“In a word,” says economist Stephen Marglin, “markets are the cutting edge of the loss of human connection.”17 Most economists, he adds, see that loss of human connection as a virtue; markets are more efficient than communities, which valued friendliness, community spirit, and a willingness to work on behalf of the community without expecting to be paid. As markets develop for what used to happen in families for free, the caring that happened at home is slowly transferred to larger, more impersonal institutions. The cost of care goes up, not least because it had nowhere to go but up since women working at home weren’t being paid for what they did. That rising cost of care is good news if you’re someone who wasn’t being paid for the care you were giving, but not so good if you’re someone who needs care and who can’t afford to pay for it. But even if you can afford to pay for it, money doesn’t guarantee that the care you get is going to be high quality.18
The economic story says that getting involved in your community is a constraint and an obligation. Your parents or grandparents might have stayed in one neighborhood — even one house — for thirty, forty, or fifty years, and known everyone within shouting distance. Psychologist Mary Pipher wrote: “There is pleasure in just acknowledging each other, in nodding on the street and chatting in the cafés and grocery stores. To move away from a true home is to move away from life. I don’t think we begin to acknowledge and understand how much we have lost.”19
But in the economic story, staying put is not ideal. Being mobile is preferred because mobility enables economic development. The more mobile you are, the story says, the more access you’ll have to jobs, education, services, and social activities.20 Even marriage doesn’t have to keep you in the same city as your spouse anymore. Couples in commuter marriages live apart during the week to pursue their individual careers in different cities and maintain their relationship over the phone or through weekend flights “home.” You need to stay loose, be ready to pick up and go, though that makes it harder for you to put down roots and develop close, long-term relationships.21
Those close, long-term relationships, though, aren’t what they once were either. In the economic story, friends, neighbors, people in your community, and even strangers, whether in person or online, are all potential members of the audience you’re building for whatever it is you do as you strive to develop your personal brand. As business author Tom Peters put it, “When you’re promoting brand You, everything you do — and everything you choose not to do — communicates the value and character of the brand. Everything from the way you handle phone conversations to the email messages you send to the way you conduct business in a meeting is part of the larger message you’re sending about your brand.”22
Your relationships are transactional — a means to an end, not an end in themselves. What matters is building a bigger audience. If you can connect with the right people, the people with the biggest audiences themselves, you never know what someone might be able to do for you or how you might be able to monetize those connections in the future. German sociologist Ferdinand Tönnies called that type of association Gesellschaft, a connection created to promote the interests of its members, where people who are essentially separate come together for a period of togetherness because it is to their benefit to do so. Tönnies then contrasted that association with Gemeinschaft, on the other hand, which occurs when people are essentially united even though they may be occasionally separate, where the ties between them, like family ties, exist whether they are advantageous or not.23
In terms of your community, the economic story says that you can care for the needy and create social change by taking an entrepreneurial or business-based approach to social issues. That kind of activity, called social entrepreneurship, is about trying to make markets work for people. Social entrepreneurs add value (social value in this case) by offering new products and services that are supposed to ultimately meet social needs, or by developing social programs that produce some kind of significant social return.24 Not-for-profit organizations are told to develop revenue streams so they can make money and rely less on donations and public funding, even though critics warn that becoming business-oriented can be dangerous, that operating a not-for-profit organization as a business can undermine the organization’s social mission.25 Even so, a report from the Kellogg Foundation notes that nonprofits “are using entrepreneurial models and language to design their services, organizations, and partnerships…There are hundreds — and perhaps thousands — of examples throughout the United States of organizations that are experimenting with enterprise or market-based approaches for solving problems. Many of these are based within traditional organizations such as Goodwill, Salvation Army, Boy and Girl Scouts, community food banks, etc.”26
According to the former Chief Marketing Officer and Managing Director Corporate Opportunities of the Boys & Girls Club of America (B&GCA), the organization is practicing social entrepreneurship by developing “mutually beneficial” marketing alliances with corporate partners. The alliances are based on the idea that the B&GCA brand is worth something to a corporation and can help it achieve its goals. B&GCA has developed alliances with Coca-Cola worth $60 million, and alliances with JCPenney ($7 million), Circuit City ($3 million), Crest/P&G ($3.3 million), Compaq ($7.5 million), Microsoft ($100 million), The Sports Authority ($3.3 million), and others.27
In the economic story, traditional philanthropy doesn’t work, but if you cross charity with the principles behind venture capital, you get something even better — venture philanthropy. Venture philanthropists aren’t donors who fund grant proposals — they’re investors who invest in business plans. From this point of view, investment is more effective than charity; emerging venture philanthropists “don’t want to hear about the have-nots and the negativity associated with this dependency syndrome.”28 Market concepts should be used to design social goods and services. Programs funded shouldn’t be evaluated at some future date — their performance should be measured, and they ought to demonstrate innovation, measurable outcomes, and tangible results. Venture philanthropists can calculate their social return on investment by quantifying things like how much income tax revenue is generated by a homeless person who gets a paying job; the higher the return, the better the investment.29
The economic story also tells us that venture philanthropists ought to manage the relationship between themselves and the not-for-profit organizations they invest in. They can provide management expertise as well as cash, maybe get a seat on the board, monitor the organization’s performance and make it accountable for results, then develop an exit strategy that’s based on the organization becoming self-sufficient. Research suggests, though, that the U.S. nonprofit sector’s adoption of market values and methods has weakened democracy and citizenship — weakened the ability of those organizations to create and maintain a strong civil society. The market’s emphasis on being entrepreneurial and satisfying customers is incompatible with the sector’s traditional emphasis on citizenship, collective action for the public interest, and the democratic ideals of fairness and justice.30 Nevertheless, venture philanthropists are to throw their support behind programs that focus first on economic and educational improvement, believing that spiritual and social wealth will follow.31
One form of shared wealth that is critically important in the economic story is the environment. The story tells us that we ought to value the natural world because the environment is literally worth money. Biodiversity is natural capital — a storehouse of economic resources that exists for our benefit, something we can literally put a price tag on. Mother Earth is a service provider who provides life-fulfilling and life-sustaining ecosystem services. Those ecosystems, including the species of which the ecosystems are made, are delivered to all of us free of charge.32 Ecosystems like the polar regions matter because they give us commercially valuable fish, provide food, shelter, clothing and tools from the caribou, give us fuels from wood, sod and peat, and turn on the “global air-conditioning.” The oceans
and seas matter because they represent a renewable energy potential and a desalinated water supply, regulate the climate, provide protein for one billion people, give us sea sponges from which we make fibre-optic technology, and facilitate the shipping and transport means for 90 percent of our international trade in goods.33
Because nature’s ecosystems provide us with so many goods and services for free, in the economic story, the loss of those systems represents an enormous financial liability. The best way then, to demonstrate just how much these ecosystems are worth is to price them out so we can see how much it costs us when nature is destroyed. In Germany, a meeting of the G8+5 Environment Ministers in 2007 led to a global study on the economics of the loss of biodiversity and ecosystem degradation. The study highlighted countries saving or making money from conservation efforts. In Venezuela, “investment in the national protected area system is preventing sedimentation that otherwise could reduce farm earnings by around U.S.$3.5 million a year. Planting and protecting nearly 12,000 hectares of mangroves in Vietnam costs just over $1 million but saved annual expenditures on dyke maintenance of well over $7 million…Investment in the protection of Guatemala’s Maya Biosphere Reserve is generating an annual income of close to $50 million a year, created 7,000 jobs, and boosted local family incomes.”34 The Natural Capital Project — a collaboration of The Nature Conservancy, the World Wildlife Fund, and Stanford University’s Woods Institute for the Environment — is looking “for practical ways to quantify the seemingly unquantifiable: What is the dollar value of a wetland? Can you put a price tag on a rainforest and the many services it provides humanity?”35 One of the project’s internationally renowned scientists says, “Our goal is…to show how one can actually get a really high return on investing in living natural capital through conservation.”36
In other words, the economic story tells us we ought to save nature because it pays to save it. In economic terms, it’s win-win. The story doesn’t concern itself with what happens if it costs us to save our environment. How will we justify sparing a rainforest or protecting a species from extinction if it’s literally worth more to cut the forest down or to let the species die? Still, in the economic story, “If you want to save the Amazon, go to business school and learn how to do a deal.”37
YOUR COMMUNITY
Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for profit, honor, or private interest of any one man, family, or class of men.
—JOHN ADAMS, U.S. PRESIDENT, 1776
The biggest challenge is going to be how to best utilize taxpayer dollars to the benefit of industry.
—MIKE SMITH, U.S. DEPARTMENT OF ENERGY, 2002
FOR ALMOST AS LONG as we’ve been coming together in groups and sorting out how to get along, we’ve regulated how we live together in community through different levels of government. When the economic story spreads through your community and into your government, it changes how the government understands itself and makes decisions on your behalf, which means it also ends up profoundly changing arm’s-length government organizations like prisons and public libraries.
Before the economic story began to spread, we lived together and governed ourselves based on the assumption that the public and private sectors served different purposes. The public sector operated in the public interest, developing and investing in public goods like health, education, and safety for the good of the community. The private sector, at the other end of the spectrum, operated for monetary gain. The two sectors were even governed by different bodies of law: constitutional and administrative law for the public sector, and corporate law for the private sector.
Public servants subscribed to a set of values that came to be known as the public service ethos. According to that ethos, public officials were ideally to be law-abiding citizens of upright and honest character who were accountable to the democratic process, loyal to the common good, and impartial and fair in their treatment of others — no special favors for friends and higher-ups.1
Civil servants carried out the work of the government and were answerable to it. The government, being democratic, was in turn answerable to you, the public, so the whole system was ultimately answerable to the people. That public service ethos gave us a vision of political life as a noble calling, a life lived in dedication to the public good and in service to your community and country. Not everybody in public service lived up to that ideal, but the ideal existed, and people aspired to it.
Then the story changed.
In the 1970s and 1980s, researchers began to notice that governments in Australia, Canada, New Zealand, the United Kingdom, and the United States had shifted from using one set of values and practices to another. The basic difference between these two ways .of doing and being government (one called Public Administration and the other called New Public Management) revolved around whether or not the public and private sectors really were distinct. Public Administration said yes, the sectors were different and ought to be managed differently. New Public Management said no, the sectors weren’t distinct, and that the tools and techniques of the private sector could be used to manage the public sector too. In this way, the rise of New Public Management in government represents the spread of the economic story.2
The economic story says that the public sector is rife with problems: it’s inefficient and ineffective, wastes money by not controlling costs, has low standards of quality, lets its employees have too much influence through trade unions and professional associations, and so makes citizens unhappy. Civil servants and politicians aren’t responding to a noble calling of service to community and country — instead, they are rational, self-interested individuals just like the rest of us. Civil servants are entrepreneurial and want to maximize their departmental budgets. Politicians, on the other hand, want to maximize their chances of reelection.3
Given all of these problems in the public sector, the economic story says the solution is to run government like a business. Citizens become customers. Governments start to focus on what businesses focus on: improving quality and performance, cutting costs, being productive, providing better customer service, being more responsive to customers, and benchmarking against best practices. Cost control and performance improvement supersede the old philosophy of development and investment for the public good. Competition is introduced into government through outsourcing, deregulation, privatization, and commercialization, in order to make government effective and responsive and therefore worthy of your support.4
According to the economic story, civil servants who once provided public services in-house should outsource that work to the private sector and supervise the delivery of those services instead.5 But because the private sector is not answerable to the democratic process, that outsourcing raises concerns that community, democracy, and the public interest are being eroded as the public service ethos fades.6
As the economic story spreads in government, a language based on economics develops along with a new way of thinking and reasoning about what goes on in government — a kind of accounting logic.7 That accounting logic makes two assumptions; first, that anything and everything your government does can be assessed in terms of what value is added, and second, that the value added can be linked to how much money is spent on the activity in the first place. An accounting logic says that if a program or action is worth more than it costs, it is a good investment and worth doing. If it is worth less, it is a bad investment and not worth repeating.
On the surface of things, an accounting logic seems neutral and objective, independent and fair — a way of comparing numbers to numbers. In reality, it’s less than straightforward. Public goods like health, education, literacy, and security are notoriously difficult to measure. If your city decides to set aside green space for a park, what is that park worth, in dollars? And how is that number arrived at exactly?
An accounting logic can also be used to indirectly control what civil servants do. By eva
luating their work in terms of value-added, an accounting logic weakens professional independence and skews civil servants’ behavior toward what they are being evaluated for. (If your performance review is suddenly based on how many paperclips you can link together, you will probably start linking together paperclips.) But what professionals do — the “outputs” that the accounting logic wants to measure — has never been easy to assess or even to compare from person to person to begin with.8
Nevertheless, by 2000, New Public Management was recognized as the main paradigm being used by governments around the world even though no one was sure whether governments were actually becoming more efficient and effective as promised or not.9 In the economic story though, values like efficiency and effectiveness are equivalent to the common good. The question, “What should we do?” comes to have one answer: “Whatever is efficient.”10 That philosophy changes how governments think and act.
Government is the only body in society that’s legally allowed to use force and coercion against you in order to keep the social order. If you break the law, it’s the government that can take away your freedom and sometimes even your life as part of its exercise of authority. In America, when you’re convicted of a crime, the government takes away your freedom by sending you to prison.
Prisons have existed for thousands of years — once used only sporadically though because of the expense — but governments haven’t always been involved in punishing crime. In the Middle Ages in England, crime was thought to concern only the criminal and the victim, not the criminal and the rest of society, so government, representing society’s interests, didn’t have a role to play. Blood feuds developed as a result, but even so, the tradition of non-government intervention lasted until the 1800s.11
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