I’m glad you mentioned the unexpected effects of the entrance of women into the workforce. I also read Warren’s book years ago and was disappointed she turned into a standard hysterical liberal in the Senate.
My impression is that firms were a lot leaner before the 1970s. I visualize the economy as a factory where women showed up for work and were naturally given office jobs. Eventually the factory moved to China but the office jobs stayed.
Like you, I don’t think any of this was intentional. However, the entrance of a lot of pink collar employees enabled a lot of government mandates and bureaucracy that otherwise would have been impossible. Government is happy as this just raises GDP and tax revenue even through wealth isn’t actually created.
A shrinking workforce as the baby boomers retire would also solve some of this, if we don’t let businesses swamp the workforce with third world immigrants.
I really enjoyed this. Have you ever read Robert Jackall’s book Moral Mazes: The World of Corporate Managers? I’d love a similar review of that book. I think parts of it dovetail into this since Jackall talks so much about the strange ethical system created by corporate management.
I have that on my bookshelf but never read it. There’s a strong argument that limited liability structures are fundamentally immoral and lead to bad incentives for everyone involved.
The BS job/work phenomenon is real, and yes, education, especially higher education, is rife with such jobs/work. Reading this article reminded me of an element in the Gervais Principle, namely the buffering of executives with "know-nothings", which seems to be an apt designation and growing cohort. I interact with such individuals every day and they usually bring nothing more than a clumsy stream of consciousness to any discussion. No skill, no analytic insight, no framework for progress. However, the element that frustrates me the most is the conspiracy of silence. I understand why this phenomenon occurs, even why it persists, but as Graeber notes in the Strike Magazine article, the "moral and spiritual damage that comes from this situation is profound. It is a scar across our collective soul." This "cost" has a profound ripple effect on the organization and beyond. Indeed, it is seemingly part of the explanation why so many people find so little value in their work and why that weighs upon their psyches so prominently.
This is especially true in Education, where the number of admin jobs now equals the number of classroom teachers. It's why an independent school can be less expensive with higher quality output than a government school in most cases. I thank you for making clear why most of the businesses I invest in through the stock market make such small returns. I wish there was a stronger focus on dividends rather than stock price. Increasing the wages of line workers is a better investment than stock buybacks. I love your solution of hiring from within. Exactly! This lines up very well with the business books analysis on "built to last" where the longest living most productive companies always hired from within and their leaders where able to lead significant changes in direction.
Once you start noticing the ideology of managerialism - which I'm distinguishing from the task of mgmt - you see it everywhere. For example, in the church, most church officers are corporate middle managers who hand-down government-aligned decision summaries then hold "listening sessions" where feedback goes into a black hole. In tech, managers will tell you R&D is a "cost center" which means engineering salaries are a cost to be minimized like IT yet there are tons of "directors of this" and "managers of that" running around having meetings with customers and internal stakeholders that always result in the need for some R&D guy to do more with less like the horse in Animal Farm. The current order seems to force you to choose between being the horse or one of the pigs.
The way out of managerial capitalism is unclear - we're not in an era where makers as sole proprietors can really compete in complex markets, are we? For the blue-collar guys, we've offshored most of the light mfg onramps to Asia (MBAs did this in the '90s). The trades can't absorb all of these guys, can they? What about in the white collar world - do you try to become some sort of 1099 hired gun? That seems like it might work for software, but what about the other engineering disciplines?
I don't have a ton of knowledge on this given I haven't worked a corporate job for two decades. I'd assume the degree of managerialism differs significantly among companies and industries. There are very large private companies like Koch and Cargill, or ones rationally managed by a single quasi-owner, like most of Berkshire's subsidiaries.
My friends in the petroleum industry seem pretty happy; my guess is that commodity businesses must value engineering work more, since they differentiate on cost and return on investment, than businesses relying on branding. The technical performance of Exxon's refinery means more to Exxon's bottom line than the performance of Frito-Lay's line making potato chips.
Funnily enough, I was discussing almost this very topic in a GC the day before you published. Someone (a CPA) remarked AI was going to replace us all (white collar workers). I responded that seemed about right as 2/3rds of white collar work was a scam:
"(7) Sort of related to the principal-agent problem and the requirement for high-agency: "Everything is a Scam". Here are some examples I followed over the past decade: modern art, war (2,3), corporate governance (2,3,4,5), health care and big pharma, government (2), and fractional reserve banking. Having to go to college to get a job instead of taking an IQ test and getting applied vocational training is a Scam. That's 2/3 of GDP right there!"
I added, there's some subtle irony here. Luddites attacked the industrial revolution because it was making ~2/3rds (I dunno... some big number) of Europe's GDP (jobs) technologically obsolete. However, from this far away the jobs were at least real. Those laborers were producing goods and services. Today's scam economy employment does not produce anything of value-added. It's middle class jobs program.
Then thinking about it a bit longer: it does create demand though. Demand for goods and services that the non-scam economy laborers provide.
So while we, the few and the proud value producers -- blue collar guys, engineers, and so forth, lament not getting the "fair share" of the value we create, in aggregate, we do need the scam economy to induce demand. Further, from the Elite's perspective playing Civ IRL, they don't care about the distinction of scam vs. productive economy. They just look at: is production meeting demand, and it largely is, so they DGAF.
I liken it to the de-agriculturalization wave. The one farmer that stayed on the farm is producing enough food for the 99 others that left. Maybe he's salty about it, but from the Elite's (and in this case everyone else's) perspective, that's a Win.
What was lamentable and now progressed to outrageous, is we've collectively made consumption our false god. We didn't get anything of substance by expanding the scam economy to soak up women into the labor force (lamentable). And now we're doubling down on stupid by bringing in millions of foreigners (outrageous).
These foreigners have nothing to offer the West (it's not just a USA problem) except consumption demand, which (like farmers did before) its reasonably to think the productive 20% will continue to fill.
But you can see from the Elite's myopic perspective they think this is a Win. Foreigners are head count to them. They feel as good about it as a semi-worthless middle manager seeing his direct reports go up. They are insulated from the crime and, on-whole, benefit from the inflation.
So the white pill is whether you're in the value-add economy or scam-economy, it's reasonable to think our needs will continue to be met. Maybe slack off a little now and then. Go on sabbaticals and take the long view.
The black pill is they've irreversibly wrecked the country (whichever western country you choose) just like they wrecked the Upper Midwest by the Great Migration. In which case, prepare yourself to gentrify the global south. It's not too late and it's not any worse than what our forefathers contended with when they left their homes as explorers and settlers.
I'm not as blackpilled as you, but I agree that some form of Latin America is our future, which isn't so bad, really, for the wealthy. However, I'll say that the political degrees of freedom is bigger than commonly imagined. With Governor DeSantis speaking of "denaturalization," solutions are available to reestablish patrimonial hegemony for the historic American nation that are at least as constitutional as anything FDR did.
I'll hold off on commenting too much, but I also agree that perhaps the ideal of wanting to be left alone with a static culture is not a realistic goal. Only a culture confident enough to seek its own expansion fulfills human spiritual needs. As Beattie put it, "don't tread on me" is weak tea compared to "silence is violence" because the latter, as Frost put it, takes its own side in the argument. Classical liberalism appears to be a uniquely autistic Northern European innovation, and then only stable for very short periods of time.
I’m glad you mentioned the unexpected effects of the entrance of women into the workforce. I also read Warren’s book years ago and was disappointed she turned into a standard hysterical liberal in the Senate.
My impression is that firms were a lot leaner before the 1970s. I visualize the economy as a factory where women showed up for work and were naturally given office jobs. Eventually the factory moved to China but the office jobs stayed.
Like you, I don’t think any of this was intentional. However, the entrance of a lot of pink collar employees enabled a lot of government mandates and bureaucracy that otherwise would have been impossible. Government is happy as this just raises GDP and tax revenue even through wealth isn’t actually created.
A shrinking workforce as the baby boomers retire would also solve some of this, if we don’t let businesses swamp the workforce with third world immigrants.
I really enjoyed this. Have you ever read Robert Jackall’s book Moral Mazes: The World of Corporate Managers? I’d love a similar review of that book. I think parts of it dovetail into this since Jackall talks so much about the strange ethical system created by corporate management.
I have that on my bookshelf but never read it. There’s a strong argument that limited liability structures are fundamentally immoral and lead to bad incentives for everyone involved.
The BS job/work phenomenon is real, and yes, education, especially higher education, is rife with such jobs/work. Reading this article reminded me of an element in the Gervais Principle, namely the buffering of executives with "know-nothings", which seems to be an apt designation and growing cohort. I interact with such individuals every day and they usually bring nothing more than a clumsy stream of consciousness to any discussion. No skill, no analytic insight, no framework for progress. However, the element that frustrates me the most is the conspiracy of silence. I understand why this phenomenon occurs, even why it persists, but as Graeber notes in the Strike Magazine article, the "moral and spiritual damage that comes from this situation is profound. It is a scar across our collective soul." This "cost" has a profound ripple effect on the organization and beyond. Indeed, it is seemingly part of the explanation why so many people find so little value in their work and why that weighs upon their psyches so prominently.
This is especially true in Education, where the number of admin jobs now equals the number of classroom teachers. It's why an independent school can be less expensive with higher quality output than a government school in most cases. I thank you for making clear why most of the businesses I invest in through the stock market make such small returns. I wish there was a stronger focus on dividends rather than stock price. Increasing the wages of line workers is a better investment than stock buybacks. I love your solution of hiring from within. Exactly! This lines up very well with the business books analysis on "built to last" where the longest living most productive companies always hired from within and their leaders where able to lead significant changes in direction.
Excellent poast.
Once you start noticing the ideology of managerialism - which I'm distinguishing from the task of mgmt - you see it everywhere. For example, in the church, most church officers are corporate middle managers who hand-down government-aligned decision summaries then hold "listening sessions" where feedback goes into a black hole. In tech, managers will tell you R&D is a "cost center" which means engineering salaries are a cost to be minimized like IT yet there are tons of "directors of this" and "managers of that" running around having meetings with customers and internal stakeholders that always result in the need for some R&D guy to do more with less like the horse in Animal Farm. The current order seems to force you to choose between being the horse or one of the pigs.
The way out of managerial capitalism is unclear - we're not in an era where makers as sole proprietors can really compete in complex markets, are we? For the blue-collar guys, we've offshored most of the light mfg onramps to Asia (MBAs did this in the '90s). The trades can't absorb all of these guys, can they? What about in the white collar world - do you try to become some sort of 1099 hired gun? That seems like it might work for software, but what about the other engineering disciplines?
I don't have a ton of knowledge on this given I haven't worked a corporate job for two decades. I'd assume the degree of managerialism differs significantly among companies and industries. There are very large private companies like Koch and Cargill, or ones rationally managed by a single quasi-owner, like most of Berkshire's subsidiaries.
My friends in the petroleum industry seem pretty happy; my guess is that commodity businesses must value engineering work more, since they differentiate on cost and return on investment, than businesses relying on branding. The technical performance of Exxon's refinery means more to Exxon's bottom line than the performance of Frito-Lay's line making potato chips.
Another banger stack post, Tom. Awesome.
Funnily enough, I was discussing almost this very topic in a GC the day before you published. Someone (a CPA) remarked AI was going to replace us all (white collar workers). I responded that seemed about right as 2/3rds of white collar work was a scam:
"(7) Sort of related to the principal-agent problem and the requirement for high-agency: "Everything is a Scam". Here are some examples I followed over the past decade: modern art, war (2,3), corporate governance (2,3,4,5), health care and big pharma, government (2), and fractional reserve banking. Having to go to college to get a job instead of taking an IQ test and getting applied vocational training is a Scam. That's 2/3 of GDP right there!"
https://www.creditbubblestocks.com/2020/12/what-intellectual-progress-did-i-make.html
I added, there's some subtle irony here. Luddites attacked the industrial revolution because it was making ~2/3rds (I dunno... some big number) of Europe's GDP (jobs) technologically obsolete. However, from this far away the jobs were at least real. Those laborers were producing goods and services. Today's scam economy employment does not produce anything of value-added. It's middle class jobs program.
Then thinking about it a bit longer: it does create demand though. Demand for goods and services that the non-scam economy laborers provide.
So while we, the few and the proud value producers -- blue collar guys, engineers, and so forth, lament not getting the "fair share" of the value we create, in aggregate, we do need the scam economy to induce demand. Further, from the Elite's perspective playing Civ IRL, they don't care about the distinction of scam vs. productive economy. They just look at: is production meeting demand, and it largely is, so they DGAF.
I liken it to the de-agriculturalization wave. The one farmer that stayed on the farm is producing enough food for the 99 others that left. Maybe he's salty about it, but from the Elite's (and in this case everyone else's) perspective, that's a Win.
What was lamentable and now progressed to outrageous, is we've collectively made consumption our false god. We didn't get anything of substance by expanding the scam economy to soak up women into the labor force (lamentable). And now we're doubling down on stupid by bringing in millions of foreigners (outrageous).
These foreigners have nothing to offer the West (it's not just a USA problem) except consumption demand, which (like farmers did before) its reasonably to think the productive 20% will continue to fill.
But you can see from the Elite's myopic perspective they think this is a Win. Foreigners are head count to them. They feel as good about it as a semi-worthless middle manager seeing his direct reports go up. They are insulated from the crime and, on-whole, benefit from the inflation.
So the white pill is whether you're in the value-add economy or scam-economy, it's reasonable to think our needs will continue to be met. Maybe slack off a little now and then. Go on sabbaticals and take the long view.
The black pill is they've irreversibly wrecked the country (whichever western country you choose) just like they wrecked the Upper Midwest by the Great Migration. In which case, prepare yourself to gentrify the global south. It's not too late and it's not any worse than what our forefathers contended with when they left their homes as explorers and settlers.
I'm not as blackpilled as you, but I agree that some form of Latin America is our future, which isn't so bad, really, for the wealthy. However, I'll say that the political degrees of freedom is bigger than commonly imagined. With Governor DeSantis speaking of "denaturalization," solutions are available to reestablish patrimonial hegemony for the historic American nation that are at least as constitutional as anything FDR did.
I'll hold off on commenting too much, but I also agree that perhaps the ideal of wanting to be left alone with a static culture is not a realistic goal. Only a culture confident enough to seek its own expansion fulfills human spiritual needs. As Beattie put it, "don't tread on me" is weak tea compared to "silence is violence" because the latter, as Frost put it, takes its own side in the argument. Classical liberalism appears to be a uniquely autistic Northern European innovation, and then only stable for very short periods of time.
I've just ordered your book "the boring diet" as a very modest token of my appreciation for all your excellent analysis & writing.