Robert Herbold’s Shared Delusions

July 19, 2011

In a recent essay in the Wall Street Journal Robert Herbold, former chief operating officer at Microsoft, uses a recent trip to China to offer his opinion on what ails the United States. First, Herbold gushes about the success of China’s “five-year plans:”

In every meeting we attended, with four different customers of our company as well as representatives from four different arms of the Chinese government, our hosts began their presentation with a brief discussion of China’s new five-year-plan. This is the 12th five-year plan and it was announced in March 2011.

Of course, central planning is not compatible with the decentralized decision-making that goes with free markets. Yet, Herbold writes, “The autocratic Chinese leadership gets things done fast (currently the autocrats seem to be highly effective).”

And so, how to dig the U.S. out of its hole? Among other things, you guessed it, Herbold advises “start approving some winning plans.”

Herbold seems to be completely ignorant as to how “winning plans” really evolve. Are they really accomplished through central-planning and autocratic leadership?  Would I be rude to wonder if Herbold is a student of economics or history? Could he be unaware of what centralized “winning plans” have wrought in North Korea?

If Herbold is as deluded as he appears, many Chinese are not. Just a few days before Herbold’s essay appeared, Liu Junning wrote in the Wall Street Journal, “Westerners who think that authoritarian rule is China’s natural state misunderstand its culture.” Junning adds that China’s prosperity is not due to a mixture of central planning and markets.  Instead, “the most significant transformations from the perspective of boosting prosperity,” according to Junning, “have involved loosening of control over the people, not some alchemy of power and Marxism.”

Why is the Wall Street Journal allocating space for Herbold to share his delusions? Presumably because, as Junning points out, many others share the belief that Chinese success is due to central planning. Further, Herbold has credibility because presumably he had a successful tenure at Microsoft. But did he really?

In his 2002 Harvard Business Review article “Inside Microsoft: Balancing Creativity and Discipline,” Herbold describes the cultural differences between Microsoft and his former employer Proctor and Gamble:

It was exhilarating to experience this degree of informality and delegation of responsibility to individuals throughout the organization, which clearly fostered both creativity and speedy decision making. But the experience was also disorienting. At Procter & Gamble, where there was a procedure for almost everything, board meetings were tightly scripted affairs.

Herbold then explains his job which he held from 1994-2001:

My job was to bring some discipline to Microsoft without undermining the very characteristics that had made it successful. I hoped to do this by creating central systems that would standardize certain business practices and give managers instant access to standardized data on each business and geographical unit.

Herbold goes on to claim that his central-planning reforms were responsible for rising profit margins at Microsoft during his tenure. Then he “charitably” adds, “I don’t take sole credit for this.”  Nowhere in the essay is there any hint that Microsoft’s success had anything to do with an unprecedented mania for technology stocks, strongly rising demand for personal computers, and most importantly, Microsoft’s game-changing smash hit, Windows 95, which Herbold had absolutely nothing to do with.

Yes, like most of us, Herbold has legendary status in his own mind. But Herbold has not matured to the point that he can recognize that his legendary status is delusional. In other words, Herbold is as deluded about Microsoft as he is about China and, importantly, he is deluded about the way to cure the American malaise.

No doubt in the coming years the snake oil that Herbold peddles will be increasingly welcomed by a segment of the American population—those who almost every day ask, “Why don’t they do something?”

Every day, many entrepreneurs are doing more than “something;” they are inventing the future Microsofts of the world. They don’t need Herbold to tell them the “winning plan.” They need those who are ignorant and delusional to stay out of their way. As Herbold’s delusions are increasingly shared by others in the United States, future Microsofts will find their homes in other parts of the world.


Driving Lessons

July 10, 2011

My twins turned 16 this spring, and this summer is time to begin their driving lessons. I had anticipated that their driver’s education class would do the heavy lifting, but little did I know. A student must complete 40 hours of parental supervised driving before graduating from driver’s education. In others words, at least where we live, if you are expecting driver’s education to teach the awkward first hours behind the wheel, guess again.

Thankfully my wife took charge of the first outing. This morning was my turn; and little did I know, my twins were to provide me life lessons as they each took their turn behind the wheel.

First, my son was about to drive off before fastening his seat belt. I reflected—how often do I begin an activity before fastening my own metaphorical seatbelt? How often do I transition to a new activity without setting my purpose and centering myself? It only takes a moment to buckle a “seatbelt.”

Continuing with my son, he next went through a stop sign without stopping. We were driving on Sunday, in an empty parking lot of a medical center, so no harm was possible. I don’t know where his mind was, but he was ignoring a warning from his environment. But what about me? I often joke with my wife that some days I feel like I’m working with a metaphorical check engine light on. I need to slow down, but I’m determined to plow through doing what I think needs to get done.

My son also needs to work on actually looking when he stops as opposed to just stopping and then going on his way. Ok, I’m guilty again. I often engage in a spiritual practice while not paying full attention to the practice. I may be listening to an mp3 file of a spiritual talk, for example, while pausing to check my email. Is not listening with my full attention the wiser course of action?

Both my son and daughter are at the stage of driving where they tend to over steer. It is not yet grooved into their muscles or into their minds that a car needs small turns of the wheel to stay on course. No need to constantly steer from right to left and back again.  Yes, I can drive a car without over steering, but I often over steer my life. If I react to each new bit of information with a sweeping gesture, I find myself driving off the smoothly paved road that is my life and onto the shoulder and into a ditch. My life does not depend on my steering.

And leave it to my daughter to provide the lesson of the day. Once she thought her foot was on the accelerator when it was on the brake. Once she thought she was steering right when she was turning the wheel left. Ok, rookie mistakes; but each time, her initial reaction was the same—she was doing the right thing and the car was reacting in the wrong way.

I explained to my children about sudden acceleration syndrome which occurs when a driver intends to press on the brake and instead puts their foot on the accelerator. When the car reacts as it should, the driver redoubles their efforts often with deadly consequences. Their mind does not accept the feedback that their foot is on the accelerator, and they simply press harder on the accelerator when the car does not stop.

There lies a life lesson—often when something is going “wrong,” I am doing or thinking something “wrong.” Far better for me to stop what I am doing and reflect, than to redouble my efforts in a futile attempt to prove that I am right.

Indeed, I freely admit to suffering from sudden acceleration syndrome of the mind. I have a thought, an undesirable consequence occurs as a result of my thought, and I use the undesirable consequence as evidence that I need to bear down and speed up my thinking.

After all, my ego reasons, I arrived at my thought after careful analysis. Are not my thought and the feeling that goes with the thought “correct”? Often in exact measure to the intensity of my thinking and feeling, the answer is “no.” The reality of the event and how the event is occurring to me is entirely different.

The cure for sudden acceleration syndrome of the mind is simple, and as in driving, easily deployed if we value doing so: We must consider the possibility that we are wrong, take our foot off our mind’s accelerator, and apply the brake. In our practice we must be willing see how addicted we are to defining ourselves, in part, by our misery and insisting it is someone else’s fault. In other words, the “brake” is becoming more aware of our thinking without identifying with our thinking.

I’m already looking forward to the next driving lesson with my children. In the meantime, I’ll practice taking my foot of my mind’s accelerator and applying the brake.

We Think We Are Free

June 30, 2011

Would you feel comfortable going to a doctor or a dentist whose training consisted of “120 hours [three weeks] of classroom and on-the-job training.” Would you hire an accountant or engineer whose training was similar? Would you consider anyone a professional if they had only three weeks of training?

Have you noticed that after every TSA outrage, government spokespeople and their media apologists maintain that the TSA agents involved were just doing their job in a professional manner? Consider this recent incident—after subjecting a frail 95 year old woman suffering from leukemia to an hour long search in which she had to remove her adult diaper a TSA spokesperson insisted TSA officers work “with passengers to resolve security alarms in a respectful and sensitive manner.” The spokeswomen concluded “We have reviewed the circumstances involving this screening and determined that our officers acted professionally.…”

Not only were they acting professionally but the TSA spokesperson maintained that their common-sense defying actions were necessary “because we know from intelligence that there are terrorists out there that would then exploit that vulnerability.” Presumably, on the grounds of “national security,” the “intelligence” that al-Qaeda is recruiting 95 year old American women to hide explosives in the diapers was not produced.

In no sense of the word are TSA officers professionals. The use of the word professional when describing them is deliberate propaganda designed to get the public to submit to coercion.  A professional is a term reserved forhighly educated, mostly salaried workers, who enjoy considerable work autonomy, a comfortable salary, and are commonly engaged in creative and intellectually challenging work.”

OK, it is clear that the minimally trained TSA officers have little or no autonomy to use common sense in doing their job. However, it is equally true that those calling TSA security personnel perverts and criminals are also missing the point. As you walk through TSA security, the ordinariness of TSA personnel is palpable. By and by, they are simply our fellow human beings trying to make their way in the world and earning a living in the best way they know how. They are a modern example of what social philosopher Hannah Arendt called the “banality of evil.”

In her book Eichmann in Jerusalem: A Report on the Banality of Evil, Arendt reports on the lack of anti-Semitism or psychological damage in Eichmann. Then you may ask, “How could he have committed such heinous crimes?” Arendt reports that Eichmann had limited intelligence, was unable to complete high school, was unable to think for himself, and had a strong desire to get ahead. Having been a witness to the rank-and-file of German civil service endorsing the “final solution,” he believed his moral responsibility was absolved.

In his book They Thought They Were Free, Milton Mayer tells the story of how decent Germans became Nazis. Consider policemen Willy Hofmeister. Mayer relates the story of how in 1938, Hofmeister was assigned the job of rounding up Jewish males in Kronenberg “for their own protection.” Hofmeister was no Nazi thug; he was polite and respectful as he did his dastardly deeds.

During one of his stops, Hofmeister explained to a Jewish man that he was taking into custody why the town synagogue was blown up that day: “They blew it up as a safety measure.”

No, American totalitarianism is unlikely to look like German fascism. Yet, if you read Arendt and Mayer, the parallels will chill you. No, most TSA personnel are not Eichmann’s in training; but then again, nor were most Germans. Most Germans who enabled the Nazi machine and most TSA personnel are more like Willy Hofmeister—just doing their jobs.

Many Americans support and defend unconstitutional and useless searches on the grounds that they are “respectfully” done and necessary for our safety. The media acts as propaganda outlets to promote these unconstitutional acts; judges rubber stamp unconstitutional laws. Many Germans thought they were free and that their behavior was normal. The spirit of Willy Hofmeister is alive and well in America. We think we are free. Are we?

This is Not the Southwest Airlines Way

June 24, 2011

On a recent Southwest Airlines flight I found the “40th Anniversary Special” of Southwest’s magazine Spirit. In the magazine, Southwest founder Herb Kelleher interviewed current Southwest CEO Gary Kelly. Kelly gives an example of an employee acting from Southwest’s core values; then he adds, “All of our people do know what is right, and they feel empowered to act on it. That hasn’t changed.” Until my recent flight, based upon my own experience, Kelly provided an accurate assessment of the Southwest corporate culture. Indeed, in my book The Inner-Work of Leadership I held up Southwest as a model for others to follow:

In spite of their no frills service, Southwest Airlines is always at, or near, the top in customer satisfaction among airline passengers. Once we understand the power of values and principles, it is easy to understand why.

Southwest has few rules (principles) for their employees to follow. “Always practice the Golden Rule” is one of their core principles. A story is told of an applicant for pilot: He was rude to a Southwest gate agent and found his interview cancelled. Southwest doesn’t believe in the ego’s philosophy of shunning responsibility by blaming others. All Southwest flight crew members, even the captain at times, pitch-in to clean the cabin and get their plane turned around quickly. As a result, Southwest Airlines has the fastest turnaround from the gate in the industry.

In other words, to work successfully at Southwest, one has to surrender an ego’s sense of self-importance. One can scarcely imagine a captain on most airlines cleaning the cabin. Doing so may actually violate rigid job classification rules of some airlines. More than that, the captain’s ego may justify his choice not to help: “It is not my fault the plane is late.” Or, “If I help out today, pretty soon they will expect me to help on all flights.” Or, “My job requires me to stay in the cockpit.”

In her instructive book, The Southwest Airlines Way, Jody Gittell explains the factors responsible for the success of Southwest Airlines. One value honored at Southwest is mutual respect among employees. The easiest way to get in trouble is to offend another employee. Gittell contrasts Southwest with American Airlines where a virtual caste system exists. Mechanics look down on gate agents. Gate and ticket agents look down on ramp employees. Ramp workers looks down on cabin cleaners. Cabin cleaners look down on building cleaners…

If my recent trip is an indication, something has begun to erode the cherished corporate culture at Southwest Airlines. Apparently many Southwest employees no longer know and do “what is right.” Employees must use values and principles in daily decision making; if they don’t, an organizational culture laboriously built over many years by the hard work of many can be destroyed.

Consider this sequence of events my family and I recently encountered. From Minneapolis we were to fly into Chicago to catch the flight that would bring us home. It was a stormy day in Chicago and flights were being delayed. Finally, Southwest canceled all flights into and out of Chicago. Stranding passengers is bad for business, and the decision-makers at Southwest have every incentive to avoid doing so; but on this day, it was the right choice. We joined the line of stranded passengers who would have to find alternate routes to their destinations.

There were literally two Southwest agents working to reschedule hundreds of stranded travelers. Does that sound like all hands on deck for Southwest employees at Minneapolis? Not so much. Chaos ensued as edgy travelers tried to push to the front of the line thinking their circumstances were more urgent than those of others. While the two agents worked as hard as they could to reroute travelers, did any other Southwest employees think it worthwhile to help keep order? Not so much. Was any Southwest supervisor on hand to pitch in? Not so much. Apparently, they had better things to do than deal with distraught travelers.

About thirty minutes after the line formed, an announcement was made: We were encouraged to call the Southwest reservation center as they would be able to assist with rerouting itineraries. On her second attempt, my wife got into the phone cue at Southwest. It was another half hour on hold before she spoke with an agent. Although she clearly explained that our flights into and out of Chicago were cancelled, she was told we could get a refund for the cancelled flights and reschedule; but we’d have to pay the difference in fares for any new flights we booked. My wife again explained that our flights were canceled. “Sorry,” the reservation clerk insisted, “you’ll have to pay the difference.” The clerk was ignorant of a basic Southwest policy shared by all airlines—if your flight is cancelled the airline has an obligation to get you to your destination at no additional charge. How could any airline employee not know this?  My wife asked to speak with the clerk’s supervisor; the supervisor got on the phone just as it was our turn to be assisted by an agent in Minneapolis.

We were among the fortunate; having been close to the front of the line, we ended our call with the reservation center. It was now an hour since we got on line.  I can’t even imagine how long those passengers who were in the back of the line waited before they were helped.

Along with perhaps 20 other rerouted passengers, we got out of Minneapolis that night on an almost empty nonstop flight to Raleigh-Durham. The forecast was for more storms in Chicago the next day; we were grateful to get to the East Coast.  There may have been other stranded travelers standing in line who were not processed in time but could have benefited by this flight.

Like us, most of the passengers on the plane to Raleigh-Durham had not originally intended to fly there. On board was at least one stranded family with young children.  Did any member of the Southwest crew on the flight ask if anyone needed assistance? No. Did the crew or ground personnel from Minneapolis notify the folks at Raleigh-Durham that stranded passengers were on the flight? No. The plane arrived at 12:40 am. Were there any Southwest personnel to greet the stranded travelers? No. Were they any visible Southwest employees at the gates or ticket counters? No. Were any shuttles still running to any local hotels? No.

It was 1:00 AM when we found a concerned Southwest supervisor who was in charge of baggage. He quickly made several phone calls in order to locate a hotel room for us. He didn’t understand why no one from Minneapolis had called ahead; if they had, he would have been ready to assist all the passengers who needed hotels. Referring to those Southwest employees who missed opportunities to be of service, he added, “It only takes a minute. This is not the Southwest Way.” His belief in the Southwest Way was palpable and touching. Now, remember, his job was in baggage; but in the spirit of the Southwest Way, he was doing what needed to be done. Having found a room, he directed us to the taxi stand. Since shuttle services had stopped, he offered that Southwest would pay for the taxi fee if we brought back a receipt.

We were still to get more of an education in the erosion of the cherished Southwest Way. Within minutes we were on the curb, confused about where to find the taxi stand; the crew from our flight walked out as a group. We asked if they could direct us to the taxi stand. Without pausing, they shrugged their shoulders and kept walking to the transportation waiting for them. From the indifferent look on their faces, it seemed that an impulse to assist us did not cross their minds.

The next morning when returning to the airport, we stopped at the ticket counter to get our boarding passes. After receiving our passes, I asked the clerk to refund the $40 “early boarding” fee that we had paid for our canceled flights. She said I would have to write a letter to customer service. I was incredulous. The agent’s supervisor was standing there and chimed in that the early boarding fee was not refundable when flights are cancelled due to weather. I said, “You canceled our flights; surely you can’t keep our money for a service that you didn’t provide.”

“That’s the policy,” she answered curtly and turned her back and walked away. My wife wisely grabbed my arm, as she sensed that I was going to react in a way not keeping with my own values.

As it turned out, when we arrived home, there was a computer-generated email from Southwest that had been sent automatically shortly after our flights were canceled. The email refunded our early boarding fee. I wondered, how could a ticket agent and her supervisor not know a basic Southwest policy? How could the manager argue with a customer that Southwest would keep money for services that they did not provide?

On this one trip, there were too many Southwest employees, in different locations, who behaved badly for my experience to be an anomaly. It seems that the Southwest Airlines Way is no longer valued by a critical mass of Southwest employees. Not only that, but some employees we encountered, such as the telephone reservation clerk and the tickets agents at Raleigh, are either incompetent and/or badly trained.

Why is the Southwest Way no longer valued?  I suspect that Southwest employees are no longer hired and evaluated based on their adherence to Southwest’s values. Of course, as an outsider I can’t be sure; but of this I can be certain: It takes years to build a cherished culture such as the one that defined Southwest but it takes much less time to tear it down. The Southwest Airlines Way is harder to achieve than Not the Southwest Airlines Way. Here lies a cautionary tale for all organizations.

Preserving a Dysfunctional World

June 12, 2011

Streaming for free through next Monday is the new documentary about the cancer research of Dr. Stanislaw Burzynski, a medical doctor and Ph.D. in biochemistry. This face-paced documentary (a little less than two hours long) is much bigger than the story of one man. It is a story of how entrenched interests are partnering with government to preserve their market position and to impede progress.  In the process, billions of tax dollars are wasted and real harm comes to us all. In short:

  1. No, Dr. Burzynski has not discovered a one size fits all cancer treatment (I don’t believe there is one), but he has successfully treated numerous documented medically incurable cancer cases with his non-toxic treatment.
  2. For many years the Food and Drug Administration (FDA) and the State of Texas have prosecuted and persecuted this medical pioneer despite admitting that his treatment works.
  3. Government, captured by big pharmaceutical interests, has cruelly prevented freedom of choice even in terminal cases.
  4. The National Cancer Institute (NCI) deliberately altered the Burzynski treatment protocols in order to discredit his theories. A former NCI scientist, Dr. Li-Chuan Chen, bravely explains how the NCI works.
  5. Most shockingly of all, the government filed copycat patents on Burzynski’s antineoplastons compounds and then tried to throw Burzynski in jail so he couldn’t contest the patents. Why? If “antineoplastons are approved, it will mark the first time in history a single scientist, not a pharmaceutical company, will hold the exclusive patent and distribution rights on a paradigm-shifting medical breakthrough.”
  6. Courageous men and women, including judges and doctors, have stood up against this government/pharmaceutical tyranny and have helped Dr. Burzynski.
  7. You can help today by watching the documentary and, if you are moved, spreading the word about this brave man’s work.

Monopolies produce bad science. The government and pharmaceutical companies fund almost all cancer research. Radiation and chemotherapy are virtually the only type of research funded. The government acts to maintain a trillion dollar cancer industry built on dysfunctional beliefs. In their distorted world, the way things are is the way things should always be. Their dysfunctional world is to be preserved at all costs.

In my book The Inner-Work of Leadership I tell the story of a 19thCentury medical heretic; a pioneer in demonstrating the importance of hygiene in hospitals. There was no FDA back then, but Dr. Ignaz Semmelweiss did not find a welcoming committee for his heretical ideas.

Dr. Ignaz Semmelweiss (1818-1865) had essentially eradicated puerperal (child bed) fever during childbirth by advocating and demonstrating the efficacy of hygiene in the delivery room. Since doctors delivering babies often came straight from the autopsy room without washing their hands, and since mortality rates were much lower in maternity wards attended by midwives, Semmelweiss reasoned that dirty hands were the cause of puerperal fever. Semmelweiss saw that he was part of the problem and a simple solution was at hand. In his ward, he required the washing of hands in soap and water followed by a chlorinated solution. Mortality rates in his obstetrical clinic plummeted from approximately 18% in 1847 to near zero the following year.

Yet, despite both overwhelming theoretical arguments and empirical evidence, Semmelweiss’s ideas were not embraced. Instead, he was treated with scorn and attacked by his fellow physicians. The very idea that a gentleman could cause illness because he was unclean was offensive. According to an account by Jeanne Achterberg, in her book Woman As Healer, colleagues of Semmelweiss “simply refused to believe that their own hands were the vehicle for disease.” Instead, Achterberg writes, “they attributed it to a spontaneous phenomenon arising from the ‘combustible’ nature of the parturient woman.” Semmelweiss was treated as a heretic. Achterberg continues, “Semmelweiss’s academic rank was lowered, his hospital privileges restricted. Despondent, he was committed to an insane asylum, where he died of blood poisoning, a disease not unlike the puerperal fever he had almost conquered.”

As this example demonstrates, our paradigms are internally consistent. An infection was considered a normal phenomenon, explained away by complicated theories of bodily imbalances. Evidence that might cause us to question our beliefs is used to reinforce our beliefs. If long held beliefs are challenged, we feel a need to defend them. And as long as we are defensive, our vision will be cloudy at best. To remain blind to our beliefs and paradigms, to refuse to question them, cuts off any real possibility of change.

Before too long, but too late for him, Semmelweiss’s ideas were embraced. The evidence was too overwhelming—and there was no FDA or NCI to maintain entrenched interests.

The Inner-Work of Freedom

June 7, 2011

Last week while touring the East Coast on her “One Nation” bus tour, Sarah Palin visited Boston where she uttered this gibberish about Paul Revere: “He who warned the British that they weren’t gonna be taking away our arms by ringing those bells and by making sure that as he’s riding his horse through town to send those warning shots and bells that we were gonna be secure and we were gonna be free and we were gonna be armed.”

Of course, there is nothing new here. Palin, like many politicians, is ignorant about many things, including history. But, what about our own ignorance? We may know the basic facts of Revere’s ride, but what if the context in which we have placed the ride is flawed in a basic way?

Paul Revere, we have been taught, is one of those essential men or women without whose actions history would have been fundamentally different. Can this really be true? Does our fate hang so precariously on the actions of single individuals? Are we really passive bystanders to the great play being enacted in front of us?

History, as taught in most schools, is a tedious compilation of discrete events with emphasis given to the actions of the great people. The theory holds that significant changes in history are caused primarily by the actions of these individuals who stood out as different from others of their time and place. For example, in American history textbooks, every president is featured, no matter how ordinary they were; special emphasis is given to those who had the biggest ambitions.

Henry Wadsworth Longfellow chose to immortalize Paul Revere—but just as easily, he could have immortalized William Dawes or Israel Bissell. Dawes rode the same route as Revere, and both were later joined by Dr. Samuel Prescott who was the only one of the three to complete his route.  Bissell rode for over four days covering over 345 miles between Boston and Philadelphia. Along his route he shouted “To arms, to arms, the war has begun,” and the message he carried from General Joseph Palmer was copied at each of his stops.

The struggle for freedom is an age-old struggle, and the American colonists were receptive to this transcendent idea. Revere, Dawes, Bissell and Prescott responded to what was needed on the night of April 18, 1775. A warning was needed, and they were inspired to act. Others also acted as they were called to do. All were part of a social fabric that was ripe for a freedom-based revolution. The essential element in the American Revolution was the receptivity of the population towards the ideas behind the revolution. Paul Revere’s ride was no more or less essential to the American Revolution than the millions of other individual acts that made the revolution possible.

There is an important lesson to be learned here. Most Americans think the essential battles in 2012 will be in the presidential primaries and then in the November presidential election. They are wrong. The essential battle is taking place in the mind of every citizen—today, tomorrow and every day. We should all be asking ourselves questions: What role should government play in society? Should the Federal Reserve be tinkering with interest rates? Should the federal government subsidize ethanol and nuclear power? Should the government be continuing its war on drugs? Should government force others to subsidize my standard of living? Should we be secure in our own homes against the coercive power of government? My list could go on and on.

If we’re unable to answer questions such as these—and as importantly, if we are unable to articulate the principles that inform our responses—than no matter who we support, we are part of the problem.  If we are unprincipled, the next president of the United States will continue to espouse policies that will erode our freedoms and prosperity. That next president will not be to blame for the misery caused by his or her policies; instead, our ignorance will be the cause.

The politicians we elect reflect our collective national inward condition. There is little fundamental difference between the Sarah Palins and Barack Obamas of the world. Neither recognizes or understands that the President of the United States was never intended to be a great man doing great things. Instead, the president was to be steward of the principles that would allow others to do great things.

Economics professor Don Boudreaux makes this observation: “Society progresses only through the countless decencies, creative acts, honest exchanges, and faithfulness to responsibilities performed daily by millions of persons, nearly all of whom will be forgotten within a few decades of their deaths.”

Many in America no longer understand the basic truth in Boudreaux’s words. They are waiting for a political savior, and they will be sadly disappointed again. There are no political saviors. Only when the average American is willing to do the hard work that comes from studying and reflecting on the principles that support prosperity and freedom will candidates that support these policies be electable.

Studying these timeless principles is not enough. We can study an idea but not be willing to live by an idea. Other beliefs, often invisible to us, seemingly hijack our behavior. We can advocate free-markets, but then seek subsidies for our organization or industry on the grounds that we are somehow special. Or, on the grounds of the false belief that we are special, we can seek freedom for ourselves but then seek to restrict the freedom of others. Do we expect others to live by principles that we fail to live by ourselves? Is it not necessary for each of us, as individuals, to go through an inner process—a process that uncovers our own false beliefs that are undermining freedom? If so, there is an inner-work of freedom. Since we as a nation are fixated on events going on outside ourselves, we have much work to do.

Without being grounded in timeless principles to guide our actions, fear grows in the minds of people. Until we choose timeless principles over fear, look for increased political polarization as candidates emerge to feed off our fears.

The False Friends of Walmart Workers

May 12, 2011

No, this news story did not appear in The Onion: In the city of Newport Beach, California, “of the 14 full-time lifeguards, 13 collected more than $120,000 in total compensation; one lifeguard collected $98,160.65. More than half the lifeguards collected more than $150,000 for 2010 with the two highest-paid collecting $211,451 and $203,481 in total compensation respectively.”  The story goes on to report about a recently retired lifeguard who at age 51, receives a government retirement check of over $108,000 per year for the rest of his life. After thirty years of employment, lifeguards are eligible to retire at 90% of their salary as early as the age of 50.

Brent Jacobsen, president of the Lifeguard Management Association, defended the lifeguard pay as “very fair and very reasonable” and “well within the norm of other city employees.”

Those readers who commented at The Orange County Register newspaper were mostly outraged, but there were dissenters. One reader wrote, “I say, well done to any lifeguard who earned that money. I saw one of these lifers and his team rescue three kids off seal rock in Laguna. Amazing. Worth every penny.” And another added, “Personally, I think they should be paid more, and they should be able to charge each idiot they rescue 25% of their future life earnings.”

Worth every penny? Most readers reacted viscerally to the news of the salaries; they understood that the wages of those with enough political connections to receive a plum lifeguard job are determined by political forces while their own wages are determined by market forces. At a fraction of the current pay, the county could attract many well-qualified lifeguards. Orange County’s median household income is $71,735. Politicians and their appointees determine political wages that bear no resemblance to market wages and are subsidized by the taxpayer. Clearly those earning a market wage for their labor are subsidizing those earning a political wage.

Taxpaying Walmart workers in Orange County are among those subsidizing the lifeguards. If you visit the website  of the Labor Center at the University of California, Berkley, you will find plenty of studies in support of unionized workers as well as studies on the wages of Walmart employees.

A recent study at the Center proposes a solution for low paid Walmart workers: a higher hourly minimum wage of $12 mandated for Walmart and other big box retailers. Ariel Schwartz of Fast Company chimed in in support of the idea, explaining that “chronically underpaid people around the country could benefit.”

Ken Jacobs, Dave Graham-Squire, and Stephanie Luce are the co-authors of the Berkley study. They assure us that the higher wages paid by Walmart would have a minimal effect on prices paid by Walmart shoppers. Further, they forecast the higher wages would have a minimal effect on Walmart since their competitors, other big-box retailers, would also be forced to pay the higher minimum age.

Allow me to pose some questions to Jacobs, Graham-Squire, and Luce:

  • Why stop at $12 an hour? That too is a meager wage in today’s world. Why not increase the minimum wage to $20 an hour?
  • As public employees, could you and your colleagues at Berkley afford to make a little less and send the proceeds from your salary reductions to Walmart workers? Since you assure us that shoppers will not notice higher prices at Walmart, perhaps you will not notice your slightly lower salary either?
  • And the most important question I would ask Jacobs, Graham-Squire, and Luce is, How do you justify using the tax system to force Walmart workers to help pay outrageous political wages for lifeguards and other public employees?

Walmart workers are no more “chronically underpaid” than are Orange County lifeguard salaries are “very fair.” Walmart workers are often workers with few skills. Walmart and other big box retailers actually increase the demand for unskilled labor. Their competition for unskilled workers helps to increase the salaries for unskilled labor.

Our hearts go out to unskilled workers, and there is no reason to doubt the sincerity of many people who passionately care about those who struggle to get by. Yet, a history lesson is in order. In real terms, the unskilled worker of the 19th century earned a fraction of what an unskilled worker earns today. The truth is that if a century ago employers had been forced to pay above market wages for unskilled labor, workers would have been forced out of jobs and possibly into starvation. A century ago, there was no Berkeley Labor Center, and yet, wages for unskilled laborers have risen dramatically.

The happy day will come when—in a wealthier world—workers with few skills will earn, in real terms, salaries of $20 an hour or more. That wealthier world will be generated by entrepreneurs whose future innovations will increase the productivity of unskilled labor and make the world better for us all. Academics like those at the UC Berkeley Labor Center interfere with that entrepreneurial process. The policies they advocate make the world poorer in many ways, not the least of which is by justifying political wages. The supply of capital that fuels the innovations that raise market wages is diminished by money spent to subsidize political wages. Advocates for political wages are wolves in sheep’s clothing and are no friends of Walmart workers.

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