Always at a Distance: The Decline and Fall of Direct Human Relations

The other day, I called around to find the best deal in town for getting my cracked windshield replaced.  I had been given a couple of recommendations, one form a friend and one from my mechanic.  So, of course, I did an internet search for windshield replacement shops nearby.  I picked three the two that had been recommended and a third that was a larger corporate operation.

I looked at customer reviews and saw a very bad one for the shop my reliable mechanic had recommended.  I always look at internet reviews with a skeptical eye, since some can be either self-serving in all the wrong ways, or spiteful for questionable reasons.  With windshield repair shops, you don’t find large numbers of reviews such as you might for books on Amazon.com.  So, I called all three and found a wide range of prices, from around $150- to $225-.  But something more interesting and annoying happened.

When I called “Safe-Shield” at its 888 number, it turned out to be a national corporate telemarketing site, tho the local shop.  I should have known.  When I told the woman on the other end of the line that I wanted a quote, she began asking all sorts of demographic and identifying information about me.

Finally, I said, “you don’t need my life story to give me the price quote I asked for.”  That was not what she wanted to hear.  She attempted to get through her scripted marketing pitch on all the reasons “Safe-Shield” was a better choice.  When I finally insisted on and got a price from her, I was shocked that it was nearly $75- more than the price my friend’s recommended shop had quoted.  That’s a third more!

I had finally gotten that quote after having run through a long automated menu tree before being subjected to the tedious sales pitch.  Why?  Because the local shop that is either a franchise or a wholly owned subsidiary entity had no control over its own relationships with its local customers.

Fact is, auto windshield repair and replacement is an inherently local transaction.  Each shop does not produce its own product or have its own supply chain.  They all draw needed parts from the same wholesale distributors of auto glass.

Later, I had a conversation with the owner of the locally owned shop, which I had chosen for the job.  He had the best price and had quoted it to me immediately without asking me for any information other than the make and model of my vehicle.  I could not resist telling him that the corporate shop’s telemarketer had quoted about $75- more than he had.  He simply replied that he could not understand how people could charge so much.  This man sells and installs products for people in his own town, with whom he may have other relations as well.  His responsibility is personal not merely a matter of being employed by a largely anonymous organization headquartered in some other state.

The implication I took was that an honest man would be embarrassed to be known to overcharge his neighbors like that.  Such a man does not objectify his business relationships with others as a distant telemarketer would.  He views them with human respect and makes a good living in the process.  Whoever runs that local shop for the corporation probably makes much less money than an honest shop owner.  The corporation, of course, makes more.

The point here is not how much anyone makes, but how humans relate to one another in an economic context.  As complex modern economies have “integrated” and corporations merged and consolidated, less and less room has been left for immediate interaction between two individuals, each of which has a personal stake in the interaction.  “When Corporations Rule the World,” as David Korten puts it, humans interact at greater and greater social distance from one another.  Their mutual indifference to their mutual humanity is correspondingly greater.

A lot of people are starting to get it.  They realize that the way things have become organized, nothing human matters any more in the conduct of business, except the pretense of human caring.  They [we] want to engage with other people in real transactions close up, as actual persons — not just actors in a scripted business ritual.  This is part of what the “buy local” movement, as well as the “slow food,” the “farm to table,” and the local and public banking and finance movements are about.  People in communities are doing business with their neighbors instead of being subjected to distant corporate criteria for economic transactions about which no negotiation is possible.

It is important to note that reducing distances in economic exchanges is a critical element in transforming the corporate growth economy into many local ecological economies.  Only by breaking the cycle of growth addiction and financial centralization will there be a chance to transform our failing economic systems to make them both humane and compatible with the earth systems upon which they depend.

Solutions to seemingly diverse problems appear to converge.  A recent and growing body of research on happiness and human well being is informative.  Beyond the basics, happiness and subjective wellbeing do not increase with greater wealth and power.  Happiness is greater in nations with lesser GDP [gross domestic product] than in the economically “advanced” nations.*

Both happiness and survival of the human species is now dependent upon reorganizing social relations.  We need steady-state local economies where transactions occur primarily among  people who engage with each other, not at a distance,, but in good old face-to-face interaction.

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* James Speth provides a good summary of the research fields of happiness and well-being in chapter 6 of The Bridge to the Edge of the World (Caravan Books, 2008).

Runaway Capital and the Necessity of SLOW

Slow Food; Slow Money; Slow Life. Such concepts are anathema to the frenzied culture of the dying industrial age. But these ideas are becoming popular among a small but growing class of folks who are simply tired of ‘the rat race.’ “Slow” is closely aligned with the simplicity movement. What do they mean, why should we want to achieve them, and what’s the point?

To fully recognize the fatal flaw of the current economic path and the need for a new direction, one really must understand acceleration. Or, grasping the power of compound interest would do. With regular savings and compound interest over a working career, a worker with a modest salary could retire a millionaire. But how many do?

For that to work, the saver must also avoid debt – especially consumer debt. That is increasingly less likely as wages are squeezed for ordinary workers who are pressured to consume more with “easy” credit. Of course, “credit” is the availability of money for borrowing. Consumer debt is a burden that more than neutralizes any savings program. The debt-based economy is a complex trap.

Runaway Capital
The debt-based economy must continually expand. How else can interest be paid but by adding more money to the system? Banks are allowed to loan a lot more money than they keep in “reserve.” That new money is created as debt in the accounts of borrowers. Economic expansion is based on expanding debt. Government debt and private debt are the basis for the profit that interest rates generate as growth.

Since the 2008 collapse, the Federal Reserve loans the Big Banks money at near zero rates. It has bought the bad debt that should have pushed the Big Banks into bankruptcy. But infused with new cheap capital, banks are nevertheless afraid to lend to businesses since so little demand remains in the economy. The result is that with institutional rates so low, banks buy each other instead of lending to business.

Corporations are afraid to invest in production since demand is so low. They use their trillions horded in cash to buy back shares and drive up share prices, making themselves appear more valuable. This allows executives to ‘justify’ larger bonuses, instead of investing in meaningful production – which would expand employment, if only in Asia.

In a finite world, at some point the acceleration of growth – via compound interest on growing debt– becomes an unsustainable Ponzi scheme. It is no longer the real economy that is growing. The expanding “financialized” economy of accelerated growth of phantom wealth through complex derivative instruments keeps expanding. It is allowed because no real restraints have been imposed on the banksters who caused the crash. The fatal flaw has been covered over in imaginary cash.

This false creation of money has no substantive basis for capital creation in real life. These financial manipulations generating phantom wealth produce no real value. The consequences for the currency will be dire. The basis for the value of the dollar cannot be sustained in debt alone. That is why the Chinese are quietly unloading dollar debt instruments – treasury notes and bonds – in favor of gold and currencies with more long-term security.

Slow Capital, Real Investment
The most important problem with “Fast Capital” is that it drives financialized economic growth at the expense of the real economies of communities. “The economy” no longer fits the real circumstances of the world we live in. It was a tenuous fit to begin with. By the 20th century so little of the world was left to conquer that it had scant room to grow. Now the growth model is being tested against environment limits. But financial growth, being abstract, is only limited by debt structures.

Today the real-growth economy is restrained by a finite supply of depleting resources and its own accelerating ecological destruction. Unfortunately, most attempts to provide an alternative world based on ‘renewable’ energy and resources are framed in the failing economic-growth model. Most advocates of renewable energy and resources do not argue for a no-growth economy. Growth is a deep political value in the economic culture. Growth is seen as an inevitable requirement for prosperity – everyone is for it. It is both the essential element and fundamental flaw in the conventional model of the economy.

A new economy that is based on slow capital is now necessary. Certainly, the transition from the economy of indiscriminant expansion to a carbon neutral economy of stability will involve selected areas of real growth – and others of major contraction. In this new context, capital investment must apply technological innovation to “the old ways” of producing needed goods in creative ways. The technologies of “labor saving” overproduction cannot work. Slow production with higher quality responding to real needs will support more jobs requiring more skill and education. Slow education is labor intensive and would require little capital – it will require social commitment of slow capital.

Creating an abundant new ecological economy requires innovative thinking and experimentation, not automated extractive industry to supply overproduced useless objects. Slow capital must be invested in new technologies for effective use of more skilled labor to convert the economy to more carbon-neutral activity serving human needs, not fast capital serving financial growth for elite phantom wealth.

It is still hard for us to visualize. Our thinking is so influenced by the growth-economy culture. But the ecological economy will be slow and both intellectually and artistically rewarding. It will focus on human interaction to realize the cultural goals of achieving basic sustenance, artistic expression, intellectual exploration, and civic engagement. None of these require fast capital, or false wants for overproduced meaningless objects of momentary attraction. All those suburban storage units will not be needed. What is most required is a societal commitment to an economy driven by core human needs.