Chapter 10. Paying for college

Of all the recommendations in this book, the most controversial will probably be the issue of paying the costs of having more of our academically talented people go to college. This is because college is usually seen as both a consumer good in the present and as an individual's investment in his * future earnings. It is rarely seen as a social investment in the future prosperity of the whole people. One reason is that a college degree (or at least some attendance at a college) is the basic form of accreditation into the respectable middle or upper classes. This feature is especially American, since we do not have a tradition of inherited nobility to work from. We are a people whose antecedents are typically obscure. Some can trace their roots for generations, but many, like me, can hardly speak with much substance about our grandparents. I do not know my father's mother's maiden name or first name. I know nothing at all about my great-grandparents. We carry our own accreditations.

One example of this is that almost all the officers in our armed services are college graduates. The phrase ``an officer and a gentleman'' reflects the class bias that an officer should be a gentleman, meaning class rather than behavior. It was probably a part of the mystique of giving orders, and could well arise from the fact that in Europe, officers tended to be the younger sons of noble and gentle families. Those did not require degrees to establish their right to command, but in America that status was connected with college. In the Second World War, the requirement of graduation was relaxed for pilots, and even these were usually required to have two years of college. Most of those commissioned through the Officer Candidate Schools were graduates.

I remember first noting this when a problem arose concerning one of my cousins. He had failed out of one of the great universities, largely because he had not taken his studies very seriously. He had been born a millionaire on his mother's side and his chosen career was as a restaurateur. Since his interest in things intellectual was minimal, I did not immediately understand why he needed a degree at all, but some reflection revealed that in his social circles being a college man was a sine qua non. A more modest college was found where he could continue and complete his undergraduate years, and he was duly anointed a member of the upper class.

As a professor, I have been aware of a large number of students at each of the universities where I have taught who were merely in pursuit of a diploma, without much desire to learn anything in particular. Many are people whose economic prospects are, like my cousin's, not dependent in any way on academic knowledge narrowly construed, and many others would be equally well served by any diploma in any subject from any accredited university. In a parallel to the armed services situation noted above, the college degree of any sort was a necessary and sufficient qualification for the job of welfare investigator for many years. (I do not know whether this is still necessary; it is clearly no longer sufficient.) As in the services, the issue was social class. The investigator was required to have a certain social distance from the troops. The pursuit of a degree as a patent of gentility has little in common with the search for knowledge and even less with its advancement. What knowledge is acquired is usually crammed into short-term memory and vanishes on the journey home at semester's end. (It is for this reason that the faculties of many universities reject the possibility of lecturing until just before Christmas and then giving examinations in January without further instruction.)

By contrast with those in pursuit of diplomas, with or without the implied knowledge, I look with distress on the fact that many young people with genuine academic ability are excluded from college by the inability to pay. This reality is often denied by those who imagine that it is perfectly feasible to make one's way through a university education by a combination of loans and part-time employment. We all know people who have done it, but then we all know people who have done things that the less gifted would find impossible, like outstanding athletic or artistic performances. What most professors who have had the experience will tell you is that students who are employed more than ten hours a week will have the quality of their studies affected. And the prospect of being graduated from college with tens of thousands of dollars owing is far more daunting to those of working-class background than to the children of more financially sophisticated houses. In these homes, it is understood that a debt at a low and/or deferred interest is a canny investment in future prosperity, a sign of good fiscal management. For the working class, debt is a mark of economic failure, and is (properly) feared. We will examine the elements of risk and investment in Chapter 32, below. For myself, I chose to attend Brooklyn College, a branch of the College of the City of New York (as it was then known) and forfeit a scholarship to Cornell because my attendance at the more famous university would have required at least twenty hours a week of employment.

In many working-class neighborhoods, one can hear stories of those who worked many hours and borrowed much money to obtain a college degree, in many cases with a record whose luster was undermined by the poorer grades earned because of time spent in employment. For those for whom the degree was not a passport to notably greater earnings, the experience has meant long-term (perhaps life-long) indebtedness. It is not surprising that this has resulted in a certain reticence in working-class children, even those with academic talent, in pursuing this path to a college education. In my days as a member of the Scholarship Committee of the Madison Federation of Labor, I was surprised to find that with a major university in town, offering subsidized education and a singularly low tuition charge, over 80 % of students from relatively well-paid union families were electing to go to the local vocational college in preference to that university. They all said they couldn't afford it.

The answer to this loss of intellectual talent to meet the needs of society is that the society itself must be prepared to invest in the talent. The repayment should be made from those who manage to turn the investment into economic gain, with no burden on those who fail to reap this benefit. As I will maintain in a later chapter, all those who have large incomes are the outstanding beneficiaries of the inheritance of knowledge and its promotion in our own times, and should properly be taxed substantially to support its furtherance. Society can afford to spread its risks over many students, with the assurance that it will reap benefits from enough of them to repay the investment handsomely. Indigent students, even bright ones, are far less able to bear that risk. Their investment is their years of study. For those for whom that study is a pleasure, this is a good deal even if it does not lead to riches. Those who do not enjoy schooling would be well advised not to take up even a full scholarship, and we are unlikely to be the losers for their absence.

The analysis of risk is significant, since the same degree of uncertainty bears differently on different players. If (to make up a figure) a college education represents an investment of $40,000 with a 10 % chance of a 20-fold return, that would look to a mathematically sophisticated working-class youngster like a 9 to 1 chance of losing badly against the possibility of becoming comfortable in middle age. Taking a guess at what the utility of money would be, it might well not look attractive to him * . To a millionaire, the same odds are quite attractive. Going further, if society generally takes the risk, it is a good investment. And then society also reaps a substantial fringe benefit in the form of an alleviation of certain social problems connected with unemployment, as I mention below, but that is in addition to the value of the investment in knowledge itself. Of course, it should involve some way of repaying the social cost out of the benefit, but that is a detail on which this particular analysis should not depend. I will discuss it in a later chapter.

The general unwillingness to pay for college for everyone contrasts with the willingness to pay, and pay handsomely, for the education of military officers. According to the Washington Post of 27 January 1995, the cost of each degree from the three service academies runs between $ 204,000 (Navy) and $ 265,000 (Army), averaging $ 237,000. Of course, military officers, most of whom will see little combat or none during their careers, are seen as valuable, though they produce no wealth. By contrast, the education of a scholar, which typically costs much less than half of that, is part of the greatest wealth-producing mechanism our society has. A program on the order of the GI Bill, which sent nearly a whole generation of Americans to college in the 1940s, would be about $ 80,000 to $ 100,000 for each participant.

The policy I suggest will be attacked as elitist by those who are eager that enough college places be available for children of the upper classes, even those without much intellectual drive, who are seeking the social accreditation I mentioned above. They are, ipso facto, proponents of elitism based on the ability to pay, instead of ability to learn. Both are elitism, but one lies closer to the function of the educational enterprise and the needs of society generally. And also, we can expect that the powerful will arrange an expansion of educational institutions to accommodate their own children, if that proves to be necessary.

Chapter 11. Paying for pre-school.

Surprisingly, one of the most important aspects of the knowledge business is the question of pre-school, including even infant day-care. The effectiveness of the Head Start program is documented, though it is true that it needs to be reinforced by adequate schooling to retain its benefit. Many poor children pass their first five or six years in a very deprived environment, in which they are often denied even the stimulation of being talked to by their parents (or parent, if there is only one). It is widely believed that this early deprivation of intellectual stimulation produces a deficit in their ability to learn which is life-long. In addition, the absence of adequate day-care is a factor in whether their parents are able to work.

In a society which manifestly has more labor available than it is able to use profitably, it is grossly wasteful to allow such deprivation to produce that kind of deficit mentioned. We can clearly produce trained teachers who can adequately meet the needs of children of any age. Indeed, in addition to the early education which would be available in this way, there are other aspects of the lives of poor children which could be alleviated by having publicly-funded day-care and pre-school available for all.

One problem afflicting the poor is the question of adequate nutrition. This meshes with the problem of income support (known as welfare payments), which is thought by many in the general public to be abused. There is now much resistance to continuing these payments. A program of pre-school and day-care which supplied up to three meals a day to the children could prevent malnutrition without relying on the adequacy of the parents' shopping, cooking, and feeding. This is not to say that such inadequacy is widespread, but that many would prefer to provide the food rather than the money. In this connection I also favor not only subsidized school lunches, but also school breakfasts.

While school lunches often attract people of every economic class, the breakfasts, and even more the dinners, would likely be forgone by those with more resources. Family meals are an important amenity, which would be forgone only by those who were short of either the time or the money, and we should be prepared to sustain either or both of these needs. Instead of the means test we now employ as to who can receive these free, we could employ what I call the Principle of the Library Card, in which people can have membership in the Public Library (and can use the public schools and the public highways) free of charge regardless of their wealth, paying for it through taxes which might depend on their ability to pay (as in progressive income taxes or graduated vehicle registration fees) in another way.

The early availability of intellectual stimulation, independent of the parents' financial capacity or intelligence, is a way of magnifying and promoting whatever endowment of intelligence our children receive. In a society which has implicitly decreed that both men and women should be employed at paid labor, the provision of this sort of child care, publicly funded and accredited, is an important link in the process of maximizing the profits of the Knowledge Business.

Chapter 12. Higher education.

Compared with the costs of pre-schools for all, stipends for high school juniors and seniors, and college grants, each of which would run in the tens of billions of dollars per year, the costs of supporting graduate and post-doctoral education are minimal. The vast majority of college graduates are glad to be finished with formal education. Probably the majority were sated by the time they were part-way through Junior year, but persisted up to their degrees. But we see that even among those who have wealthy and indulgent parents, or trust funds that would maintain them for further education, only a relative few are tempted by the prospect. Of those who are, many already find a source of institutional support, in the form of a fellowship, scholarship, teaching or research assistantship, or some form of university employment to maintain them in graduate study. In line with the benefits already mentioned, and to obtain the benefits which will be discussed in the following sections on employment theory, I think that it would be beneficial to the public generally if the kind of support which is nearly universal for science students were available in all areas of study. That is, employment nearly comparable with what other college graduates are getting, with the benefits being modest pay, health insurance, tuition, a 20-hour work week and a 39-week year. It should be set where it makes an attractive package for someone who takes in addition the pleasure of continuing education, but is otherwise burdensome if the 40 - 60 hours a week of study are counted as onerous. Keeping such people out of the job market for a few years while possibly equipping them for a very high-level job later is highly beneficial as long as employment is scarce for those with minimal education and skills. I will discuss this in the next chapter.

For those who complete their graduate educations, culminating in a terminal degree, I suggest that further independent study be available on more or less the same terms: a stipend somewhat below the standard of pay for PhDs, with the opportunity to pursue an approved program of study. It might even include payment to universities or research institutes to reimburse them for the costs involved in accommodating the additional scholars. As in the case of graduate education, there should be a level of proficiency required for entry into the program, but it should be on the relatively permissive standards in use in the 1960s, rather than the stringent ones of the 1990s. In the case of subjects like the sciences which require extensive laboratories or equipment, that should also be subject to peer review, but not nearly so tight-fisted as we see today.

The cost of all the educational programs of these last three chapters would run into the hundreds of billions of dollars, not exactly small change. It is not being offered as an easy expenditure, although it is small compared with the current military budget, which meets no visible security threat. If that budget can be justified as a prop to the general economy, when it has no prospect of economic benefit in the future, then this should be that much more attractive. It might well be argued, and would surely be, that a greater knowledge of French Renaissance music or Anglo-Saxon epics or neoPlatonic philosophy is certain not to advance our economic needs. I will remind you of the imaginary numbers, and note that nothing is certain in this regard. But even if subjects such as those mentioned bring no riches in cash, they are fruitful in externalities and are in any case preferable to the ``military Kenynsianism'' mentioned in this paragraph.

But I see that the time has come to bring in the matter of employment policy, which adds to all that I have written before, so that even where the investment in education and research has no visible payout in the form of inventions or commercially saleable books, it still confers important economic benefits. That will be the business of the next few chapters.

Chapter 13. Filling from the top.

The operation of the free market has a consequence which results in a local optimum in each hiring decision, but does not create a satisfactory global outcome. In short, each employer chooses for each position the best-qualified candidate, even if the qualifications exceed the requirements of the job. There are exceptions, when the excess is large enough, in fear of dissatisfaction of the employee and thus unsatisfactory performance. However, the observation is generally true, and the exceptions are rare.

When there is a shortage of jobs, as there has been in all of the Western world for two decades, this results in a general experience of over-qualification, with the least qualified, least educated and least skilled making up the army of the unemployed. In addition, those who have earlier cast their lot with a particular skill and suddenly find it overtaken by technological advance are often lacking others, and may not be among those who are good at acquiring new education. If, in addition, they are older, have family obligations, and are committed to debts and other arrangements which require an income commensurate with their former stations, it may be hard to find jobs which will substitute for the ones they have lost. This has the unfortunate name of technological unemployment.

At the same time, there are always some positions which are going begging. The defenders of the free market in human talent always make the point that the technology which wipes out old jobs creates new ones. But the new jobs require new skills, and the unemployed lack those skills. It is then prescribed that we should maximize our profits by training the unemployed in the skills required. But we then see that the training (or re-training) often does not take, and the jobs go to younger people coming up as they recognize the opportunities in the new positions.

The unavailing character of retraining for job-losers is legend in the working-class neighborhoods. There, former skilled workers who attempt to train as, e.g., computer operators speak with bitterness of the experience. They respond to the recipe of re-training with a paraphrase of the comment attributed to Queen Marie Antoinette: ``Let them eat training.'' It is not a recipe which has proven effective.

In addition to the economic calamity of having willing workers sitting idle, the joblessness often erodes family life, especially when it leads to homelessness as well. Some of the unemployed lose their marriages, some become derelicts, drunkards, addicts, or criminals. In addition to the wreckage of their own lives, they spread their affliction to their children, their neighbors and their communities. Their agonies are reflected in the escalating uninhabitability of our cities, in the impoverishment even of the lives of the very rich, who must increasingly live in armed enclaves, behind barbed wire and burglar alarms, reduced to obtaining all the benefits of civilization by cable rather than having the opportunity of experiencing them in person.

One irony in all of this is that there are plenty of jobs which the unemployed could fill and, for the most part, perform to total satisfaction. They are held, typically, by better-skilled or better-educated people. Those, in turn, could handle more demanding jobs than they have, but these are held, in turn, by those better-qualified yet. As we ascend this chain of over-qualification, we come at last to high school graduates who would rather be in college than hold the jobs they have. It would be a net benefit to all of us, especially those young people themselves, if they were in school and the available jobs were to ``trickle down'' to less qualified people who would do them quite satisfactorily. For those who would not be removed from the job market by being sent to college, we resume the exercise as before, moving them (in our thinking) to jobs which they could do, but which are held by more qualified people, possibly college graduates. Some of these are people who would happily trade the jobs for a chance at graduate education, if that were available and affordable to them. And so it goes, as we work our way up the ladder.

At what we ordinarily think of as the top of the education heap, the young Doctors of various sorts are being graduated into a world which now has too few jobs for them. It is possible that an expansion of the educational enterprise which this book envisions would provide posts for all of them, as was the case in the 1960s. But if not, then we must ask whether we have hit the top of the scale. The answer is twofold, In the first place, many, perhaps most, of the young PhDs would be happy, at least for a while, to take a position which involves preparing their theses for possible publication (if only on the internet). This would involve their having a decent, if not generous, allowance on which to live. Secondly, the ranks of academia include many who would be glad of an opportunity to have sabbaticals, if they don't have them, or more frequent sabbaticals if they do. This interleaving of young Doctors into the existing academic and research professions would co-exist with a sense that these are prime candidates for retraining in whatever new technology the might have been created during the decade or so since they left high school. They would have proven their capacity for intellectual flexibility and disciplined study. Meanwhile, those not recruited into these new technologies would be factored into the Knowledge Business. Some of their product might prove to be of value. Most, like most research everywhere, would not. But the cost would be less than the cost of dealing with the negative effects of the unemployment which their activities would replace. Between that and the (admittedly thin) possibility of economic or ``externality'' value in their work, the world would be operating in profit.

Having framed this ``thought experiment'', it is time to return to the real world. If we denote the present system of hiring as ``filling from the top'', then we see that the model above, which amounts to ``filling from the bottom'' is not realizable in a free society. There is almost no way to do it. I say ``almost'' because at the very very bottom, for people who are handicapped by physical or mental deficiencies, we already have a program of sheltered employment, in which people are paired with jobs within the range of their limited abilities, even though more able applicants could be found. In most cases, this involves some sort of subsidy to the employers, but not always. Sometimes the employer participates as a civic contribution, writing the effort off as a business expense. However, this project does not reach as far as, say, people of average ability or slightly below who have dropped out of the regular process of acculturation and education (e.g. high school). It is a sad fact that our increasingly technological economy will have enormously fewer jobs like turning the same bolt on the cars passing one point on the assembly line for 50 years leading to retirement. The service sector jobs which are replacing them both fail to produce full employment and do not provide their holders with the kind of life which we in North America and Europe think of as the reward of diligent and conscientious labor by people of average skill and education. That involves the possibility of at least a small home (bought or rented) with a room for each child, a new or fairly new car every five to ten years, a hope of sending the brighter children to college or vocational school, and a modest family vacation each year, among other things. The economists of scarcity are now telling us that unavoidable economic forces will make that sort of a life impossible for most of our people. They say it is a law of nature. I say it is a symptom of a mismanaged economy and we should change it.

However, in spite of the fact that we cannot fill from the bottom (as we might do in e.g. the Army), we can come close by a policy which I call skimming the cream. If we cannot force employers to choose the least qualified person who can do the job, we can remove the more qualified by a program of diligent seduction into further and higher qualification, into a higher place in the Knowledge Business. (We did that, with different motivation, in the 1960s.) At the present time, this can sometimes be see as trading the possibility of a modest job now for an exalted state of unemployment. Many bright young people eschew this option, particularly if it comes with a heavy debt. So to make it work, we need a rather comfortable safety net. Comfortable, that is, for the properly (self-)chosen people.

How do we create these positions? We can do so by expanding the concept of a scholarly position to include an elastic portion consisting of self-directed research and study at a modest (but not penurious) level of compensation, as noted above. This would involve a sharing of what we now think of as academic employment fleshed out by whatever degree of research support it would take to maintain the corps of professional thinkers. And as opportunities for more substantial positions came along, possibly requiring retraining, there would be appropriate personnel available whose mental agility had been proven in the crucible of the life of the mind.

Even if we were to give this program its harshest reading, thinking of those on research leave as being actually unemployed, but in a disguised form, that form would have fewer negative implications for the society generally. It would not be a black hole of despair, such as that which now afflicts certain sub-populations of our cities. It would not be a force stifling ambition with the promise of futility, as we now see in the urban ghettos and the rural wastelands. It would not be a breeding-ground of crime, vandalism and alcoholism. And all of that without any reckoning of the potential positive effects: the stockpiling of flexible minds and the expansion of knowledge, some of which at least would be of economic and/or external value.

Actually, we have seen something like the world which we would have if we were to have a policy of skimming the cream. In the 1960s, during the period between the launch of the Sputnik and the landing of Apollo XI, we saw a situation in which we had too few scientists, too few engineers of real creative capacity, too few computer experts, etc.. To meet our needs, we pushed hard to make the most of what we had. Not only were people working at the limit of their skills, some had to run to keep up, learning new skills as they were required to use them. To meet the need for computer analysts, we recruited first among those who had the skill, then re-trained mathematicians and physicists for the task, then chemists and architects, finally librarians, musicians, and anyone who seemed to have a claim to being a good candidate for retraining. Setting aside the national trauma represented by the war in Vietnam, it was a very exciting and rewarding time, not only for academics of every description but also for people of all kinds of skills and employment. It was a time in which, anti-war activism aside, there was a great deal of hope and civil peace. We didn't know it at the time, but those were the good old days, even for those struggling to shake off the last vestiges of legal discrimination. It was only when the economics of those years gave way to an economics of scarcity and people began to fight over the jobs which were available that hope yielded to despair and activism was replaced by crime. But that is another story. What I want to point out is how good it was when people were working at their limits and there were jobs for nearly everybody.

Is all this a utopian dream? Not really, but it does involve a social perspective, like that which we now apply to the problem of national defense. Indeed, it is a form of national defense, though not against a foreign army, but against the potentially destructive aspects of our technology, which we have handled in a very unadaptive way. It involves, in a word dreaded in the United States, a kind of socialism.

Chapter 14. Socialism.

The proposals I am making will no doubt be criticized as socialistic. To some degree, that is accurate, but excessive. The archangel of private capitalism, Adam Smith, has noted that there are certain areas of community expenditure which cannot be served by private fee-for-service economics. He cites such things as roads and bridges, which confer benefits on many who do not use them directly. To this we can add things like armies and prisons and courts. A big fight in Wisconsin this year is over whether a stadium for a professional baseball team also falls into this category.

Adam Smith did not consider whether the expansion of knowledge falls into this same category. Possibly the fact that knowledge was not as significant a feature of his time (despite its being known as the Age of Reason) accounts for that. Also, it was a time in which a higher proportion of new knowledge was seen as private property. (See Chapter 17 on Intellectual property and Chapter 38, The People's share.) However, we see that in our time, there is a vast public interest in knowledge, and it passes without cost to many users. As an example, I note the information that aspirin, or red wine, or frequent exercise will help in the avoidance of coronary artery disease. Many people will benefit from acquiring this information free of charge, and no one will pay anything for it to those who discovered it. Even the payment to the pharmaceutical companies or the vintners grossly understates the value to the recipients. A similar comment applies to the knowledge that eliminating lead from gasoline reduces the loss of mental acuity to exposed children and adults.

More commercially, the knowledge of how to build computer chips could not be fully restricted by the companies which did that, so that their competitors were able to produce alternatives by a similar procedure. The same comment applies even more strongly to the software we see produced today. In the field of the externalities, where no money changes hands, a new understanding of Shakespeare or Sanskrit benefits many who do not pay for it, in some cases people who do not even come to know of it.

In addition, any benefit to the problem of unemployment is clearly felt by the general public, and especially those whose job situations would be improved by the consequences of the policy of skimming the cream. In all, the payout to the public generally would justify a public support of the program, and indeed that is the only feasible way of paying for it. Those costs would be substantial, but comparable in scale to what we now pay for knowledge. The National Science Foundation estimated in 1992 that the payment that year for research and development in the United States was about $ 150 billion. Of that, half was being borne by private industry, and about another quarter was being funded by the Federal government for work being done by private industry. The remainder was done by universities, non-profit agencies, and government agencies of one sort or another. I will argue below that the work in private corporations which is product-oriented and held for private gain is intrinsically less efficient in producing knowledge valuable to the public as a whole than that which is produced at public expense and distributed free to all who can make profitable use of it. An example is found in certain corporate laboratories when a scientist might stumble on an idea which is not closely connected with the company's product. If it needs investment, the money might well not be forthcoming. If the researcher does not wish to change employers, the idea might go unexplored. Even if it is developed, it might change hands in a way which exposes the weakness of this kind of fragmented effort. The flat screen which is in use in e.g. laptop computers was developed in the laboratories of the General Electric Corporation (GE). That company did not elect to develop that product, and the management sold it off to the Sharp Corporation of Japan for two million dollars. That tactic produced a welcome uptick in the profit statement for the quarter in question, but was a long-term loss for both GE and the United States. Of course, Sharp obtained a bargain. It is an ill wind that blows no good.

This is clearly an area where the benefits are at least nation-wide, and perhaps more reasonably global, but it is hardly likely to be funded by a world-wide effort. However, large players in the world economy, like the United States, Europe, and probably Japan would find it profitable to pay the costs, even though some of the benefits would flow out to other players, including some who do not participate fully in paying for it. In a time when there is much touting of the Global Economy, this leakage is probably beneficial to all. The attacks which will continue to be made against governmental planning and funding based on the collapse of the Soviet Union are highly inappropriate. As I mentioned at the outset of this chapter, public support of the Knowledge Business would meet the criteria set out by Adam Smith.

And perhaps this is a place to take up the cudgels for national, if not world-wide planning of economies. The persistence of age-old Russian corruption into and through the era of Communist rule is hardly an indictment of the planning of our economies. We can read of that corruption in Tolstoy, Chekhov, Gogol, and Gorki. The same comment applies to China and Cuba. By contrast with the poor performance of the Soviet Union, we have the example of full free-market capitalism, which ruled the world almost unimpeded for all of the 19th century and a third of the 20th. It was marked by accelerating and progressively more severe cycles of boom and bust, culminating in the most disastrous economic collapse of all time, worse even than the worst excesses of Soviet Communism. That visibly intelligent people could champion it in the face of this monumental failure must raise the question of what motivation could so override their pretensions to rival experimental science. That such championship was a ticket to personal prosperity and honor is visible; whether that is the key to the mystery must be a secret locked in their own consciences. But surely, if we will not base our policies on the greater good of the greater number, our posterity will pay a heavy price for it.

Chapter 15. Free lunch.

It is a bromide of our time that there is no free lunch. Yet we are all, as I said at the outset, the heirs to a great treasure, and our legators are, for the most part, people we never heard of and who did not name us in their testaments. It was said of President George Bush that he was born on third base and thought he had hit a triple. If I may alter the metaphor to football, we have all been born within 1 yard of the goal line, and those who manage to score (the ``self-made men *'') imagine that they have run 100 yards. Even so outstanding a genius as Isaac Newton said of himself that if he managed to see further than those who came before, it was because he stood on the shoulders of giants.

Without taking anything away from the accomplishments of Henry Ford, he could not have done any of it without his legacy from Newton and Watt, not even to mention Benz. He did not even invent the assembly line. The knowledge that our generations inherit is an indispensable part of the advances they make. Even the knowledge of their own contemporaries is mostly given without cost to the world, being published in scholarly journals and exploited liberally by those with just a bit of imagination and some economic resources. To demand that they repay some of that profit into the education of their own generation or the next one is hardly an imposition.

There is almost no one among the rich in the present generation whose prosperity is not rooted in great degree in the work and genius of others, including members of that very generation, or the spending habits of others who are themselves the beneficiaries of the work of others. And almost none of the work of previous generations carries a royalty in our own time. It is all free lunch. This causes some difficulty, as states and nations seek to ride free on the investments of others. I see it at the University of Wisconsin, which imagines that we have been investing at our own cost for the benefit of the whole nation, not to mention the whole world. And there are those who complain that the Japanese have grown rich from expropriating, without payment, the results of American and European science. For myself, I find the complaints petty. There is more than enough for everyone, if we would but pursue the goal at the maximum that our inherited genius makes possible.

If we are so miserly that we refuse to bankroll the whole of our children's generation, then at least we could create the means for them to care for their own needs. Let us consider another thought experiment. Suppose we were to propose funding the program of education and research I have outlined by floating a special bond which would not be repaid until the investment had started to pay dividends, and then only from the pockets of those who had been enriched. As one measure, we could define that as those whose incomes exceed twice the median income in any given year. Suppose further that we could poll all the 17-year-olds in any given year on whether they would be accept an additional income tax to pay off the debt, a tax of (say) 20 % on the excess of their incomes above that figure. I think it obvious that the vast majority of that cohort would willingly embrace such a proposal. They would think that an opportunity to expand their horizons and their prospects on the basis that only those who win would pay would be a free lottery ticket which would require the winner to share the prize. Almost all would want it, but we do not make that available to them. Instead, we have politicians of almost all colorations who tell us that their refusal to enter into more debt is a favor to their children's generation, even when their parsimony results in closing the doors of education to that very cohort. There is a vicious logic in this, since the powerful are more interested in preserving the relative status of their children than in the general welfare of that whole generation. It might result in their children being less well off, in both economic and external considerations, but it would give them the dubious pleasure of being less deprived than others.

But isn't this whole project immensely costly? Costly, yes; immensely, no. It would be comparable with our present expenditure in research and development, which is about $ 150 billion annually, and less than we used to spend on our military budget. More than the R&D costs, but not as much as quadruple. A rough calculation yields about $ 144 billion annually for pre-school , $ 37 billion for high school, and about $ 347 billion for college, graduate and professional schools combined . I can hardly estimate what the post-graduate project would cost, but it must be small compared with these. But then, of course, there would be savings. After all, we are paying privately now for some of the costs of pre-school and college, and the expanded post-graduate program would release a flood of new knowledge into the public domain, some of which knowledge is now being purchased in industrial laboratories. Further, the transfer of some of the research from corporate into institutional laboratories would free it of some of the inefficiencies caused by restricted product horizons, as mentioned before. Finally, there are the benefits of easing unemployment and maintaining the pool of adaptable minds to tap for new technologies as they arise.

The mechanisms we now have for rewarding invention and creativity are grossly inefficient. We need to create new ones which will encourage their dedication to the public domain, where all can benefit from this free lunch.

Chapter 16 Sharing.

In the years since the disaster which fell upon the intellectual world as a result of the successful flight of Apollo XI, we have seen a great deficit in the number of job opportunities in the knowledge business. This is especially true in the arts and humanities, but it applies to most of the sciences and social sciences as well. The exceptions were, for a while, the arts of making money, in particular economics and business training of various sorts. This shortage of jobs, described as a glut of labor, has resulted in the knowledge business suffering as a desirable career choice, and there are fewer takers at every level of the education process, particularly graduate school. And there are fewer research opportunities as well. The young Doctors today face a world in which job opportunities come without any prospect of permanence, even for excellent performance. The pay is poor and the usual fringe benefits, such as retirement and health coverage, are absent. The hours are long and the employer is often indifferent to scholarly accomplishment. Not only have the young Doctors suffered, but the entire academic, indeed the entire knowledge profession, has been beset with poorer rewards and greater intrusion of the ignorant meddling of legislators, trustees, and managers.

The academic and research communities have regarded this misfortune as though it were an act of God or a natural and unavoidable occurrence. In a sense, within the boundaries of what we were willing to do on our own behalf, it was. For to make any significant change in the history of the past quarter century would have required that the profession, and especially the academic portion of it, would be tightly organized and willing to press stringent demands, possibly backed by the threat of industrial action. That, the majority have plainly been unwilling to do. But many ask, with justice, what we could have done in any case, even if so organized, in the face of that shortage of positions. One serious problem in this business is that it is highly inelastic as to labor. That is, decreases in the cost of intellectual talent do not result in any noticeable increase in demand for people's services. If the salaries of academics, for example, were to be halved overnight, there would probably be very few additional professors hired. Thus, it takes only a relatively small deficit of positions to create a buyers' market, and this has been exploited ruthlessly by administrators and trustees, without any compensating increase in the number of academics hired. If it had been possible for the academic profession, or the research profession, to assure jobs for the young Doctors, even wholly or partly at their own expense, the economic status of all of them might well be better today.

In an organized industry, the academics might have insisted that place be created for the young people by increasing the phenomenon of sabbatical leaves, even paying more of the cost ourselves, perhaps making the sabbaticals compulsory, and even possibly making them more frequent than every seventh year. It is true that there are many academic families, particularly among the young ones, where the loss of income would be very troublesome, but it is exactly those young families who have been hurt most by the fall in salaries and benefits which the job shortage has occasioned. And if there would be a loss in salary, at least there would be some gain, both to the scholars and the human race generally, from the increase in knowledge. It is not beyond belief that they might today be getting more money, averaged over the years of their employment, with more time for the study which, I would assume, is their major motivation for undertaking the relatively modest living which the academy affords.

What is true of the knowledge business holds even more for the rest of the economy. For the past fifty years, advances in technology have been raising the productivity of labor. In the early part of this half-century, the strength of the unions assured that Labor was able to secure a share of the benefit of this productivity, probably about one third. However, as this advance continued, it began to create something of a labor surplus, which led to a phenomenon which was given the ominous name of ``technological unemployment''. As the goods shortage produced by the Second World War abated, and as the purchasing power of the working classes failed to keep up with the capacity of the technologized industries to produce the demanded goods with ever-decreasing inputs of labor, we began to be beset by increasing unemployment. The unions failed, for the most part, to recognize the impact of this threat. Like the academic profession, organized labor was, for the most part, unwilling to make any sacrifice to deal with the rising unemployment. Specifically, there was no substantial move to shorten the work week or increase vacation time in order to keep employment full. Those who were employed, who were and are the vast majority, simply looked the other way, and their union leaders did likewise. There were some tentative moves in the opposite direction, such as the Humphrey-Hawkins Bill, which would have made the U. S. Government an employer of last resort, or the All-unions Committee to Shorten the Work Week, organized by the United Auto Workers. But these were weak moves which never gained wide or deep support, and as the productivity of labor increased, the army of the unemployed grew and their desperation provided strikebreakers whenever these were called for. The unemployed felt little solidarity with the workers who had largely ignored their plight. Thus, the power of the unions waned. By 1970, labor ceased to participate in the benefits of technological advance, and from that time, each new advance became the occasion for weakening the unions and failing to keep pace with the advance of inflation. By the 1990s, companies were actually extracting give-backs of even nominal wages as well as benefits. By being unwilling to share, labor had lost more than the sharing would have cost. At an estimate, full employment would have resulted in wages being 50 % higher than they are today, so that instead of working 30 hours for 45 hours pay by 1970 standards, those who are employed are working 40 or 45 hours for 30 to 35 hours' pay. In addition, we have a huge number of unemployed, many more who have fallen from well-paying jobs to near-proletarian labor, and fear of job loss among those who are still working.

The promise of technological advance has always been that it would free the human race from the burden of toil, but this promise has never been realized except through struggle on the part of the working people. The first strike in the American Colonies was in 1776 in Philadelphia (!) when the carpenters demanded a 72-hour week. Over the years, successive struggles lowered the work week to 60, then to 48, and finally to 40 hours. But since 1938, there has been no decrease, even in the face of astounding advances in labor productivity. Instead, the employers have successfully fought to create a measure of unemployment aimed at reducing their employees to helpless servitude. Indeed, the Chairman of the Federal Reserve Bank has expressed his concern when even the official unemployment figure (a grossly understated one) threatens (sic, sic, sic) to fall below 5.5 % . Neither the workers nor their leaders saw this disaster coming to the point that they were willing to share the work in order to forestall it.

In this way, the refusal to share has resulted in a degradation of the rewards of labor, both in the intellectual world and in the world of manufacture of goods and services. It is almost biblical in its import. By not casting our bread upon the waters, we have been denied the benefits our generosity would have generated. In addition to the misery that has been inflicted upon so many, there is also (and this is the message of this book) the loss of the knowledge we could have reaped for the past twenty-five years if we had continued with the program of knowledge-seeking we had pursued in the 1960s.

In the long run,the benefits of the Knowledge Business must be seen as the property of the whole human race. However, so long as humanity chooses to organize itself into nation-states with boundaries and mercantilist economies, it is at least essential that the advanced countries enforce some part of the dividend to all the people. The sharing of the available jobs for ordinarily skilled workers, and a reasonable living in exchange for such work, is an essential component of the promise of participation in the rising tide which is supposed to raise all boats. Today in the United States, about 75 % of the population no longer has a hope of employment at more than about six dollars per hour, and many are unable to get employment even at that low wage. The bulk of high school graduates who have not gone to college, many of those with weak degrees, and some of those with honors degrees and graduate degrees are jobless or working at menial wages. Of those with these educational qualifications, most have no hope of a good life as we have known it unless they are outstandingly gifted in intelligence, athletic ability, skill or strength, or are engaged in one of the richer and more dangerous forms of criminal activity. This is a very sick state of affairs. If we were to agree that some portion of the Gross Domestic Product is the general public's legitimate dividend on the Inheritance I speak of, and that this dividend is to be shared by all who are willing to work, with a share of the riches in exchange for their share of the work, then I think we could come out of the malaise which grips our Nation. Otherwise, not. Sharing is the true key to prosperity and safety in the world of tomorrow.

Chapter 17 Intellectual Property.

In some sense, it has long been known that knowledge is wealth. Those who knew how to make, for example, magnificent violins kept the secret to themselves, and the art died with them. Today, platoons and battalions of physicists and acousticians have tried to plumb the secrets of Stradivarius and Amati, with only middling success. Other secrets died with the holders or with whole peoples. As this book is being written, knowledge of the healing powers of various plants of the Amazon rain forest is vanishing as the magicians of those peoples fail to find acolytes to inherit it. In an attempt to save knowledge from that fate, we have seen the adoption of patent laws which offer inventors a limited monopoly on the fruits of their ingenuity in exchange for recording their advances and thereby eventually adding them to the public domain. In a somewhat similar way, the invention of printing led to the same sort of protection for the reproducible arts, in the form of copyright laws. But the advance of technology has now rendered those mechanisms obsolete, and they have become impediments to the dissemination of knowledge.

As I mentioned earlier, most new knowledge is conferred gratis upon the human race, in the form of publication from which the author takes only the reward of fame and admiration. It is true that for many of these inventors, it is possible to capitalize on this prestige in the form of academic advancement or corporate promotion, but the payment does not come from those who benefit directly from the advance in knowledge. In the field of computer software, there is a growing tendency of inventors to place the work where others can use it, asking only that the user donate voluntarily either a modest fee or whatever he * thinks it is worth to him *. In part,this is an expression of open-handed philanthropy, but it is also a recognition of the fact that it has become increasingly futile to try to hold on to anything as mercurial as an idea. The battles being fought over the use of xerographic copies of copyrighted material also show that while the doctrine of ownership of intellectual property has been a spur to its creation, it has now become an impediment to its dissemination.

So how do we have it both ways? After all, it is the business of intelligence not to be constrained by the disheartening wisdom that we cannot. Before the electric light, we had to have it dark or smoky, but could not have light without smoke. Before the fluorescent tube, we had to give up most of our energy to heat if we wanted light, and then later came ionized gas lighting. Each advance, in some sense, allows us to have it both ways. I propose that there are ways of rewarding inventors and writers for putting their genius into the public domain. Without detracting from the present option of taking a patent or a copyright, we should create such an option for those who are willing to go that route. Many possibilities offer themselves. One is that of the Prize. There was, for example, the Kremer Prize for man *-powered flight. Originally five thousand pounds, it was increased to fifty thousand before it was claimed by the designers and builders of the Gossamer Condor. I don't know how much it cost to build that machine and fly it, mostly on donated labor, but it must certainly have been much more than the amount of the prize. Similarly for the Gossamer Albatross, which was the first man *-powered machine to fly across the English Channel and the Voyager, which was flown non-stop around the world without refuelling. The subtle knowledge of low-speed flight which the human race gained from those enterprises was valuable far in excess of not only the prize but also the cost. It is truly remarkable how much effort can be expended to win a Pulitzer or Nobel Prize, or a knighthood, or election to the National Academy of Sciences. I suggest that a large number of substantial prizes for the most valuable inventions of each year, with funds donated by the major industrial countries, would produce a richer harvest than the patent system. The cost would almost certainly be less than the benefit obtained.

An alternative possibility would be to charter an Institute of Inventors, like the National Academy of Sciences, which would be a self-certifying organization but which, like the Academies of Communist Eastern Europe, would carry a stipend for its electees. Perhaps even a hierarchy of ranks in this institute depending on the perceived value or importance of the honored inventions. The process of selecting those to be rewarded would not be perfect, and that could be argued in opposition to either of these suggestions, but indeed the present system is probably even less reliable. A wise inventor today might not invest the time, effort, and cost for obtaining a patent unless he * had some confidence of being able to sell the license to someone who could use it profitably. And in addition to the uncertainty of selling the idea, there is also the substantial possibility that it would be pirated, as was the case with the intermittent windshield wiper, whose inventor spent a large part of his life in litigation with automobile companies to secure some payment for their arrogant appropriation of his creation. Both suggestions are at least as fragile in their seeking for justice as is today the award of employment, tenure, and promotion in the Academy, which relies upon such a system, but that profession remains an island of tranquillity and certainty compared with the jungle of commercial life.

The rewards of invention today rarely go to the inventor, and even when they do, it is only partial, sometimes very partial. An outstanding example is to be found in the Edison General Electric Corporation. The riches occasioned by the electric light and electric generation went only in small part to the inventor. The vast bulk of it went to J. P. Morgan and the group of investors he recruited. In time, they even took Edison's name off the business. In the thinking of the theoreticians of capitalism, Morgan was the real genius, because he recognized that this was an invention worth acquiring. (Stealing?) But we can ask in what was this talent of his? Edison was already a famous genius, but in fact there were few on Wall Street willing to put their money behind his work without the imprimatur of a recognized opportunist like Morgan. Such people are supposedly the strength and glory of the capitalist system, but in fact the vast majority of them are weaklings and cowards waiting for an investment with no risk. When they do move to capitalize on the knowledge created by others, they demand and get the vast preponderance of the rewards. It is said that this is the best way, but in fact whenever the Nation really wants something done, we know that the best way is to do it ourselves, as was the case in flying to the Moon.

I will also raise here the question of the knowledge owned by us all, the inheritance I spoke of in Chapter 1. The patent system allows the inventor, and by extension the parasites who fatten on his * genius, to grab for himself * the benefits of previous knowledge which belongs, as I aver, to all of us. In the process, depending on how he * does it, he * may even fence off previous work in a way which keeps others from using it. Thus, for example, the recent patent granted by the U. S. Patent Office on any future modification of the cotton plant. The patentee did not invent genetic manipulation, nor did he create cotton, but he has, in effect, fenced in a substantial portion of the common, if I may use that metaphor. A large part of what he has taken was the property of us all. We are entitled, in some sense, to a huge share of anything that will come from that patent, but the state of the law today does not grant it to us. Other cases are less egregious, but it is obvious that a large share of every patent is a private use of this common inheritance. I applaud its use, but I do insist that we should all share in the profit. Maybe then we would be more willing to pay its costs.

The system of patents works well for the large industrial laboratories, which are funded by corporations for the specific purpose of advancing the shape, form, or quality of their product. Even there, as I noted earlier, much new material goes without follow-up because it is not sufficiently product-specific. Much of the result of new patents is also wasted in that the company which makes the discovery does not use it, but holds the patent to prevent any one else from intruding into their protected market. The individual inventor is effectively shut out from the opportunity of seeing his * work realized, in most cases. I have even had instances in which I was unable to give away the product of my thinking free of charge, because of the legal pitfalls facing any company which was so incautious as to listen to an individual inventor. The whole phenomenon actually has a name, NIH, for Not Invented Here.

The same considerations as for patents applies, but with somewhat less impact, to copyrights. There are many people who have written books or other works of various kinds which they wish to donate to the human race. They would like to be rewarded for it, in many cases, but would publish in any case if they had the opportunity. Nonetheless, they would like to retain some control over the way in which their creations are used. The copyright laws enable them to do so. But the same laws make it difficult for others to share and spread this beneficial product. Some people will put books onto the internet or distribute them as data files, on discs or tapes or even CDs. But then they run the risk of seeing them duplicated without proper permission. Someone might usurp their product, since it is so easy to do. It is even easier than using a copying machine, and that has been the subject of much litigation.

It would be valuable if we were to find a way to make knowledge more available without infringing this right of intellectual property. Perhaps by a variant of the Prize Principle mentioned above. Suppose there were a large number of large prizes offered each year for the best works donated to the public domain. The creators would not have to find publishers willing to finance the cost of embodying it in matter, as by printing it, or performing it and recording it, etc.. They might well just put it into circulation using the mechanisms of mass communication in the hope of attracting an audience and possibly winning a prize. It would be an alternative way of spreading knowledge which might advance the common weal. We should be glad to pay for it.

Our present concept of intellectual property is one which rewards the owner of knowledge for restricting access to it. That should not be our purpose. We should find a way of rewarding the dissemination of knowledge which fosters its spread to the greatest degree possible.

Chapter 18 Information

This is being touted as the Age of Information. In a sense it is, since the advance of information technology in the past thirty years has transformed the world of business, including the Knowledge Business. Information is not knowledge, though it is often treated as though it were. But it is a great resource in the search for knowledge. As a trivial example, it is now possible to put all the valuable manuscripts in the British Museum or the Library of Congress onto graphic data files so that it would be unnecessary, except in the most special cases, for anyone to handle them and so that they would be available for use by scholars all over the world, at essentially no cost, and possibly simultaneously. More significantly, one of the major impediments to the exchange of information, the necessity to embody it in matter, would be eliminated. As just one more example, I have put the second draft of this book onto the internet so that anyone who is interested can download it while I work on polishing it. This might well result in a slightly smaller sale of a printed version, if there is to be one. However, since my principal motivation in writing this book is the dissemination of a point of view rather than making money, that is acceptable to me. (I am also aware that some circulation in draft form might actually have the effect of increasing the demand for the finished product.) The necessity of moving information in the form of matter has always been considered an unavoidable difficulty. A. J. Liebling has written that ``Freedom of the Press is only guaranteed to those who own one." The ownership of a press, or of a broadcast station, has given some people (e.g. William Randolph Hearst) disproportionate power in the political arena. Others have been able to spread their ideas only to the extent that they were able to secure passage from one of these media.

In a few cases, information could pass without being embodied in matter, such as spoken communications or performances, but the former were only a small proportion of all transmissions in the past few centuries and the latter also required access to a suitable stage. Today, people can gain access to a large audience for little more than the price of a personal computer, a modem, and a telephone connection. The boast of nuclear power, that it would generate electricity too cheap to be worth metering, was a sham, but it is true of the passage of information over the internet. Nonetheless, we must never underestimate the rapacity with which private interests will appropriate the public patrimony. We saw it with the lands of the Western United States, taken freely by the railroads, the public airwaves colonized by private ownership of the right to broadcast, and now the internet is being parcelled out to private interests who will charge for the right to speak and listen on the public common.

In order to facilitate the spread and generation of knowledge, we require the free (in both senses) use of this amazing new medium. In a real sense, it is more important than even the public highways. Information is not knowledge, but it is one of the things out of which knowledge is made, perhaps even the most important of these. As a printed book was a more potent medium for the transmission of ideas than one which had to be copied by hand, so a book on a data file is almost infinitely more accessible than one which is on paper. Of course, it is uncomfortable to read a book on a cathode ray tube, like the one I am looking at right now, but it would be easy and cheap to produce a ``reader'' which would look like the screen of a laptop computer and serve only the function of displaying such data-file books. I have urged such a ``reader'' in every forum where I thought it might be taken up. With the present mood of the Patent Office, that might even be a patentable idea.

In addition to books, there are other places where we might wish to distribute information without having to invest in the cost of embodying it in matter. Someone might wish to ``showcase'' musical talent, or exhibit a novel interpretation of a classical musical work. Today that involves the cost of manufacturing a recording and distributing it. The innate transportability of the idea is held hostage to the cost of the matter. A person with a video camera might well make a film, or record a performance of a play or a dance, but what is the route he * must take to reach a public with it? He * must secure financing for at least copying the film onto other cassettes and then distributing them, at substantial cost, to stores which would have the task of selling them. The ideas might be free, but the cassettes are not. Nor are the shipping costs. A final example is to be found in computer software. Here, the bonds of materiality are slipped, and those who wish to disseminate their work to the world are able to offer it, free of charge, without having to invest in its materialization. Indeed, as I mentioned in the last chapter, the problem in that case is that the information flows all too easily for those who are trying to draw a fee for its use.

In the world of the ``information superhighway'', it should be possible to sell and buy information without investing in matter to do it. We should be able to go down to the ``bitshop'' to buy a book, or a performance, or a program to be written onto a medium we already own or one which, perhaps, we buy at the shop for the purpose of taking away the information we have just bought. And if I have an account at that shop, I should be able to buy it by telephone without making the trip. Information would then be so fluid that the copy rights would be at risk, as they already are. And to compensate for that, we should be willing to reward those who allow their work to be distributed freely.

The enclosing of portions of the common patrimony is not an activity which should be countenanced. It is true that in this case, the impoverishment of all can result in the enrichment of a few. But the losses are greater than the gains. In addition to that which is paid for, where the losses equal the gains except for negligible costs, there is also what is not taken, not bought, not used, and not employed in the advancement of humankind. In that, we are all the losers.

The railroads eventually sold off the lands they got in exchange for laying the tracks. They are no longer running the trains, but they have kept the bribe, and sold it. The broadcasters no longer acknowledge any obligation to serve the public good, but they still own the licenses, and sell them at a huge profit. The descendants of the British lords who fenced in the commons and drove off the common people are still living on the dividends of this ill-gotten gain. Now the telecommunications corporations are grabbing up the fruits of the labors paid in part from public taxes and based on the use of the common rights-of-way on the information superhighway. Like the knowledge upon which this is based, it is our property. We should plan to take it back as soon as possible, and the question of payment should be considered an open one.

Chapter 19. Unemployment.

The promise of the advance of knowledge, and of the technology which it has generated, was a world freed from the curse of Adam, the burden of toil. Instead, we have seen an acceleration of unemployment everywhere. It is hard to reckon the exact amount, since the sources of data are scanty and governments everywhere seek to minimize the figures by finding excuses to exclude large numbers from the count. As a few trivial examples, most married women who are available for work but are spending their unemployment at home are not counted, but are called full-time housewives. Most of the unemployed over a certain age are considered retired, particularly if they have given up seeking work, and universally if they are living on a pension, however unwillingly. No students are counted, no matter their motivation for being in school, etc.. In most countries, those who have never been employed cannot be counted as unemployed.

Of all those in the world who are available for work, at least 30 % are unemployed, and the figure may well be over 50%. Most of these are in impoverished countries of the third world, but increasingly many are in Europe, North America, and the Antipodes. Recently, the problem has begun to afflict Japan and South Korea. The consequences of this unemployment come under two rubrics: economic and social. In the developed countries, the economic effect is destructive to Labor, but eagerly embraced by Capital. The social effects are destructive to both. Many among the rich think that they can grab the cash benefits and buy their way out of the disintegration of the social world. They are mistaken. Laboring people have yet to catch on, in any major way, to the fact of how both their social and economic well-being is being eroded by this disaster.

It is important to understand what is meant by the phrase ``labor-saving machinery''. The labor of the replaced worker can only be considered saved if some worthwhile use is made of it. If it shows up merely as the idleness of unemployment, then it is not saved but wasted. Indeed, it is worse than wasted. It becomes an actual pollutant of our social life. One way to put the labor saved to use is to distribute it as leisure. That may or may not be the best way. Another is to find a use for it, either in private or public enterprise, but the ability to do that seems to have eluded us. And a third is to invest it, and about the best investment around is to be found in the Knowledge Business.

During the past two centuries, up to about twenty years ago, new technologies were often put onto the bargaining table, and a share in the benefit was claimed by Labor as the price of continuing economic activity. Part of the sharing has been the gradual shortening of the hours in what we define as full-time employment. Also, the total compensation for even the shortened work week had increased over the decades, up to that time. An essential component of this advance in worker compensation has been labor unions, and the major tool of the unions in securing it has been the alternative of striking. As the rate of unemployment has risen, particularly long-term unemployment, it has been progressively easier for employers to secure strikebreakers when they needed them. This ease has been accelerated both by government policies to enable the employment of permanent replacements for the striking workers and also by the perception of the desperate unemployed that organized Labor had largely ignored their plight since 1945. The weakening of unions by this strategy has led to a decrease in their memberships, as a fraction of the labor force. At the same time, the shift of labor from the assembly line to clerical and other white-collar work has presented the unions with new challenges of organization, challenges for which their talents were increasingly unavailing. Finally, the consequences of red-baiting of unions in the 1930s, resolved by their abandonment of social-democratic ideology in the following decades, resulted in the rejection of union membership by millions of workers who were bemused by the illusion that they were professionals who would be tainted and abased by any association with the culture of the factory.

As a result of all of the above, it has been possible for Capital to split the ranks of those who depend on wages for a living and increasingly to dictate more unsatisfactory working conditions. In particular, any need for additional labor tends to be met by overtime hours rather than by hiring new workers. The costs are greater, but the long-term benefits of having frightened and docile workers and desperate potential strikebreakers has acted to advance the interests of shareholders and especially managers.

In the three decades following the Second World War, an average worker in North America could expect a job which would require few skills, would provide the costs of maintaining a family in very modest comfort with a car, a modest home, some vacation, health insurance, retirement benefits, and the possibility of sending some of the children to university. In the past twenty years, that reality has faded into a dream from out of the past. The wages of unskilled and semi-skilled workers have fallen in real terms, while the costs of all those things have risen, even when adjusted for inflation. Even discounting those who drop out of high school, an average high school graduate has almost no hope of achieving that sort of life today. And the rot has begun to afflict even college graduates with the more modest degrees and those, regardless of the quality of their degrees, who have no outstanding skills or special connections. Even some PhDs are going jobless, and the numbers of these are increasing.

Much has recently been written about the need for retraining and the expectation that each person in the future will have four or five careers at different lines of work. Lifetime employment, it is said, is at an end. But this view must be meshed with the reality that most people become unemployable if they are looking for work in their late 40s or beyond. Thus this new dictum is actually an early warning that most people can expect to become permanently unemployed half-way through what we today consider a normal working life. And it is expected that the working people of the nation, and of the world, will docilely tolerate this outrage.

At the same time, the consequences of hopelessness are becoming harder for the rich to bear. More people are unwilling to endure the risk involved in entering the cities at night for concerts, plays, or lectures. More rely on their televisions and cables to bring them entertainment and culture while they rest, presumably secure, behind gates and barbed wire, or merely the shelter provided by distance. Yet even these are increasingly beset by the costs of imprisoning those whose antisocial behavior cannot be tolerated, even at a distance. These costs are substantial, despite the fact that the perpetrators are not yet a major portion of even those described as ``the underclass''.

Yet there can be little doubt that hopelessness is a generator of fearlessness in those who do not anticipate that they will be able to obtain a decent mode of living. This proposition can be illuminated by the observation of those who were convinced that O. J. Simpson had indeed murdered his ex-wife. They said, ``What a stupid thing to do. He had everything to live for.'' The comment carries the implication that those who apparently have nothing to live for can well be expected to do whatever comes into their heads at the moment. Where there is no hope, fear is much abated.

Even a job on the assembly line is something worth protecting by a diligent attention to at least most laws. And those who grow up in a climate where no one goes to college, no one gets a decent job, and no one has any rights before a police force (who are themselves baffled by how to deal with the tide of lawlessness they are expected to check) are likely to throw it all up and take a flier on e.g. a high-paying if dangerous career as a drug runner or an apprentice to a gang. It doesn't take many choosing this option to make the cities quite unmanageable. And the abandonment of the cities to the underclass is not an answer either. Criminals are almost as mobile as millionaires these days. We have not yet come to the condition of Colombia, where the kidnapping of the rich is a major industry, but only a fool would bet his * life that it will never come to that in North America.

I hold it essential that the vast bulk of inhabitants of the world should be employable, and should be employed. If we cannot control those beyond the borders of our own countries, at least within them we need to meet this goal. The alternative is truly horrendous, as we already see if we are willing to extend the limits of our humanity beyond the bounds of our own families. It is not sufficient to say that there are plenty of jobs for college graduates because firstly it is not true and secondly even if it were, most families have no hope of sending their children to the universities. But, as I indicated above, the practice of filling jobs from the top means that large numbers are now permanently unemployed, and the situation will only worsen until we take active steps to correct it.

There have been several attempts to find ways of using the reserve of unskilled labor, but none have ever succeeded to any degree. Organized Labor attempted to promote the Humphrey-Hawkins Bill, which would have made the U. S. Government the employer of last resort when officially recognized unemployment went above 4 %. However, there was only dim willingness to pay the costs of that initiative, and the same fate has overtaken every attempt to employ the least attractive employees in civic enterprises at minimal rates of pay. Many have argued that we should be able to increase the output of product by more use of labor, but this form of supply-side economics has been as unavailing as all the others.

In the area of armament industry, the nation is willing to practice demand-enhancing employment, even to the point of continuing to produce weapons which are specifically tailored to deal with a unique antagonist, the defunct Soviet Union. If we were willing to devote similar resources to the advance of education and research, we might well relieve the burden of unemployment and, as a bonus, possibly reap enormous benefits in the form not only of economic benefit, but also of health, freedom, and culture.

Given the inability of our economic system to use what is perceived as a surplus of labor to enhance the output of our factories and the unwillingness of the body politic to pay adequately for the many civic tasks (like the cleaning of our streets and parks) that are going undone, there remain two major ways of opening the ranks of well-paid employment to the bulk of the population. One is by reducing the work week to whatever it would take to share out the jobs, with some assurance of adequate income. This would necessitate a somewhat mercantilist government policy, in which the near-slave labor of the impoverished third world is not permitted to erode labor standards in the developed countries. (See the next chapter on Greed, below.) The other, and not conflicting, strategy is to ``skim the cream'' of those who are willing to undertake more education and research by financing those activities to the fullest (and taking a portion of the gains to help support those who do not or cannot participate in The Knowledge Business), thus opening up a corresponding number of jobs for some of those now going jobless. Of course, even extending further education to all who are willing to undertake it on conditions of subsistence will certainly not mop up all of the unemployment. Some of the other strategies will have to be employed. But there is no better investment of the liberated time than to expend it, and the resources necessary to support it, in furthering the inheritance of knowledge for the human race.

If we do not find a way to defeat the ogre unemployment, the gains of the rich will prove temporary and illusory as the demand for goods wanes in the developed world and more and more must be spent on the (ultimately vain) attempt to control an increasingly angry and desperate underclass. The fruits of greed will then be a much worse world for everyone.