4. PRINCIPLES AND FAITH FOR COMPRESSION
When people embark upon a major reformation of their society, the transition period reflects the degree of their faith in the end result. Establishing guiding principles at the start provides a foundation for that faith. The following principles apply simple common sense on a national level.
Reduce the National Lifehour* Cost: the cost of any good or service should be reduced if possible--everyone will benefit in the end;
Corporate Compression Is Possible: corporations can efficiently adjust to compression, for they do it all the time under the guise of mergers and takeovers--everyone will benefit in the end.
These are the basic principles. If these guidelines are observed, America will have a more efficient and productive economy in which people work fewer hours but have more wealth.
Reduce the National Lifehour Cost
Any reform that significantly reduces the national cost of any good or service should be pursued. These reforms must be enacted regardless of the effects on the present providers of the goods or services. If the present providers cannot provide the product at the more efficient, less costly price, then they should change jobs. For instance, if energy for turning the wheels of progress can be provided at a fraction of the cost that oil companies charge, then oil companies should be allowed to go bankrupt. Or, if financial, insurance, or commodity needs can be provided at one-fourth their current cost then these companies should be allowed to fold.
Only one crucial element should be considered in the pursuit of national cost reduction. That all-important element is the unit of measurement to be used. Given the managed instability of a dollar, it is obviously not the ideal unit of measurement. We need a commodity of measurement that is stable and immutable. That commodity is literally man's time, his lifehours.
With 230 million people, America has approximately 2 trillion human lifehours each year. The national lifehour figure is arrived at by multiplying
230 million people x 365 days x 24 hours
The money supply may fluctuate widely but the substance behind those symbols is more stable. New public and private enterprises that provide a needed service or good should be judged on cost in lifehours. If an existing institution consumes 10% of the total national lifehours and the proposed reform will provide the product at only 2% of the total lifehours, the obvious choice is the reform.
Without compression of the workweek, efficient innovations currently represent unemployment for displaced workers. What do you do with the unemployed? Generating makeshift work or putting them on unemployment undermines the time-savings of any innovation. Those engaged in productive work must continue to work a full forty-hour week while losing buying power to unemployment costs, taxation, and inflation. Clearly, the solution for the overworked is full-scale compression of the workweek.
Protecting Jobs No More
Implied in the above section is the idea that no existing job is sacred. No job should be protected if the product can be provided in fewer lifehours through other means. If an industry cannot increase its efficiency to reduce the time cost of a product, then it should seek a new profession. Maintaining an industry at a lower rate of productivity causes everyone to work more for the product than necessary.
Utilizing compression and other reforms in the elimination of less efficient industries is different from the present process of eliminating less efficient industries. The latter is merely a statistical illusion. Presently, less efficient industries are eliminated without replacement by more efficient industries. Many corporations are acquired and subsequently dismantled to reduce the acquiring company's competition.
Politicians and necronomists confuse the increased revenues of the acquiring firms with greater production efficiency. They see dollars instead of time. However, one should not confuse price-gouging with production efficiency. Price-gouging is the destruction of firms that were incorrectly categorized as "deficient" when in fact they were merely "less efficient." This errant labelling has mammoth effects on the quality of life in terms of available goods and services.
Price-gouging efficiency does not lower the lifehour cost of a product. Instead, the consumer has to pay more for products that are in shorter or controlled supply because of the acquisition and vivisection of viable production by other corporations in the same field. NUSA Reforms proposes new institutions that will really lower the timely cost of most goods and services, beginning with government.
Consider the financial system. In 1971, the banking community consumed five percent of the GNP; in 1981, banks consumed almost ten percent. Stated another way, the "net interest paid by non-financial corporations as a percentage of profits" was
1961-65 ( 9.5%)
Should the increased income of banks be viewed as efficiency in production? Or efficiency in price-gouging? If a farmer doubles his production and income in ten years, he is a more efficient producer. However, if the farmer affects a monopoly and doubles the price of his product for the same doubling of his income over a decade, he is merely an efficient price-gouger. This example indicates that people should not blindly follow the cry for "more efficiency."
Since 1971, banks have not increased their product. They are still providing the same service. Despite the use of computers, which has drastically lowered the cost of transacting financial services, banks have doubled their take in ten years. In other words, the time- and price-savings of innovation was not passed on to consumers. What allowed banks to inflationarily raise the price of their services for record levels of income?
Banks bought politicians. With politicians in their pockets, bankers were able to increase their control of the nation's money supply. This increased monopoly is reflected by the rising cost in time and dollars for financial services. Percentages of Gross National Product and national lifehours are synonymous, since if you double your percentage of the GNP, you can double the amount of production lifehours that you can buy.
These points are elaborated on in the chapters on "Private Taxation of America" and "Crisis and Collapse of the Thrifts." In addition, the chapter on the Savers' Mutual Fund describes a new financial network whereby America can have an efficient financial system that consumes less than two percent of the GNP or national lifehours. This new financial system should be instituted because it will provide an essential service at a more efficient price in the commodity that counts: lifehours.
In summary, no job should be protected from a more efficient, time-saving mode of production, but all jobs should be protected from business practices that bring about deficient production and price-gouging. If this principle is consistently observed, people can have faith that the cost of living will drop even if some of them have to change jobs. However, with compression, people will want to switch to jobs that require fewer hours of work per week!
Taxed. Taxers. Taxees:
Cutting regulatory costs often means increasing unemployment as well as increasing the number and cost of unsolved problems. Overall, it is a losing proposition. You end up with the same tax and inflationary losses, but you no longer have someone watching out for your interests. This is what happened to America when there were budget cuts in the EPA and the SEC.
Reagan did not cut the tax burden, he shifted it. In addition, he increased the problems for the average American. Symbol manipulator that he was, he rode on a wave of popularity based on cutting federal income tax and federal regulation. But did he really cut your taxes or regulate the problems out of your life? If you were a Reagan supporter, enjoy your higher local taxes, local crime, local inflation, and local pollution, for these are the harvest of Reagan's actions.
If you are one of the taxed, do not think that cutting your taxes automatically cuts the problems out of your life. Do not think that reducing the number of federally supported taxers or taxees will increase the quality of your life. If you do not share the available work with the newly unemployed, you should expect a rise in taxes and problems. Compression, on the other hand, is the way to reduce costs and enjoy a more problem-free existence.
It is better to do nothing at all than to cut tax rolls without creating job vacancies in the private sector first. The overall consequence of not creating jobs is a more inflationary, problem-filled world. In the face of budget reductions, compression creates private job openings for former taxers and taxees.
The inflation of today is, in part, due to the phobic reaction of necronomists and politicians to the deflation of the 1930s. The Depression onset was actually deflationary in terms of dollars. It was inflationary in terms of time, for human lifehours* were immensely cheapened. Because they measure an economy in the symbols (not substance) of time, top policy-makers equate deflation with massive unemployment. They ignore, consequently, any solution that speaks favorably of deflation. One such solution is productive deflation.
Previously, the word phobic was used in place of "fear" because, while fear is based in reality, a phobia has no real basis. Despite what necronomists say, the Great Depression was actually a period of inflation. More important than the mutable value of a currency is the value of that which the currency symbolizes: time. The 1930s saw marked inflation in human time. The thirties were not a period of deflation in the most important sense which illustrates that the reaction of the politicians is phobic--without basis in reality.
Productive deflation occurs when the levels of productivity increase for a good or service and the time-savings is passed on to the consumer. Inflation occurs when the level of production and productivity is not maintained or inflationary price-gouging occurs. Remember the earlier example in which bankers bought time-saving equipment and did not pass the savings on to their customers. Instead, the bankers bought politicians and the right to gouge prices.
Politicians should prevent all forms of inflation. For example, a tax should be imposed on inflationary price-gouging. Better yet, the growth of competition should be stimulated to underprice the price-gougers and institute productive deflation. Are the politicians following the course of productive deflation? On the contrary, competitors in the same field are being joined by merger or acquisition at alarming rates.
NUSA Reforms details the ways in which price-gougers can be supplanted by institutions that productively lower the cost of goods and services. Deflation, when viewed as the reduction of the amount of time it takes to produce or buy an item, is not a bad word. There should be no fear of deflation; negative feelings toward deflation are an inappropriate response based on measuring the quality of life in symbols of time rather than the substance of the symbols, time. Therefore, productive deflation is one of the key principles for a better world.
Corporate Compression Is Possible
As the knowledge of NUSA Reforms and compression spreads, corporate resistance will grow initially. This subject was touched on previously in terms of hesitation by businessmen. Regardless of the objections corporations offer against compression, they do it all the time.
Takeovers, mergers, and corporate restructuring are nothing more than compression based on another set of values. As opposed to being based on capitalism per capita, most of the existing rearrangement of corporate decision-making is for a fewer few: decapitalism, not pure capitalism. The following quotations give examples of how corporations consistently rearrange the process of decision-making, policy-making, and duty fulfillment. Within these quotations are hints of how industry-wide compression would institutionalize a shorter workweek.
Some Companies Try Fewer Bosses To Cut Costs, Decentralize Power.
These references show that the corporate world is adaptable if there is an incentive.
Some corporate policy-makers will object to a compression of the workweek and the inevitable rearrangement of the decision-making and duties within their firms. Other, more enlightened corporate leaders will need no more incentive for compression than the fact of the existing and inevitable collapse from overtaxation and rising unemployment. But NUSA Reforms offers more than the dread of the present disastrous course as reasons for the corporate world to embrace compression.
Since compression would benefit the nation as a whole by reducing the tax burden of unemployment, inflation, and crime, these tax savings should be given to the corporations that institute compression. In other words, there should be two corporate tax rates. Corporations that rearrange their hierarchy of decision-making (duties) should be taxed half of what the unenlightened, time-wasting corporations are taxed.
This use of the tax system to reward individuals and industries that work to solve problems is quite different from the supply-side approach of Reaganomics. Reagan's shotgun approach gave tax breaks to all corporations, especially to those that acquire and vivisect other corporations for inflationary, price-gouging income. Tax breaks should never be given to anyone or anything that increases the problems in life. Generating unemployment is definitely a problem.
Corporate America will find the transition to compression easier if it stops viewing employees dichotomously as
A corporation, business, or nation is a time-producing process based on the decisions made by the people composing the process.
Time production is based on the summation of all the decisions by the involved people, from the president to the lowest paid worker. If a company wishes to maximize its productivity of time (and the products and dollars in which time is collected), it should pursue not only new tools in production, but also productive rearrangement in the decision-making hierarchy.
The choice of words is important in the accurate description of a corporation. All personnel should be viewed as policy-makers, decision-makers or quality-controllers. The following quotation expresses the unity of all corporate employees.
You see, quality control is not just a little room adjacent to the factory floor, whose occupants make a nuisance of themselves to everyone else. Quality control is--or should be--a state of mind. It must permeate the entire operation. Everyone, form the president to the production trainee, is part of quality control. But it is up to the top manager to instill in everyone the desire to produce goods of the highest quality.
Part of instilling a sense of quality control is developing a new vocabulary that accurately describes the hierarchy of decision making. In addition, the implementation of this unified view in the form of titles and compensation is a more concrete step toward developing this sense. All employees should be put on an hourly basis. All employees should have a stock option in which a mandatory percentage of their pay is converted into corporate stock. Without concrete unification of compensation, corporate compression cannot work.
The preliminary step is converting all compensation into hourly wage with a stock option. The next step delineates levels of decisions, duties, and responsibilities. This involves review of the existing personnel list and ranking the employees' duties according to complexity. The results are tabulated so that a hierarchy of duties can be presented.
As nationwide compression occurs, a corporation can reduce the weekly hours of each position and its responsibilities, beginning at the top. Thus, if a ten percent reduction in the workweek was legislated and legitimized, the top decision maker would delegate some of his lesser duties to someone below him who would be promoted with increased pay. The degree of delegation (i.e., the compression of the workload for the top person) would be approximately 10% of the responsibilities at the top.
As the duties and responsibilities of a higher position are compressed, someone is promoted from below to pick up these duties. The promoted person would receive a corresponding pay increase for his more responsible work. The previous duties of the promoted person would be picked up by another person promoted from below, and so on. This progression of decision-making vacuums would continue all the way to the bottom of the decision-making hierarchy within the corporation. When it hit the bottom, people would be hired from the ranks of the unemployed.
Period of Adjustment and Enforcement
A common question about or objection to compression is that the economy is too complex to expect compression to occur each time a compression is warranted based on rising unemployment. Naturally, this adjustment would not be overnight.
After a compression decree is legislated and legitimized through modern telecomputation, industries and individuals would have some time in which to balance their work schedules. For instance, if a five percent reduction in the workweek was ordered, people would not have to cut their total workweek immediately by five percent. The requirement would be that they reduce their total worktime during the next two quarters to five percent below that of the previous quarter and keep it below that level. With this individual tuning of compression, one could keep working at his existing rate up to the last week of the quarter and take a sufficient number of days off in order to balance his permissible workload.
When a decree of compression is passed, corporations would quickly initiate the compression as described above. Corporations would adjust people's work loads so that everyone suddenly doesn't have to take a week off. The key thing to remember about a decree of compression is that compression is not immediately required; it doesn't have to occur the next day. An individual merely has to reduce his average workweek within a quarter or two. This can be done by working fewer minutes per day, fewer hours per week, or fewer days per month. Regardless of how the person does it, within a quarter or two, his accumulated workhours must not show that he was paid for more than the number of permissible hours for a quarter.
The last sentence of the previous paragraph provides one means to how enforcement of compression will occur. If the average workweek is reduced by five percent, your income for the following quarter should not be for more hours than is permissible. Otherwise you and your place of employment will be fined. Another safeguard will be the requirement that you spend half of your time-savings in education or public works; it will be hard to work as much as you did if you're spending time in a class room, as a Big Sister, or as a Foster Grandparent.
But most importantly, enforcement will come from a growing sense of internal commitment to a better life through compression. Wealth will be increasingly perceived as a combination of both material gains and free time. Personally and collectively, people will show disdain for any who try to subvert the reduction of the workweek. The social contract will increasingly become an article of faith by which people regulate themselves and their relationships with others. The choice is synonymous with the rejection of economic turmoil (inflation, unemployment, taxation, and violence).
As compression is more fully and widely understood, a competition will occur within the nation to see how quickly the average workweek can be compressed. A main reason for this competition will be the realization that more material wealth can be had by compressing the workweek than by hogging production. Hogging production results in rising inflation, taxation, and violence; these parts of economic turmoil restrict and reverse material wealth. Compression will work because it provides the best of both the material and mental worlds.
Appeal to Affected Workers
Compressing the workweek to absorb the unemployed should not bother too many presently employed people. Naturally, consternation will arise among some workers as new systems for providing certain national goods and services are instituted. People in these replaced enterprises must accept the inevitable. However, if these people are willing to work as hard as they presently do, compression will not only provide alternative jobs but also jobs that compensate with more buying power in fewer hours Of course, those who are presently overpaid for their goods and services will have to work harder to maintain their income.
This appeal for change is addressed particularly to those in middle management and below in government, finance, insurance, and commodity services. Currently, these inflationary services benefit a fewer few, not the average worker. The existing modes in these fields are simply inadequate and inefficient with regard to national needs. Compression will affect these industries most radically. However, if compression replaces your industry with a more efficient method, don't listen to superiors who incite you to "save" your job. By defending an outmoded industry, you save only the inflationary incomes of your superiors and defeat yourself.
If you are suffering inflationary losses, overtaxation, violence, and fear of unemployment, compression is the solution. Don't let those who will readily lay you off (by hoarding the available work to maintain their salaries and bonuses) deter you from participating in the betterment of America. Don't worry about losing any of your company-related pension funds: NUSA Reforms is an encompassing project that will not only increase the production of wealth (material and mental) but preserve the rights to present wealth. NUSA can guarantee your accrued benefits better than any corporate executive. In fact, NUSA can guarantee a pension plan better than any other because the Democratic Capitalists will give America productive deflation so that each pension dollar buys more each year. If the principles of compression are understood and enacted, no productive person need worry about the change. With compression, everyone will benefit.
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