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Essays & Articles |
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January 9, 2008 by Gary North, Ph.D.
Every few weeks, I give a lecture to a group of about 15 men and women who are taking a month-long course on how to get and keep a job. These are inner city adults. Some of them have never had a full-time job. I use a teaching tool: a print-out of a song. It is not only a good song musically, it is a great song in terms of its message. It tells the story of a mythical railroad porter named Muley Sykes. Muley was one of those rare individuals who knew what he wanted to do with his life from an early age. He saw a train, and he wanted to be a railroad man. I tell the audience that "railroad porter" was the first lifetime salaried profession open to the average black man. It did not require advanced education, unlike medicine and the law. The porter's union was established by A. Philip Randolph in 1925, who ran it until 1968. The rule was: "No whites need apply." That would not be legal these days. I have posted the lyrics here. I tell students that their occupation will put food on the table, but their calling is the most important thing they can do in which they are most difficult to replace. Muley's occupation was his calling. This is exceedingly rare. OH, TO BE 20 AGAIN! NOT! This is getting tough for young adults today. There is a new sociological category for the American age group 20-30. David Brooks, author of the insightful and hilarious book, Bobos in Paradise, categorizes this group as "odyssey."
I am in the fifth group: active retirement. I have planned for this ever since adolescence. I had a head start on my peers. My odyssey years were no odyssey. I was in graduate school. I had two false starts in one 18-month period: 1963-65. I recovered rapidly. But getting through took longer than I had planned. I was fortunate. I wrote my way through my doctoral program. I gained a crucial skill that has proven to be the central factor in my career. My career has had little to do with my formal training and everything to do with my means of paying my way through. Brooks continues:
The key here is delay. It is some version of "What do you want to be when you grow up?" Delay costs these people dearly, because they lose the crucial years of capital formation. They don't get compound growth on their side early.
I am thankful that I did not have to go through the Odyssey years. I don't like living without knowing what I will be doing the next day. I always know what I will be doing. I will be sitting at a keyboard -- a 1984 keyboard. THE GREAT TRADE-OFF What we do with the limited time available to us is important. There is a trade-off with time that is the most severe of all trade-offs, because time, once spent, cannot be re-gained. So, our early decisions lock us in to lifestyle patterns that make us ever more resistant to change. The costs of readjusting our allocation of time keep rising. Habits and debts also make change difficult. Initially in life, men want independence, and this takes money. Then, when they get a lot of money -- and only about 20% do -- they are tempted to reconsider their lives. They decide that significance is more important to them than additional money. But how can they get significance? All they know how to do is make money. Women face a parallel decision, but much earlier. Married women face career decisions that married women did not face prior to World War II. They want to know how to balance a paycheck career and a family career. They see that their careers as mothers have more significance then their career as wage earners. Men tend not to see this trade-off until the kids are grown and gone. What makes readjustment possible for men is mid-life crisis, when the cost of more money in terms of lost time rises dramatically. Men's priorities change as a result of the shifting money-to-time ratio. Some men respond positively by finding new areas of productivity. Others respond negatively by finding new areas of expenditure. For women, the empty-nest syndrome is inescapable, so their question is how to respond. In the past, grandmother status replaced motherhood status, but geographical mobility has changed this. Children scatter, taking grandchildren with them. All of this affects career decisions made decades earlier. Then there is wage competition from Asians. The American work force is facing pressures from abroad that did not exist 40 years ago. Tariffs are lower, transportation costs are lower, capital transfer costs are lower, and communications costs are vastly lower. This means more foreign trade and therefore more foreign competition. As consumers, Americans love this, as the country's $750 billion a year balance of payments deficit indicates. But, as producers, American workers are unhappy about these developments. So, we are schizophrenic. Congress recognizes this and tries to respond. On the whole, however, the U.S. government moves toward more open borders and lower tariffs. This means more competition for American laborers and manufacturers. THE TICKING CLOCK Ben Franklin, in Poor Richard's Almanack, put it this way: "A child thinks that twenty dollars or twenty years can never be spent." Actually, he said twenty pounds, which was a lot more money in 1755. But you get the idea. Money gets spent, and so does time. It is the relentless ticking of the clock that should focus our attention. Franklin's contemporary, Samuel Johnson, quipped that there is nothing like a sentence to be hanged in two weeks to focus a man's attention. But the end is just as real in 40 years as two weeks. The more future-oriented you are, the more attention you will pay to the ticking clock. Ludwig von Mises called this time-preference. Future-oriented people have low time preference. They discount the future at a lower rate of interest. This applies to future benefits, but it also applies to future costs. The present-oriented person is like the grasshopper in the story of the grasshopper and the ants. He fiddles all summer and starves in winter. In the Disney cartoon, he sings, "The world owes me a living." It doesn't. Edward Banfield's book, The Unheavenly City (1970), got him in a lot of trouble on campus at Harvard because he wrote that inner-city men are present-oriented. He defined lower class as present-oriented. This was politically incorrect in 1970 . . . and probably today. His point was that inner-city men, especially if they are single, act for the moment. They want action. They don't count the long-term cost of their actions. Mises would have said that such people discount the future with a very high rate of interest. The distant future is worth almost nothing to them. So, it has little effect on their present actions. When men enter the labor force at age 18 or 21 or even 30, they are so focused on earning a living that they do not look to the future. They do not see that there is usually a trade-off that begins with that first paycheck: security vs. significance. The more children, the greater the weight a man places on security. He has got to stay ahead of the monthly bills. That race, which is a race against time, is no longer than 31 days. It is a sprint. But life is more a marathon than a sprint. This, young men tend to forget. Presumably, you are not a young man. You sense that your clock's spring is running down. Ask not for whom the clock ticks. It ticks for you. You can scream and you can yell, but it does no good to get ticked off. Let me tell you what I am personally going through -- not because you get excited hearing about me, but because you may be facing a similar set of problems. In February, 2006, I became a ward of the state. I lost my private medical insurance because I became eligible for Medicare. If I had not signed up for that gigantic welfare program, I would have been uncovered. For most medical expenses, I don't care. For catastrophic coverage, I do care. I go to a physician maybe once every three years. But what if I have a stroke? What really bothers me is the inexorable fate of the Medicare program. It is going to bankrupt the government, which means that it will force the Federal Reserve System to cover up this bankruptcy with fiat money. That threatens me, healthy or not. It threatens the future of this country. Similar programs threaten every Western industrial nation. You know all this. I don't need to run the numbers by you again. Someone will get stiffed: old people, workers, or people who hold dollar-denominated assets other than inflation-resisting commodities. So, I am looking to generate income that will hedge against the FED and also against a political revolt by taxpaying workers who finally figure out that the political system is stacked against them. SECURITY VS. SIGNIFICANCE To enter a career that offers growth in income, inflation hedging, and significance is rare. I have been looking for such a niche market all of my life. I have yet to enter it. I am still spending a lot of my time earning a living by selling products that are highly time-specific. Such products do not have much potential for influencing the world over the long haul. That doesn't mean that what I write isn't significant for someone. But it's like repairing a vehicle. This can help someone get from point A to point B. This journey may be quite significant, such as for an ambulance. But the repairman is part of a complex process in the division of labor. His work is readily replaceable. What he does in any specific case usually receives little credit by the general public for making the world go around. Few people pay any attention. While all moral labor possesses significance and value, not much labor possesses visible, long-lasting value. At some point, some people start looking for visible, long-lasting value. Maybe most people don't. This is because they recognize early that they are highly replaceable and therefore insignificant. They never take up the quest for significance because they see no future to it. They have no self-confidence. I think this is a major mistake. People equate significance with fame. They think that significance is achieved only when lots of people impute importance to a particular piece of work or lifetime of work. But fame can be negative. It can be imputed for reasons most of us would prefer to avoid. Hitler is famous. Who needs this? Every once in a while, a TV news show or a newspaper features a story on some obscure person who labored long and hard in the shadows, but who positively influenced lots of people. Aged or recently deceased teachers are candidates for such stories. Their influence came from their having positively shaped the lives of students in their classrooms. These students may not be famous, but they recall with favor the efforts of some dedicated person who made their lives better for a school term. Significance therefore comes from the same source as economic value does: from imputation. Someone imputes value to a person's output. It therefore has value. Its value has more to do with the good judgment of the imputer than it does from the producer's work. Put a different way, the labor theory of value is incorrect. It's not the value of what goes into a product or service that produces value. It's the delight of the buyer, who decides that owning it or using it is worth more than hanging onto money. There was a movie years ago called Doc Hollywood. It was a piece of fluff, but it did focus clearly on the question of money vs. significance. Michael J. Fox plays a hot-shot young physician ready to start his career. He plans to become a Hollywood plastic surgeon, making a great living by making women with money look better. On his way to Hollywood, he gets stuck in some rural town in South Carolina. Why his route to California took him through South Carolina was never made clear. Arkansas, maybe. Anyway, the town's only physician is aging. He will retire soon. The town has not much money, but it has a real need. His choice: Go for the money or go for the significance. The movie centers on this theme. CONCLUSION What about you? Do you regard your occupation as significant? Does anyone else? I tell those inner city adults that most of us are not like Muley Sykes. We don't get paid for our callings. We get paid for services rendered to consumers. Our callings are self-funded most of the time. If you can find a career that is also your calling, you have attained something rare. Be thankful.
Dr. Gary North earned a Ph.D. in history and is one of America's keenest economic analysts and commentators. He supports the Austrian school of economics and is a previous assistant to libertarian congressman Dr. Ron Paul. Visit his website at http://garynorth.com. To subscribe to Gary North's Reality Check go to http://www.dailyreckoning.com/sub/GetReality.cfm. If you enjoyed this essay and would like to read more of Gary's writing please visit his website at http://www.garynorth.com or http://www.freebooks.com.
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