Sunday, August 8, 2010

The Institution of "Capitalism & Luxury Goods"

Daniel Indiviglio had a great article on the gender pay gap earlier this week, "Why Working Mothers Fall Behind".  This is based on the New York Times story and a recent study on the gender pay gap.  Indiviglio's observation is, if we focus purely on men and women who stay in the labor force during their professional career [by discounting the women who take breaks or drop out], there is no gender pay gap.  The gender pay gap, at this time, is basically a proxy for the real pay gap, between people who stay in, and people who drop out, of the labor force.

His article touched off some interesting discussions around the web.  I finally had some time to look at the comments today, and it struck me, that this is another place where we can ponder Carroll Quigley's Institutionalization Theory! :D

A brief recap on Institutionalization: Over time, instruments of power calcify into institutions, thus stopping contribution into our civilization's growth, eventually leading to its collapse.

In our current Western Civilization, Quigley identified our "instrument" as free market Capitalism.  As Quigley remarked, luxury goods is the engine behind the growth of commerce in general, and in today's economy, luxury goods and services [anything not essential to subsistence-level food and shelter] have grown to dominate the economy.  Our current labor market system is a reflection of that, where most people labor to produce luxury goods and services.   In this system, people advance by working harder AND making more personal connections than other people.  Therefore, dropping out of the labor force [or part-timing during the toddler years] negatively impact one's professional growth, by limiting effort of work and opportunities to connect.

At the same time, this labor system does not look good demographically.  The higher-paid professionals are having less and less children, while the lesser-paid people continue to meet replacement-level need.  Therefore, demographically, we will have proportionally more descendants of the lower class and less of the upper class.  If you subscribe to the theory that you learn productivity and work habits from your parents, then you can see that we're on the path to Idiocracy.  Good thing that the US has a fairly mobile [and upwardly mobile] labor market/culture, where the schools have taken on the social function to inculcate "hard work" into the students.  Looking across the pond toward Europe, they're at a much more advanced stage of the demographic Idiocracy than we are, a warning to us all.

Then again, we should re-examine this system, a confluence of free market capitalism and monogamy.  Polygamy again has emerged as a discussion topic this week.  As it happens, polygamy presents a possible answer to this demographic conundrum we're examining here:  A business unit with organic [in the "internal to oneself" sense] childcare capability and multiple working parents who can stay in the labor force.  The internal dynamics of a polygamous household does present significant challenges to the adoption of this practice.  However, if we cannot figure out the educational institutionalization problem [where the education hierarchy, aka teacher union, is perpetuating an underperforming status quo, and where higher education is not adequately preparing students for the future], this is where we might have to end up at.

Speaking of polygamy, we have a kind of a polygamous system at present, with the prevalence of infidelity.  The hypocritism that infidelity engenders today, as well as the sub-optimal economic arrangement [where the high wage earner has to support multiple, duplicated, childcare efforts as opposed to a single, consolidated childcare focal], makes the current polygamous system self-defeating.

And yes, I do realize that I need to find another book and author to harp on.  Now that Megan McArdle is looking at Tainter, and I having just finished The Collapse of Complex Societies, I guess I should do my Tainter book report here.

1 comment:

Dora Ali said...

great job

http://www.afu.ac.ae/en