Chapter 30. Saving the Earth

As I have mentioned just above, one of the complaints laid against the technological advances of the past few centuries is that they have had the effect of destroying the environment and imperiling the continuation of life on Earth as we know it. This is certainly true. At the same time, the same critics have claimed that but for industrialization, the Earth would have remained an idyllic and paradisiac place, where all the animals and plants would live in the balance of Nature. The usual locus designated for the loss of innocence is the industrial revolution, and the policy being advocated is one of returning to Nature. If the policy were one of returning to pre-Stone Age living, that might be right. But even as early as the Old Stone Age, homo sapiens had already become a threat to most of the other species of large organisms on the planet. By the time of the agricultural revolution, some ten thousand years ago, we had attained a level of technology which would, if unchanged, eventually deprive them of habitat.

Homo sapiens is one of the outstandingly adaptive creatures on Earth. We have long since colonized every continent but Antarctica and almost every island. And wherever we have settled, we have remade the world in the mold that has seemed best to us at the time. But as we plainly see, our choices have not always been the best. Indeed, until the comparatively recent past, we have had very little idea of the consequences of our undertakings. And this was true even before recorded history, but there we can only guess.

What is more certain is that whenever other large animals lived in competition with humans for habitat, those animals have lost. This seems clearly to apply to the ancient mammals of North America, and applies today even to the bengal tiger, the giant panda, the anthropoid apes of Africa and many other major species. Whenever large vegetable species competed with the agricultural needs of humans, they have been cleared away. Cockroaches, rats, and weeds have managed to persist, along with mosquitoes, bacteria, and parasitic worms, but even lions and tigers have been unable to maintain their habitats in competition with agricultural colonies of people. And the people themselves have often been our own worst enemies. We know that the irrigating of Mesopotamia resulted in a salting of the land which, over the course of just a few centuries, reduced the Fertile Crescent to a near-desert. There is question of how much of the transformation of the Sahara from savannah to desert is due to the introduction of voracious grazers (goats) into the fragile ecosystem by pastoral peoples. The Polynesians clearly changed the ecology of Easter Island to a degree that it was no longer able to sustain the amount of life it boasted when they arrived there. The demand for firewood in the foothills of the Himalayas has deforested them so badly that now every rainfall sweeps tons of topsoil into the Ganges River, to be carried into the Bay of Bengal. The overgrazing and overplanting of various parts of Africa are creating new deserts even as this book is being written. In addition, many anthropologists attribute the extermination of most large animal species of North America to the hunting by humans as they flooded in from Asia some ten thousand years ago. The story goes on and on.

Of course, it must be said that the rate of depredation of the past three or four centuries is remarkable by comparison with any earlier period. Mechanized clear-cutting of the forests, strip-mining of the land and pollution of the air and water by industrial processes have created ecological disasters broader and deeper than anything we have seen from the pre-industrial era. And many, including many of the neoLuddites, argue that this is a condemnation of the knowledge business and all its works. While conceding the data, I do not grant the inference. Despite the toll already taken, and the further destruction which will take place before the erosion is turned around, I argue here that once homo sapiens learned agriculture, only a great advance in knowledge and technology could possibly rein in the prodigal efficiency of our species' vitality, and that it is almost inconceivable that Science and humanistic concern could develop to the necessary degree, a degree we have not yet achieved, except as a by-product of the agricultural, commercial and industrial revolutions.

A sign of hope may already be found in the richest nations of the world, which have notably cleaned much of their air and water compared with what we had a century, or even a half-century ago. New technology has enabled us to produce much of what we need with less input of materials and energy and less output of pollution. We have not turned the corner on the larger problem, but we can already see the mechanism of amelioration.

One of the chief elements of danger to the planet lies in human fecundity, which has put population pressure on any wild lands adjoining human settlements. Yet we see that in the developed countries, the populations are shrinking, except for immigration from less developed areas. That is because families in the industrialized countries choose a life style in which they have few children or none, and the advance of medical science gives them the means to restrict conception. A part of this effect is due to the fact that relatively few of the children are dying young, a phenomenon which is new in the twentieth century. Those who fear that half or more of their children may die have not twice, but perhaps five times, as many. Those who do not live in modern cities, and who do not have electricity, have fewer diversions to tempt them away from the joys of the bed, and Indira Ghandi (a prime minister of India) spoke eloquently of the efficacy of electrification as a birth-control strategy. People with a limited horizon have little sense of the dangers inherent in overpopulation in the large. Even in places like Mexico and India, the rich countries are thought of as workable places for emigration to relieve the pressure of overpopulation.

In addition to the factors mentioned above, a major one is the spread of education, particularly the education of women. Knowledge is an important element in all the matters cited above, and knowledge is also an important element in the liberation of women from the sort of bondage which limits them, in so much of the world, to kitchen, church, and children. (cf. Kueche, Kirche, Kinder: Nazi slogan.)

It is sometimes said that the indigens of North America had found a sustainable life style in balance with the natural world. That may be or not. Recent scholarship seems to indicate that the Mayans created agricultural disasters by irrigation comparable to that of Mesopotamia, and a similar suspicion now hangs over the vanished inhabitants of Mesa Verde. And whether the plains indigens of North America were or were not in sustainable balance with the bison, they were certainly not in homeostasis with each other. The struggle for habitat was a constant feature of their lives.

Only in the 19th and (principally) 20th centuries has a sense arisen of the danger to the environment from human expansion and industrial despoliation. And only in these centuries has the command of Science reached the point where we can imagine that the problem can be understood and remedied. If the human race had followed the simple life of the pre-literate agricultural world, we would slowly have eaten up the whole planet. With the knowledge gained while rapidly consuming the resources within easy reach, and then those within less easy reach, we may yet come to a point where we can turn the process around, where the global population will slowly fall as it now doing in Europe, where replaceable and recycled materials are substituted for those we have been using up, where we adopt policies which will maintain the remaining species, and where a sustainable modus vivendi will support life on Earth until one cosmic disaster or another extinguishes it. Or it may not. But without a much greater level of understanding and a more effective technology, it cannot happen.







Chapter 31. Progress

The issue of progress in Chapter 29 raises a question which is dealt with rather poorly in our economic life. It is interesting that it has a sort of answer in the economic theory of games, and that that answer is undermined by the realities of economic life. It frequently happens that a certain change in economic circumstances will produce a benefit for one party, A, while imposing a cost on another party, B. If the gain to A exceeds the loss to B, we have a situation of potential progress. If the loss to B exceeds the gain to A, we have the possibility of predation.

Let us dispose first of the case of predation. I choose this name to describe the phenomenon because it is analogous to the case of the lion and the antelope, and also rhetorically pungent. When the lioness kills the antelope, the pride gains a meal; the antelope loses its life. When a burglar steals my television set, the gain to him * is less than the loss to me. It is even worse when someone takes my wallet, which contains, in addition to some money, a great many things which are valuable to me and worthless (or nearly so) to him *. And if he * stabs me in the process of stealing my wallet, it is even worse. In all of these cases, there is a net loss of utility to the biological or economic world, though the predator makes out nicely. No theory of raising all the boats can justify it.

In the case where the gains to A exceed the cost to B, our theories distinguish between those situations in which B has the power to veto the change and those where he * does not. When he * does, the theory of bargaining games reaches as far as to say that B can command all of his * losses and also a part of the excess of the gains over those losses. This amounts to a game which I call Tweedledum and Tweedledee, in which the Red Queen offers a sum of money to Tweedledum and Tweedledee on condition that they agree how to divide it. (For more on this game, see Appendix B on The Iron Law of Wages.) The Red Queen here is the economic situation, and the sum of money is the difference of the gain minus the loss. No one has managed to say anything worth saying about how the players should divide the premium. And examination of the realities of situations where this model apply indicate that the division is very rarely equal, for one reason or another.

A major effort on the part of A in situations like this one is often directed to depriving B of the veto. This is sometimes done by turning public opinion against him *, claiming that B is an impediment to progress. This tactic is especially successful when A is actually the public, as we shall see below. And it is really easy to accomplish when A is the government, and B is the public individually rather than collectively. That is, if the government takes a dime from each of 280,000,000 Americans to build a $ 28,000,000 public project, there will hardly be a squeal. On the other hand, Wisconsin Public Radio regularly makes two week-long begging marathons each year to secure an amount of support which adds up to five cents per inhabitant each time. If the State were to appropriate that amount twice a year, the citizens would scream.

The protection of the workers thrown onto the scrap heap by the mechanizations of the industrial revolution could have been alleviated by the government of the day. I assume they never actually took the possibility seriously, if they considered it at all. It was convenient to the capitalists and to their supporters in Parliament or Congress that the cost of progress be borne by the displaced workers without any compensation. During the past half-century, we have seen situations where the owners of newspapers were so eager to install new machinery that they negotiated contracts with various printing unions which would guarantee to keep their pressroom crews employed without pay loss until they died or retired, then closing their employment lines permanently. The arrangement ultimately fell apart because of the overreaching of the unions combined with the greed of the owners. The workers demanded that new workers be hired and the bosses saw a chance to dump the agreement and transfer all the cost to the eliminated employees. It had always been the position of the modernizing employers that such a transfer was the only road to progress. A moment's reflection will reveal that there are many such paths, and that each could apportion the costs in different ways. Clearly, a commitment at midCentury to lifetime employment by Japanese corporations did not impede their spectacular modernization, including the introduction of lots of robots.

In today's world, we often see government taking property by the right of eminent domain. The owners of the property are entitled only to their provable losses, and are often lucky to get even those. Thus, if the State takes your house, it might pay you what you would have gotten by selling it. Since you were not selling it, it clearly was worth more to you, in some realistic sense, than the price you could have gotten. This is the sort of calculus which is the stock in trade of elementary Economics courses, but we do not hear it when the victims of the depredation are individual citizens. This, too, is a dereliction of duty on the part of our economists. In addition, we see that in the case of e.g. the rail link in England between London and the Channel Tunnel, the threat of compulsory purchase of houses and farmland along the right-of-way drives down the prices well before the State decides to take the land and pay for it, further reducing the price the dispossessed owners will receive for having their lives torn up. And as always, their cries of pain and their demand for adequate compensation are squelched by the accusation that they are standing in the way of Progress.

The proof that Progress is indeed at stake is often buttressed by a claim that the good to be realized by the Nation or the State is very large, but no one comes forward to pay those uprooted a generous settlement out of the supposed benefits. They are denied a veto, or even the sop of generous treatment. Similarly with those done out of their jobs or other items of value by the ``march of Progress''. We could well test the inflated claims made for the public good in all these projects by establishing a principle of law that says that the share of those who are dispossessed in the great benefit supposedly to be reaped is a certain multiple of their provable costs. That sort of open-handed generosity is what we saw in the grant of huge tracts of land to the railroad companies in exchange for laying track into the Western United States. I would think the factor for such compensation should be between double and triple the provable value of the losses. In most cases, this would exceed the actual losses, and would represent a participation by the displaced in the wealth that their discomfiture would help to make possible. If the (usually rosy) estimates of the gains to be made do not extend to triple the costs of those who must bear the burden, then it is unlikely that the supposed Progress is much of an advance.

In particular, I am concerned about those whose lives are being torn up by being forced into permanent unemployment or professional debasement by the changes in technology which are advertised as Progress. I am thinking e.g. of the skilled machinists who are being made redundant by the excellent work done by robots now controlled by the data-processing contained in a computer chip costing only a few dollars. They have every right to be bitter. They have, as we constantly hear, played the game by the rules. They gained a valuable skill, committed their working lives to the exploitation of that skill, and are now fobbed off by the fable of the buggy-whip. By implication, their skills are as worthless as buggy-whips in an age of automobiles. It is an insult. They are not artifacts but people, and their taxes have contributed mightily to the knowledge which their detractors are using to cast them into economic oblivion. Commentators even pontificate over the fact that lifetime employment is at an end, and that skills like those of the machinists are to be considered of only passing value. By comparison (and we shall examine this below), those who are living on inherited wealth and have no skills of any economic value, who have sheltered their incomes from taxes and lead the life of gilded idleness, are able to profit from the knowledge which was created by the taxes of the working people and dedicated to the public good by those who have discovered it.

We shall examine later my contention that those who work should also be able to live on their inheritance, if they need to, and that this inheritance is their legitimate right, that those who use it to create profits must pay a large share of the profits to the owners of the knowledge they use, and that these taxes are not stolen from them by the government, but are their payment to the People for the assets they use. Progress, if it is genuinely that, must pay generously for the assets it consumes, especially if what it consumes is the ability of decent and honest people to earn a modestly comfortable living.







Chapter 32. Risk

One of the major elements dealt with in capitalist economics is risk. When Edison had invented electric lighting and a system of electrical generation and distribution to make it feasible, he was dependent on financiers to put up the money to realize it, and to take the risk involved over whether the system would work. Much is made of the contribution of those financiers, in particular J. P. Morgan, the outstanding venture capitalist of the day. Because there were very few people in a position to take such a gamble, Morgan is celebrated in current economic theory as the genius of electric lighting, at least to the extent that it is considered appropriate that he individually and his partners collectively should have reaped the greatest share of the rewards of that invention. Of course, it did not take a great deal of courage, if one had that kind of money. Edison was already an established genius, and the potential of the electric light was obvious. The only question was who was in a position to take the risk, even as good a risk as that was.

I have mentioned earlier, in Chapter 10, that for a reasonably good student from a working-class home the risk of being graduated from college with a debt of $ 20,000 and having to find the money, with interest, out of the proceeds of that education are very daunting. Many do not choose to go that route, even among pretty good students. For those people, such a debt can look like a ticket to a life of misery and poverty. Recent laws prevent them from even finding such relief as the laws on bankruptcy offer to every entrepreneur who fails in business. Many who do take the gamble become essentially life-long economic fugitives.

Actually, the risk is rather a good one, if one can afford it. The earnings of those with college degrees is quite a bit more than for those without them, so that for those who can afford the risk, it pays well. To make the point with an exaggerated example, consider the model of a gamble which requires an investment of one million dollars with a 1 % chance of a return of one billion and a 99 % chance of total loss. For a billionaire, this is a magnificent opportunity. For someone with an inheritance of exactly one million, it is a 99 % risk of losing a fine legacy in the quest for unneeded luxury. For a person with $ 100,000 who is offered a chance to risk it all and go $ 900,000 into debt without the possibility of bankruptcy protection, it would be gross folly to take such a risk.

The world, and even the United States, is full of people who have the intelligence to make a good stab at a lucrative career if they can go to college, but who lack the means. Those who do not have the problem of means can easily claim that there is plenty of opportunity for those who are looking for it. Those who have actually done it in the past are even more unsympathetic. It is one of the least attractive features of the ``self-made man *''. At any rate, whether the fears are justified or not, there are plenty of bright young people who are locked out of participation by their perception that the potential rewards do not warrant the substantial risk. In brushing away that reality, we do not save money, but lose it. We lose the benefits those people's talents might have generated.



But there is another model, one in which the risk is borne by the public in exchange for a large portion of the winnings. If the model of risk is that one need not wager a million dollars to win a billion, but merely ten dollars, there are many who would do so, even if the winnings were taxed away at 99 %. Not to oversimplify, the Knowledge Business requires talent and education to bring forth its benefits. Those who have the talent will often be willing to invest their time if the other costs can be borne by someone else. It is not even always a question of money. Sometimes just a reasonable degree of support can make possible the intellectual development which has some chance, usually a long chance, of being of value to others as well. Enough of these cases exist to warrant public support of all the most talented thinkers. The British used to do it, until Thatcherism eroded the willingness to continue, and even today their support of their impecunious university students is a reproach to the stinginess of far more prosperous nations. The vast bulk of the benefit, when there is some, is rained indiscriminately upon the general public in the form of public domain, and even that which results in substantial profits has a substantial proportion of general enrichment. To recover the costs of this enterprise from those who use the knowledge as a resource, as most successful people do, in one degree or another, would be only just. I do not suggest anything as stringent as 99 %, but something like 75 % of the incomes above $ 100,000 does not strike me as excessive.

Let me refine an earlier thought experiment: suppose it were possible to propose an arrangement to this year's graduating class from high school. All who could secure admission to an accredited college would be financed out of money borrowed for the purpose. They would receive money for room, board, tuition, fees, and books just as we paid those for the veterans of the Second World War. In exchange, that cohort would agree that the costs of paying interest on that debt and retiring it would be repaid by a surtax on the incomes of those members of the class whose incomes exceeded, say, twice or thrice the median income in each year after graduation from college. Only the portion of income over the threshold figure would be taxed. I.e., only taxing what could legitimately be called the fruit of the investment. No means test. (See the next chapter.) Even the wealthy would receive the same benefit, but the cost to them might be more, since their income would also probably reflect an increase due to parental influence in the job market. We could never properly administer such an arrangement, of course( and how would we obtain the consent of the cohort?), but I imagine that the vote in favor would be overwhelming. The rich might well complain. (See Chapter 34, College.) But it would certainly make a valuable and productive education available to the cohort as a whole, just as the GI Bill of Rights did in the late 1940s and early 1950s.

Given that we could not propose such a deal, and on the assumption that it would be accepted if it could be offered, it follows that it makes economic sense to indenture the nation's future to provide such education to those who can make the best use of it, and pay it off from the proceeds of the investment. It is a good risk, but one which many feel (accurately or not) that they could not prudently take individually. It is certainly prudent when seen as a risk to be taken collectively by the whole cohort. Only the winners would pay. What certainly makes no sense is to deprive so many today of the possibility of making a fine and rewarding contribution in the future on the indefensible ground of saving them from the debt.







Chapter 33. The means test

In the last chapter, I alluded to the question of means testing for the benefits of public expenditure. This has become more prevalent in recent years and I see it as a way of undermining the benefits involved. The idea is to reduce the status of the benefit from that of a public expenditure to that of a form of charity. The most recent such program has been to effectively means-test Social Security payments. The argument is that those who have substantial other incomes do not ``need'' the federal pension plan. That is step one in a program to restrict payment to those who do need it, then to those who are very needy, and then to let it wither in the way that has been applied in recent years to the minimum wage. We are also seeing that happen increasingly to public education, and especially to higher education.

The contrary position is that which I used to call the principle of the library card. Access to the public library is accorded to all residents as a way of bringing the benefits of civilization to our communities, not as a way of extending charity to those too poor to buy books. The same has been true of public schools, which are open without charge to all, regardless of ability to pay. And, to add another element, the public highways. On the means test model, we could charge for all these things, with a paternalistic waiver of the fee for those who could successfully beg for it. In the case of the roads, which serve the needs of commerce, we do not do it, and those roads and bridges which do carry a toll have no provision for permitting the poor to use them without charge. The public schools are also open to all, but they have been progressively impoverished both in the United States and in Great Britain, with more and more of the upper middle classes paying for private education where that is available. This process feeds on itself, and as people find they must buy the service privately, they become ever more unwilling to also pay the cost, through taxes, of providing the service to others. In a vicious cycle, the proportion in private education climbs and the public schools are starved for adequate funds.

At the present time, the public schools in Wisconsin are under threat by a program in the City of Milwaukee, where the State is dealing with the inadequacy of the public schools by offering a subsidy to parents who send their children to private schools, including religious schools. The costs of this subsidy are assessed against the school aids to the public schools, thus impoverishing them even more. Access to the subsidy is means-tested. What is left is an increasingly privatized system of education, in which the public schools are increasingly left to those who are unacceptable to any private school. The public schools become, in effect, outpatient reform schools.

A similar fate is even reaching to the public libraries. The outstanding example is California, where a citizen initiative succeeded in placing an infamous proposition on the ballot which passed a constitutional amendment lowering taxes to the point that many communities have closed all or most of their public libraries and heavily restricted the hours of the others. So even the library card has in our time become a luxury. Perhaps it will soon become a fee-paying service, with presumably free cards for those who are found poor enough under some sort of means test.

The proper place to test means is at the tax office, not at the public library or the public school, the public road, or the public college.







Chapter 34. College

To those of us who teach in universities, this scene from THE WIZARD OF OZ has a certain bitter familiarity. We don't see it a lot, except for honorary degrees, but it is not without its referents. I remember many years ago dealing with the question of required Calculus when it was a feature of our BA and BS degrees. The teaching of that subject was a real trial, and it was hard finding a way to pass enough students to keep from feeling like a martinet, especially when we did not particularly agree that this subject was the right one for many of those upon whom we were constrained to inflict it. One day, in conversation with my colleagues, I proposed for discussion a hypothetical offer of a professor to give an average grade (then a C) to any student who would agree on day 1 not to come to any classes, not to go to any office hours, and not to take any of the examinations. The unanimous opinion at the table was that almost no one would be left to teach (and some omitted the ``almost'').

Our colleges serve the dual roles of imparting knowledge to those who need or want it, and of conferring privilege on those who receive degrees. The balance is different in different institutions, but none is 100 % one way or the other. And there are certainly some fully accredited colleges where a student of average intelligence who attends class regularly, makes a modest effort and crams for the examinations can expect to get a degree at the end of four years, depending only on payment of the tuition. At the time of this writing, there is a large portion of the Regents of the University of Wisconsin System who are in favor of offering a written contract of almost exactly those terms to any student who will tailor his * studies to making it happen.

College is the most expensive part of the program of education I laid out earlier in this book. My model is the GI Bill of Rights of the 1940s and 1950s. We should give room, board, tuition, fees, and books to students in accredited colleges, and probably some of the better trade schools as well, just as we did then. This would be a financial boon to many middle-class families, who now struggle to put their children through college, and a blessing to the most capable working-class youngsters who have no hope of college at the present time. The cost could be paid in part by current taxes and partly from a debt which the beneficiaries would undertake to pay out of the presumed benefits of those who managed to turn the privilege into an economic gold-mine.

The losers would be those who are now in a position to buy privilege for their children and who have the means to do the buying easily. Their children would benefit only to the extent that this program would mean an acceleration of the accretion of knowledge, which would enrich the whole generation. But this is an instance in which the rich do not believe the story of the tide and the boats. They want privilege for their own children, not merely those children's fair share of a bigger pie.

Indeed, for those who can remember the midCentury, the influx of veterans into the most prestigious universities made it harder for the children of the prosperous to obtain admission. The contrast was spectacular with the preWar colleges, where it was said that if the check was good and the body was warm you had a freshman. The effect was most marked at Harvard and MIT, but even many state universities were forced to limit admission mainly to residents and largely on a merit basis. But the quality of education was spectacular, and I was fortunate enough to share my first two years of college with the last of the veterans, after which education became noticeably less exciting.

The interesting dichotomy here is between thinking of education (or more accurately the reputation of being educated) as a private good, which those of means buy for their children and actual education as a social investment in the prosperity of the next generation and the deeper welfare of the human race. It is distressing that the professoriate, decked out in the trappings and honors of this secular priesthood, have become accomplices in the demand that we certify as intellectually superior almost anyone whose family can pay the tuition and who will meet the rather minimal conditions mentioned above. As though to mock the word, this is called democracy in education. The idea that college should be first and foremost for those who are genuinely interested in it, or at least those with some noticeable talent, is called elitism. The idea that only the prosperous should be able to get it (except for a few super-geniuses) is not called by that name.

Yet even now, employers are beginning to catch on that the students who have gotten through college and even graduate schools of business by cramming for examinations are likely to retain little more of their studies past the next summer vacation than the Scarecrow's garbled version of the Pythagorean Theorem. In a lovely reversal, these employers have found that the way to hire thinkers is to employ those who study subjects thought to have no economic benefit: Astronomy, Art History, Anglo-saxon literature, etc.. But of course, as soon as it is known that the smart money has learned this, the opportunists will flock to those courses and they will become polluted with straw-headed exam-crammers.

The emphasis on private goods in this last decade of this millennium, as exemplified by the privatization of nearly all public assets in Tory Britain, has been embraced by the economists of the Chicago school and their acolytes. In that paradigm, it is thought proper that the advantages of the college diploma should go to those who can pay for it. And they have helped to put the blessings of the supposedly sacred vocation we serve upon this crass prostitution of our priestly function. Meanwhile, the cause we should be serving, the accumulation of knowledge for the benefit of humanity, goes begging for resources to support it.







Chapter 35. Pre-school

The second most expensive program I have proposed is that of universal pre-school with full meal availability. This is partly, but only partly, in the direction of promotion of the knowledge agenda. It also functions as a major modification of the economic safety net, which has proven unsatisfactory in the view of most Americans and is in the process of being dismantled.

Over the course of the past sixty years or so, the United States government has largely replaced the system of orphanages which often served the needs of children whose parents could not adequately support them by a program of Aid to Families with Dependent Children (AFDC). This supported the mothers of children who could not obtain support from the fathers. It was cheaper than the orphanages and was thought to provide the loving care which was not usually a feature of orphanage life. Originally conceived as a program for widows, it became over the years more one for unwed mothers and abandoned wives. In the course of time, it began to be seen as a modus vivendi for poor unmarried women and was perceived (possibly erroneously) as a pattern which passed from generation to generation. By the 1990s, a widespread consensus was found for the desire to discontinue this form of social support and to force the parents involved into work to support their children. A small additional effort was mounted to secure child support payments where an absent parent could be identified who could pay it, but this was not very availing. For the most part, this new burden is falling on single or abandoned mothers.

A major difficulty in this program is that mothers who are working (or single fathers in the same position) must have day care for the children in order to be free for employment. This raises the question of providing adequate child care for these parents, and, by extension, for other working parents as well. Parents in well-paid positions have been able to secure very good pre-school care for the children, but those with minimal jobs have been unable to find this premium care, for the most part. The new programs of removing the safety net provided by AFDC will create a huge demand for better child care facilities for working parents.

One of the problems with the removal of the safety net is the danger that a large part of the impact may fall upon the children. Not only do they suffer from lack of competent care, but there is a deficit of intellectual stimulation, and even the nutrition required for a growing body and brain is often lacking. A disproportionate fraction of this group become failures in school, vandals or criminals, and also prisoners. The cost to the public generally of this form of deprivation is enormous, though not all the victims follow this tragic course. It is often reckoned that every dollar spent in adequate child care for a member of this vulnerable population saves seven dollars over the course of that person's life. This is a matter of concern even for most of those who feel that the burden on the mothers is a consequence of their own improvidence. However, if meals were available at child care centers, that would be a way of circumventing malnutrition even in those situations where the parent was unable to make ends meet. This expedient has an interesting connection with the question of the means test. We could expect that parents of all economic classes would take advantage of the school lunch, but the more prosperous would most likely want to have breakfast and dinner with their children. In the cases where this is not so, it is just as well that we have some assurance that the children are properly nourished.



As to education, we know that some children experience a paucity of intellectual stimulation in the home, and for such the pre-school experience under the care of professional personnel would usually bring out intelligent development where it was in peril of being lost through lack of the proper stimulation at the appropriate developmental stage. This is especially significant in the verbal area. But in a larger context, we know the immense difference that the Head Start program has made for poor children. The investment of Society in the resource of intelligence should start with the fostering of all the talent there is, from as early as possible. The pre-school is where it should start.







Chapter 36. National net worth

The national debate in the United States in recent years has been over the national debt. Both major parties spend enormous amounts of ink and air time in decrying the debt and offering their recipes for ways to lessen it. Both are positing reductions in federal expenditure. Both claim to be doing this in order to spare our children the burden of increased debt. Both are talking nonsense.

Among the things which are being done to lower the deficit and thus to arrest the increase in the debt are the retreat of the federal government from particular programs of investment in the future, most particularly in the fields of health, education and welfare. It has been my purpose thus far in this book to demonstrate that most of the cuts in education, at least, cost the next generation far more than the additional debt, even with usurious interest, could possibly do. But there is a far deeper and more pervasive flaw in the thinking, a flaw which indicates that we are doing our bookkeeping in a half-witted and unproductive way.

We need to recognize that each generation, with few exceptions, has had a richer inheritance than the previous ones. This is especially true of the inheritance of knowledge, but for the most part it is also true of the physical and industrial assets they obtain. There are exceptions to this last generalization. Those generations which inherit the ruins of war, or the residue of a period of despoliation of the environment, have a legitimate gripe in this regard. But for the most part, the advances in knowledge cancel out even these losses. The young people growing up today can expect a richer legacy than any previous cohort. To complain on their behalf of the debt which will come with that legacy would be comparable to an heir who received from his * parents a home worth a million dollars, but burdened by a mortgage of $ 200,000. It would be a churlish and ungrateful child who would complain of being saddled with his * parents' debt. In this sense, our children can expect to inherit a world in reasonably good working order, equipped with the machinery and facilities to provide them with a pretty comfortable living, if they can just manage to get all the pieces together and provide equitably for each other, an accomplishment which seems to have eluded us, at least for the present. To measure this inheritance without too great attention to the debt, I propose as a thought experiment the concept of national net worth.

In the case of individuals, we note that it is not generally the case that those with the greatest debts are the poorest. Indeed, it is more often the reverse: the greater the debt, the greater the wealth. Mostly that is because the rich use debt as a way to advance their fortunes, rather than as an expedient to procrastinate payment of their obligations. Even those who are on the point of declaring bankruptcy for hundreds of millions of dollars will be seen to recover from that to a position of prosperity more often than the poor wretches who are burdened by a few thousand dollars of consumer debt with no visible mechanism of acquitting the obligation. Thus, when President Clinton proposed a program of national investment in 1993, an irresponsible attack was made on him. He was accused of favoring the increase of the national debt and thus moving to burden further the next generations. And in the service of this bogus accounting, legislators who undoubtedly have the intelligence to know the folly of their positions voted down the program.

Let us imagine that we were to concoct the concept of a national net worth, (NNW) rather like the personal net worth which we see often in our financial planning. The public assets consist of such public property as schools, parks, roads, bridges, town halls, fire engines, water works, universities, and also courts, prisons, police equipment etc.. We must add to those the value of the educations which we have implanted in the minds of our citizens and the value of the knowledge we have put into the public domain. These last two items we could value at the cost of their acquisition, though that would be a gross undervaluation, for reasons which we have already explored. For the rest, we should reckon the cost of their replacements, diminished by a factor related to the expected life expectancy of the still-usable assets. This would be only an approximation, but it could be done in accordance with accepted principles of accounting. Unlike the situation in private circumstances, the value of assets might well not agree with the price that could be gotten by selling them. For how much could one expect to sell a prison, say, or a landfill or a sewage-treatment plant? Or even a road, for that matter, or an air traffic control facility? Those things which we must have, as a community, in order to continue functioning must be reckoned at replacement value, with due account for the gap in time until that replacement must be effected.

Measured by this idea of the national net worth, the selling off of public assets at bargain prices, as was done by Tory governments in Britain under Margaret Thatcher and John Major, would be seen as reducing the NNW, rather than the way it is now regarded: reducing the debt and the taxes. On the other hand, the ``bail-out'' of Chrysler in the United States could be seen as a canny investment, as was the building of the Interstate Highway System.

In this spirit, we should find that careful investments on the public behalf would be increasing the inheritance, the net worth, of our public assets. Of course, the value of the national net worth would be known only approximately. But that is true, to a greater or lesser degree, of all our economic statistics. The important item would be the knowledge of whether it was roughly growing or shrinking. If it was growing, even over an increase in the debt, we would not need to tolerate stupid talk about burdening our children with our debts, while if it were shrinking, even with the debt shrinking, then we would know that we were not living up to our responsibilities.







Chapter 37. Investment

The entire question of public investment raises another issue which is peculiarly apposite. We find ourselves in a period when the public is making many investments which are, however, for private gain. The matter which comes most frequently to the forefront of the news concerns public investment in stadia for the use of privately-owned professional sports companies, such as baseball or football teams. However, the phenomenon is not limited to that circumstance. In Michigan, the major automobile companies have been building new factories only when the State and cities contribute by condemning and purchasing land, providing special municipal services, and cancelling large portions of the taxes which will come due. These donations to the corporations are in effect investments from which the public can expect no dividends, other than the jobs which will not be removed to other locations in non-union states or abroad. In a similar vein, several airlines have required their employees to invest in the company. Some of the investments have been in the form of stock which would not have sold on the securities market, but which might bear dividends in the future. Another form of investment has been the ``give-backs'' of pay and benefits to reduce the costs of operation. These will not yield any direct share of the profits. Even in those cases where the employees have bought the whole of the company from the previous stockholders, it has been at an unrealistically high price. Thus, the People are being made investors in business in a parody of socialism. They pay the price and bear the risk, but do not share in either the control or the profits (if any) which are the usual prerogatives of the investor.

The arrangements outlined above are some of the very few which are less attractive to the public than what is called ``lemon socialism'', in which failing enterprises, such as the passenger railroads of the United States and Great Britain are sold off to public ownership for a fictitiously high estimate of their value, and then run at a deficit because the public needs the service. In the extraordinary case (as with Jaguar automobiles) where the business is resurrected and becomes profitable, the benefit accrues to the public. Jaguar was sold to Ford, and the money returned to the public purse. When there is no profit, this is as bad as the other, but at least there is the possibility, however tiny, of public benefit from the investment. When the State builds a stadium or a factory or a special sewer line, it bears the risk of losing its investment if the enterprise fails, but reaps no reward if the investment bears fruit.

An entirely different calculus applies to the investment in knowledge. There, the public stands to gain substantially if it is understood that the student or the researcher is acting for the People and will be required to share the proceeds, if there are any. This perception is defeated if we consider the State's participation in the Knowledge Business as an expenditure rather than an investment. In that case, the rhetoric is over the cost seen as merely spent, and the benefit goes to the recipient of the scholarship, the tuition support, or the research fellowship. It looks like an expensive gift to a private party. I am struck by the similarity to a comment of the late Renaissance economist Thomas Mun, quoted by Adam Smith:

If we only behold the actions of the husbandman in the seed-time, when he casteth away much good corn into the ground, we shall account him rather a madman than a husbandman. But when we consider his labours in the harvest, which is the end of his endeavors, we shall find worth and plentiful increase of his actions.

[Thomas Mun, England's Treasure by Forraign Trade, or the Ballance of our Forraign Trade is the Rule of our Treasure, 1664 (posth).]

Seeing education as a consumer expenditure is like seeing the husbandman as the waster of grain. Seeing it as an investment is like knowing that there is a harvest in the offing.

But we must ask the question of how we collect on the profits of the investment. At the present time, we collect little, because the owner of the education quite properly believes that his * investment of time and money, in particular if the latter has resulted in substantial debt, makes the increase of earning capacity his * own personal property, to which no one else has a claim. This is outstandingly true of the physicians in the United States today, whose claim to the profits of their educations rests in large part on their personal sacrifices in securing it. The fact that the public, in one way or another, has paid the greater share does not come into their reckoning. Only those who have been wholly financed as e.g. by the armed services or the Public Health Service might have such a humble outlook, and even those are often not inclined to give the public any more of the profit than what their contracts specify. In some cases, they try to evade even that.

To maximize the profit of the investment, the public should solicit the participation of the ablest. It is not always so clear who these are. In East Harlem, for example, the rate of high school graduation was less than half. But that was greatly altered for the graduating class of one junior high school. An alumnus who had succeeded in business offered to send to college any child of that class who succeeded in being graduated from high school and obtaining admission to a university. The success rate of that class jumped to 85 % . I think it fair to say that those who would not have achieved the high school and college diplomas would overwhelmingly have been trapped in working-class life or worse. For those who achieved a level above working-class, I think it would be fair to have made a part of the agreement that they would share the excess, returning a portion to the next generation from (perhaps) the same junior high school or the same district. More generally, it would be fair for the recipients of public financing of their educations to share the rewards with the investors if they achieve comfortable lives. Then the public becomes like the sower of grain, who is not throwing it away but planting for a harvest. And it would be wise of the public to invest as widely as possible on that basis, given the great potential of profit which the Knowledge Business affords.







Chapter 38. The People's share

I come now to a rather delicate question. What is the legitimate share of the People in the profits reaped from the knowledge which is our common property, and how much belongs to those who find ways to use it? It is clear to me that the ideology of the states which called themselves socialist gave too little to the innovators, while the present practice in the countries which are designated as capitalist gives too little to the public. What is a reasonable partition of the fruits of this inheritance?

Keeping in mind the legitimate grievance of the Luddites, we should start with the elimination of what is called technological unemployment. The ideology which regards a skilled machinist as someone who has not taken the trouble to acquire a saleable skill is not only unrealistic but also cruel. And the demand that he * should meet the problem by retraining in another skilled profession which also faces the same risk is unrealistic on several grounds. The first is that skills of that order are hard and long in their acquisition, particularly for those who have lost the resilience of youth. The second is that even if such a skill were acquired, the older worker would face substantial age discrimination (notwithstanding the law) in competing with younger workers for employment. The third is that the available positions are principally in disciplines which require higher education, which is even more unreachable for an unemployed worker with a family, a mortgage, and a multi-thousand dollar balance due on his * credit card.

It is time finally for the promise inherent in the concept of Progress to be realized, for the time saved from toil which cannot be put to productive use to be distributed to the working people as leisure. I accept that there needs to be a small amount of unemployment corresponding to the situation of those who are looking for their first jobs, or looking to change jobs, or temporarily dislocated for any of various other reasons, such as having an employer go out of business, but these ``structural'' unemployed should come to at most a fraction of 1% of the labor force. Those who are able and willing to work are entitled to claim as their share of the common legacy a decent job at a living wage. In addition, those who have been deprived of an especially skilled job at a higher wage are entitled to compensation, even generous compensation, for that loss, in the spirit of the discussion in Chapter 31 on Progress. Changes which do not create profits sufficient to pay such indemnification are not progress, but merely the mechanisms of advancing one person's wealth at the expense of others'. The details of who will pay the indemnity are not specified yet. It may be that the innovator can convince the public generally, through the State, to bear that cost, or part of it, for him *. That might be the case where the element of progress was clearly for the benefit of all. Yet the loser must be compensated out of the benefits to others, or we will have the kind of injustice of which the Luddites properly complain.

A second claim which I find reasonable is that for ordinary unskilled or semi-skilled work, the common portion of the resource of knowledge should support a level of compensation which we recognize as a comfortable working-class standard of living. That includes, in my way of seeing it, the ability to afford a home adequate for the raising of a family, and the ordinary comforts of working-class life as we came to know them in the 1960s and 1970s. If we cannot or will not provide such a life as the reward of such work as we have available for people with ordinary preparation for employment, then we must be ready to accept the consequences of serious social disruption as the cost of this economic injustice.

One of the mechanisms which is available for dealing with this situation is to be seen in the Fair Labor Standards Act, which dictates maximum hours and minimum wages. It may be that this expedient requires some fine-tuning. I can think of particular changes that I would wish to see incorporated, but that is detail. It is clear to me that in a world of giant corporations and in the light of the Iron Law of Wages for an unregulated economy, the supposed wonders of ``the invisible hand'' of the market leave entirely too much to be desired. One of the ways of keeping the balance of wages and hours from running in the direction of too much pay for too little work can be found in the policy of ``skimming the cream'' which I described in Chapter 13 on Filling from the top. But to the extent that we cannot bring the wages and hours into balance, with useful work being done by the labor saved by progress, we can take our reward in the form of leisure.

In addition to the little comforts which were the lot of ordinary working people in the 1960s and 1970s, there are other benefits which should, at a minimum, flow from the People's ownership of the common knowledge. With the wealth which we draw from it, there is no reason why we need to tolerate hunger or malnutrition, at least for children, at least in the industrially developed part of the world. In Chapter 35 on Pre-school, I indicated how this can be accomplished for those children. Actually, I think a similar program should be adopted for all school-aged children, at least in the United States. As the world's population approaches six billion, there begins to be some doubt about how far beyond this minimum we can extend such a guarantee. And the same fountain of wealth can easily afford the program of universally available education which I have outlined in Chapter 9. Finally, there is still so much wealth in the difference between the productivity of the 1960s and that of the 1990s that some rise in the level of luxury for working people (in which there has actually been a decline) can be afforded without critically injuring the motivation for seeking and funding advances in technology in the future.

Another area which commands attention as part of the People's share is the issue of health care. This one is touchy, because the costs have become so very high in recent years. People demand adequate care, and also demand that the costs be reduced. There are at least two ways of dealing with this apparent contradiction. One is to take it as a natural law (See Chapter 20 on Greed.) that we cannot satisfy the needs of all. In this model, those who can afford the ``luxury'' level of care, either through personal wealth or the ability to afford a more comprehensive insurance will have it; the others will have to deal with the harsh realities which are said to be the natural lot of the poor. Of course, I reject this. The second method is to establish a level of care to which everyone is entitled and pay the costs of providing it to everybody. This comes with a subtlety, and I want to discuss that next.

The very advance of medical science and technology have put diagnosis and treatment of disease on a new level. Conditions have come to be treatable which everyone, from the poorest to the richest, simply had to endure. In some cases, the treatments are costly, such as cardiac bypass. This one has been attacked as not cost-effective. Some people have suggested that it is too expensive to be included in any general health-insurance plan. It is perhaps ungenerous of me to suspect that the vast majority of those who hold this opinion would in fact opt to have the operation if they needed it to save their own lives and if their bank accounts or their insurances would bear the cost. The opinion is that it is too costly to ``waste on Them''. When the State of Oregon proposed a medical plan which would expand the availability of highly efficient interventions, like universal immunization and prenatal care, at the expense of not offering very inefficient care to anyone, the outcry against this form of ``rationing'' doomed it. I am not advocating the rationing. I am arguing for placing the lives and health of all the people on an equal footing, so long as the dividends of the public knowledge will pay for it. The rich, in this century, have reaped a huge benefit in this area from the advance of the People's knowledge, and it is time, as soon as the economy can bear it, for the People to share in that. There is likely no way to prohibit the rich from using that knowledge prior to the time when all can do so, but it might be worth considering a kind of ``luxury tax'' on all procedures not available to everyone, a tax which would enhance access of everyone to more care than would otherwise be available.

The 1960s and 1970s give us a model. The level of taxation was higher then, but there was still plenty of technological advance. In the last fifteen years, almost all of the rewards of advance, including the increase in the productivity of labor, has gone to the very rich, with more than half of the population actually seeing a decline in their living standards and their hopes of a decent future. If the ordinary people had been held harmless from the advances, there would still have been enough benefit available from e.g. half of the remaining technological advance to more than fund the benefits I have outlined here as the People's share.

Finally, (and here we get into heavier socialistic thinking), as this program becomes accepted (if it does), we should see more of the product of the publicly-financed knowledge reserved to the public use. The benefit to those who will become the bearers of this bonanza should be an increased opportunity to do more, what many wags have described as ``the leisure of the theory class''. Instead of fat paychecks, we should see lesser teaching loads, more sabbaticals, more scholarly conferences, etc., with the cash benefits going to the public which will have provided the paid educations and supported the laboratories and libraries which make it all possible. To compensate for the loss of the possibility of great personal wealth, we need to offer these brain workers the kind of economic security that all would reap from a much more productive economy: school for the children, medical care for the sick, and security in age or disability. That would be the promise to all, and would moderate the need for hefty salaries.

The further regulation of wages and hours would have the effect of putting out of consideration some of the jobs we now see. There is always some such effect of higher minimum wages, though it is overstated by those whose motivation is not really the protection of the unskilled or the efficiency of labor but the maximization of profit. Some advocates for conservative economics claim to be concerned that higher wages to the poor will cost them their employment, and say they are distressed on that account. It is significant that these uniformly maintain that the social benefit they posit (fuller employment) should be financed out of the pockets of the lowest-paid. If we were to propose that the lower wages should continue, but should be topped up to the level of working-class comfort I have detailed above by ``negative income taxes'' of the kind proposed by President Nixon, the crocodile tears being shed by most of these unlikely philanthropes would dry up promptly, since that would necessitate payment of heavier taxes by the rich and powerful. So we see that the concern is not for the employment of the unskilled or the use of labor in low-value work, but the question of whose ox is gored.

Finally, let me say that all the benefits of the common store of knowledge should be shared by all equally. The rich should benefit in the availability of free education on the same terms as the poor, and also in the programs to prevent hunger. Anatole France's great comment should apply here in reverse. He observed that the Law in its majestic impartiality forbade both rich and poor from begging in the streets, stealing bread, and sleeping under the bridges at night. I propose that both rich and poor have free meals available for their children at school, and that those children all be granted free access, paid by progressive taxation, to all the education they have the stomach for.









Chapter 39. Rentiers

The suggestion of a substantial negative income tax raises the whole question of the welfare system. If we create such a payment instead of having a minimum wage adequate to support working-class comfort for working Americans, we might find a substantial number of people who would eschew minimum-wage work and live ``on the dole''. This situation offends the puritan strain in our culture, but only if the practitioners are poor, for then it is perceived that they are living at the expense of others, and the others have a right to complain. On the other hand, if the non-workers are living at the expense of others by means of shares owned in companies, then it is considered as a perquisite of wealth. If the rentiers are legatees, it may be that they never contributed any effort of their own to creating that wealth. Nonetheless, it is considered a valid use of personal wealth to create a system which one's heirs can use to live without working. There are some who show a disapproval, usually mild, of such an idle life-style, but these are generally thought of as puritan cranks. The right of rich people to avoid work which does not bring in enough money to tempt them is usually touted as one of the benefits of the free market in labor.

It is perhaps odd that the perceptions in the previous paragraph would probably not be changed much if we were to consider the negative income tax as being derived from the People's ownership of the legacy of knowledge. The resentment of wealthy taxpayers, even if defined as paying for use of that knowledge, is not so easily deflected as the old socialist resentment against ``exploitation'' by the likes of Henry Ford, to say nothing of his grandchildren and great-grandchildren. But if we put aside the puritan opprobrium against sloth, we could consider the merits and demerits of having people who abstain from the economic rat-race to live on their unearned incomes. (On the other hand, despite my differences with Ford on many issues, I cannot imagine that he would have thought it desireable that his grandchildren and great-grandchildren should live without doing socially useful work.)

For decades, the answer to the problem of unemployment, at least in part, was a system misnamed as ``welfare''. In the popular imagination, those who wouldn't or couldn't make a go of the world of employment had the option of ``going on welfare''. It was a poor life, but an idle one. That was what they imagined. Actually, there were only a few welfare programs, mostly for women with children but without husbands and for seriously disabled people. I once carried out a bit of research to find out what was available in Madison Wisconsin for a healthy young man without work who was in need of shelter and food. It was almost nothing, and that was twenty years ago, more or less in the heyday of the welfare era. One supper and one night's flop - maybe. Even for that the facilities were limited and when they were full the door was shut.

However, it is interesting to investigate what would be the philosophical fallout if the actual policy had been more like the European model, where one had the option of the dole indefinitely if one could not or did not find work. In a period of substantial unemployment, there is a bit of tension over whom you would rather see take a job: a person who you knew wanted one or someone who you suspected did not. I would prefer to save the job for the one who wanted it, but I suspect that my position is in the minority. From the point of view of the utilitarians, we maximize happiness my way, but that is only if we count only the happiness of the two candidates. If we reckon also the bile of the puritan interlopers, then more happiness is obtained by compelling the supposed slacker to work than in giving away something (a desired job) to the other.

For the past fifty years, Labor has been content with the welfare solution. Unfortunately, the only way a healthy unemployed young man could live off welfare was as an adjunct to an unmarried mother. And it is hardly surprising that there were some who arranged to do just that. In fact, some were so enterprising that they managed to adjoin themselves to several such. It was not an essential feature of this game that they be the fathers of the children in question, but it did make it easier to accomplish.

My own opinion is that in a situation of unemployment those who are willing to stay out of the job market for a pittance are actually providing a valuable social service. It reduces the strain on others. But for those like the Chairman of the Federal Reserve System who worries when unemployment falls much below 6%, anyone who is not underbidding his * neighbor for a job is an additional problem.

As I see the optimization problem, the basic work reward (BWR) should be made up of three parts, and the combination of those parts should yield a comfortable working-class life. There is the standard work week W , the minimum wage M , and the knowledge dividend D . The standard work week should be controlled, as by a control on the maximum week one could work without penalty, so that every one can have access to that much work, and that would supply all the work that any employer will require, given the minimum wage. The knowledge dividend should be set to provide the difference, if any, between the product of the minimum wage M and the standard work week W (which together make up the standard minimum pay, or SMP) and the BWR :



Any who elect to live on the knowledge dividend rather than take work at the minimum wage or more would be in the same position as the Ford heirs, but rather poorer. Any decrease in M would likely increase W , but by how much is not clear. However, the amount of the knowledge dividend would depend on the product of these, and would be paid out of taxes on profitable employment and enterprise.

The knowledge dividend would be paid to all adults, rich and poor, employed or not. Anatole France again. I would hope an enlightened populace would give to the idle poor, if any, the same tolerance it now affords to the idle rich. The fact that these might include some artists, novelists, lay preachers, etc. who were supporting themselves meanly in order to follow a different drummer should be considered one of the benefits of this suggestion.

The government, in this model would have to fine-tune the equation, lowering the work week and/or raising the minimum wage to assure that unemployment was as small as possible. However, there would always be the temptation to move in the opposite direction, to avoid the necessity of taxing to finance the increase in the knowledge dividend. A supplemental payment to the involuntarily jobless might prove an effective mechanism to give incentive to the government not to deal unsympathetically with the down-side of this proposed mechanism.







Chapter 40. White heat

In 1964, Harold Wilson promised that Britain would ``forge Socialism in the white heat of the technological revolution''. In this, he was both wrong and right. The wrongness is obvious. The British essentially gambled their whole technological strategy on the Concord, and when that failed as an economic undertaking, the policy mistakenly ridiculed as ``picking winners'' went down with it. And with it, eventually, went the mild pink socialism of the Labour Party. Yet in a deeper sense, Wilson was right. Marx knew that the indispensable base for a socialist economy was a successful and mature (he would have said ``overripe'') Capitalism. He envisioned England or Germany. His vision did not extend to the United States or Canada, not to mention the Antipodes. Wilson knew that a transition to any kind of socialism in Britain would require a new source of wealth so great that it would be possible to create the socialist state without greatly inconveniencing those who were already rich. Socialism without expropriation. And the clear source of such wealth was to be found in what he called the Technological Revolution, and what I have expanded to encompass nontechnological learning: The Knowledge Business.

But something happened on our way to Utopia. The rich decided that they wanted it all and with the help of the Tories they have grabbed it up. The wealth created in the intervening years could indeed have accomplished that dream, and without the pain that we have seen in the impoverished peasant societies which have attempted to build socialism without such a base, but the details evaded them. Perhaps a more thoroughgoing analysis of the situation would have recruited a more dedicated electorate. It didn't happen.

It could yet happen. If the next generation is willing to wait that long, the dream could yet be financed out of the profits of their own technological advances, if they can get the permission of their parents and grandparents to go into debt to achieve them. And it could be hurried along if those older ones would be willing to claim back a part of the wealth which was created in large part by the Socialist educational policies of the 1960s and 1970s. At the same time that the British and the French were chasing down a blind alley with the SST, the Americans, without knowing it, were laying the groundwork for an industry worth many trillions of dollars. It is only dumb luck that the winners of that gamble turned out to be the Americans and the Japanese. The British and the French certainly had excellent scientists and engineers, but their businessmen * were abysmal. I have observed that the entry criteria for European management were far from meritocratic, and favored the well-connected rather than the ingenious. It is true even today, and was much more so then. A nation which is still paying huge stipends to nobles who are implicitly still collecting on military services rendered to William the Conqueror, and can hardly believe that they have a Prime Minister of distinctly lower-class roots, still relies overwhelmingly on the holders of inherited wealth to steer the course of the economy. Them and their courtiers, of which more in the next chapter.

It can yet happen. The Forge of Socialism is still available, but the Labour Party has tired of seeking the Grail, and the same is true in Europe generally. Can someone rekindle that furnace? Maybe.