Bill Knight – January 24
10:50 am
Wed January 23, 2013

The Servant Economy

When President Obama delivers his 2013 State of the Union address, remember a comment he made at last year’s State of the Union speech: "Our workers are the most productive on Earth, and if the playing field is level, I promise you: America will always win.”

Bill Knight

That sounds inspiring, but – as economist Jeff Faux shows in his recent book, “The Servant Economy: Where America’s Elite is Sending the Middle Class” (Wiley) – neither political party is improving America's unemployment, income inequality, or overall economy. And Faux encourages everyday Americans to seize opportunities to demand reform.

A founder of the Economic Policy Institute, Faux critiques Democrats and Republicans alike for protecting transnational corporations “while abandoning the rest of us to an unregulated, and therefore brutal and merciless, global market.”

The latest lousy example is the Trans-Pacific Partnership trade pact, which proposes to protect investors but provides ways to offshore jobs (engineering and research as well as manufacturing and low-wage work).

Why is there so little improvement? Faux says that no one in charge – politically or financially – will concede that things aren’t getting better because the economy still works for the 1% who run the country.

The economic situation is less a “service economy” than a “servant economy,” he shows. There have been servant economies before. In fact, sometimes, people embraced such a status, especially as an alternative to available work. In the early Industrial Age, jobs in factories or farms were dangerous and ill-paying, so working in the homes of the rich was attractive. Downton Abbey was preferable to Yorkshire’s coal pits.

However, that changed as workers organized, achieved the right to bargain collectively and won a bigger share of the wealth they produced. Over the first half of the last century, America’s elite lost some of their dominance, if not influence, and fewer Americans worked as servants for the super-rich. That increasing equilibrium reached its peak in the decades after World War II, when the United States could afford a solid middle class, a strong military effective across the globe, and a prosperous economic elite – simultaneously. However, the last 30 years showed that that post-war era may now be viewed as a fluke. Ever since, the 1%, the military and the middle class have competed, and the middle class has been losing for decades.

Bill Knight's January 24 commentary

Sam Pizzigati from the Institute for Policy Studies says, “Since the late 1970s we’ve witnessed an assault on the building blocks of equality – unions, progressive taxes, regulatory limits on business – that has hollowed out the American middle class. Most Americans no longer make things. They provide services.”

Today, the United States can no longer support Wall Street’s insatiable greed for ever-growing wealth built on speculation, plus a military-industrial complex with an annual budget that’s 20% more than the next nine nations combined, plus a middle class trying to maintain itself despite rising costs of living and falling pay.

Faux asks, “One of these? Certainly. Two? Perhaps. But not all three.”

The elite, financing both Republicans and Democrats and successfully lobbying for legislation benefiting the 1%, have their Capitol Hill mouthpieces cry, “Jobs, jobs, jobs.” However, their mutual coziness with globalization actually means, “Lower wages, lower wages, lower wages.”

That leaves the middle class and especially young people with lousy choices, Faux writes. Young Americans could be educated to be engineers, programmers and the like, but spend their careers in “competition with people all over the world willing to work for much less.” Or they could join the servant economy and “service those few at the top who have successfully joined the global elite.”

The main problem, Faux says, is not that folks don't know what should be done. It’s that the corruption of politics by big money has hampered, if not killed, attempts to make the economy fair and work for more people. As high-paying service jobs follow industrial jobs offshore and government safety nets are systematically dismantled, more and more Americans will be forced to eke out existences as educated, 21st century servants – as insecure and stripped of dignity as serfs in feudal Europe.

Globalization won’t vanish, but citizens must demand that interests of transnational corporations are balanced with people and genuinely American businesses (large and small), and that the U.S. economy makes Americans goods and services competitive worldwide without sacrificing jobs, wages or standards of living.

Faux is not completely pessimistic. Escaping the 30-year descent to servanthood needs everyday people to become educated, agitated and organized, he says, to eventually press for better wages, hours and working conditions but to first overturn a system that equates money with free speech and corporations with human beings.

The opinions expressed in this piece are not necessarily those of Tri States Public Radio or Western Illinois University.

Bill Knight is a freelance writer. His newspaper columns are archived at billknightcolumn.blogspot.com