Clause 61: The Pushback Blog

Because ideas have consequences

What, Exactly, Do You Do Here?

with 2 comments

Back in 1982, two Harvard MBA students published a book in the Official Handbook mold, titled The Official M.B.A. Handbook, or How to Succeed in Business without a Harvard M.B.A.. The authors didn’t want to impair their future chances to recapture their educational investment, so they wrote under pseudonyms.

It turned out that they were ten minutes ahead of their time. They captured the issues around the aspirations of the decade.

One particular item in the book has stuck with me. The authors were discussing how to choose a career. They presented an overlooked but important consideration.

 

The Line of Direct Labor. Fisk and Barron, p. 104.

The Line of Direct Labor. Fisk and Barron, p. 104.

M.B.A.’s, having a rather oversized opinion of their own worth, are very sensitive about being underpaid. In addition, they know that pay levels are often keyed to one’s level of tangible output, if output is actually measurable. Thus, managers who work in jobs with tangible output get paid appropriate salaries, while managers whose output cannot be measured can earn absolutely stratospheric ones.
— Fisk and Barron, p. 104.

Yes, it’s satire, but satire has to have some grounding in recognizable truth in order to be funny. Moreover, in our time, yesterday’s satire will be left behind as stale and unimaginative by what people say and do in all earnestness tomorrow. As Tom Wolfe had written not five years before, “No sooner do you think you have hit upon a piece of Rabelaisian hyperbole for our times than reality shrinks you like a wool sock.”

What actually happened in the past thirty years is that everyone in the middle class has made a run for the right side of the Line of Direct Labor. The goal has been to find a setup where you have no tangible output, or even better, no output at all. This has led to corporate environments that I described in an earlier post. Even if you can’t get into a line of business that has no tangible output, you can set yourself up away from the tangible output within the business by being a gatekeeper or a professional critic. A substantial portion of the people who have middle-class jobs have done exactly this.

However, the relatively few people hitched to responsibilities with tangible output are carrying all those others who are above such mundane considerations. This leads to less wealth production and more people claiming credit for the wealth that is produced.

You would never know it to look at the published figures:

 

St. Louis Federal Reserve Economic Data (FRED): Real Gross Domestic Product, Downloaded 4 May 14. http://research.stlouisfed.org/fred2/series/GDPC1

St. Louis Federal Reserve Economic Data (FRED): Real Gross Domestic Product, Downloaded 4 May 14. http://research.stlouisfed.org/fred2/series/GDPC1

But this is completely meaningless if you want to understand the wealth picture. Gross domestic product (GDP) is a backed-into number. We have no way of measuring what was actually produced. We measure what was spent and say, “Well, if someone spent the money, they must have got something for it.”

But this is not true. All those people who don’t have tangible output, or any output at all, are also getting paid, eating food, buying houses and putting gas in their cars. All their expenditures show up in GDP, even if they don’t contribute anything — even if they actually obstruct wealth production. Furthermore, they are competing in the marketplace with those who do produce for scarce goods, bidding the prices up.

This is the dark, seamy, stinky story no one wants to touch: what if the middle class, as a whole, isn’t producing enough to earn its keep? Far better to stroke everyone with stories about how they are ripping you off. You, the salt of the earth, are out working hard every day and hanging on to what you have by your fingernails. Why is that? Because they are taking advantage of you.

But we have been down this road before, and it wasn’t pretty.

 

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Written by srojak

May 4, 2014 at 3:33 pm

2 Responses

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  1. Where can I find a copy (ebook, whatever) of How to Succeed in Business without a Harvard M.B.A?

    samantha

    May 5, 2014 at 11:21 am

    • I believe it is out of print. Some people sell it used on sites such as amazon.com.

      srojak

      August 16, 2014 at 10:32 pm


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