EDITORIAL: Saving Ourselves, Part Four

Read Part One

In this article series, I’ve made a couple of references to the non-fiction bestseller, Small is Beautiful: Economics as if People Mattered, by British economist E.F. Schumacher. The book was published in 1972 and focuses largely on Mr. Schumacher’s ideas about the most effective ways for the “developed world” to assist the “developing world.”

The “developing world” is referred to in the book also as “The Third World.”

Mr. Schumacher makes it clear, throughout the book, that he views human society from the perspective of an ethical Christian… which is to say, coming from a belief that we must look after not only ourselves, but also those less fortunate… that God intended us to be our brother’s keeper. The story of 1972, as it unfolds in Mr. Schumacher’s bestseller, is portrayed as a conflict between those who, from their positions of power in the industrialized nations, want to exploit the people and resources of the Third World for corporate profit — and those who want to see the Third World develop independent, sustainable economies capable of solving their own social problems.

That second group was, in 1972, at a decided disadvantage, in terms of having the power to advance their (perhaps more humane) agenda. But a great deal has happened in the ensuing 45 years, including the rise of India, China and the rest of Asia as industrialized powerhouses — and the decline of industrial manufacturing in the United States.

Please note that I use the word, “rise” with some trepidation. “Rise” implies an improvement. It implies that the adoption of the industrial-capitalist economic model in India and China and the rest of Asia has improved life for the average person. And indeed, there are indications of improvement, which can be measured. Longer life expectancies, for one. We can measure that, statistically. We can easily measure access to cell phones and large screen TVs, and the advertising networks that underwrite them. Increased purchasing power. Softer chairs. A larger variety of ice cream flavors.

We can measure these things, and we can use words like “developed”… as if some pleasant goal has finally been reached.

But we can — if we choose — also measure other aspects of society as they relate to the “developing world” as it adopts the tools and values of the “developed world.” We can measure, for example, suicide rates. We can measure the rise in obesity, clinical depression, chronic diseases. The rapid loss of the planet’s rainforests, at a rate of something like 116 square miles per day — an acre every second. The disappearance of animal species. The poisoning of soil, air and water.

We can measure these things as well.

What we cannot measure, easily, is whether the industrialization of Planet Earth has given us peace of mind.

I enjoy referencing Mr. Schumacher’s thoughtful arguments from half a century ago, because — even though the term “Third World” has fallen into disfavor — I like to think of Pagosa Springs as part of Colorado’s “Third World.” Oh, of course, there are signs that we, the residents of Archuleta County, have finally moved into the Age of Consumerism, like the rest of America. We now have a Walmart store. We have Broadband Internet in certain parts of town. Paved bicycle trails. An expanding hospital.

And then… there are certain signs of an “underdeveloped economy.”

Poorly maintained roads, for one. People living in cars and tents because they can’t afford local rental rates, in spite of working two jobs. A widening gap between rich and poor.

I’ve shared this chart, below, in a couple of previous Daily Post articles. It is entitled “Growth of real hourly compensation for production and nonsupervisory workers, compared with growth of productivity, 1948 through 2011”:

Growth of real hourly compensation for production and nonsupervisory workers, compared with growth of productivity, 1948 through 2011. Source: Analysis of unpublished total economy data from Bureau of Labor Statistics, Labor Productivity and Costs program and Bureau of Economic Analysis, National Income and Product Accounts public data series.

Source: Analysis of unpublished total economy data from Bureau of Labor Statistics, Labor Productivity and Costs program and Bureau of Economic Analysis, National Income and Product Accounts public data series.

What we see here (using inflation-adjusted dollars) is that, from 1948 until about 1972, the increases in American compensation (for private sector, non-supervisory workers) tracked closely with steadily increasing national productivity.

The chart was researched by Lawrence Mishel, president of the Economic Policy Institute, and his analysis notes that from 1948 through 1973, the hourly compensation of a typical worker grew in tandem with productivity, as we view the “cumulative growth in productivity per hour worked of the total economy” (inclusive of the private sector, government, and nonprofit sector) and the “cumulative growth in inflation-adjusted hourly compensation for private-sector production / nonsupervisory workers” — a group comprising over 80 percent of payroll employment.

After 1973, productivity continued to grow strongly, while for the typical worker‚ compensation was relatively stagnant.

Dr. Mishel is here addressing a national issue, using measures drawn from the entire U.S. economy. But what strikes me, this morning, is how accurately the above chart seems to reflect the wage situation in Archuleta County. The local cost of living has risen steadily since 1972, when Ralph Eaton and his fellow developers began building out the Pagosa Lakes subdivisions as a “recreational community.” The overall Pagosa economy has been on a rollercoaster ride ever since, but the wages paid to the average worker — adjusted for inflation — have remained fairly stagnant. And fairly low, compared to the rest of Colorado.

Meanwhile, the cost of housing in Archuleta County has pretty much tracked with the national trends:

No one moves to Pagosa Springs expecting to become a millionaire. This is not a place where the working class earns six-figure salaries.

Why, then, would any working class family relocate to Pagosa Springs? To the Third World, so to speak?

Read Part Five…

Bill Hudson

Bill Hudson founded the Pagosa Daily Post in 2004 in hopes of making a decent living writing about local politics. The hope remains.