Showing posts with label corporations. Show all posts
Showing posts with label corporations. Show all posts

Monday, February 18, 2013

Engineering the Future: Do We Know What We’re Doing?


I assume many of my readers are either engineers, or interested in engineering and its effects on society, so what I am about to say may surprise you.  It is simply this:  engineers are playing a role in American society that may end American society as we have known it up to now.  Let me explain.

George Friedman runs a consulting company in Austin called Stratfor, which keeps an eye on geopolitical trends and charges what are no doubt hefty fees to corporate clients for doing so.  Something—possibly altruism—moved him to write a piece for the Austin American-Statesman that offers his considered opinion (for free) on a subject of interest to all Americans:  the future of American society. 

His argument hinges on two numbers:  the percentage of U. S. gross national product (GNP) going to wages, presumably to lower- and middle-class wage earners; and the percentage of GNP going to corporate profits after taxes.  Statisticians have been keeping tabs on these numbers since 1947, shortly after World War II.  Both of these numbers are currently at extreme levels, smashing all records since the collecting of these statistics began.  But they are going in opposite directions:  the fraction of GNP going to corporate profits is now the highest it’s ever been since 1947—about 11%—and the portion of GNP going to wages is the lowest it’s ever been. 

Rather than taking a simple cheap shot at excess profits, Friedman sees in these numbers support for a contention that corporate America is becoming a victim of its own success.  In 1947, lifetime employment of wage-earners working for large corporations was the norm, and over that lifetime the average hourly worker with only a high-school education could expect to get married, buy a house, a couple of cars, have some kids, and maybe put one or two of the kids through college.  And that is pretty much what happened.  Today, by contrast, a person starting out even with an advanced college degree can expect during one’s career to work for many companies, most of which will get bought out, restructured, or moved offshore at some point, and even engineers with good starting salaries will be fortunate to be continuously employed without large gaps in employment or having to do extensive retraining at several points.

The cause of job instability and rapid change is the streamlining that corporate America underwent in the 1980s, when foreign competition wrought havoc with the old-style gray-flannel-suit world of lifetime employment.  The new-model corporation emerged leaner, meaner, and more efficient, if you measure efficiency (productivity, really) by the return on investment in capital and labor.  Engineers made these productivity gains possible with all the technology, communications systems, and automation improvements that have come online in the last several decades. 

But the labor involved in a typical firm today is vastly different than the labor of sixty years ago.  In 1947, a healthy young man with a tenth-grade education and good hand-eye coordination could get one of those lifetime jobs I mentioned earlier.  Today, to earn the money that would make that 1947 lifestyle possible (upgraded to 2013, of course), he would have to compete with “symbolic manipulators” (in George Gill’s phrase) who hold Ph. Ds and still have to change jobs every few years to get a raise.  That is simply not possible.

Not only is the high-school dropout of today unable to get a decent job; he can’t afford many of the things that today’s economy makes.  That drying up of the domestic market is what Mr. Friedman sees as the really ominous cloud on the horizon.  Already, many U. S. companies are finding that their growth markets are mainly overseas.  We assume that this is because domestic markets are simply saturated, but maybe they are actually shrinking because the less-employed U. S. workers can’t afford to buy the things that the corporations make.   The result?  Millions of young people who can’t get a decent job, can’t afford stable relationships and the other promises of the American dream, and who may turn America into something closer to one of those countries where mobs of unemployed young men create continual civil unrest.

Mr. Friedman poses no solution in his article.  But another writer poses something that, while not exactly a solution, is a clearer diagnosis of the problem.  In The Ways of Judgment, Oliver O’Donovan talks about a different kind of “communication” than the one that engineers are used to discussing.  Way back in the 17th century, the word used to mean “anything good that two or more people have in common.”  Communication meant not just talk, but trade, education, the town or country where people live together, institutions of all kinds—in short, the whole social fabric of benevolent interaction among human beings. 

The essence of this meaning of the word “communication,” O’Donovan says, is work. By “work,” he means “every human activity that enhances the material of communication, developing its social meaning, converting material goods into spiritual forces by the alchemy of communication.”

To O’Donovan, just as “work is the essence of social communication, unemployment is the paradigm of social breakdown.”  O’Donovan means by unemployment not simply being out of a job, but not having a job that makes the world a better place.  Mr. Friedman’s underlying basis for his discussion is GNP—in other words, the economy—as it is for most politicians these days.  But every discussion that starts by assuming economics is the highest good, mistakes a means (money) for an end.  That end, in O’Donovan’s view, is not making money, but social communication, the fruitful interaction of people who have something in common.

We may be facing a future in which the coming generation increasingly cannot find work that allows them an adequate means of social communication.  A big factor in this problem is the deterioration of the family structure, which is both a cause and an effect of economic changes.  The family is probably the most vital and intimate form of social communication of all.  Any nation which neglects the preservation and encouragement of the family will sooner or later end up running on fumes, because mentally and physically healthy, disciplined, competent workers capable of long-range planning do not simply grow on trees.  They typically come from healthy families, and the fewer of those there are, the fewer upstanding citizens we will have to work with in the future.  

I have no grand plans or solutions that will give enough meaningful, remunerative work to enough people that we in America can continue to hope for a better future for most, if not all, of our children.  But if we find a way to do this, I have a feeling it will be the kind of thing that happens not with a government program, or a clever academic insight, but by changing one soul at a time.

Sources:  George Friedman’s article “Crisis that afflicts middle class threatens root of U. S. power” appeared in the Feb. 17, 2013 print edition of the Austin American-Statesman.  The quotations from Oliver O’Donovan’s book The Way of Judgment (Eerdmans, 2005) appear on pp. 250-251.

Monday, May 07, 2012

Engineering, Freedom, and the 28th Amendment


In a talk I gave in Doha, Qatar last fall at an engineering ethics conference, I listed some cultural characteristics that seemed to be necessary for engineering to flourish.  One of the characteristics I listed was “freedom for organizations” to pursue projects in the marketplace of ideas and goods.  Of course, most engineering is done by commercial organizations called corporations, which are legally treated as persons in many ways.  In the U. S., this way of treating corporations goes back at least to the 19th century, and farther if you look into English common law.  But broadly speaking, any group of people doing something as a group can be regarded in the light of a corporation, and so even nonprofit outfits such as Wikipedia, local churches, and (I suppose) even high-school chess clubs could conceivably be regarded as corporations.

What has the nature of corporations got to do with engineering?  A threat to the existence of corporations is, indirectly, a threat to the flourishing of engineering.  And a threat to the freedom, and conceivably the very existence, of corporations has arisen from one Rep. James McGovern of Massachusetts, who used his position in the U. S. House of Representatives last November to introduce a proposed 28th amendment to the Constitution.  Now, amendments to the Constitution are among the most difficult legislative objects to enact, because they require not only the approval of two-thirds of both the House and the Senate, but also three-fourths of the state legislatures.  So in practical terms, the proposed amendment is very likely to fall by the wayside before it could get within hailing distance of actually becoming law.  But even a small danger of a terrible tragedy is worth paying attention to, as students of engineering disasters know.

Why would passage of this amendment be so bad?  Because it revokes all the rights and freedoms reserved in the Constitution for the people, from anything you can conceivably call a “corporation.”  Individual “natural” persons would still have freedom of speech, the press, religion, and so on.  But two or more of them together, as long as such a grouping could be construed as a corporation, would be at the mercy of Congress, which could do anything it liked in terms of regulation:  prohibit any action, tax the entity to death, or even prohibit its very existence.

The alleged rationale for this amendment is the 2010 U. S. Supreme Court decision (Citizens United v. Federal Election Commission) that upheld the right of corporations to make political expenditures.  In the view of some, this decision gave too much power to deep-pocketed corporations, which can now buy political ads with impunity.  While there are deep and serious problems with the way political campaigns are funded in the U. S., the cure proposed by Rep. McGovern would be a great deal worse than the disease.

Just to give a specific example, consider this blog you are reading.  It is appearing through the courtesy of one of the largest corporations in the U. S.:  Google.  While I as an individual am venting my opinion on what Rep. McGovern is doing, it is the corporation known as Google which is actually putting my words out there for other people to read.  If the proposed 28th amendment became law and Congress took a dislike to anything—anything at all—that anybody said in any blog that Google puts online, there would be no obstacle whatsoever to stop Congress from passing a law that gave Rep. McGovern’s office censorship rights over everything Google does.  While there is a clause in the amendment that says nothing shall be construed to limit the “people’s” rights, the word “people” is explicitly defined in the previous clause to exclude corporations.  Because posting all those blogs is a corporate act—you can’t find the one individual at Google solely responsible for operating blogspot.com—it is not protected by that construal clause, and out it goes if Congress wills.

This matter came to my attention in a column written by George Will, and he has plenty of other examples of what havoc could result from the proposed amendment.  This proposal is only the latest in a series of unwise and intemperate actions that seem to be getting more frequent in Washington.

Freedom, though vitally important in a democracy, is not an absolute foundational right.  The enjoyment of freedom, for engineers as for everyone else, comes with the obligation to use freedom responsibly.  For engineers, this means thinking about the consequences of actions and projects that affect other people.  For legislators such as Rep. McGovern, it means considering the larger consequences of one’s proposed legislation, and how it could cause problems much worse than the original one it was designed to solve.  We can thank the wise and prudent framers of the original Constitution that they made the amendment process as difficult and cumbersome as it is.  It is hard enough to block ultimately frivolous and inimical proposals such as Rep. McGovern’s, but straightforward enough to allow enactment of changes for which there is sufficient national consensus.  But the fact that even one duly elected member of Congress could be so shortsighted and imprudent as to propose the de-personalizing of all corporations is a bad sign that wisdom and prudence are getting in short supply.

Sources:  George Will’s syndicated column on May 6, 2012 was entitled “Taking a Scythe to the Bill of Rights,” and can be found at many media outlets, for example http://thedailyworld.com/sections/opinion/columnist/george-will-—-taking-scythe-bill-rights.html.  Rep. McGovern’s own explanation of his reasoning can be found at the website http://freespeechforpeople.org/McGovern, which also has a link to the text of the proposed amendment.