Signs of the Economic Apocalypse, 5-12-08

From SOTT.net:

Gold closed at 885.80 dollars an ounce Friday, up 3.2% from $858.00 for the week. The dollar closed at 0.6459 euros Friday, down 0.3% from 0.6480 at the close of the previous Friday. That put the euro at 1.5482 dollars compared to 1.5432 the week before. Gold in euros would be 572.15 euros an ounce, up 2.9% from 555.99 at the close of the previous week. Oil closed at 125.96 dollars a barrel Friday, up 8.3% from $116.32. Oil in euros would be 81.36 euros a barrel, up 7.9% from 75.38 at the close of the Friday before. The gold/oil ratio closed at 7.03 Friday, down 5.0% from 7.38 for the week. In U.S. stocks, the Dow closed at 12,745.88 Friday, down 2.5% from 13,058.20 at the close of the previous Friday. The NASDAQ closed at 2,445.52 Friday, down 1.3% from 2,476.99 at the close of the week before. In U.S interest rates, the yield on the ten-year U.S. Treasury note closed at 3.77%, down nine basis points from 3.86 for the week.

The price of oil shot up last week by more than 8%. Various reasons have been trotted out for the rise in oil prices, but none of them seem to account for it. Oil prices have almost exactly doubled in the past year ($62.51 on May 11, 2007) at a time when supplies are plentiful and the world economy is weakening. A year ago, by comparison, gold was at $672 an ounce. Clearly we are seeing a commodity bubble nourished by the huge influx of money available to speculators from central banks, but oil has been rising so much faster lately that we can only conclude that insiders think the United States and Israel are about to embark on a suicidal course of attacking Iran, Syria and Lebanon in the remaining months of Bush’s term. Analysts are not directly saying this in the context of oil prices, though, preferring to use euphemisms such as “geopolitical fears.”

Oil hits record $126 on supply worry

Robert Campbell

May 9, 3:45 PM ET

NEW YORK (Reuters) - Oil jumped to a record above $126 a barrel on Friday, extending gains to more than 11 percent since the start of the month on fuel supply concerns and a rush of speculator buying.

U.S. crude settled up $2.27 at $125.96 a barrel before rising to a record $126.25 in late post-settlement trade. London Brent crude gained $2.56 to settle at $125.40 a barrel, off the earlier high of $125.90.

"It appears that any calculations that included waiting for the next pullback were discarded on the European opening this morning as waves of buying materialized, particularly from speculative interests," said Mike Fitzpatrick, vice president at MF Global.

Oil has surged since slipping as low as $110.53 a barrel on May 1. Investors have seized on disruptions to crude oil supplies in the North Sea and Nigeria, as well as galloping demand for distillate fuels, a category that includes diesel fuel and heating oil.

Strong demand for diesel fuel in Europe, along with the growing use of distillates for generators to supplement strained power grids in fast growing emerging markets, have cut into stocks of distillate fuel and pushed up prices sharply.

"Lingering geopolitical fears and high heating oil prices are helping the market, but the speed of the rise is too fast," said Tatsuo Kageyama, analyst at Kanetsu Asset Management in Tokyo.

The steady rise in crude oil prices once again has turned the spotlight on the Organization of the Petroleum Exporting Countries (OPEC), which for months has insisted it has no control over the factors it blames for pushing up the price of oil, including speculation and the weak U.S. dollar.

An OPEC source said the group might consider boosting output before its next scheduled meeting in September should crude oil prices keep rising.
But Ecuador's oil minister said there were no plans for an early meeting.

"If the price keeps going up, OPEC may consult on an increase in production before it meets in September. In my view, any increase would have to be more than 500,000 barrels per day to have an impact on the price," said the OPEC source.

President George W. Bush said on Thursday he would bring up the subject of oil prices during talks with Saudi leaders during a planned trip to the Middle East from May 8-13.

Bush's trip to the region comes as the Iran-backed Hezbollah group seized the Muslim half of Beirut on Friday from fighters loyal to the U.S. backed governing coalition in the worst spate of violence in Lebanon since the country's 1975-90 civil war.

Although Lebanon is not an oil producer, civil unrest there has pushed up oil prices in the past, most recently in the summer of 2006 when Israel invaded Lebanon in an unsuccessful attempt to subdue Hezbollah.

It doesn’t take too much reading between the lines of the last two paragraphs in the above article to see what the “geopolitical fears” are. Cheney has already toured the Middle East. Bush is going there now while blaming Iran for U.S. setbacks in Iraq and Lebanon. Israel and the U.S. neocons have increased the pressure on Bush to attack Iran before leaving office, and they have been doing this very publicly. The only question that remain: Will the military carry out his orders? Will they need an “incident” to push public opinion along?

In other market news, stock fell last week, in part because Wall Street financial firms may have to actually let shareholders know what they are doing. What does this say about the system?

Wall Street fears the light

Loren Steffy

May 8, 2008

The fear in Wednesday's stock decline was palpable.

Wall Street was responding to the specter of transparency the way it always does — with alarm.

Big brokerage firms, led by Merrill Lynch and Lehman Bros., plunged after the nation's top securities cop called for more disclosure of Wall Street's finances.

The decline was the biggest in two months for financial stocks.

Securities and Exchange Commission chief Christopher Cox said his agency later this summer will require investment banks to make more capital and liquidity information public.

In other words, these publicly traded firms will have to give their investors a more accurate financial picture of what they're doing.

Those who own shares in investment banks have reason to worry.

The bright light of public scrutiny almost always costs Wall Street money.

It's an institution, after all, that profits most when it can exploit the ignorance of others.

Creature of the night

Wall Street prefers the dark, where it can control the information meted out to investors. It's no coincidence, after all, that market participation exploded with the advent of the World Wide Web, which made stock prices readily available with minimal delay to average citizens.

Nor is it surprising that companies such as Bloomberg became multibillion-dollar businesses by taking information once held exclusively in the dark hallways of Wall Street and making it available to those with money at risk.

In the 1970s, when the SEC forced Wall Street to disclose brokerage commissions, rates tumbled and Wall Street's profitability shifted to other businesses such as investment banking.

Something similar happened in the bond market.

As real-time pricing seeped in, investors could see the difference between their bids and the seller's asking price, known as the spread. The spread represented brokers' profit.

If you wanted to know the price of a municipal or corporate bond, you had to ask your broker.

You assumed he was giving you an accurate price and that he wasn't inflating the spread for his own benefit.

When pricing became more transparent, the spreads narrowed.

Information, after all, is the foundation of competition.

Worries no wonder

Is it any wonder, then, with Wall Street facing new disclosure demands over its finances that investors are worried?

Most investment banks provide some basic liquidity information in their quarterly financial statements, and some provide more detailed data to the SEC that the commission currently doesn't make public.

Cox's plan would require banks to disclose that information and provide more details about funding and capital ratios.

Eventually, firms also will have to reveal their concentrated exposure to key markets, he said.

For example, had the rule been in place this year, Bear Stearns would have had to discuss its vulnerability to the collapsing mortgage market.

International rules

Commercial banks already have to release this kind of data under the international standards by the Basel Committee on Banking Supervision, a 10-nation consortium of central bankers.

The Basel Committee is developing a new set of standards that would require similar disclosure from investment banks.

It's unclear whether better disclosure would have saved Bear Stearns.

Certainly, it would have given investors a clearer picture of what they were buying into.

Cox, of course, is on the defensive, facing questions from Congress and the investing public over the SEC's failure to head off Bear Stearns' demise.

Exposing time bombs

As the SEC stood on the sidelines, the Federal Reserve stepped in and brokered a fire sale deal to JPMorgan Chase, in part because it worried that Bear's failure would spark a cascade of financial institution failures that would reverberate through the short-term debt markets.

Cox's plan might not have prevented that, but it may have caused investors to question Bear's exposure to mortgage securities long before those holdings became fatal.

Who knows what other time bombs may be ticking on Wall Street's books?

What other financial risks have investment banks understated in the name of fast profits?

That's what Wall Street is worried about. When we turn on the lights, its party is over.

Sometimes, after analyzing such a sick system week after week, it’s a good idea to step back and think about what a healthy system would look like. Was there a fork in the road at some point in the past where we took a wrong turn?

The Gospel of Consumption
And the better future we left behind

Jeffrey Kaplan

Private cars were relatively scarce in 1919 and horse-drawn conveyances were still common. In residential districts, electric streetlights had not yet replaced many of the old gaslights. And within the home, electricity remained largely a luxury item for the wealthy.

Just ten years later things looked very different. Cars dominated the streets and most urban homes had electric lights, electric flat irons, and vacuum cleaners. In upper-middle-class houses, washing machines, refrigerators, toasters, curling irons, percolators, heating pads, and popcorn poppers were becoming commonplace. And although the first commercial radio station didn’t begin broadcasting until 1920, the American public, with an adult population of about 122 million people, bought 4,438,000 radios in the year 1929 alone.

But despite the apparent tidal wave of new consumer goods and what appeared to be a healthy appetite for their consumption among the well-to-do, industrialists were worried. They feared that the frugal habits maintained by most American families would be difficult to break. Perhaps even more threatening was the fact that the industrial capacity for turning out goods seemed to be increasing at a pace greater than people’s sense that they needed them.

It was this latter concern that led Charles Kettering, director of General Motors Research, to write a 1929 magazine article called “Keep the Consumer Dissatisfied.” He wasn’t suggesting that manufacturers produce shoddy products. Along with many of his corporate cohorts, he was defining a strategic shift for American industry—from fulfilling basic human needs to creating new ones.

In a 1927 interview with the magazine Nation’s Business, Secretary of Labor James J. Davis provided some numbers to illustrate a problem that the New York Times called “need saturation.” Davis noted that “the textile mills of this country can produce all the cloth needed in six months’ operation each year” and that 14 percent of the American shoe factories could produce a year’s supply of footwear. The magazine went on to suggest, “It may be that the world’s needs ultimately will be produced by three days’ work a week.”

Business leaders were less than enthusiastic about the prospect of a society no longer centered on the production of goods. For them, the new “labor-saving” machinery presented not a vision of liberation but a threat to their position at the center of power. John E. Edgerton, president of the National Association of Manufacturers, typified their response when he declared: “I am for everything that will make work happier but against everything that will further subordinate its importance. The emphasis should be put on work—more work and better work.” “Nothing,” he claimed, “breeds radicalism more than unhappiness unless it is leisure.”

By the late 1920s, America’s business and political elite had found a way to defuse the dual threat of stagnating economic growth and a radicalized working class in what one industrial consultant called “the gospel of consumption”—the notion that people could be convinced that however much they have, it isn’t enough. President Herbert Hoover’s 1929 Committee on Recent Economic Changes observed in glowing terms the results: “By advertising and other promotional devices . . . a measurable pull on production has been created which releases capital otherwise tied up.” They celebrated the conceptual breakthrough: “Economically we have a boundless field before us; that there are new wants which will make way endlessly for newer wants, as fast as they are satisfied.”

Today “work and more work” is the accepted way of doing things. If anything, improvements to the labor-saving machinery since the 1920s have intensified the trend. Machines can save labor, but only if they go idle when we possess enough of what they can produce. In other words, the machinery offers us an opportunity to work less, an opportunity that as a society we have chosen not to take. Instead, we have allowed the owners of those machines to define their purpose: not reduction of labor, but “higher productivity”—and with it the imperative to consume virtually everything that the machinery can possibly produce.

From the earliest days of the Age of Consumerism there were critics. One of the most influential was Arthur Dahlberg, whose 1932 book Jobs, Machines, and Capitalism was well known to policymakers and elected officials in Washington. Dahlberg declared that “failure to shorten the length of the working day . . . is the primary cause of our rationing of opportunity, our excess industrial plant, our enormous wastes of competition, our high pressure advertising, [and] our economic imperialism.” Since much of what industry produced was no longer aimed at satisfying human physical needs, a four-hour workday, he claimed, was necessary to prevent society from becoming disastrously materialistic. “By not shortening the working day when all the wood is in,” he suggested, the profit motive becomes “both the creator and satisfier of spiritual needs.” For when the profit motive can turn nowhere else, “it wraps our soap in pretty boxes and tries to convince us that that is solace to our souls.”

There was, for a time, a visionary alternative. In 1930 Kellogg Company, the world’s leading producer of ready-to-eat cereal, announced that all of its nearly fifteen hundred workers would move from an eight-hour to a six-hour workday. Company president Lewis Brown and owner W. K. Kellogg noted that if the company ran “four six-hour shifts . . . instead of three eight-hour shifts, this will give work and paychecks to the heads of three hundred more families in Battle Creek.”

This was welcome news to workers at a time when the country was rapidly descending into the Great Depression. But as Benjamin Hunnicutt explains in his book Kellogg’s Six-Hour Day, Brown and Kellogg wanted to do more than save jobs. They hoped to show that the “free exchange of goods, services, and labor in the free market would not have to mean mindless consumerism or eternal exploitation of people and natural resources.” Instead “workers would be liberated by increasingly higher wages and shorter hours for the final freedom promised by the Declaration of Independence—the pursuit of happiness.”

To be sure, Kellogg did not intend to stop making a profit. But the company leaders argued that men and women would work more efficiently on shorter shifts, and with more people employed, the overall purchasing power of the community would increase, thus allowing for more purchases of goods, including cereals.

A shorter workday did entail a cut in overall pay for workers. But Kellogg raised the hourly rate to partially offset the loss and provided for production bonuses to encourage people to work hard. The company eliminated time off for lunch, assuming that workers would rather work their shorter shift and leave as soon as possible. In a “personal letter” to employees, Brown pointed to the “mental income” of “the enjoyment of the surroundings of your home, the place you work, your neighbors, the other pleasures you have [that are] harder to translate into dollars and cents.” Greater leisure, he hoped, would lead to “higher standards in school and civic . . . life” that would benefit the company by allowing it to “draw its workers from a community where good homes predominate.”

It was an attractive vision, and it worked. Not only did Kellogg prosper, but journalists from magazines such as Forbes and BusinessWeek reported that the great majority of company employees embraced the shorter workday. One reporter described “a lot of gardening and community beautification, athletics and hobbies . . . libraries well patronized and the mental background of these fortunate workers . . . becoming richer.”

A U.S. Department of Labor survey taken at the time, as well as interviews Hunnicutt conducted with former workers, confirm this picture. The government interviewers noted that “little dissatisfaction with lower earnings resulting from the decrease in hours was expressed, although in the majority of cases very real decreases had resulted.” One man spoke of “more time at home with the family.” Another remembered: “I could go home and have time to work in my garden.” A woman noted that the six-hour shift allowed her husband to “be with 4 boys at ages it was important.”

Those extra hours away from work also enabled some people to accomplish things that they might never have been able to do otherwise. Hunnicutt describes how at the end of her interview an eighty-year-old woman began talking about ping-pong. “We’d get together. We had a ping-pong table and all my relatives would come for dinner and things and we’d all play ping-pong by the hour.” Eventually she went on to win the state championship.

Many women used the extra time for housework. But even then, they often chose work that drew in the entire family, such as canning. One recalled how canning food at home became “a family project” that “we all enjoyed,” including her sons, who “opened up to talk freely.” As Hunnicutt puts it, canning became the “medium for something more important than preserving food. Stories, jokes, teasing, quarreling, practical instruction, songs, griefs, and problems were shared. The modern discipline of alienated work was left behind for an older . . . more convivial kind of working together.”

This was the stuff of a human ecology in which thousands of small, almost invisible, interactions between family members, friends, and neighbors create an intricate structure that supports social life in much the same way as topsoil supports our biological existence. When we allow either one to become impoverished, whether out of greed or intemperance, we put our long-term survival at risk.

Our modern predicament is a case in point. By 2005 per capita household spending (in inflation-adjusted dollars) was twelve times what it had been in 1929, while per capita spending for durable goods—the big stuff such as cars and appliances—was thirty-two times higher. Meanwhile, by 2000 the average married couple with children was working almost five hundred hours a year more than in 1979. And according to reports by the Federal Reserve Bank in 2004 and 2005, over 40 percent of American families spend more than they earn. The average household carries $18,654 in debt, not including home-mortgage debt, and the ratio of household debt to income is at record levels, having roughly doubled over the last two decades. We are quite literally working ourselves into a frenzy just so we can consume all that our machines can produce.

Yet we could work and spend a lot less and still live quite comfortably. By 1991 the amount of goods and services produced for each hour of labor was double what it had been in 1948. By 2006 that figure had risen another 30 percent. In other words, if as a society we made a collective decision to get by on the amount we produced and consumed seventeen years ago, we could cut back from the standard forty-hour week to 5.3 hours per day—or 2.7 hours if we were willing to return to the 1948 level. We were already the richest country on the planet in 1948 and most of the world has not yet caught up to where we were then.

Rather than realizing the enriched social life that Kellogg’s vision offered us, we have impoverished our human communities with a form of materialism that leaves us in relative isolation from family, friends, and neighbors. We simply don’t have time for them. Unlike our great-grandparents who passed the time, we spend it. An outside observer might conclude that we are in the grip of some strange curse, like a modern-day King Midas whose touch turns everything into a product built around a microchip.

Of course not everybody has been able to take part in the buying spree on equal terms. Millions of Americans work long hours at poverty wages while many others can find no work at all. However, as advertisers well know, poverty does not render one immune to the gospel of consumption.

Meanwhile, the influence of the gospel has spread far beyond the land of its origin. Most of the clothes, video players, furniture, toys, and other goods Americans buy today are made in distant countries, often by underpaid people working in sweatshop conditions. The raw material for many of those products comes from clearcutting or strip mining or other disastrous means of extraction. Here at home, business activity is centered on designing those products, financing their manufacture, marketing them—and counting the profits.

Kellog’s vision, despite its popularity with his employees, had little support among his fellow business leaders. But Dahlberg’s book had a major influence on Senator (and future Supreme Court justice) Hugo Black who, in 1933, introduced legislation requiring a thirty-hour workweek. Although Roosevelt at first appeared to support Black’s bill, he soon sided with the majority of businessmen who opposed it. Instead, Roosevelt went on to launch a series of policy initiatives that led to the forty-hour standard that we more or less observe today.

By the time the Black bill came before Congress, the prophets of the gospel of consumption had been developing their tactics and techniques for at least a decade. However, as the Great Depression deepened, the public mood was uncertain, at best, about the proper role of the large corporation. Labor unions were gaining in both public support and legal legitimacy, and the Roosevelt administration, under its New Deal program, was implementing government regulation of industry on an unprecedented scale. Many corporate leaders saw the New Deal as a serious threat. James A. Emery, general counsel for the National Association of Manufacturers (NAM), issued a “call to arms” against the “shackles of irrational regulation” and the “back-breaking burdens of taxation,” characterizing the New Deal doctrines as “alien invaders of our national thought.”

In response, the industrial elite represented by NAM, including General Motors, the big steel companies, General Foods, DuPont, and others, decided to create their own propaganda. An internal NAM memo called for “re-selling all of the individual Joe Doakes on the advantages and benefits he enjoys under a competitive economy.” NAM launched a massive public relations campaign it called the “American Way.” As the minutes of a NAM meeting described it, the purpose of the campaign was to link “free enterprise in the public consciousness with free speech, free press and free religion as integral parts of democracy.”

Consumption was not only the linchpin of the campaign; it was also recast in political terms. A campaign booklet put out by the J. Walter Thompson advertising agency told readers that under “private capitalism, the Consumer, the Citizen is boss,” and “he doesn’t have to wait for election day to vote or for the Court to convene before handing down his verdict. The consumer ‘votes’ each time he buys one article and rejects another.”

According to Edward Bernays, one of the founders of the field of public relations and a principal architect of the American Way, the choices available in the polling booth are akin to those at the department store; both should consist of a limited set of offerings that are carefully determined by what Bernays called an “invisible government” of public-relations experts and advertisers working on behalf of business leaders. Bernays claimed that in a “democratic society” we are and should be “governed, our minds . . . molded, our tastes formed, our ideas suggested, largely by men we have never heard of.”

NAM formed a national network of groups to ensure that the booklet from J. Walter Thompson and similar material appeared in libraries and school curricula across the country. The campaign also placed favorable articles in newspapers (often citing “independent” scholars who were paid secretly) and created popular magazines and film shorts directed to children and adults with such titles as “Building Better Americans,” “The Business of America’s People Is Selling,” and “America Marching On.”

Perhaps the biggest public relations success for the American Way campaign was the 1939 New York World’s Fair. The fair’s director of public relations called it “the greatest public relations program in industrial history,” one that would battle what he called the “New Deal propaganda.” The fair’s motto was “Building the World of Tomorrow,” and it was indeed a forum in which American corporations literally modeled the future they were determined to create. The most famous of the exhibits was General Motors’ 35,000-square-foot Futurama, where visitors toured Democracity, a metropolis of multilane highways that took its citizens from their countryside homes to their jobs in the skyscraper-packed central city.

For all of its intensity and spectacle, the campaign for the American Way did not create immediate, widespread, enthusiastic support for American corporations or the corporate vision of the future. But it did lay the ideological groundwork for changes that came after the Second World War, changes that established what is still commonly called our post-war society.

The war had put people back to work in numbers that the New Deal had never approached, and there was considerable fear that unemployment would return when the war ended. Kellogg workers had been working forty-eight-hour weeks during the war and the majority of them were ready to return to a six-hour day and thirty-hour week. Most of them were able to do so, for a while. But W. K. Kellogg and Lewis Brown had turned the company over to new managers in 1937.

The new managers saw only costs and no benefits to the six-hour day, and almost immediately after the end of the war they began a campaign to undermine shorter hours. Management offered workers a tempting set of financial incentives if they would accept an eight-hour day. Yet in a vote taken in 1946, 77 percent of the men and 87 percent of the women wanted to return to a thirty-hour week rather than a forty-hour one. In making that choice, they also chose a fairly dramatic drop in earnings from artificially high wartime levels.

The company responded with a strategy of attrition, offering special deals on a department-by-department basis where eight hours had pockets of support, typically among highly skilled male workers. In the culture of a post-war, post-Depression U.S., that strategy was largely successful. But not everyone went along. Within Kellogg there was a substantial, albeit slowly dwindling group of people Hunnicutt calls the “mavericks,” who resisted longer work hours. They clustered in a few departments that had managed to preserve the six-hour day until the company eliminated it once and for all in 1985.

The mavericks rejected the claims made by the company, the union, and many of their co-workers that the extra money they could earn on an eight-hour shift was worth it. Despite the enormous difference in societal wealth between the 1930s and the 1980s, the language the mavericks used to explain their preference for a six-hour workday was almost identical to that used by Kellogg workers fifty years earlier. One woman, worried about the long hours worked by her son, said, “He has no time to live, to visit and spend time with his family, and to do the other things he really loves to do.”

Several people commented on the link between longer work hours and consumerism. One man said, “I was getting along real good, so there was no use in me working any more time than I had to.” He added, “Everybody thought they were going to get rich when they got that eight-hour deal and it really didn’t make a big difference. . . . Some went out and bought automobiles right quick and they didn’t gain much on that because the car took the extra money they had.”

The mavericks, well aware that longer work hours meant fewer jobs, called those who wanted eight-hour shifts plus overtime “work hogs.” “Kellogg’s was laying off people,” one woman commented, “while some of the men were working really fantastic amounts of overtime—that’s just not fair.” Another quoted the historian Arnold Toynbee, who said, “We will either share the work, or take care of people who don’t have work.”

People in the depression-wracked 1930s, with what seems to us today to be a very low level of material goods, readily chose fewer work hours for the same reasons as some of their children and grandchildren did in the 1980s: to have more time for themselves and their families. We could, as a society, make a similar choice today.

But we cannot do it as individuals. The mavericks at Kellogg held out against company and social pressure for years, but in the end the marketplace didn’t offer them a choice to work less and consume less. The reason is simple: that choice is at odds with the foundations of the marketplace itself—at least as it is currently constructed. The men and women who masterminded the creation of the consumerist society understood that theirs was a political undertaking, and it will take a powerful political movement to change course today.

Bernays’s version of a “democratic society,” in which political decisions are marketed to consumers, has many modern proponents. Consider a comment by Andrew Card, George W. Bush’s former chief of staff. When asked why the administration waited several months before making its case for war against Iraq, Card replied, “You don’t roll out a new product in August.” And in 2004, one of the leading legal theorists in the United States, federal judge Richard Posner, declared that “representative democracy . . . involves a division between rulers and ruled,” with the former being “a governing class,” and the rest of us exercising a form of “consumer sovereignty” in the political sphere with “the power not to buy a particular product, a power to choose though not to create.”

Sometimes an even more blatant antidemocratic stance appears in the working papers of elite think tanks. One such example is the prominent Harvard political scientist Samuel Huntington’s 1975 contribution to a Trilateral Commission report on “The Crisis of Democracy.” Huntington warns against an “excess of democracy,” declaring that “a democratic political system usually requires some measure of apathy and noninvolvement on the part of some individuals and groups.” Huntington notes that “marginal social groups, as in the case of the blacks, are now becoming full participants in the political system” and thus present the “danger of overloading the political system” and undermining its authority.

According to this elite view, the people are too unstable and ignorant for self-rule. “Commoners,” who are viewed as factors of production at work and as consumers at home, must adhere to their proper roles in order to maintain social stability. Posner, for example, disparaged a proposal for a national day of deliberation as “a small but not trivial reduction in the amount of productive work.” Thus he appears to be an ideological descendant of the business leader who warned that relaxing the imperative for “more work and better work” breeds “radicalism.”

As far back as 1835, Boston workingmen striking for shorter hours declared that they needed time away from work to be good citizens: “We have rights, and we have duties to perform as American citizens and members of society.” As those workers well understood, any meaningful democracy requires citizens who are empowered to create and re-create their government, rather than a mass of marginalized voters who merely choose from what is offered by an “invisible” government. Citizenship requires a commitment of time and attention, a commitment people cannot make if they are lost to themselves in an ever-accelerating cycle of work and consumption.

We can break that cycle by turning off our machines when they have created enough of what we need. Doing so will give us an opportunity to re-create the kind of healthy communities that were beginning to emerge with Kellogg’s six-hour day, communities in which human welfare is the overriding concern rather than subservience to machines and those who own them. We can create a society where people have time to play together as well as work together, time to act politically in their common interests, and time even to argue over what those common interests might be. That fertile mix of human relationships is necessary for healthy human societies, which in turn are necessary for sustaining a healthy planet.

If we want to save the Earth, we must also save ourselves from ourselves. We can start by sharing the work and the wealth. We may just find that there is plenty of both to go around.

If we are given only “the power to choose and not to create” as Richard Posner put it, and or choices are narrow and predetermined, then the only way out is to engage in true creativity and truly free choice. Just turning off our machines is not enough, we need to no longer be machines. During the First World War, G. I. Gurdjieff put in very stark terms what the consequences would be if we didn’t stop being machines:

“People are machines. Machines have to be blind and unconscious, they cannot be otherwise, and all their actions have to correspond to their nature. Everything happens. No one does anything. ‘Progress’ and ‘civilization,’ in the real meaning of these words, can appear only as a result of conscious efforts. They cannot appear as a result of unconscious mechanical actions. And what conscious effort can there be in machines? And if one machine is unconscious, then a hundred machines are unconscious, and so are a thousand machines, or a hundred thousand, or a million. And the unconscious activity of a million machines must necessarily result in destruction and extermination. It is precisely in unconscious involuntary manifestations that all evil lies. You do not yet understand and cannot imagine all the results of this evil. But the time will come when you will understand.” (from In Search of the Miraculous, by P.D. Ouspensky)