Capitalism for Customers

At the moment I'm in Prague for a conference. It's my first time back in almost two decades, since just after the Wall fell and the Czechs broke up with the Slovaks. I used to walk around this place with old Czechoslovak bills, still in circulation, which had been stamped in one corner with a "C" (or an "S") to indicate whether these were now Czech or Slovak crowns.

When I was last here, I was occasionally amused by the flamboyantly gruff and rude service you sometimes encountered here, which I took to be largely about the previous decades of dysfunctional command economy. I remember showing up at movie theater on a deserted street one night, with no other customers in sight and only a handful inside, only to have the old woman behind the counter refuse to serve us until she had very very deliberately (indeed, increasingly slowly and deliberately) finished tacking up some flyer inside the ticket booth. My education had provided me with a handy explanation beforehand: in a non-market economy, where there's no profit, there's no reason to try to be more profitable, and no reason to please the customer. If they want a movie ticket, they can wait, and show you a little respect.

I expected that two decades would make the Czech Republic more like the United States in this regard, with certain minimal standards of polite and reasonably efficient service when you're dealing with businesses. But over the last ten years, I've noticed that American customer service more and more often resembles the way Czech used to be about six days after they stopped being Communists. Perhaps I'm simply older and crankier, and more used to deference, but that seems not to be it, and I've had some downright surreal interactions when I was with someone else who could confirm that I was a) treated remarkably rudely by someone I was giving money and b) carefully polite myself. Over the last few months especially, I've had several experiences in the States that went beyond post-Communist Czech all the way to full blown Kafka.

In theory, customer service in a capitalist economy should be good, since everything is driven by the desire for profit. Customer service should be especially good in a consumer-based service economy, because that's where most of the profit is. Yet, as the United States has increasingly become that kind of consumer economy, and simultaneously become more and more of a capitalist's paradise, customer service seems to be much worse than it was in, say, the 1980s. How could this be?

The answer, I think, is that service jobs are worse in the States than they were twenty-five years ago: lower-paying, more demanding, less likely to carry benefits. And those jobs are no longer so much a stepping stone to better jobs as they are a whole sector of the economy. Service is bad because the people performing the service are paid badly and treated badly, and there's no profit motive to make them keep the customer satisfied, because they're not going to make any of that profit, even indirectly. A Communist-era waiter or ticket seller or bus driver had no economic reason to be efficient or friendly, because no matter how well they did their job it wasn't going to benefit them; nobody was making any money off this. An American working in a low-end service job today is in the same boat, or a worse one: someone is making money off their work, but doing it well doesn't get them anywhere. Doing a job well doesn't lead to a better job; there's just an endless series of crappy jobs. And the profit it all for investors: we've had decades now of hearing how overpaid workers cut into profits. If that's your mindset, you can't expect workers to be motivated by pay or profit. They don't get any.

The Czechs are better at customer service now, some of the time. (The rest of the time, well, they're still a Slavic culture and dealing with tourists is a pain in the ass.) But things aren't looking up for us in the States.

Happy Fourth of July (Boston Iced Tea Edition)

cross-posted from Dagblog

I'm enjoying the Glorious Fourth from my front porch, with Old Glory flying and a whole fridgeful of red and blue berries just waiting for some patriotic whipped cream to make them a virtuous Yankee dessert. Later today, my Red Sox will be taking on the British Commonwealth's only big-league baseball team, Toronto. I hope they do the Sons of Liberty proud.

In honor of the day, a recipe and a bit of historical trivia. First, the recipe:

Boston Harbor Iced Tea
1. Brew Darjeeling tea and ice it.
2. Rim drinking glasses with sea salt.
3. Pour iced tea into glasses. Sweeten each glass with two spoonfuls of molasses at the bottom.
4. Scoff at the British East India Company.


A bit of trivia, then. Although we talk about the Boston Tea Party as a revolt against taxes, that was only part of the problem. It was actually a revolt against a government-sponsored monopoly. In fact, the British cut the tax on tea.

There had been a tax on tea in the colonies for years. And the colonists did object to it, but not nearly as much as the Stamp Act, which taxed every paper document in the colonies. The Stamp Act led to a bitter series of protests, reprisals and confrontations between the colonists and parliament. At the end, Parliament essentially backed down but left the tax on tea in effect, just to save face. The colonists didn't like it, but sometimes you have to compromise. The Americans were willing to let Parliament walk away from the table with something. And then, of course, to drink black-market tea rather than pay the tax.

Then Parliament decided to pass the Tea Act of 1773, which gave the British East India Company an exclusive monopoly on importing tea to America. (Modern conservatives claim the government should not break up monopolies, but 18th-century Britain created monopolies by fiat.) To sweeten the deal, Parliament lowered the tea tax. But Parliament's goal was to help a powerful, well-connected corporation make more money.

So, in an ongoing slow-burn confrontation over who had the right to levy taxes, you have Parliament going back to undo a compromise. And you had them doing that in order to favor a gigantic, politically-connected business concern over consumers and smaller merchants. (They actually made it illegal for any of the Americans to sell tea, and anyone who bought it had to pay the monopolists' price, not the market's.) Reminds me of something, but I can't say what. Happy Fourth, everybody!

The Last White Gangster

cross-posted from Dagblog

The FBI has caught Whitey Bulger, after a mere sixteen years. The arrest made national news because of the FBI's well-earned embarrassment and because of the mythology around Bulger. As a crime boss, Bulger was not nationally significant. He was a formidable gang leader with firm control over one slice of Boston's organized crime, but it was only a slice. He was the scariest gang leader in Boston, but not necessarily the biggest or richest. You'll hear a lot in the papers about what a criminal genius he is, and he really is smarter than any hoodlum should get, but what it's really about is this: Jimmy Bulger is the Last Great White Gangster.

Bulger is the last Irish-American mob leader who's likely to control even a slice of the underworld in a major American city. He is ethnically similar to many of the journalists and editors covering him, and they obviously love writing about him. He's the last gangster who looks like Jimmy Cagney, so even very good coverage of him gets tinged with sympathy and sentimentality that Bulger has never come close to deserving. It's a nostalgia trip. Reporters call Bulger "colorful," but it's only because he's so very pale.

Some of the Bulger myth is based on fact. He corrupted cops and FBI agents, who helped him murder and helped him escape. His brother was President of the Massachusetts State Senate for eighteen years, with Jimmy a notorious criminal the whole time. He is the primary model for Nicholson's character in The Departed, although even that bleak movie pulled its punches about Bulger's depravity and Boston's corruption. He did inform on the Boston Mafia, enabling the FBI to tape one of the Mafia's hokey (but, surprisingly, real) initiation ceremonies. And some people in South Boston, where Whitey did his crimes, did and do talk about him as a Robin Hood figure. But all of that was possible because Bulger was, well, Whitey. The open political connections, the wrongheaded sympathy from cops and deluded loyalty from the neighborhood all come down to ethnic solidarity and Boston's shameful history of race relations. Race isn't the whole story. It's only forty or sixty percent. But it's the forty-to-sixty percent that the media will leave out, and the part that explains all the rest.

The biggest break that the Bulgers ever got was the court order that desegregated the Boston schools by mandating busing in 1974. Back then Whitey was working for a gangster named Howie Winter and his brother Billy was South Boston's state senator. When busing happened, Southie flew into a frothing rage. It took the neighborhood at least twenty-five years to get over it. And while people (including William Bulger) will tell you with a straight face that all the anger wasn't about race (it was really about local control and neighborhood schools and yadda yadda yadda), that's just whitewash. People screamed racial slurs in the streets. They wrote them on public walls. Black people, including kids and unlucky bystanders, got intimidated and physically attacked. (Other Irish-American neighborhoods were also angry, but South Boston and Charleston were the worst, and Southie was ground zero.) Was every last single opponent of busing a dyed-in-the-wool racist? No. But plenty of them voiced the most toxic racism you can imagine, loudly and proudly. Twenty years later, you could still hear some people from those neighborhoods saying vile, hateful things in a matter-of-fact tone. And the fury wasn't even about the quality of white kids' education: South Boston High was a lousy school, at the bottom of the state rankings. What the angry mobs wanted was to make sure their kids went to a failing and dysfunctional school with other white kids.

Billy Bulger became a leader of the anti-busing movement, and it made him. Four years later he was President of the State Senate. Whitey was fighting busing, too, in his own way: the pro-busing Mayor of Boston actually worried at one point that Bulger might have him killed so the anti-busing Deputy Mayor could take his place. If you think of William Bulger as a segregationist Southern governor and his brother as Grand Dragon of the local KKK, you have the basic picture. And the deference they've received from Boston's press and politicians should be seen through that lens; they were the devils that liberals had to deal with, and too many locals had sympathy for.

Cops, including federal cops, liked Jimmy Bulger because he was an Irish neighborhood guy just like many of them were. (His FBI handler was a guy named Connolly who'd grown up in the same Southie housing project.) And the busing crisis turned that garden-variety ethnic bond into something deeper and more tribal as places like Southie and Charleston grew more defensive and aggrieved. Some of those cops felt that their ethnic group was losing ground in the city, and they weren't in any special hurry to see Boston Irish losing power in the underworld. In fact, the FBI was happy to help Whitey expand by undermining Italian mobsters. Whitey got stronger in the 1980s as the Mafia got weaker. The Last White Gangster basically got endangered-species protection.

People were willing to tolerate, even to celebrate, the Bulger brothers because they were a bulwark of Irish political influence that was otherwise in danger of eroding. At least they were Irish, and you couldn't be sure the next guys would be. William Bulger ran an old-school political patronage machine; if you backed him, he could help this or that nephew find a public job. Whitey was an old-school ethnic racketeer. He might have robbed South Boston blind and helped keep it poor, but at least the neighborhood got exploited by one of the tribe.

The "Robin Hood" myth about Whitey is partly the usual dysfunctional ghetto Stockholm Syndrome bullshit, and partly about the belief that Whitey kept African-Americans at bay. People will actually say that Whitey "kept drugs out of the neighborhood." That's not just a lie but a self-delusion. Whitey Bulger kept drugs out of Southie the way that Santa Claus keeps toys out of the living room on Christmas morning: he didn't deliver the packages himself, but everyone who did was acting in his name. The "keeping drugs out of the neighborhood" story demands (or allows) whoever believes it not to notice that Southie was totally full of drugs.

But if you read "keeping out drugs" as "keeping out blacks," it makes a lot of sense. That was the thing about Southie: the kids were on drugs, but all the drug dealers were white. Some people in Southie and Charlestown were willing to fight bitterly for the right to have their own all-white drug traffic and all-white extortion rackets and failing all-white schools where white kids could get a rotten education among their own kind. South Boston's love for Whitey Bulger is about the desire to be abused and exploited by a fellow member of the tribe; you can only have a Last White Gangster if you have a Last White Ghetto for him to rule over.

The Bulger brothers are masters of South Boston's greatest art: playing the victim. Whitey has the balls to complain that the FBI confiscated the $800,000 in his apartment and ask for a court-ordered lawyer. Billy Bulger complains that he was forced to resign as president of the University of Massachusetts in 2003 just because his brother had been a federal fugitive for nine years and Billy admitted having contacted him during that time. (Give Mitt Romney his due for making that happen.) That's the same Billy Bulger who used to complain that anti-busing protestors were being unfairly painted as racists just because they stood around screaming "Nigger!" at teenagers. Whitey's girlfriend, Catherine Grieg, excused his explosive temper by telling the neighbors that he had Alzheimer's, and serious media outlets gullibly repeated that. In fact, Whitey is just a terrible person. If his violent anger is a symptom of Alzheimer's, then Alzheimer's set in while he was in the womb. The Bulger brothers' Southie, the Southie they exploited and preserved, was just the same way: loudly declaring victimhood at the hands of any outsider handy, while reserving the right to do all the actual victimizing themselves. But don't let the martyr act fool you: neither South Boston nor Jimmy Bulger are victims. They're simply hoods.

No Privacy, Only Privilege

cross-posted from Dagblog

The media can't resist talking about Congressman Weiner's penis. That's no surprise. The American entertainment industry exists to talk about penises and the things various penises like. And our news media is only a minor subsidiary of that entertainment empire.

On the other hand, the news media has no interest, zero, in the fact that Clarence Thomas leaves his wife's income off his financial disclosure forms, despite the, ahem, plain reading and original intent of those forms. Bor-ing! So technical! No one wants to hear a story about financial technicalities and legal loopholes. Blah, blah, blah, some loophole exists somewhere that allows people to funnel large sums of money to a Supreme Court Justice when they have a case in front of the Court. Who cares about loopholes?

Of course, Weiner's misadventures are tied to an overwhelming public interest: voyeurism. He's an exhibitionist, we're voyeurs, there's no point interfering in the course of nature. But no other "public interest" is involved. No crime. No public policy, no public funds, no harassment of employees and no harm done to anyone over whom Weiner had power. (Dave Letterman really isn't allowed to scold.) Weiner didn't even flirt with his own constituents. And any annoyance he was causing unwilling recipients could have been stopped easily. Creeps are easy to block.

So what's the crucial news angle here? Nothing. Weiner's behavior is creepy and compulsive and sad, but it has nothing to do with the public welfare. We just want to talk more about penises, and he's obliging us.

The important thing is that no one has any privacy anymore. Privacy is so 20th century. It's boring, like talking about checks and balances or public integrity or the right to a fair hearing before the Supreme Court. Privacy is for old farts. And so is observing other people's privacy.

You can argue that Weiner violated his own privacy by texting and tweeting his private business. But he texted and tweeted to private citizens, in private. And various third parties published them, with no justification whatsoever.

If a politician were writing racy letters, longhand, to women he met on bars along the campaign trail, and enclosing a naughty Polaroid or two, that would be creepy and bizarre. But if one of those women went to a newspaper or television station with those letters and photos, the appropriate question would be, "What public interest is served by publishing these?" The only rational answer is "None." That the illicit blathering took place through digital technology doesn't change that. The press has no right to publish people's letters or transcripts of their phone calls, unless there's a reason. If the FBI is a wiretapping a criminal and he begins to indulge in phone sex, they're legally obliged to stop taping and come back later.

But we now live in a society where major news organizations will publish embarrassing sexual material on no pretext at all. We have a British tabloid, and perhaps other newspapers, wiretapping private citizen's phones in order to publish details of their private lives. We have creeps like Andrew Breitbart and James O'Keefe hacking and snooping and secretly taping, answerable to nothing but their own slender consciences.

Back in the Iron Curtain days, Communist secret police would wiretap dissidents and then publish whatever dirty laundry they overheard. (Milan Kundera writes about the Czech secret police taping the dissident Jan Prochazka kvetching about his friends over a few drinks, and then playing his back-biting gossip on the radio.) That's what a police state aspires to: a world without privacy.

Now we're approaching that secret policeman's dream world, except we've outsourced the secret policing into private hands. Everyone is allowed to wiretap everyone else. Everyone can publish each other's e-mails, pass along each other's pictures. We've chosen a world where the freedom to humiliate each other, and to stare at others' humiliation, is treated as the bedrock right, and freedom from humiliation is a privilege that can be revoked on a whim. Anybody's whim.

Sure, you can say that Weiner had it coming, that he got himself into trouble. But that's what they'll say about you, too. You should have known better than to send that e-mail or that text message. You should have known better than to pay for that with a card. You should have known better than to go to that website. You should have known better than to write that down. And you can say that Weiner is a public figure, and so has no private life at all. But when it's your turn to be humiliated, there will be some colorable excuse: you're a schoolteacher. You have a blog. You commented on the internet, or a gave a quote to your local paper. There will always be a convenient excuse. But the real reason is this: the rest of us want to dig through your business, and we've decided that it's our business, too.

Clarence Thomas, on the other hand, has decided that his wife's income is no one's business, the letter of the law notwithstanding. Justice Thomas doesn't want to tell us who his wife's clients are, or how much she's paid. And if he doesn't have to, anyone who wants to pay off Justice Thomas simply has to hire Ginny Thomas and pay her more than she knows it's worth. Sure, they won't be paying the Justice. He'll just have access to the money and the things it buys.

I'm not accusing Justice Thomas of being on the take. He has revealed enough of his joint finances to support any such accusation. But what he is doing is creating a precedent (which any Supreme Court Justice should surely understand), by which a federal justice can be bribed with impunity. In fact, his behavior creates a clear road map to bribing a Supreme Court Justice and getting away with it. And that is a shameful precedent to set.

There's no privacy for private citizens in 21st century America. There's just privilege, and secrecy, for the privileged few.

When Clarence Thomas was the guy who allegedly chatted about porn movies in the office, we were utterly fascinated with him. Now that he's subverting the basic integrity of the highest court in the land, no one's interested. And this scandal, unlike the salacious twittering, is very literally our business. Clarence Thomas is sworn to do the people's business. He is not allowed to contract himself out while he does it. But evidently, these are the new rules. Big Money is going to be allowed to funnel all the money it likes to Supreme Court Justices. As long as the Justice taking the cash doesn't spend it on hookers, he'll be fine. And the rest of us won't notice how our world has changed. We'll all be looking at someone's crotch, twittering about what a scandal it is.

Revisiting LeBron (and Retaining Employees)

cross-posted from Dagblog

So, last summer LeBron James decided to leave Cleveland, leading to a massive outburst of Clevesentment and a widespread belief that Cleveland had burned down among my friends and family who don't live there (and not just among them, judging from the search terms that old post collected). A year later, he's gotten himself to the NBA Finals for the first time in his career. So, I would say his career decision is going much the way he planned.

I won't defend the gross narcissism that LeBron displayed while announcing his decision, or while taking his arrival victory lap around Miami. But the decision itself was perfectly legitimate and reasonable. It's America; you're allowed to change jobs when your contract is up. And let's review what LeBron did:

He gave up millions of dollars (that only his old team was allowed to pay him) in order to be on a team that had a better chance of success, and where some of his teammates were paid as well as he was. (And yes, LeBron makes an obscene amount of money with the Miami Heat. But that obscene amount is exactly what Miami pays Chris Bosh, and not quite 4 percent more money than the Cavs currently pay Baron Davis.)

This goes against the teachings of modern American business, which says that the most important thing is to pay the best (or "best") employees as much as possible, and to keep other salaries low. Think about corporate CEOs, who are now paid ludicrous sums on the grounds that you need to pay for the vision and leadership, while the wages of ordinary workers in those companies stagnate. The current handbook of American business is to pay the "stars" lavishly and make the gap between those "stars" and their peers as great as possible. Part of this is penny-pinching, because it is cheaper to give one person a $20,000 dollar raise than it is to give ten people $2500 apiece. But another part is the ideology of our post-capitalist business class, which believes in income inequality as a good in itself. If they have $20,0000 to spend on raises, they would rather give it all to one person rather than split it up four or five ways, because by paying someone a lot of money they convince themselves that they have created "excellence."

LeBron's definition of "excellence" is apparently different. Rather than making $3 million a year (or $8 million a year) more than any of his teammates and losing to the Celtics every year, he preferred to be on a team where other, comparably-paid stars would help him beat the Celtics and the Bulls and go to the Finals. The man's motivated by money, but not just by money. He wants to succeed.

The same day LeBron played his first game in the Finals, Inside Higher Ed ran a piece about public universities losing star faculty during the current recession. Private universities have always poached public university professors, and increasingly so over the last twenty or thirty years. In the current downturn, it's gotten manic.

The IHE piece starts with the basic presumption that it all comes down to money, which is certainly a factor. A few years of pay freeze will cool employee loyalty right down. Then it shifts to saying that many such decisions are "idiosyncratic." But gradually, as the IHE goes through typical cases, another pattern emerges: top faculty often abandon schools where the quality of their department or college is being undermined, and are more loyal to places where their department seems to be growing and getting stronger. One professor mentioned in the article fled the University of Wisconsin because he was tired of having the university attacked by state politicians, and because year after year of budget cuts made it harder and harder for him to fund his doctoral students. Sometimes, IHE quotes Brian Leiter saying, it's a chain reaction:

Sometimes, he said, one or two stars in a top department at a prestigious institution can move elsewhere and trigger a larger-scale migration of talent. A herd mentality then sets in. "If too many of your good colleagues leave, then people start to think the boat is sinking," he said. "That’s probably the most common reason."

But on the other hand, this can be turned around by hiring more people:

Diehl [the Dean of UT-Austin's College of Liberal Arts] said he knows what it's like to be on the other side of a migration. Not long ago, he said, two top economics professors left for, of all places, Madison. Diehl said that one of them had told him that the then still-emerging issues with the regents played a role in his decision to leave.

Diehl feared the departures signaled that the economics department was at risk of imploding. "A department needs a certain critical mass," he said, not just in numbers but also in quality. "If the feeling is it’s a sinking ship, the talent will go elsewhere, especially in economics where there's a robust job market. We had to act decisively to stanch the bleeding."

He set about persuading Sandra E. Black, who was then a visiting professor from the University of California at Los Angeles, to stay. She agreed and, as a top labor economist, created enough of a buzz, Diehl said, that Austin was able to hire six more junior faculty. It was, he said, a case of a good offense serving as the best defense against a migration.

Now, hiring six new colleagues is fantastically expensive, much more than giving your top two or three economists fat raises. And neo-liberal economics would suggest that it's precisely the wrong approach, since you spend much more money and the people you're trying to keep get none of it. The standard MBA playbook would be to throw five-figure raises at the stars. But it's like LeBron and the extra $3 mil he doesn't really need. Employees who are competitive and attractive on the job market want personal rewards, but also want to be part of a successful enterprise. Econ-1 neoliberalism would tell you that it's much smarter to give one person a $25,000 raise than it is to give that person a $5,000 raise and then spend $250,000 hiring junior colleagues for her and $20,000 increasing her funds to pay grad students. But that is often the better way to go. Many ambitious and talented people would rather be paid handsomely to succeed than be paid obscenely well to be mediocre.

Scientists love a nice raise, but they also want lab budgets and funding for grad students and money to hire post-docs. Humanities professors want to be able to fund good grad students, and want good colleagues to talk with. (The highest-end endowed chairs, the apex of the professor track, often come larded with special funds and other goodies, some of which (like research funds) directly benefit the holder but many of which are designed to keep the holder happy by directing money to other people: money to fund a prize doctoral student, or to give to colleagues for their research.) Everybody wants to be in a department that feels like it's moving forward. It's the same with us as it is with LeBron, although the salary numbers are two or three decimal places off: it's about winning. It's about teammates.

And almost everybody wants to be in a place where they feel that the students are learning successfully, where there are enough resources to fulfill the educational mission. Administrators can save money by crowding classrooms with too many students, and off-loading lots of teaching onto ill-paid part-timers who get little instructional support, and then spend a fraction of those savings on one or two fat raises for "star" professors. But most faculty would rather have a modest raise and thriving students than a massive raise and a huge crowd of struggling students. Of course, there are a few who don't care whether students succeed or fail, and who would rather just take the money. But those aren't the people that you want to keep.