Hoogenboom, a former Brooklyn College professor, contributes an excellent article entitled "Civil Service Reform and Public Morality" in which he attacks the common belief that the Gilded Age was all that corrupt (I would argue that the present day is more corrupt in terms of real dollars but less overtly so) and makes a useful point as to the reason for the emphasis of corruption in the Gilded Age (p. 42):
"The historian is usually liberal, more often than not a Democrat. He is hostile to big business, an advocate of government regulation, strong executive leadership and an expert civil service. The post-Civil War era stands for all the historian opposes. It was an era of Republicanism, big business power, ineffectual attempts at government regulation, weak executives and an essentially nonprofessional civil service."
As a result, while reformers of the Gilded Age exaggerated corruption, historians tend to repeat the accusations too uncritically (p.43).
In Hoogenboom's view, the Mugwumps wanted careers in government, but were foreclosed by the spoils system. Thus, they became enemies of the spoils system. He gives the example of Charles Eliot Norton, who was related to Charles W. Eliot, Harvard's president, and co-founded the Nation with E.L. Godkin. Norton believed that democracy contributed to "the unfortunate national 'decline of manners.'" When President Grant was elected, Norton hoped to be appointed as ambassador to Holland or Belgium, and when he was ignored, he concluded that Grant was under the control of the spoils system. Likewise, George William Curtis, editor of Harper's Weekly, "was not opposed to the spoils system until it ceased to function satisfactorily for him and his friends." Lincoln had offered him an ambassadorship to Egypt, but postwar politicians (p. 46) "snubbed Curtis and his peers."
I don't find this argument entirely convincing, because the examples that Hoogenboom gives of Curtis's failure to win New York's senatorial nomination and failure on the Civil Service Commission are consistent with alternative interpretations, namely, that Curtis was not manipulative and found real-world politics to be distasteful. Hoogenboom also uses Henry Adams as an example, but again this example is not convincing of his point that the Mugwumps' interest in reform came from their lack of personal gain from Gilded Age politicians.
Hoogenboom argues that "The careers of Norton, Curtis and Henry Adams demonstrated that the civil service reform movement fitted a pattern of those out of power versus those in power...The civil service reformer's political impotence accurately reflected his loss of social and economic power. He was out of step with the rest of society..."
The last of the contributions about which I blog is McFarland's. I had previously blogged his book, but he has a slightly different take on his data here. McFarland argues that "I do not believe that displacement was the primary stimulus for the Mugwumps' reform efforts. As I will attempt to show in my conclusions, the Mugwumps' moral intensity and elitist feelings were in large part the outgrowth of their family tradition, educational background and professional status. Their familial, educational and professional experiences led them to feel a personal responsibility for the preservation of civic morality.
McFarland's data is interesting He complies a list of 396 Mugwumps and then traces their occupations viewable here.
Friday, January 25, 2008
Post-progressivism
Progressive-liberalism originated in the 1890s and saw its heyday in the nineteen teens. Ninety years have passed, yet the premises of the progressive-liberal movement, which was Republican as much as Democratic (Theodore Roosevelt, a Republican, and Woodrow Wilson, a Democrat, were Progressives) remain the same. When Progressivism was founded, it was regarded as "new". But after ninety years, progressivism and its followers have to be said to be following an old idea. In the coming months, I intend to show that progressive-liberalism, and today's liberalism, which has remained largely the same, was an ideology appropriate to the modernist era. Modernism differentiates from post-modernism with respect to organizational structure, scale, flexibility, unity of public opinion, technology, aesthetic, diversity and a host of other characteristics. Progressive-liberalism is an ideology that was appropriate to large-scale government characteristic of the modern era. It reached its limits in part because progressivism never solved the corruption that faced the post-Civil War political machines and in part because its organizational form is inappropriate to today's problems, for instance the need for economic competitiveness and education able to meet more competitive demands.
The post-progressive era is characterized by the need for greater flexibility,the need for heightened innovation in many fields such as health care and transportation, better education, and smaller organizations. The problems it faces such as cultural atomization, interest group pressure, the need to cope with interest group pressure at the national level, the need to develop a competitive economy, and the need for accelerated innovation, suggest the need for new emphasis on governmental forms. The new governmental forms include the importance of localism, the ability to experiment, the need for additional flexibility in responding to change and greater scope for the private sector. Flexibility, for example, involves the importance of being able to respond to military opponents who derive their power from "fourth generation" military strategy and terrorism. In turn, government must become decentralized, must learn to experiment and must learn to learn.
The post-progressive era is characterized by the need for greater flexibility,the need for heightened innovation in many fields such as health care and transportation, better education, and smaller organizations. The problems it faces such as cultural atomization, interest group pressure, the need to cope with interest group pressure at the national level, the need to develop a competitive economy, and the need for accelerated innovation, suggest the need for new emphasis on governmental forms. The new governmental forms include the importance of localism, the ability to experiment, the need for additional flexibility in responding to change and greater scope for the private sector. Flexibility, for example, involves the importance of being able to respond to military opponents who derive their power from "fourth generation" military strategy and terrorism. In turn, government must become decentralized, must learn to experiment and must learn to learn.
Tuesday, January 22, 2008
President Diocletian
Chad the Elder of Fraters Libertas notes that the Democrats
"are trying to out-demagogue each other on the horrible state of the economy and how the only answer to our woes is government, government, and yes MORE government."
and
"Most of the Republican candidates aren't much better. From the populism of Huckabee to the corporatism of Romney, there's not a lot for a free marketeer to get excited about."
Chad goes on to note that fiscal stimulus plans borrow from Smith to pay Jones, and from Jones's grand-children to pay Jones. The greatest generation has saddled the baby boomers with dismal Social Security benefits, and the baby boomers have saddled generation Y with enormous federal debt, dollar depreciation, unfunded retiree health insurance and even worse Social Security benefits.
Chad notes that
"An indiscriminate spurt in "aggregate demand" is essentially irrelevant to longer-term economic problems"
and...
"Given the weakness of the dollar and some other frightening signs that we're already slumping towards a Seventies style era of stagflation, a rate cut by the Fed is not what I would prefer from a policy perspective. But as someone who's been trying to sell a house in a soft market and hopefully purchase another one soon, lower interest rates sound pretty damn appealing right now."
Chad's blog is good, but only intimates the worst long term risk to the economy in the last paragraph. According to the prisoner's dilemma, people have trouble colluding to maximize their well being. Rather, they minimize their maximum loss.
In the prisoner's dilemma, the cops have caught two crooks. They are interrogated separately, just like on Law and Order or The Wire. If neither talks, they both get three years. If either talks, one gets 4 years and the other gets 0 years. If both talk, they both get two years. Game theorists argue that they will both talk because the talking strategy dominates the non-talking one. I have played a simulation game called The Oil Pricing Exercise with my conflict and negotiation classes at NYU and Brooklyn College for the past eight years. I have done it close to thirty times, and the vast majority, ninety percent, indeed arrive at a suboptimal solution (I doubt more than 10% arrive at jointly profit-maximizing approach) even though sub-optimal (which game theorists argue is most rational for each individual but not most rational for society as a whole) means a lower grade.
The economy is a prisoner's dilemma. If we all collude and respect free markets, in the long run we will all be better off. There will be more innovation and a more productive economy, so we will be wealthier on average. If special interests or well meaning progressive-liberals interfere with the economy, wealth is shifted from its most productive uses, and the long run effect is that we are all poorer, although a few may be richer than they would have been in a free market (hence the much-observed income inequality). Given the incentives for special interests to extract favors from the government, and politicians' interest in short-term solutions that benefit today's "prisoners" at the expense of their children, free markets are at a political disadvantage in a free economy, even though in the long run they would make everyone better off. One of the bitterest flaws of Herbert Croly's and the Progressives' ideas (not to mention socialists, fascists, etc.) is that they did not realize that by freeing the public will from the restraint of limited government, in the long run society will become poorer and income inequality will increase. We are seeing the inevitable process before our eyes. The solutions that the Republicans and Democrats offer will make us poorer over time. We are leaving our great grandchildren a more modest living standard than could have been.
Chad's post illustrates this. His need to sell his house means that he has a vested interest in inflation, i.e., in reduced interest rates. In the long term, the inflation will harm those who do not own homes and who do not get salary raises. Chad knows this, but the money is too sweet to resist.
If you generalize this across the economy, and into areas of the economy like hedge funds or Wall Street where $100 or $200 thousand represents a restaurant bill, the motives for lobbying for lower interest rates are profound. There is no recession. Instead, Wall Street has paid its executives high salaries for years while it has destroyed economic value. Non-productive industries lobby for lower interest rates at the expense of the productive sectors of the economy.
Stronger moral education and better education about free markets would considerably help. It would probably take several decades to wring out the inefficiencies in the American economy and replace our lazy, speculative mentality with one based on initiative, productivity and thrift.
I fear that we are on a downward spiral and much will have to happen before America turns itself around. If ever. Rome didn't turn around after Diocletian's "government, government and more government" solutions*. It lasted another 100years.
*Diocletian believed that going forward under the current system of Roman Imperial government was unsustainable. He initiated a number of reforms to prevent a return to the disorder of previous generations and maintain the viability of the Empire. These included splitting the Empire into two in order to be more manageable, creating a new system of Imperial succession, ruling as an autocrat and stripping away any remaining façade of republicanism, and economic reforms aimed at the problem of hyperinflation..."
"...Further, in 301, Diocletian attempted to curb the rampant inflation with his Edict on Maximum Prices. This edict fixed prices for over a thousand goods, fixed wages, and threatened the death penalty to merchants who overcharged. Instead of curbing inflation, the edict's price controls drove goods onto the black market and created shortages. In some areas, the edict was simply ignored, and it was soon withdrawn in failure."
"are trying to out-demagogue each other on the horrible state of the economy and how the only answer to our woes is government, government, and yes MORE government."
and
"Most of the Republican candidates aren't much better. From the populism of Huckabee to the corporatism of Romney, there's not a lot for a free marketeer to get excited about."
Chad goes on to note that fiscal stimulus plans borrow from Smith to pay Jones, and from Jones's grand-children to pay Jones. The greatest generation has saddled the baby boomers with dismal Social Security benefits, and the baby boomers have saddled generation Y with enormous federal debt, dollar depreciation, unfunded retiree health insurance and even worse Social Security benefits.
Chad notes that
"An indiscriminate spurt in "aggregate demand" is essentially irrelevant to longer-term economic problems"
and...
"Given the weakness of the dollar and some other frightening signs that we're already slumping towards a Seventies style era of stagflation, a rate cut by the Fed is not what I would prefer from a policy perspective. But as someone who's been trying to sell a house in a soft market and hopefully purchase another one soon, lower interest rates sound pretty damn appealing right now."
Chad's blog is good, but only intimates the worst long term risk to the economy in the last paragraph. According to the prisoner's dilemma, people have trouble colluding to maximize their well being. Rather, they minimize their maximum loss.
In the prisoner's dilemma, the cops have caught two crooks. They are interrogated separately, just like on Law and Order or The Wire. If neither talks, they both get three years. If either talks, one gets 4 years and the other gets 0 years. If both talk, they both get two years. Game theorists argue that they will both talk because the talking strategy dominates the non-talking one. I have played a simulation game called The Oil Pricing Exercise with my conflict and negotiation classes at NYU and Brooklyn College for the past eight years. I have done it close to thirty times, and the vast majority, ninety percent, indeed arrive at a suboptimal solution (I doubt more than 10% arrive at jointly profit-maximizing approach) even though sub-optimal (which game theorists argue is most rational for each individual but not most rational for society as a whole) means a lower grade.
The economy is a prisoner's dilemma. If we all collude and respect free markets, in the long run we will all be better off. There will be more innovation and a more productive economy, so we will be wealthier on average. If special interests or well meaning progressive-liberals interfere with the economy, wealth is shifted from its most productive uses, and the long run effect is that we are all poorer, although a few may be richer than they would have been in a free market (hence the much-observed income inequality). Given the incentives for special interests to extract favors from the government, and politicians' interest in short-term solutions that benefit today's "prisoners" at the expense of their children, free markets are at a political disadvantage in a free economy, even though in the long run they would make everyone better off. One of the bitterest flaws of Herbert Croly's and the Progressives' ideas (not to mention socialists, fascists, etc.) is that they did not realize that by freeing the public will from the restraint of limited government, in the long run society will become poorer and income inequality will increase. We are seeing the inevitable process before our eyes. The solutions that the Republicans and Democrats offer will make us poorer over time. We are leaving our great grandchildren a more modest living standard than could have been.
Chad's post illustrates this. His need to sell his house means that he has a vested interest in inflation, i.e., in reduced interest rates. In the long term, the inflation will harm those who do not own homes and who do not get salary raises. Chad knows this, but the money is too sweet to resist.
If you generalize this across the economy, and into areas of the economy like hedge funds or Wall Street where $100 or $200 thousand represents a restaurant bill, the motives for lobbying for lower interest rates are profound. There is no recession. Instead, Wall Street has paid its executives high salaries for years while it has destroyed economic value. Non-productive industries lobby for lower interest rates at the expense of the productive sectors of the economy.
Stronger moral education and better education about free markets would considerably help. It would probably take several decades to wring out the inefficiencies in the American economy and replace our lazy, speculative mentality with one based on initiative, productivity and thrift.
I fear that we are on a downward spiral and much will have to happen before America turns itself around. If ever. Rome didn't turn around after Diocletian's "government, government and more government" solutions*. It lasted another 100years.
*Diocletian believed that going forward under the current system of Roman Imperial government was unsustainable. He initiated a number of reforms to prevent a return to the disorder of previous generations and maintain the viability of the Empire. These included splitting the Empire into two in order to be more manageable, creating a new system of Imperial succession, ruling as an autocrat and stripping away any remaining façade of republicanism, and economic reforms aimed at the problem of hyperinflation..."
"...Further, in 301, Diocletian attempted to curb the rampant inflation with his Edict on Maximum Prices. This edict fixed prices for over a thousand goods, fixed wages, and threatened the death penalty to merchants who overcharged. Instead of curbing inflation, the edict's price controls drove goods onto the black market and created shortages. In some areas, the edict was simply ignored, and it was soon withdrawn in failure."
Bernanke, Ridin' That Train, Lowers Rate 75 Basis Points
"Ridin' that train. High on cocaine. Casey Jones you better, watch your speed. Trouble ahead; trouble behind. And you know that notion, just crossed my mind."--The Grateful DeadMoney News on Newsmax reports that the Fed has lowered interest rates 75 basis points (from 4.25 to 3.5 percent), "the biggest one day move in recent memory".
Gold stocks continue to perform well, but at 11:40 the Dow is down 138 points to 11961, the S&P 500 is down 23 points to 1302 and the Nasdaq is down 55 points to 2285.
The Fed is concerned is concerned about recession fears and the recent sharp stock market declines. The interest rate cuts should boost stock values but will also continue to depreciate the dollar. The Fed reduces interest rates by printing money. Lower interest rates enable unproductive firms to remain in business because their costs of borrowing are reduced. Firms that do not create a market-determined value that would enable them to exist are subsidized by increasing the money supply, which reduces wage earners' inflation-adjust salaries. Thus, the Fed is taxing the productive sectors of the economy to subsidize the unproductive ones. The unproductive sectors are centered on big business, the financial sector and Wall Street, who have (1) extracted excessive CEO and investment banker salaries; (2) repeatedly made terminally stupid business decisions; and (3) and now go to the Federal Reserve welfare trough for a bail out.
Meanwhile, the dollar will depreciate and inflation will escalate.
Although the markets are cool now, they likely will heat up in response to the reduced rates, but the response will be temporary.
Howard Katz's Poem
At the beginning of each issue of Howard S. Katz's financial newsletter, the One-Handed Economist, he offers a poem. Here is the poem from the January 11 issue, which is on his website:
In gold your wealth you now should park.
It hit 900 dollar mark.
Upon Filet mignon we sup
Cause price of gold is going up.
Oh, Ben Bernanake gets no thanks
He only wants to help the banks
He takes advantage of the rubes
And US dollar-down the tubes.
Yes, US dollar sinking fast
The other nations are aghast
The more they print, now don't you know,
The lower does its value go.
And as the dollar hits new lows,
Now into gold the money flows.
Yes, gold stocks, gold stocks, buy, buy, buy.
Gold stocks are going to the sky.
Model portfolio, good news
About our profits we enthuse.
And on this subject I can say,
This week we hit $200 K.
Oh Ben Bernanke he is bad.
He steals our wealth and makes us mad.
So people you must all be bold.
And buy those mining stocks of gold.
In gold your wealth you now should park.
It hit 900 dollar mark.
Upon Filet mignon we sup
Cause price of gold is going up.
Oh, Ben Bernanake gets no thanks
He only wants to help the banks
He takes advantage of the rubes
And US dollar-down the tubes.
Yes, US dollar sinking fast
The other nations are aghast
The more they print, now don't you know,
The lower does its value go.
And as the dollar hits new lows,
Now into gold the money flows.
Yes, gold stocks, gold stocks, buy, buy, buy.
Gold stocks are going to the sky.
Model portfolio, good news
About our profits we enthuse.
And on this subject I can say,
This week we hit $200 K.
Oh Ben Bernanke he is bad.
He steals our wealth and makes us mad.
So people you must all be bold.
And buy those mining stocks of gold.
Monday, January 21, 2008
Individualist Ethics and Corporate Social Control
The history of human resource management has evolved from an individualist/conflictual approach where wage cuts followed by strikes were common. As employers started to realize that violent strikes were counterproductive, they implemented three approaches. One, scientific management and welfare capitalism, aimed for a "mental revolution" among labor and management whereby workers' aims were aligned with management's through incentives and employee benefits. A second approach was a bureaucratic approach whereby laws, rules and union agreements established a high degree of formal control through regulation and collective bargaining. However, by the 1930s employers had realized that a third approach, emotive manipulation or social control through managing workers' feelings, attitudes and ethical beliefs had the potential for a more complete influence. This theory was related to Progressivism, which, as McFarland has argued, followed an earlier attempt by the Mugwumps to establish professional standards, credentials and licensure in such fields as medicine, law, economic policy, public health and library science. The Mugwumps were most concerned with rationalization of the public sector.
The Mugwumps had earlier demonstrated that an organized movement, even if small in numbers, that utilized mass media to unify and focus the movement, could result in effective political action. The Progressives utilized this approach. The argument that labor relations could be improved through psychological methods followed the muckrakers and Herbert Croly's emphasis on the use of public power and mass movements to recreate democracy.
The shift to emphasis on psychological and social control, via the management theories of Elton Mayo and Chester Barnard, was a reflection of the Progressive movement's tactical application of the same principles for public influence. The Progressives emphasized moral relativism to combat the American religious tendency toward individual conscience. They utilized the groupthink approach that Mugwumps pioneered. They realized that to manipulate the public, understanding of the public's group processes was necessary. Thus, the progressives applied the welfare benefit approach that local political clubs had used for centuries, but nationalized it and rationalized it.
The Mugwumps had earlier demonstrated that an organized movement, even if small in numbers, that utilized mass media to unify and focus the movement, could result in effective political action. The Progressives utilized this approach. The argument that labor relations could be improved through psychological methods followed the muckrakers and Herbert Croly's emphasis on the use of public power and mass movements to recreate democracy.
The shift to emphasis on psychological and social control, via the management theories of Elton Mayo and Chester Barnard, was a reflection of the Progressive movement's tactical application of the same principles for public influence. The Progressives emphasized moral relativism to combat the American religious tendency toward individual conscience. They utilized the groupthink approach that Mugwumps pioneered. They realized that to manipulate the public, understanding of the public's group processes was necessary. Thus, the progressives applied the welfare benefit approach that local political clubs had used for centuries, but nationalized it and rationalized it.
Sharad Karkhanis--Man of The Year
I just put up Phil Orenstein's press release concerning the Queens Village Republicans' award to Sharad Karkhanis as "Educator of the Year". I have decided that Sharad should also be awarded "Man of the Year". I am hereby designating him the first official recipient of Mitchell Langbert's blog's Man of the Year award. Who needs Time?
Sharad Karkhanis Wins Educator of the Year
Free Speech For Sharad
For Immediate Press Release Contact: Phil Orenstein January ?, 2008 (917) 620-2663 Email: maduroman@att.net
CUNY EMERITUS PROFESSOR FIGHTING DEFAMATION LAWSUIT TO BE HONERED AS EDUCATOR OF THE YEAR
Dr. Sharad Karkhanis will be honored as the Educator of the Year for his distinguished scholarship and the courageous battle he is presently waging against an unprecedented legal assault on freedom of speech and freedom of the press in a repressive urban academic environment. The awards presented at the annual Lincoln Day Dinner at Antun’s in Queens Village, sponsored by the Queens Village Republican Club, are designed to celebrate outstanding contributions to the greater good of the New York community. The Club, the oldest GOP group in America founded in 1875, stands behind Dr. Karkhanis’s battle for his constitutional rights and has allotted 5% of each Dinner ticket sold to be donated to his defense fund, “Free Speech for Sharad” to help defray the legal bills.
The Dinner program will feature a number of noteworthy and controversial speakers and honorees besides Dr. Karkhanis. Queensborough Community College History Professor and Lincoln scholar Gerald Matacotta will revive the historical tradition of the annual Abraham Lincoln Address with a presentation bringing Lincoln’s moral principles into focus on our present day state of affairs. Queens Village resident Major Jeffery R. Calero, who perished in Afghanistan in November when an IED detonated while he was on combat patrol, will be honored posthumously with the Ultimate Sacrifice Award to be presented to his fiancée, parents and siblings. Michael P. Ricatto, successful entrepreneur and founder of Better Leadership America, which advocates for a safer and more secure America, will be receiving the Businessman of the Year Award for his passion to give back to the New York community something greater, in appreciation for the opportunities he was afforded in America. Jeffery S. Wiesenfeld, City University of New York Trustee, who advocates improving academic standards at CUNY will speak on: “The poisoning of our next generation by our academics throughout our nation.” The keynote speaker will be George J. Marlin, author and former Mayoral candidate and Director of NY and NJ Port Authorities, will address the topic: “Is there a future for New York Republicans and Conservatives.
Dr. Karkhanis Professor Emeritus of Political Science from Kingsborough Community College (KCC), is presently being sued for defamation in a $2 million lawsuit filed by fellow professor and union official, Susan O’Malley (aka: Susan Gushee O’Malley) accusing him of making recent defamatory statements in his email newsletter The Patriot Returns, 13,000 issues of which he has been regularly distributing to CUNY faculty since 1992. Dr. Karkhanis has often criticized the Professional Staff Congress (PSC), the CUNY faculty union leadership for mismanagement of funds and has lambasted Professor O’Malley for trying to land teaching jobs for convicted terrorists at CUNY, writing that she has an “obsession with finding jobs for terrorists” and is trying to “recruit terrorists” to teach within the CUNY system. The lawsuit charges that such statements are defamatory.
Ever since he first criticized her in 1995, Professor O’Malley, former chair of the University Faculty Senate (UFS) and PSC executive committee member, has been trying to silence Dr. Karkhanis, since his reporting has been hurting her re-election campaigns for union and University Faculty Senate (UFS) seats (Patriot 3/22/95). “In December, Prof. O'Malley ordered Sharad to stop the publication of the Patriot. Does Prof. O'Malley realize that KCC Campus is neither the Gulag of Marxist Russia nor is it a Nazi concentration camp…understand that Sharad is a free man - free to speak, free to write, free to talk to anyone… There is nothing you can or anyone else can do about this.” (Patriot 3/19/96)
In 1997 Dr. Karkhanis received two death threats at KCC, which he believed to be coming from a faculty member of KCC or CUNY who wants to shut down the Patriot. The FBI launched an investigation and campus security protected him while on campus and he had the service of a bodyguard whenever he went off campus.
In the April 2000 CUNY union elections the “New Caucus” took control of the PSC, and the Patriot has been their watchdog ever since. The Patriot exposed the leadership’s excessive involvement in political activities, funding radical causes and supporting the legal defense of convicted terrorists and criminals with the member’s dues, while the union Welfare Fund that members rely upon for medical benefits nearly vanished. The Patriot reported, “under New Caucus stewardship the WF Reserves have dropped from $15,000,000 to below $2,000,000.” The PSC leadership has organized and funded such radical pressure groups as, “New York City Labor Against the War” and “Labor for Palestine”, donated $5000 to support the legal defense of Lori Berenson, in prison for aiding Marxist Shining Path terrorists in Peru, and donated a sizable amount for the defense of Sami Al-Arian convicted of conspiracy to aid terrorist group Palestinian Islamic Jihad. After the 9/11 attacks, the PSC organized anti-war teach-ins on CUNY campuses blaming the attacks on “American Imperialism” at one of the events, and mobilized its membership to protest the Republican Party at its National Convention in the city in 2004. Since they have been in power, the Patriot has monitored the PSC leadership’s failure to negotiate a satisfactory contract for CUNY faculty members while spending a considerable amount of $60 million in collected dues money on irrelevant and dangerous political causes.
Recent issues of the Patriot have targeted O’Malley’s tireless efforts to find teaching positions at CUNY for convicted terrorist conspirator Mohammad Yousry, and Susan Rosenberg, convicted Weather Underground terrorist, sentenced to a 58 year prison term for the possession of 700 pounds of dynamite. Karkhanis wrote satirically: “There are hundreds of qualified people looking for teaching jobs. Why does she prefer convicted terrorists who are bent on harming our people and our nation, over peace-loving Americans?” (Patriot 3/12/07)
On September 28, O’Malley filed a lawsuit with the New York Supreme Court seeking $2 million in monetary damages for wrongful statements published in the Patriot and a permanent ban on the future publication of offensive material against the plaintiff. In a subsequent interview in the New York Sun concerning the lawsuit, O’Malley said: “It’s all very, very silly.” After Karkhanis refused to be intimidated into silence by the threat of a costly lawsuit, the formal legal complaint, Susan O’Malley v. Sharad Karkhanis, John Doe and Jane Doe was filed on December 21, 2007.
One week prior to filing the formal charges, O’Malley lost two UFS seats by more than 50% of the vote in the KCC elections held for campus senator and alternate. This is the first time since 1980 she has been voted out of her UFS office. It appears that these election defeats dealt a humiliating blow to O’Malley by fellow KCC faculty who may be loosing respect for her due to the frivolous nature of the lawsuit. CUNY faculty have argued that such matters of dispute between colleagues should be dealt with in a collegial setting within the CUNY system rather than making it public in a court of law with frivolous charges and outrageous monetary claims.
• Special accommodations for the press will be made at the Dinner event at Antun’s.
• Regularly updated news and information on Dr. Karkhanis’ case can be accessed from the Free Speech at CUNY Website. http://freespeechcuny.blogspot.com/
• The Patriot Returns archives can be accessed at: http://www.patriotreturns.com
• The formal legal complaint: Susan O’Malley v. Sharad Karkhanis, John Doe and Jane Doe is posted on Professor Mitchell Langbert’s blog: http://mitchell-langbert.blogspot.com/2007/12/susan-omalley-v-sharad-karkhanis-john.html
[[END OF RELEASE]]
For Immediate Press Release Contact: Phil Orenstein January ?, 2008 (917) 620-2663 Email: maduroman@att.net
CUNY EMERITUS PROFESSOR FIGHTING DEFAMATION LAWSUIT TO BE HONERED AS EDUCATOR OF THE YEAR
Dr. Sharad Karkhanis will be honored as the Educator of the Year for his distinguished scholarship and the courageous battle he is presently waging against an unprecedented legal assault on freedom of speech and freedom of the press in a repressive urban academic environment. The awards presented at the annual Lincoln Day Dinner at Antun’s in Queens Village, sponsored by the Queens Village Republican Club, are designed to celebrate outstanding contributions to the greater good of the New York community. The Club, the oldest GOP group in America founded in 1875, stands behind Dr. Karkhanis’s battle for his constitutional rights and has allotted 5% of each Dinner ticket sold to be donated to his defense fund, “Free Speech for Sharad” to help defray the legal bills.
The Dinner program will feature a number of noteworthy and controversial speakers and honorees besides Dr. Karkhanis. Queensborough Community College History Professor and Lincoln scholar Gerald Matacotta will revive the historical tradition of the annual Abraham Lincoln Address with a presentation bringing Lincoln’s moral principles into focus on our present day state of affairs. Queens Village resident Major Jeffery R. Calero, who perished in Afghanistan in November when an IED detonated while he was on combat patrol, will be honored posthumously with the Ultimate Sacrifice Award to be presented to his fiancée, parents and siblings. Michael P. Ricatto, successful entrepreneur and founder of Better Leadership America, which advocates for a safer and more secure America, will be receiving the Businessman of the Year Award for his passion to give back to the New York community something greater, in appreciation for the opportunities he was afforded in America. Jeffery S. Wiesenfeld, City University of New York Trustee, who advocates improving academic standards at CUNY will speak on: “The poisoning of our next generation by our academics throughout our nation.” The keynote speaker will be George J. Marlin, author and former Mayoral candidate and Director of NY and NJ Port Authorities, will address the topic: “Is there a future for New York Republicans and Conservatives.
Dr. Karkhanis Professor Emeritus of Political Science from Kingsborough Community College (KCC), is presently being sued for defamation in a $2 million lawsuit filed by fellow professor and union official, Susan O’Malley (aka: Susan Gushee O’Malley) accusing him of making recent defamatory statements in his email newsletter The Patriot Returns, 13,000 issues of which he has been regularly distributing to CUNY faculty since 1992. Dr. Karkhanis has often criticized the Professional Staff Congress (PSC), the CUNY faculty union leadership for mismanagement of funds and has lambasted Professor O’Malley for trying to land teaching jobs for convicted terrorists at CUNY, writing that she has an “obsession with finding jobs for terrorists” and is trying to “recruit terrorists” to teach within the CUNY system. The lawsuit charges that such statements are defamatory.
Ever since he first criticized her in 1995, Professor O’Malley, former chair of the University Faculty Senate (UFS) and PSC executive committee member, has been trying to silence Dr. Karkhanis, since his reporting has been hurting her re-election campaigns for union and University Faculty Senate (UFS) seats (Patriot 3/22/95). “In December, Prof. O'Malley ordered Sharad to stop the publication of the Patriot. Does Prof. O'Malley realize that KCC Campus is neither the Gulag of Marxist Russia nor is it a Nazi concentration camp…understand that Sharad is a free man - free to speak, free to write, free to talk to anyone… There is nothing you can or anyone else can do about this.” (Patriot 3/19/96)
In 1997 Dr. Karkhanis received two death threats at KCC, which he believed to be coming from a faculty member of KCC or CUNY who wants to shut down the Patriot. The FBI launched an investigation and campus security protected him while on campus and he had the service of a bodyguard whenever he went off campus.
In the April 2000 CUNY union elections the “New Caucus” took control of the PSC, and the Patriot has been their watchdog ever since. The Patriot exposed the leadership’s excessive involvement in political activities, funding radical causes and supporting the legal defense of convicted terrorists and criminals with the member’s dues, while the union Welfare Fund that members rely upon for medical benefits nearly vanished. The Patriot reported, “under New Caucus stewardship the WF Reserves have dropped from $15,000,000 to below $2,000,000.” The PSC leadership has organized and funded such radical pressure groups as, “New York City Labor Against the War” and “Labor for Palestine”, donated $5000 to support the legal defense of Lori Berenson, in prison for aiding Marxist Shining Path terrorists in Peru, and donated a sizable amount for the defense of Sami Al-Arian convicted of conspiracy to aid terrorist group Palestinian Islamic Jihad. After the 9/11 attacks, the PSC organized anti-war teach-ins on CUNY campuses blaming the attacks on “American Imperialism” at one of the events, and mobilized its membership to protest the Republican Party at its National Convention in the city in 2004. Since they have been in power, the Patriot has monitored the PSC leadership’s failure to negotiate a satisfactory contract for CUNY faculty members while spending a considerable amount of $60 million in collected dues money on irrelevant and dangerous political causes.
Recent issues of the Patriot have targeted O’Malley’s tireless efforts to find teaching positions at CUNY for convicted terrorist conspirator Mohammad Yousry, and Susan Rosenberg, convicted Weather Underground terrorist, sentenced to a 58 year prison term for the possession of 700 pounds of dynamite. Karkhanis wrote satirically: “There are hundreds of qualified people looking for teaching jobs. Why does she prefer convicted terrorists who are bent on harming our people and our nation, over peace-loving Americans?” (Patriot 3/12/07)
On September 28, O’Malley filed a lawsuit with the New York Supreme Court seeking $2 million in monetary damages for wrongful statements published in the Patriot and a permanent ban on the future publication of offensive material against the plaintiff. In a subsequent interview in the New York Sun concerning the lawsuit, O’Malley said: “It’s all very, very silly.” After Karkhanis refused to be intimidated into silence by the threat of a costly lawsuit, the formal legal complaint, Susan O’Malley v. Sharad Karkhanis, John Doe and Jane Doe was filed on December 21, 2007.
One week prior to filing the formal charges, O’Malley lost two UFS seats by more than 50% of the vote in the KCC elections held for campus senator and alternate. This is the first time since 1980 she has been voted out of her UFS office. It appears that these election defeats dealt a humiliating blow to O’Malley by fellow KCC faculty who may be loosing respect for her due to the frivolous nature of the lawsuit. CUNY faculty have argued that such matters of dispute between colleagues should be dealt with in a collegial setting within the CUNY system rather than making it public in a court of law with frivolous charges and outrageous monetary claims.
• Special accommodations for the press will be made at the Dinner event at Antun’s.
• Regularly updated news and information on Dr. Karkhanis’ case can be accessed from the Free Speech at CUNY Website. http://freespeechcuny.blogspot.com/
• The Patriot Returns archives can be accessed at: http://www.patriotreturns.com
• The formal legal complaint: Susan O’Malley v. Sharad Karkhanis, John Doe and Jane Doe is posted on Professor Mitchell Langbert’s blog: http://mitchell-langbert.blogspot.com/2007/12/susan-omalley-v-sharad-karkhanis-john.html
[[END OF RELEASE]]
Toward an Aristotelian Moral Ubermensch
In his >Mugwumps, Morals and Politics 1864-1920 Gerald McFarland writes (p. 147):
"The consequences of the progressive perspective were evident in an older Mugwump organization, the National Municipal League. Gradually, the NML shifted its goal from one of creating municipal efficiency by throwing out the rascals to creating efficient administration by working with whomever was in. As less emphasis was put on individual moral responsibility and more on malfunctioning of the system, the tone of municipal reform changed. It was a change of style that even progressively inclined Mugwumps found quite jarring."
In The Lonely Crowd David Riesman argued that the twentieth century saw an evolution from inner directedness, whereby personal goals and firm morals drive aims and values, to other directedness, where conformity, peer pressure and media opinion drive aims and values. The transition from Mugwumpery to Progressivism that occurred among some few of the Mugwumps during the first decade of the 1900s (many Mugwumps had died by then and two thirds of the Mugwumps did not adopt Progressivism or publicly adopted only one Progressive issue, according to McFarland).
The transition from inner-directedness to other-directedness may have resulted from (or at least be related to) the change in political emphasis from the late nineteenth century Mugwumps to the Progressives. The Mugwumps were largely religiously educated and mainly came from Protestant backgrounds. They had a specific moral sense, part of which involved an emphasis on individual responsibility and morality. In contrast, the shift among the Progressives to a systems approach lifted the emphasis on responsibility and morality from the individual and turned it into a political or public problem. The Progressives may have emphasized this in their educational activities, which were led by John Dewey. In other words, the shift from inner-directedness to other-directedness may be a result from the Progressives' political ideology. Their emphasis on systems may have been linked to scientific management and the idea that you can improve output through rationalization of systems. Herbert Croly discusses scientific management in Progressive Democracy.
Business schools also gained currency around this time or a bit later, and the ideas of Chester Barnard and the human relations advocates of the 1930s were reflective of the progressives' emphasis on systems as opposed to individual moral responsibility. Barnard emphasized morals heavily in his Functions of the Executive , but his interpretation of morals was entirely relativistic. He argued that executives must be morally creative to motivate workers. Such moral creativity leaves little room for moral grounding. He probably thought that public morality and public scrutiny and control systems would be sufficient to prevent deviant moral beliefs from becoming part of executives' moral creativity. But Barnard does not treat the problem adequately. Rather, he gives examples that suggest that deviant behavior, such as becoming indifferent to the death of one's parent, can be induced through moral creativity. In this, Barnard was not unlike Adolf Eichmann, the chief of the Nazis' prison camp operations. In Eichmann in Jerusalem , Hannah Arendt quotes Eichmann as saying that he is a Kantian and that the duty to obey orders was his moral imperative. This kind of moral creativity finds little inhibition once the problem of morality becomes one of moral systems rather than conscience or individual responsibility.
The management literature has addressed the problem of inhibiting moral deviance in two key ways: through control systems (financial accounting and incentive systems that reduce conflicts between agents and principals) and through organizational culture. But neither approach anticipates the possibility of sociopathic or morally deviant management, as occurred with Enron and other firms in the first decade of the 21st century.
The inclucation of moral sense is a lifelong process. Aristotle argued that the young must develop habits through their upbringing, and if such habits are not developed then they will not be able to be taught to be moral decision makers. Progressive education approaches that encourage students to discover principles for themselves may fail to encourage the habits necessary for moral decision making. Thus, Progressive education contribute to the lax morality that we have witnessed in business. But even those who have good upbringings in the first place can develop bad habits when they work. Social pressure to conform to deviant orgnaizational norms can displace the good habits a young executive learned when he was young.
Aristotle argued that moral behavior involves balancing extremes. Excessive honesty, revealing too much information, is foolish and can lead to being duped. Excessive dishonesty leads to criminality. The mean involves good faith, fair dealing and comeptent negotiation. The competent executive needs to negotiate the moral challenges with which organizations cope but needs to retain the ability to judge when compromises with his basic personal values are too great. That our education has failed to do this is evident from the case of Enron, whereby young MBA graduates bought into Enron's dishonest handling of regulatory agencies; accounting fraud; willingness to cheat investors; and similar kinds of criminality.
Progressivism and its followers, to include Chester Barnard and the advocates of modern management theory, agency theory and systems-based approaches to control, de-emphasize individual responsibility. This is erroneous, as Adolph Eichmann and Jeff Skilling proved. The unscrupulous will always find the way around systems. Not that systems can be ignored or should be, but they are not enough.
Students must learn to balance Aristotle's moral mean with Barnard's moral creativity. To do so requires a considerable degree of self-awareness and managerial skills, of the very kind that managerial skills advocates such as David Whetten and Kim Cameron have advocated. Finding the Aristotelian moral mean in a complex organization means have considerable interpersonal skill and moral awareness, both of which are too often missing.
"The consequences of the progressive perspective were evident in an older Mugwump organization, the National Municipal League. Gradually, the NML shifted its goal from one of creating municipal efficiency by throwing out the rascals to creating efficient administration by working with whomever was in. As less emphasis was put on individual moral responsibility and more on malfunctioning of the system, the tone of municipal reform changed. It was a change of style that even progressively inclined Mugwumps found quite jarring."
In The Lonely Crowd David Riesman argued that the twentieth century saw an evolution from inner directedness, whereby personal goals and firm morals drive aims and values, to other directedness, where conformity, peer pressure and media opinion drive aims and values. The transition from Mugwumpery to Progressivism that occurred among some few of the Mugwumps during the first decade of the 1900s (many Mugwumps had died by then and two thirds of the Mugwumps did not adopt Progressivism or publicly adopted only one Progressive issue, according to McFarland).
The transition from inner-directedness to other-directedness may have resulted from (or at least be related to) the change in political emphasis from the late nineteenth century Mugwumps to the Progressives. The Mugwumps were largely religiously educated and mainly came from Protestant backgrounds. They had a specific moral sense, part of which involved an emphasis on individual responsibility and morality. In contrast, the shift among the Progressives to a systems approach lifted the emphasis on responsibility and morality from the individual and turned it into a political or public problem. The Progressives may have emphasized this in their educational activities, which were led by John Dewey. In other words, the shift from inner-directedness to other-directedness may be a result from the Progressives' political ideology. Their emphasis on systems may have been linked to scientific management and the idea that you can improve output through rationalization of systems. Herbert Croly discusses scientific management in Progressive Democracy.
Business schools also gained currency around this time or a bit later, and the ideas of Chester Barnard and the human relations advocates of the 1930s were reflective of the progressives' emphasis on systems as opposed to individual moral responsibility. Barnard emphasized morals heavily in his Functions of the Executive , but his interpretation of morals was entirely relativistic. He argued that executives must be morally creative to motivate workers. Such moral creativity leaves little room for moral grounding. He probably thought that public morality and public scrutiny and control systems would be sufficient to prevent deviant moral beliefs from becoming part of executives' moral creativity. But Barnard does not treat the problem adequately. Rather, he gives examples that suggest that deviant behavior, such as becoming indifferent to the death of one's parent, can be induced through moral creativity. In this, Barnard was not unlike Adolf Eichmann, the chief of the Nazis' prison camp operations. In Eichmann in Jerusalem , Hannah Arendt quotes Eichmann as saying that he is a Kantian and that the duty to obey orders was his moral imperative. This kind of moral creativity finds little inhibition once the problem of morality becomes one of moral systems rather than conscience or individual responsibility.
The management literature has addressed the problem of inhibiting moral deviance in two key ways: through control systems (financial accounting and incentive systems that reduce conflicts between agents and principals) and through organizational culture. But neither approach anticipates the possibility of sociopathic or morally deviant management, as occurred with Enron and other firms in the first decade of the 21st century.
The inclucation of moral sense is a lifelong process. Aristotle argued that the young must develop habits through their upbringing, and if such habits are not developed then they will not be able to be taught to be moral decision makers. Progressive education approaches that encourage students to discover principles for themselves may fail to encourage the habits necessary for moral decision making. Thus, Progressive education contribute to the lax morality that we have witnessed in business. But even those who have good upbringings in the first place can develop bad habits when they work. Social pressure to conform to deviant orgnaizational norms can displace the good habits a young executive learned when he was young.
Aristotle argued that moral behavior involves balancing extremes. Excessive honesty, revealing too much information, is foolish and can lead to being duped. Excessive dishonesty leads to criminality. The mean involves good faith, fair dealing and comeptent negotiation. The competent executive needs to negotiate the moral challenges with which organizations cope but needs to retain the ability to judge when compromises with his basic personal values are too great. That our education has failed to do this is evident from the case of Enron, whereby young MBA graduates bought into Enron's dishonest handling of regulatory agencies; accounting fraud; willingness to cheat investors; and similar kinds of criminality.
Progressivism and its followers, to include Chester Barnard and the advocates of modern management theory, agency theory and systems-based approaches to control, de-emphasize individual responsibility. This is erroneous, as Adolph Eichmann and Jeff Skilling proved. The unscrupulous will always find the way around systems. Not that systems can be ignored or should be, but they are not enough.
Students must learn to balance Aristotle's moral mean with Barnard's moral creativity. To do so requires a considerable degree of self-awareness and managerial skills, of the very kind that managerial skills advocates such as David Whetten and Kim Cameron have advocated. Finding the Aristotelian moral mean in a complex organization means have considerable interpersonal skill and moral awareness, both of which are too often missing.
Sunday, January 20, 2008
Gerald W. McFarland's Mugwumps, Morals and Politics, 1884-1920
Gerald W. McFarland. Mugwumps, Morals and Politics 1884-1920. Amherst, Ma: University of Massachusetts Press, 1975. 291 pages.
Gerald W. McFarland's Mugwumps, Morals and Politics 1884-1920 (Amherst, MA.: University of Massachusetts Press, 1975) is a well-researched, well-written and scholarly book. In contrast to David M. Tucker's Mugwumps: Public Moralists of the Gilded Age and John M. Dobson's Politics in the Gilded Age: A New Perspective on Reform McFarland combines a quantitative analysis with his historical narrative; focuses on the later Mugwumps (the narrative ends in 1920); and reviews a wider range of activities than Tucker, who focuses on the ideology of key Mugwumps, and Dobson, who focuses on politics. The Mugwumps were, in McFarland's book, a broader movement than in Tucker's, although Tucker's perspective is better because it clarifies the original Mugwumps' purposes.
McFarland does not consider that the Mugwumps may have been ideologues, motivated by belief in science and morality. Rather, McFarland suggests at several points that the economics of the Mugwumps was "derivative" and motivated by class interest or erroneous thinking. Not that he discounts their ideology entirely, but he does not stress it. It would seem that if the Mugwumps indeed spent a large portion of their time fighting for the gold standard, free trade and efficient government, then they held an underlying belief system to which they were emotionally committed. The gold standard is not, as McFarland seems to think, a silly, abstract idea. Thus, I prefer Tucker's purpose-driven or teleological perspective to McFarland's. But McFarland's book is excellent nonetheless.
McFarland's logic can be equally applied to the Progressives, who followed the Mugwumps by a generation. The leading Progressives were upper class and some were former Mugwumps. Many were professionals. Many were business executives. For instance, the Roosevelts were from a wealthy background. The Progressives' ideas were certainly derivative, in part based on 17th century Mercantilism and in part based on Bismarck's welfare state, which itself was derivative of feudalism. The former Mugwumps, such as Theodore Roosevelt, Simeon Baldwin (who adopted a modest Progressive program into his gubernatorial administration) and Louis Brandeis, who transformed themselves into regular Republicans and then Progressives benefited from their beliefs professionally much more than did most of the Mugwumps. Progressivism advocated the creation of commissions, professional jobs, regulations and the like that served the narrow interests not only of professionals, but of big business as well.
Some of the Mugwumps began to gradually transform into Progressives by the 1890s. McFarland finds that 40% of the Mugwumps never adopted Progressivism, 27% adopted one or more Progressive ideas (many of which were extensions of Mugwumpery involving improving government) and only 33% became outright Progressives. Some of the Mugwumps, such as Josiah Quincy, mayor of Boston, adopted socialist ideas. Perhaps not coincidentally, Quincy was one of the few Mugwumps associated with corruption and political spoilsmanship.
When progressive ideas confronted the Mugwumps, their professional interests likely conflicted with their classical liberal ideology. In other words, the spoils from Progressivism were probably greater than the spoils from classical liberalism. Outside of the emphasis on professionalization (which includes establishing the professions in which many of them worked as well as rationalizing government) the classical liberal ideology never served their eonomic interests, so if the Mugwumps were purely an economic interest group they might as well have dropped classical liberalism in the first place and become another interest group pleading for favors from the Stalwarts or Halfbreeds (supporters and opponents of President Grant). This is a problem for the view that classical liberalism served the Mugwumps' economic interests.
The economic philosophy that best served upper class investors and real estate holders was Populism, but this point seems to escape McFarland, or at least he deemphasizes it. Similarly, although Wilson adopted the Federal Reserve Bank in 1913 and the Federal Trade Commission, an anti-trust measure, in 1914, neither of these were viewed as radically progressive. Many Mugwumps supported the Fed because they believed that removing control of money from the political process would rationalize it. They could not anticipate widespread acceptance of Populism via Keynesian economics in the 1930s and Roosevelt's ending of the gold standard in the 1930s.
But Wilson became much more progressive when he realized that he needed to win over the progressive wing of the Democratic and Republican Party for the 1916 election. Thus, political opportunism as much as anything can explain Progressivism's successes, for example Wilson's adoption of it. Opportunism applies less to Mugwumpery than to Progressivism, for the Mugwumps had little to gain from bolting or from supporting classical liberalism. Few were factory owners and many were investors. Opposition to labor unions would have been much less important to them than support for the gold standard (the gold standard hurt speculators because it resulted in deflation). Yet, they supported the gold standard, which was not beneficial to them economically.
What destroyed Mugwump individualist-liberalism was the wresting of scientific blief from classical liberalism that occurred in universities. Richard T. Ely's establishment of the American Economics Association in the 1890s seriously damaged the individualist-liberal Mugwump movement. They could no longer say that "science" supported their moral views. Although von Mises offered an alternative perspective beginning in the 1920s as did Hayek in the 1940s and Friedman in the 1960s, mainstream academics have emphasized market failure since the 1890s. This made it much more difficult for Mugwumps and later conservatives and libertarians to defend their views.
McFarland's quantitative descriptions of the Mugwumps are useful, although they would have been improved had they been hypothesis or theory driven. The findings that the Mugwumps were almost entirely college graduates (in an era when only two percent of the public graduated from college); that they were not the super-rich millionaires like Jay Gould associated with the regular Republicans (and that a smaller percentage of Mugwumps were millionaires than were the regular Republicans who attended fundraisers); that the Mugwumps came from well-to-do ancestries; and that they were mostly professionals involved in nascent professions attempting to establish themselves (professors, librarians) are interesting but not powerful (i.e., they do not enable us to reject Tucker's null hypothesis that they were morally and ideologically driven).
It seems that the transformation of a third of the Mugwumps from classical liberals to Progressives is linked to their gradual recognition that to win power they needed to one-up the political machines in the cities, which had traditionally provided jobs and benefits to immigrants and the poor. The way to do this, some Mugwumps began to realize in the 1890s, was to provide benefits to the working class that superseded the machines' paternalistic and spoils-based approach. Progressivism was thus a way to wrest power from the political machines by replacing locally-based paternalism with nationally based paternalism. Thus, the New Deal was the logical extension of progressivism, not because of ideology, but from the standpoint of obtaining power and utilizing programs to win power.
The machines began to realize that the Progressives' strategy worked, and responded by tentatively adopting the Progressives' reform ideas. Charles (Silent Charlie) Murphy, the boss of Tammany Hall from the 1890s to the 1920s began to support reform-oriented candidates as early as 1903. Ultimately, Murphy supported Al Smith for Governor of New York, and it was Smith who conceptualized the framework that became the New Deal. Smith was a Tammany Hall man. Franklin D. Roosevelt succeeded Smith as governor of New York, and when he was president in the 1930s adopted Smith's program on the national level.
Thus, progressivism was the nationalization of political bossism. Roosevelt never addressed urban corruption, which would have been a chief Mugwump concern. Tammany Hall was destroyed by the fusion (Republican) mayoralty of Fiorello Laguardia, but it is not clear that this completely eliminated corruption. Progressive and New Deal administrators like Robert Moses, who admittedly was more effective than prior generations' administrations, "got things done" at a very high cost to poor New Yorkers. The progressives' and New Deal liberals' control of New York from the Laguardia administration through John Lindsay resulted in the city's near bankruptcy (saved by Felix Rohatyn and some financial maneuvering), a result that did not attend the political bossism of the nineteenth century.
A useful point that McFarland makes is on p. 113 in his discussion of Robert Treat Paine, a philanthropist and attorney from Boston:
"Paine was a Social Gospel Episcopalian--not a reform type that would dominate liberal circles after the New Deal, perhaps, but a type that played a major role in the incipient social progressivism of the 1890s."
Likewise, McFarland notes (p. 103-4):
"One of the foremost spokesmen for social progressivism was R. Fulton Cutting, a Mugwump who served as chairman of the Citizens' Union...Cutting was descended from Robert Livingston and Robert Fulton and had inherited a large fortune through his family connections...
"In a speech...Cutting denounced past reform movements for savoring 'more of Oligarchy than Democracy'. Patronizing appeals for civic morality had met with limited success, he believed, because reformers made no effort to make city government important to the average voter...As a advocate of Social Gospel Christianity, Cutting predicted that the twentieth century would produce a broad trend toward expanded government social and economic programs: "There is a swelling tide of human brotherhood that seeks to expose itself through Democratic institutions and the religion of the Twentieth Century is destined to employe Government as one of its principal instrumentalities for the solution of social issues."
Cutting said so in 1901. What is revealing in the cases of Paine and Cutting is that (1) they were upper class; (2) they were devout Protestants of the Social Gospel type; (3) they had seen the Mugwumps' reform ideas frequently defeated by corrupt political machines that provided benefits to immigrants and the poor; (4)they believed that they found a way to implement both their Christian beliefs and their interest in reform.
As with any effective ideology, the Paine/Cutting view combined a strategy for obtaining power with a belief that the strategy is morally right. More than 100 years later, Mike Huckabee continues to reflect this perspective, which reflected the views of a segment the Republican Party in 1901.
Those who believe in individualist-liberal ideas, the economics of Mill and Smith, and see progressive-liberalism as a reactionary, poverty-generating system that harms citizens and reflects anything but love, need to make the case that classical liberalism is humane and helps the poor while government does not. As well, the reform of universities to regain a place for classical liberal ideas is crucial. The mass media lacks the theoretical grounding to provide a foundation for a successful reversal of progressive-liberal domination.
Gerald W. McFarland's Mugwumps, Morals and Politics 1884-1920 (Amherst, MA.: University of Massachusetts Press, 1975) is a well-researched, well-written and scholarly book. In contrast to David M. Tucker's Mugwumps: Public Moralists of the Gilded Age and John M. Dobson's Politics in the Gilded Age: A New Perspective on Reform McFarland combines a quantitative analysis with his historical narrative; focuses on the later Mugwumps (the narrative ends in 1920); and reviews a wider range of activities than Tucker, who focuses on the ideology of key Mugwumps, and Dobson, who focuses on politics. The Mugwumps were, in McFarland's book, a broader movement than in Tucker's, although Tucker's perspective is better because it clarifies the original Mugwumps' purposes.
McFarland does not consider that the Mugwumps may have been ideologues, motivated by belief in science and morality. Rather, McFarland suggests at several points that the economics of the Mugwumps was "derivative" and motivated by class interest or erroneous thinking. Not that he discounts their ideology entirely, but he does not stress it. It would seem that if the Mugwumps indeed spent a large portion of their time fighting for the gold standard, free trade and efficient government, then they held an underlying belief system to which they were emotionally committed. The gold standard is not, as McFarland seems to think, a silly, abstract idea. Thus, I prefer Tucker's purpose-driven or teleological perspective to McFarland's. But McFarland's book is excellent nonetheless.
McFarland's logic can be equally applied to the Progressives, who followed the Mugwumps by a generation. The leading Progressives were upper class and some were former Mugwumps. Many were professionals. Many were business executives. For instance, the Roosevelts were from a wealthy background. The Progressives' ideas were certainly derivative, in part based on 17th century Mercantilism and in part based on Bismarck's welfare state, which itself was derivative of feudalism. The former Mugwumps, such as Theodore Roosevelt, Simeon Baldwin (who adopted a modest Progressive program into his gubernatorial administration) and Louis Brandeis, who transformed themselves into regular Republicans and then Progressives benefited from their beliefs professionally much more than did most of the Mugwumps. Progressivism advocated the creation of commissions, professional jobs, regulations and the like that served the narrow interests not only of professionals, but of big business as well.
Some of the Mugwumps began to gradually transform into Progressives by the 1890s. McFarland finds that 40% of the Mugwumps never adopted Progressivism, 27% adopted one or more Progressive ideas (many of which were extensions of Mugwumpery involving improving government) and only 33% became outright Progressives. Some of the Mugwumps, such as Josiah Quincy, mayor of Boston, adopted socialist ideas. Perhaps not coincidentally, Quincy was one of the few Mugwumps associated with corruption and political spoilsmanship.
When progressive ideas confronted the Mugwumps, their professional interests likely conflicted with their classical liberal ideology. In other words, the spoils from Progressivism were probably greater than the spoils from classical liberalism. Outside of the emphasis on professionalization (which includes establishing the professions in which many of them worked as well as rationalizing government) the classical liberal ideology never served their eonomic interests, so if the Mugwumps were purely an economic interest group they might as well have dropped classical liberalism in the first place and become another interest group pleading for favors from the Stalwarts or Halfbreeds (supporters and opponents of President Grant). This is a problem for the view that classical liberalism served the Mugwumps' economic interests.
The economic philosophy that best served upper class investors and real estate holders was Populism, but this point seems to escape McFarland, or at least he deemphasizes it. Similarly, although Wilson adopted the Federal Reserve Bank in 1913 and the Federal Trade Commission, an anti-trust measure, in 1914, neither of these were viewed as radically progressive. Many Mugwumps supported the Fed because they believed that removing control of money from the political process would rationalize it. They could not anticipate widespread acceptance of Populism via Keynesian economics in the 1930s and Roosevelt's ending of the gold standard in the 1930s.
But Wilson became much more progressive when he realized that he needed to win over the progressive wing of the Democratic and Republican Party for the 1916 election. Thus, political opportunism as much as anything can explain Progressivism's successes, for example Wilson's adoption of it. Opportunism applies less to Mugwumpery than to Progressivism, for the Mugwumps had little to gain from bolting or from supporting classical liberalism. Few were factory owners and many were investors. Opposition to labor unions would have been much less important to them than support for the gold standard (the gold standard hurt speculators because it resulted in deflation). Yet, they supported the gold standard, which was not beneficial to them economically.
What destroyed Mugwump individualist-liberalism was the wresting of scientific blief from classical liberalism that occurred in universities. Richard T. Ely's establishment of the American Economics Association in the 1890s seriously damaged the individualist-liberal Mugwump movement. They could no longer say that "science" supported their moral views. Although von Mises offered an alternative perspective beginning in the 1920s as did Hayek in the 1940s and Friedman in the 1960s, mainstream academics have emphasized market failure since the 1890s. This made it much more difficult for Mugwumps and later conservatives and libertarians to defend their views.
McFarland's quantitative descriptions of the Mugwumps are useful, although they would have been improved had they been hypothesis or theory driven. The findings that the Mugwumps were almost entirely college graduates (in an era when only two percent of the public graduated from college); that they were not the super-rich millionaires like Jay Gould associated with the regular Republicans (and that a smaller percentage of Mugwumps were millionaires than were the regular Republicans who attended fundraisers); that the Mugwumps came from well-to-do ancestries; and that they were mostly professionals involved in nascent professions attempting to establish themselves (professors, librarians) are interesting but not powerful (i.e., they do not enable us to reject Tucker's null hypothesis that they were morally and ideologically driven).
It seems that the transformation of a third of the Mugwumps from classical liberals to Progressives is linked to their gradual recognition that to win power they needed to one-up the political machines in the cities, which had traditionally provided jobs and benefits to immigrants and the poor. The way to do this, some Mugwumps began to realize in the 1890s, was to provide benefits to the working class that superseded the machines' paternalistic and spoils-based approach. Progressivism was thus a way to wrest power from the political machines by replacing locally-based paternalism with nationally based paternalism. Thus, the New Deal was the logical extension of progressivism, not because of ideology, but from the standpoint of obtaining power and utilizing programs to win power.
The machines began to realize that the Progressives' strategy worked, and responded by tentatively adopting the Progressives' reform ideas. Charles (Silent Charlie) Murphy, the boss of Tammany Hall from the 1890s to the 1920s began to support reform-oriented candidates as early as 1903. Ultimately, Murphy supported Al Smith for Governor of New York, and it was Smith who conceptualized the framework that became the New Deal. Smith was a Tammany Hall man. Franklin D. Roosevelt succeeded Smith as governor of New York, and when he was president in the 1930s adopted Smith's program on the national level.
Thus, progressivism was the nationalization of political bossism. Roosevelt never addressed urban corruption, which would have been a chief Mugwump concern. Tammany Hall was destroyed by the fusion (Republican) mayoralty of Fiorello Laguardia, but it is not clear that this completely eliminated corruption. Progressive and New Deal administrators like Robert Moses, who admittedly was more effective than prior generations' administrations, "got things done" at a very high cost to poor New Yorkers. The progressives' and New Deal liberals' control of New York from the Laguardia administration through John Lindsay resulted in the city's near bankruptcy (saved by Felix Rohatyn and some financial maneuvering), a result that did not attend the political bossism of the nineteenth century.
A useful point that McFarland makes is on p. 113 in his discussion of Robert Treat Paine, a philanthropist and attorney from Boston:
"Paine was a Social Gospel Episcopalian--not a reform type that would dominate liberal circles after the New Deal, perhaps, but a type that played a major role in the incipient social progressivism of the 1890s."
Likewise, McFarland notes (p. 103-4):
"One of the foremost spokesmen for social progressivism was R. Fulton Cutting, a Mugwump who served as chairman of the Citizens' Union...Cutting was descended from Robert Livingston and Robert Fulton and had inherited a large fortune through his family connections...
"In a speech...Cutting denounced past reform movements for savoring 'more of Oligarchy than Democracy'. Patronizing appeals for civic morality had met with limited success, he believed, because reformers made no effort to make city government important to the average voter...As a advocate of Social Gospel Christianity, Cutting predicted that the twentieth century would produce a broad trend toward expanded government social and economic programs: "There is a swelling tide of human brotherhood that seeks to expose itself through Democratic institutions and the religion of the Twentieth Century is destined to employe Government as one of its principal instrumentalities for the solution of social issues."
Cutting said so in 1901. What is revealing in the cases of Paine and Cutting is that (1) they were upper class; (2) they were devout Protestants of the Social Gospel type; (3) they had seen the Mugwumps' reform ideas frequently defeated by corrupt political machines that provided benefits to immigrants and the poor; (4)they believed that they found a way to implement both their Christian beliefs and their interest in reform.
As with any effective ideology, the Paine/Cutting view combined a strategy for obtaining power with a belief that the strategy is morally right. More than 100 years later, Mike Huckabee continues to reflect this perspective, which reflected the views of a segment the Republican Party in 1901.
Those who believe in individualist-liberal ideas, the economics of Mill and Smith, and see progressive-liberalism as a reactionary, poverty-generating system that harms citizens and reflects anything but love, need to make the case that classical liberalism is humane and helps the poor while government does not. As well, the reform of universities to regain a place for classical liberal ideas is crucial. The mass media lacks the theoretical grounding to provide a foundation for a successful reversal of progressive-liberal domination.
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