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Neither a Borrower
Nor a Lender Beby Doug Dowd
Anyone giving that advice today would be seen as deranged; but, as some oldies will remember, such was once the received truth, as proclaimed by Founding Father Ben Franklin (along with “Waste not, want not” and “A penny saved is a penny earned”).
However. The USA leads the world in its consumer and business borrowing and all kinds and amounts of waste, damaging society and dangerous to human beings and other creatures and the planet itself; and our savings rate is negative. Part of that same unholy family is that among industrial countries we take first prize for the numbers of children living in poverty and without health care.
Of course we also lead the world's nations in production, productivity, and financial dazzle. How does that connect to the elements of the preceding paragraph? As the thighbone is connected to the hipbone, and the hipbone is connected to the backbone, and the backbone is connected to the headbone.... Put differently, the economy's “high” all too closely resembles that of the coke addict: our economic “well-being” is squarely dependent upon ever-rising and always more dangerous indebtedness and waste; but in the absence of a much changed socioeconomy, not getting that “fix” would send the U.S. economy reeling, and take the world down with it.
Like any addiction, this one becomes always more demanding: for its demands to be met, more and more of its victim's world must be fed into its maw: in the case of drugs, that means job, family, character, health; in the case of the economy, it means the need for all sectors of social existence to be bent to the needs of MORE!—more production and consumption of junk, and more borrowing to finance it—borrowing by consumers and businesses at home, borrowing by the U.S.A. at home and in the world economy.
A quick look at developments since 1980:
Item: In 1980, the year Reagan entered the White House, the national debt was just over $900 billion; when he left it in 1989 it had tripled to $2.8 trillion; in Bush's years it rose to just under $5 trillion.
Item: In 1980, ours was the largest creditor country in the world economy's history; by 1989 we had become history's largest debtor, a debt now about $2 trillion.
Item: In 1978 household debt as a percentage of consumers' after-tax income was 62 percent; now it is over 100 percent.
Item: Recently, corporations have been borrowing heavily to buy back their own stock to provide all those fabulous stock options to CEOs and others and to finance mergers and acquisitions, and, most interesting of all, to finance buybacks which, by reducing the number of their shares outstanding, inflate earnings per share (e.g., $14.2 billion of such buybacks by IBM in the past two years (New York Times, June 4, “What's Hiding in Big Blue's Small Print”). Moreover, financial companies are accelerating their “repackaging” of loans in order to “resell” them as bonds and notes—that is, borrowing on outstanding debt so they can lend and spend more—a process whose magnitude has risen from $2.4 trillion in 1989 to $7 trillion in 1999. In sum, as between government, consumers, and business, biz takes the prize for financial recklessness. And why not? When (not if) it all turns sour it's not the wise guys who made those decisions who'll get the stomach aches, but shareholders and workers, with ripples out to economy. No problem.
And waste? We have to turn Franklin around: Waste, and want not. Waste is the opposite of efficiency; and both terms beg to be defined. In doing so, it is essential to begin by understanding that there is no “scientific” definition. To set the stage, an assertion: “Capitalism has been simultaneously the most efficient AND the most wasteful productive system in history.” How so? As so often for social analysis, it depends on the focus, on the questions being asked.
When mainstream economists speak of “efficiency”—put forth as the prime virtue of the “free market economy”—they have reference to “input-output” relationships in a particular plant. In doing so in our vastly wasteful economy, they are (in the words of Matthew, 23:24) “straining at a gnat, and swallow[ing] a camel.”
Which is marvelously efficient, to the economic (and other) consequences of the marketing and uses of the automobile, what we find are immense amounts of wasted labor, capital equipment and natural resources—and time, the time wasted in congested traffic—and an equally immense contribution to air pollution (and its associated costs). In varying forms, such waste is found throughout the economy: the planned obsolescence of autos is joined by that of many consumer durables (the new champion now the computer), as is their massive advertising and packaging (98 percent of the cost of toothpaste, for example, goes to packaging, advertising, and profits); and agriculture sustains itself by restricting production, as does much of manufacturing and mining. And then there is the obscene waste of the military-industrial complex (now spending more [inflation adjusted] than in the Reagan years), whose sustenance requires the sustenance of the cold war mentality, with all of its sociopolitical damages.
But most tragic of all that is wasted is labor—that which is unemployed, under-employed and, not least, stupidly employed. It is not as though those affected will have another life in which to find their capabilities, and use them. And here we refer only to those in the rich countries; ponder a moment on what has been taken from, done to, and disallowed for most of the people on the planet since the advent of “capitalist efficiency,” centuries ago.
Implicit in the foregoing is a definition of waste: that which serves no meaningful human or social purpose. Such a definition—any definition—raises as many questions as it answers. Who defines “meaningful,” or “purpose”? It is defined for us, in our economy, by those who control it. That means, mostly, the largest companies, domestic and transnational, whose political power is roughly proportionate to their economic power: naturally, which extends their control beyond the economy. Their definition of “meaningful human or social purpose” is simple: that which feeds their profits and their power. Take it or leave it.
And then there is destructive waste, its prime movers and beneficiaries, and its victims. Most who read these words know most or all—or more—of what has been and now will be said here. It's important enough to repeat, to carve in stone beads, and to say those beads over and over again—as we organize and fight—until we have rid ourselves and the earth of ongoing and looming disasters.
If lamentations about the air, the water, the soil, the forests, the disappearance or threat to flora and fauna in general, the damages done to workers and consumers and unlucky residents by toxic emissions, the constant threat from nuclear wastes—what a filthy laundry list!—if all those lamentations had just begun, say, in the 1990s, that would be sufficent cause for alarm.
But Rachel Carson, by no means the first to sound the alarm, wrote Silent Spring in 1962; William Kapp wrote his Social Costs of Private Enterprise in 1950. Those who developed nuclear energy (and weapons) knew from the first the dangers entailed (many even worried that the first bomb test in 1945 might go all the way; but went ahead). And asbestos companies long knew the dangers of their production to their workers and consumers. And cigarette manufacturers? Dun't esk.
In short, those rule us didn't get there by their wisdom but by their ceaseless and heedless search for profits and power, come what may. The time has come—once more! as always!—for ordinary people not just to take thought about what this ongoing system has meant and means to peoples all over the earth, whether in rich or poor countries, but also to stop wasting time and get more political, stop borrowing in order to buy “what we have been taught to want” and start getting our country to provide what it and we and the rest of the world's peoples need.
The time has come, as Lincoln put it in his day, “to disenthrall ourselves”—which, translated for our day, to get off our asses, stop wasting time, and build a movement that shoves those at the top off to the side. Or what are we?
Aug 8, 2000
