Easy Chair Series

Work

Professor: Dr. R.J. Rushdoony

Subject: Conversations, Panels and Sermons

Lesson: 54-91

Genre:

Track:

Dictation Name: EC356

Year: 1986

This is R. J. Rushdoony, Easy Chair number 356, February the fifth, 1996.

One of the problems we face today is very similar to that that faced the United States 1930 on, the problem of work. Jobs are declining in numbers. People are unemployed. What to do?

Well, I am going to turn rather briefly to a book by a Harvard professor, Juliette B. Schor, S C H O R The Overworked American: The Unexpected Decline of Leisure. Her perspective is definitely not mine, but the book is all the same a very interesting one, because she calls attention to what has been happening, namely, that Americans, the most productive people in the world, have in recent years become even more productive. Now in recent years there have been an... occasional years when our productivity for one reason or another has fallen off, but apparently it is increasing. Then there is another factor. She feels that because the productivity is increasing and most Americans are really working longer hours, even though they technically are not. They are working eight hour days. When all the extra time they put on a job is counted in, they are working much longer than their fathers.

She cites an interesting thing from the Depression and I quote, “When the Kellogg Company made their historic switch to a six hour day on the first of December, 1930, they were searching for a strategy to cope with the unemployment of the Depression. To their surprise they found that workers were more productive, on the order of three percent to four percent. In some departments the pace had picked up even more. According to one observer, 83 cases of shredded whole wheat biscuit used to be packed in an hour under the eight hour day. At the time of my visit the number was 96. The workers were pleased, preferred the quicker pace but shorter hours. And management was well pleased as well.

“According to W. K. Kellogg, ‘The efficiency and morale of our employees so increased, the accident and insurance rates are so improved and the unit cost of production is so lowered that we can afford to pay as much for six hours as we formerly paid for eight.’”

He goes on to... or she, rather, to call attention to other things which call attention to similar results.

We can digress although she, in a sense, does also briefly refer to it, to the Middle Ages. The Middle Ages was a time when men did not work as many days in a year. For us 52 days, sabbaths. Then they had about 100 days that were saints days and there was no work. And yet their productivity was quite high so that having the rest they did, having as many days off as they had, they were still remarkably productive.

Dr. Schor gives some data on the contrasts over the centuries. It was in the 1840s to about 1860 and some areas beyond that, much beyond that, that men worked the longest hours. Dorothy’s father as a railroader worked every day without any days off and the days were originally very, very long days and it was only when he was near retirement that the eight hour day became routine. Of course, the railroad workers forced other extremes and shortened the length of a trip that a work crew could take. So from being overworked, they went to being underworked for high pay.

Well, over the centuries the work load has not been helped by increased hours. Longer hours do not make for efficiency. And so Schor feels that there is a strong case to be made for shorter hours or for some kind of change. She calls attention to the fact that in the medieval period a working day stretched from dawn to dusk, 16 hours in the summer and eight in winter. However, this did not mean that they worked all the time. And they very often, because of saints days, put in dramatically fewer hours in a year.

In fact, she quotes James E. {?} who when I was growing was regarded as one of the great men in the field of labor studies who said that the medieval work day was not more than eight hours. The worker participating in the eight hour movements of the late 19th century was simply striving to recover what the ... his ancestors worked by four or five centuries ago.

So if {?} was correct, it means that the medieval worker did not work long hours. He worked fewer days and yet he was productive. So a case could be made, Schor feels, that the American worker is overworked.

Let me cite something else she says which is on a different subject, but very, very important. Debt. Most people are working hard to pay off debts. In fact, Dr. Schor as a professor of economics says, and I quote, “For a single person who owns a house that is paid for, 30,000 or even less may be enough to finance a perfectly comfortable middle class life.”

Well, I think she is very conservative in that statement. Think about it for a moment. She said a single person. But when you consider that most couples now are paying in many of our urban areas 1500 a month payments on their houses, more? All right. Douglas, I stand corrected.

[Murray] Twenty three to 2800 is average.

[Rushdoony] Well, I am out of touch. My data is about 15 years old.

[Murray] This is in the Bay area.

[Rushdoony] Twenty three hundred up in many instances. All right. If they had no such debt they could live on a dramatically lower income. So what is governing our economy today is not the needs of the couples, but their debt. And they cannot take a month or two months without work.

I recall, oh, about 25 years ago or earlier, earlier under Johnson there was a recession for a time. And we lived at that time in the San Fernando Valley at the west end first in Woodland Hills and then in Canoga Park. In those days there were a vast number of aerospace plants all through that area. When the layoffs began and the recession was not more than six to eight months, in short order houses were being foreclosed and were up for sale, because those engineers who were making big money, they were well to do, were living hand to mouth. They had all kinds of recreation vehicles. They had expensive vacations. They were living as though their fat salaries were going to continue to go on indefinitely. So if we removed debt from the scene today and people lived as they once did, five year mortgages only, one fourth down, people would be able to get along on much, much less money.

Well, Paul, would you like to make a comment on that or do you want to wait a minute?

[Biddle] Well, I... I think that if you had more available income... say you had a five year mortgage and you sold off... excuse me, you paid off the mortgage at the end of the five years. You would probably bid up the price of other properties to acquire another property, because your expectations and your ambitions would always be a function of how much you could put on the table.

I... the... the other thing I was thinking of is that I think many people nowadays are, as you say, they work to pay their debt, but if they didn’t... didn’t have a problem with income, they wouldn’t work. The problem is the exchange of the labor, the dollars and then translating that into an investment and so on, many people now at the age of 50 now are saying that they don’t want that. And they stop and they reflect. They sell off the houses as Mark said in California and move to another state where it isn’t so expensive, willing to take less in the way of income, but I look also at the people who work. I see... you speak of the productivity. I am wondering if people who as they get older their productivity increases, of course, because of their learning curve movement. But I am wondering if these people who move forward in terms of years wouldn’t like to walk away from the learning curve, perhaps, and go into something fresher, because they get sort of jaded doing the same thing over and over. They want a second career, a second lifestyle so to speak to kick in.

[Murray] {?} in today’s work place you don’t stay in the same field very long. I mean, nowadays young people coming up have to plan as part of their career track that at least ... at least once at the bare minimum and probably at more realistically twice during their... their working life they are going to have to change careers totally. You know, this idea of ... of apprenticing one way or another into a particular trade and going to work for some large company and collecting a gold watch is a myth of the past. It is... it is not happening. The... the ... the... the anthem of the wage slave middle class, however few of them are left, is exemplified by the bumper sticker that says, “I owe, I owe, it is off to work I go.”

[Rushdoony] Yes.

[Murray] You know, we have a debt driven economy.

[Rushdoony] Yes.

[Voice] I mean, if people paid everything off this country would collapse for a while. The only... the only reason people... a lot of people work is to maintain an unrealistic lifestyle with unrealistic expectations which is driven by television. I mean it is no longer magazines and newspapers anymore.

[Voice] That is right.

[Murray] Young girls grow up today wanting better than what their mother had.

[Voice] Yes.

[Murray] ... in the way of furnishings and ... and all of the accoutrements of ... of maintaining a home.

[multiple voices]

[Rushdoony] And the day after they are married.

[multiple voices]

[Voice] Yes.

[Voice] They want it immediately.

[Voice] {?} When I first went off to Asia I lived in, oh, goodness, in the middle part of the 60s. I remember I came into Hong Kong and the American expatriates were working five day weeks. That is what we were expected to do. But the locals worked six days a week. And I thought, well, gee, that is a tremendous workload. Some of them would every other week flip over and do seven. So you would have six and then seven and then you do six and then seven. And I ... I couldn’t understand how we would get these people to work that way. And then I started looking at things we did for them. And this was true not only in Hong Kong, but even more so in Japan. On these...and the day started at 10 o'clock and would run until eight o'clock in the evening.

I observed there that, one, we paid for their transportation costs. They didn’t have to pay for their car fares or trolley fares and anything like this. Secondly, we paid for their lunches and then dinners. In some instances, we even gave them places to take naps where they had like little rest areas that they could go to during the day.

We didn't get, in effect, 10 hours a day of labor out of these people and six days {?} worth of work. It was modified. And when I started looking at... at how the effective time spent on... on tasking was compared to what we would do in the United States, I could see that the what the Americans were doing was more labor intensive than what hey were doing in Hong Kong and Japan in... in these extended hours and the extended formats. So I... I think, as you say, when people have less work in terms of time commitment they were able to get greater output. I see that happening with the Americans versus the Asians that I saw in the 60s. I think it could happen again today if we had even shorter work weeks.

[Rushdoony] Yes. Eric {?}, an Austrian economist and count some few years ago called attention to the remarkable productivity of Americans as against the rest of the world, that some peoples in Asia who worked 14 hours a day could not equal in productivity an American’s eight hour day.

[Murray] You know, but they don’t utilize technology the way that we do in order to get that kind of productivity. They don’t have the technology available in many cases. And even if they did, they don’t know how to use it, although they in the past 20 or 25 years they have learned how to use it. And they... they have beat us at our own game in automobile manufacturing and in ship building and electronics manufacturing and a number of other areas.

[Voice] There is also the matter of what do we offer to the employee that makes them productive. Henry Ford popularized the automated assembly line for automobile and it became a... a standard. You do one thing and ... and punch it out and that is an efficient way to create automobiles, but it is not, as we know now, an efficient way to treat employees.

[Murray] It is a killer of men.

[Voice] And some years ago I remember seeing a news show and it was about the ... I believe it is called the Lincoln Company. They make welding equipment and it is somewhere back east. And the gist of it was that it was one of the most... it was one of the most antiquated factories in the United States, but it was probably amongst the most efficient because they didn’t pay wages. It was all piece work and the employees were paid per how much work they got done. And you had to take a test and actually perform work duties to see whether you qualified to work there. And it was quite a competition for these jobs. They had to have a sign forbidding any employees on the floor before a certain hour in the morning because they would get there early... try to get there too early because they could get that much more work done, because the more work they got done the more tabs they actually got done, the more they got done so that nobody got the same wages. They got it according to how much they got accomplished.

[Murray] You will never find those kinds of examples given in any kind of a classical treatise like this lady here, because you know, it... it points up that incentives...

[Rushdoony] Yes.

[Murray] ...is what drives people. And I would find at the expense of Rush getting an angry letter or two, I would find the opinions of a Harvard professor highly suspect, because they are protected by tenure and the 99 percent of them have never held a job in the competitive work place where as many teachers, but particularly in the public school system they don’t have to produce. They don’t have to produce a product. They don’t have to produce an educated child. They just have to show up and work and do what they are told, you know, present the lesson plan that they are told. And so I... I would find the opinions of, you know, someone in that kind of a situation a little suspect as, you know, been out in the work place themselves.

[Voice] And education is a good example of an area where they are the experts because they are doing it according to what he experts say. They are doing it right.

[multiple voices]

[Voice] And the results don’t have anything to do... they are... they are ... they are doing the right things and the theories prove that they are doing the right things, but the test results are, well, these kids come from broken homes and... and we can’t control all the factors that go into...

[multiple voices]

[Voice] ... the social problems that they are.... they are bringing to the schools with them that that is why they are not learning.

[Murray] They are masters at finding excuses for their own incompetence.

[Voice] And results, we all hold people accountable for results and for productivity. And I... I think more that is coming back as companies are downsizing. They are get... getting rid of some of the dead wood. And they are trying to... to... cut things to the bone where this is what we essentially need to get is job done and we are going to get rid of the extra people and it is a lot of this down sizing is the fact that they are finding a lot of their employees are not productive. They are not really accomplishing what they need to accomplish to produce a finished product.

[Murray] Well, technology is... is in the process of eliminating the assembly line and virtually has already completed that in the automobile industry and the electronics industry because everything is computer aided design with the purpose of computer aided production techniques. And right now for instance I sell products that are made by Motorola. Human hands don’t touch them. When I send an order in for a pager, for instance, set up in a particular way, that information is ... the order is typed... typed into a computer and a box comes out the other end. Nobody touches that product and it comes out custom made exactly the way you ordered. And automobiles will in the future will be produced that way.

[Voice] That is right.

[Murray] You will order an automobile with the color, et cetera, all of the stuff that you want. There will be no more of this. The dealer decides what options you are going to get because, you know, that is the best deal for him. You will order automobiles based on what you want.

[Voice] That is right.

[Murray] And it is coming very quickly. And it will all be done with computer aided design so the... the drudge work that, you know, Henry Ford started is really a thing of the past and has been. And really the Japanese were the ones that pushed us into it because they were the first ones to come up with the robots to make cars.

[Voice] Yes, I don’t know what behavioral theory was when you did your doctoral work, Rush, but when I did my doctoral work we had these classes in behavioral theory that you look at how people view their work as hands on blue collar type people verses people who are management who are not hands on. And I am thinking you mentioned Lincoln Electric. Now that is out of Cleveland, Ohio. And it is not uncommon for welders there to pull down 80 to 100,000 dollars a year. And that is very high wages for a welder to bring in to definition.

Those people, I don’t know whether they have so much a strong identification with the company, although I know they are very jealous of their jobs and, as you say, they come in early to try to get their profitability up and so on, because they are viewed as individual profit centers, so to speak. But if you... something I look at, that it showed the... the... the real truth of this hands on mentality versus management versus people who are equity holders, just three classes. And if you looked at Taiwan when Taiwan developed a stock exchange and began to have a surplus of capital in their trade relationships and this occurred about 19... get my years straight now. They keep running by me so fast. It has probably been about 1985 you started seeing Taiwan just being a tremendous tiger. Their stock exchange gets started. And you have millionaires occurring overnight from investing in shares. They couldn’t find people to work in the factories.

No one had any interest in a product. They had no identification with the old company. They were an individual profit center and this time it was welding. They were playing shares. They were... they were investing in the market place.

So I ... I... I think that in terms of the worker mentality we... we have forgotten that... that people don’t work for the glory of the man who owns the company. They work there because they have debts to pay and so on. And as long as there is an overlap in the interest between the people who work and the people who manage and the people who provide capital, things proceed. And once they slip apart, you find people wanting to move to Oregon and quit working the heavy duty work schedules they have. You find managers that would rather go out and golf rather than sit at... in the office and figure out how systems flow and where the problems are. And you find people with capital becoming very ... what should I say? Uninterested in the plight of their managers and workers.

{?} has to come together. That is a Christian concept {?} that there... there is a contribution to be made by each person and each person is rewarded accordingly.

[Voice] Harmony of interest.

[Voice] Yes.

[Voice] Yeah.

[Voice] So we talked about this work thing here. I... I don’t know if the Americans are over worked so much or they are just out of kilter with a religious harmony and equilibrium there.

[Murray] It is interesting that religious... the harmony aspect. It seems to be something that the Japanese embraced and it came from a fellow from the University of Chicago. What was the name he was...

[Voice] The fellow with quality control {?}?

[Murray] Well, he... they have an award in Japan in his honor.

[Voice] Yes.

[Murray] I... I forget his name. He is well known.

[Rushdoony] Oh, yes, yes. I know from {?}

[Murray] {?} document of his contributions to the Japanese industrial ... industrialization after World War II. He went over there and taught them the harmony of interest concept and they embraced it 100 percent where everybody fro the bottom to the top in the company has to get together and solve... solve problems. There is no vertical structure to their hierarchy and their management system.

[Voice] Well, you know, we talked about the contribution of debt to overworking. I think maybe we can’t forget that it is rivaled also by unconscionably high taxation.

[Voice] Yes.

[Voice] People have to work a number of months out of the year simply to pay off federal, state and other taxes.

[Murray] We have too many drones in the hives.

[multiple voices]

[Rushdoony] I would like to call attention to something else that Dr. Schor has to say on this book on Americans and work. Let me quote. “We live in what may be the most consumer oriented society in history.

[Voice] Yes.

[Rushdoony] Americans spend three to four times as many hours a year shopping as their counterparts in western European countries. Once a purely utilitarian chore shopping has been elevated to the status of a national passion. Shopping has become a leisure activity in its own right. Going to the mall is a common Friday or Saturday night’s entertainment, not only for the teens who seem to live in them, but also for adults. Shopping is also the most popular weekday evening out of home entertainment and malls are everywhere, four billion square feet of our total land area has been converted into shopping centers or about 16 square feet for every American man, woman and child.”

Then she goes on to say that shopping is no longer confined to stores or malls. You have shopping by television, shopping by phone mail order catalogs, toll free numbers, computer hook ups and so on so that even shopping by automobile, you can have hook ups so you can continue shopping that way and learn what is available so that shopping has become the most popular leisure activity in the United States.

And she said, as a result, national parks, museums and so on now have a shopping center which is something fairly new. They did not exist before. They have them also now in England, I know.

But, at any rate, this statement, too. Americans used to visit Europe to see the sights or meet the people. Now born to shop guides are replacing Fodor and Baedeker, the travel guides. Complete with walking tours from Faragamo to Fendy. Even island paradise where we go to get away from it all are not immune. Witness such titles as shopping in exciting Australia and Papua New Guinea, so that gaining possessions, shopping for the sake of shopping, shopping to see what is on the market, what other people are buying, what is the newest in anything, clothing or furniture or gadgets and the like has become a passion with an increasing number of people. So we are working to buy things.

[Voice] I don’t believe that phenomenon, Rush, could exist, at least not in the extent to which it does now without the debt economy that we have.

[Rushdoony] Yes.

[Murray] Plastic money. Credit card, impulse buying.

[Rushdoony] Yes. Yes.

[Murray] People used to have to think a little bit...

[Voice] Absolutely.

[Murray] Wondering about what they bought when they had to part with whatever their currency was. People from Europe come over here and they want to go to the shopping malls. But shopping malls are failing. The reason is they are not safe. You have to have a bullet proof vest and a body guard to go there and it is an economic venture in particularly in urban areas. Shopping malls are failing because people don’t feel safe there.

[Voice] They are also expensive. Discount, now, it is discount buying is the in thing now.

[Voice] That is right.

[Murray] Well, they... you know, we go through waves in our economy. Let’s face it. You look back over the past 30, 40 years and, you know, we have all seen waves that the superstores, now we have the mega star.... stores, the Walmart, you know, each one of them comes up with a little bit different wrinkle. Walmart became the ... the ... the friendly super store. But if you go in there and look around you find in many cases that you cannot find the quality level that you are willing to invest your money in. You find out you have to go to some neighborhood guy over here who has got, you know, a decent pair of shoes or something else that is not made out of plastic that looks like it will last for more than a couple of weeks.

[Rushdoony] Yes.

[Murray] So people are beginning to, you know, because of our economy, the uncertainties in our economy, they are beginning to shop for more durable products at... at all levels, regarding, you know, it is not just, quotes, durable goods or what they call durable goods like washing machines and... and refrigerators. It is a ... a good pair of shoes.

[Voice] Yeah.

[Rushdoony] And most shoppers don't calculate the time and the gasoline cost and add that on to the price of what they go to purchase.

[Voice] That’s right.

[Murray] Well, they... they were willing to discount that, because of the experience of seeing all of the products in one place.

[Voice] Yes. That’s right.

[Murray] ... because that... that was a new experience. That was unique. It was like going to a fair or an exhibition. You could walk down row after row of different types of shops and see all of this stuff. And it was kind of a substitute entertainment. You know you couldn’t buy everything there, but it was fun to go look. Well, now it is not as safe as it was to just go look. And people are bushed, you know, they are working longer hours. They don’t have the leisure time to go spend walking around malls. You know, the mall concept goes back probably 25... 25 years.

Well, things have changed since then. You know, both man and wife are working. They are bushed by the time they get home. The energy is not there to go hiking around a mall looking for something.

[Voice] There is a new psychological classification of the compulsive buyer, these people who get depressed, you know, and go out and spend money to get rid of their depression. That certainly, I say, modern phenomenon and is generated by this heavy consumer orientation, which is driven by a debt culture and debt society we were talking about.

[Murray] Well, some of that goes to more basic elements like gluttony.

[Voice] Oh, yes.

[Murray] And envy. You know, if you want to keep up with the Jones’ you want everything the guy next door has got whether you can afford it or even need it.

[Voice] Yeah. Well, these all are ... all go together. That is for sure.

[Rushdoony] I think you are right about the credit card and its part in all of this. I know that prior to World War II anybody who bought on credit anything except a house was regarded as somehow a suspicious character and not to be trusted living on the margin. By and large it was only the very wealthy who had charge accounts. And it was looked upon with contempt by the average person. It took a while for the credit card to catch on. And I think it was partly because the way things developed you were driven to it.

To illustrate, I threw away and burned, in fact, all the credit cards that were sent to me in the early years. I didn’t want them. But after a while I had to have them because with the traveling I do more and more hotels and other things were not expecting... accepting checks...

[Voice] Well, you can’t... you can’t rent a car without a major credit card.

[Rushdoony] Yes. So I was driven to using credit cards.

[Murray] Well, it is a... it is the ultimate form of inflation.

[Rushdoony] Yes.

[Murray] Because the government doesn't have to account for much money is in circulation any more. And it is a... it is a neat sleight of hand.

[Rushdoony] That is an interesting point, because it points to something fundamental in the analysis of inflation. I have talked to all kinds of people and I found that their ideas, including some who should know better of what inflation is are wrong. They see inflation as an increase in the price of goods and deflation as a decrease and that is not true. Inflation is an increase in the money supply.

[Voice] Absolutely.

[Rushdoony] And all you have to do is to pick up a Wall Street Journal and look and you will see day by day the increase in the money supply.

[Murray] Yeah, well the rest of that sentence is so that government can pay off its... it... its debt in inflated money.

[Rushdoony] Yes. That is right, so that...

[Murray] That is the purpose behind it.

[Rushdoony] Inflation is created by the federal government and as a result we are all paying the price.

[Murray] It is another form of taxation and it has to be recognized as so.

[Rushdoony] Definitely.

[Voice] Well, it is stealing, but it helps debtors and harms creditors and ...

[Murray] Who is the biggest debtor?

[Voice] That is... that is exactly right. What made me think about it. I just said it a minute ago.

[Murray] Yes. Follow the money.

[Voice] That is right. Absolutely.

[Murray] You find the purpose.

[Rushdoony] Yeah.

[Voice] People need to recognize what precisely is it stealing.

[Rushdoony] Yes.

[Voice] It is theft.

[Voice] Well, you know, I want to carry that point forward that you have all brought up now. Having been in the banking industry early on in my life and what I saw was that once we started getting economists becoming... having an impact on the presidential office, the presidents couldn’t get too much sometimes out of the federal reserve system because these were all stodgy bankers. But the one area they could work on was the banking controls through the legislation. Now we are seeing banks being able to do so many things. If you recall after the depression banks were restricted. You couldn’t sell insurance. You couldn’t sell shares. You couldn’t do all many things. But now, if you notice, in order to keep the good times rolling, you can’t imagine the contribution that debt due to plastic makes to the money supply. And the things that I have seen happen are that, one, we have relaxed the constraints upon banks in areas that they can conduct business. Secondly, we have never seen a decline in interest rates from these 19 percent levels when there is every reason to believe they could come way down.

[Voice] Yes.

[Voice] We are talking about six percent money now, seven percent money. The reason is because a president needs a banking system that will help, I believe, his prospects in elective office.

[Voice] Yeah.

[Voice] If he can’t work with the fed, why not work...

[Murray] That is why consistently every presidential election year the fed loosens interest rates...

[multiple voices]

[Murray] ...as they have just done in within the past week or two.

[Rushdoony] Yes.

[Voice] And that is really insidious. And I think the American public should look up to those things and say, “Hey, wait a second. This is more than a political process. It is my pocketbook.” And let’s focus in on taking care of my pocketbook rather than you political futures.

[Murray] Have you seen anywhere discussed how the... the billions and billions of dollars of bank losses from savings and loan industry were repaid? All you have got to do is take a look at the spread between the interest rate that you get paid on a savings account or checking account right now, which is about one point something percent and the 21 percent annual percentage rates. That is where they are raking it in.

[Voice] That is a little suspicious. I hadn't thought of that. It is a good point.

[Murray] Yeah, I mean they are... they are... the good old tax payer is ... it is... it is... it is another form of hidden taxation.

[Voice] That is right.

[Murray] ...because the government has allowed the industry to {?}

[multiple voices]

[Murray] ...into the cellar, cellar and nobody seems to have figured it out. And I... nobody knows, you know, how... how is this ... how is this enormous debt, this 500 billion or whatever it was they predicted it was going to be and they have just announced that they have ... they have overcome the... the losses from the savings and loan debacle ahead of schedule, amazingly, ahead of schedule.

[Voice] The American people’s just sopped it up.

[Murray] God zapped {?} again.

[Voice] Why, I am glad I brought that point up {?}.

[Voice] I was going to offer another thing that you were talking about consumer credit. When I went into Japan with the bank I was working for which was a major American multi national bank. The Japanese did not have personal consumer credit. For instance, if you went to buy a refrigerator and many people in Japan wanted refrigerators in the beginning of the 1970s, they saved up their yen and then they bought a refrigerator, but they didn’t put it on the few pennies a day plan or, you know, charge it on to their MasterCard, whatever. So the bank came in and there was an area we thought would be very lucrative and so we requested permission of the central bank in Japan to issue consumer loans through a Japanese bank and we, in effect, would handle the paper and have some profitability of it. And that was an uphill battle for a while, because the Japanese government was not really sure they wanted to develop consumer credit.

And now I will carry you forward a few years with that. Once we put it in place, it became very popular for everything from refrigerators to travel to the United States and Hawaii and what have you. I mean, Japanese now love their credit cards as much as any American does. But they now have some of the highest failures on credit cards just as in the United States we have a lot of people that re succumbing to credit cards and then not able to service the debt.

Japan has the same thing. That was one of the big arguments, I remember, in 1970 when they said, “We don’t think we should give this. They won’t be able to handle it. They will just keep spending it and spending it.”

And, by golly, it came about.

[Murray] They have solved the system beautifully with a socialized credit system. For those that don’t pay the ones that can pay higher {?}

[multiple voices]

[Voice] ...pay for them. Yes.

[Murray] Yeah. That is the reason you get the 21 percent APR, because you are paying for the defaults. It wasn’t that he money is that expensive.

[Voice] Whenever you have a system like we have in the United States with consumer credit—and it does not exist in other countries, I think it is proven to take why do we have it and they don’t? And does it really lend something to our quality of life or our ... or our purpose if we do not have it or if we do have it. There is conditions. Which one is better and why? And then contrast it to what they do in these other countries. And when I see what they have done... I will give you another country where we did the same thing. After we succeeded in doing it in Japan, we went to the Philippines and the banks introduced consumer credit there and that has been a real zoo. But I am sure that, you know, everyone has worked things through. I don’t mean to say that banks are not taking advantage of consumers in these countries. But credit is a heady mix. And if people have never had it or if they are new to it and young people are that way coming into the market. It can significantly increase your money supply and once you get that money supply {?} you get inflation. That is good for the government, because now they can pay back with cheaper dollars and there is a lot of reasons why people in government, in a government like ours might very well like that. And perhaps it is not the right thing there.

[Voice] Remember number two, debt is slavery. Therefore a debtor culture is a slave culture and is very vulnerable to blackmail and all sorts of other enticements, something that we need not forget.

[Rushdoony] The word credit comes from credo, I believe. A man of credit was a man who was trustworthy and believable in everything he said and did.

[Murray] His word is his bond.

[Rushdoony] What? Yes.

[Murray] His word is his bond.

[Rushdoony] His word is his bond. But now credit means the ability to contract debt. And you hear these advertisements. Don’t worry if you have just been through bankruptcy. Your credit is good with us. And they... of course it is, because if you have been through bankruptcy it is seven years before you go into bankruptcy again and in that time they will hold you to your debt.

[Murray] The reason is they learn from the experience of Sears and Roebuck. Sears and Roebuck had something called a revolving charge. And it meant that you never paid off the debt. They kept you on a merry go round. You kept charging stuff...

[Rushdoony] Yes.

[Voice] They were the first to do that.

[Murray] And, you know, the... the principle... people didn’t even care what the principle was anymore. They didn’t even care what the interest was because they had never had any intention of paying the thing off. As soon as they got a little room at the top end of the ... of their account, they would go buy something else and they would keep that charge right up to the hilt just like people do with credit cards today, keep the charge card right up to the hilt. And they never intend to pay it off. They see the monthly payment as just like the payment on a car. They never intend to own this thing. Even if they, you know, if they are out of work, well, they will come and get it, you know? But at least I have had it for a little while. And it ... the... this revolving charge thing was a merry go round of credit that people never got off.

[Rushdoony] That explains why someone on a ... would prefer not to know has usually 15 to 20,000 dollars that he owes on his credit cards and never pays.

[Murray] Well, the... the...

[Rushdoony] That is, he never pays it off.

[Murray] The... the bottom line of this is that Sears and Roebuck... the reason Sears and Roebuck got into trouble was that they were running their business on the basis of making more off of the interest than they were making in profit on what they sold. And there are a lot of major merchandisers, you know, Kmart and so forth that went under. All of those people that had credit, revolving charge credit system have all risen and fallen because they got away from merchandising and they got away from handling quality merchandise and they were... they were simply in the credit business. They weren’t in the merchandise business anymore.

[Voice] You know, something that you and I talked about, Rush, and that... I would like you to... for the benefit of the listeners is when you speak about how workers are burdened when they re coming out of school by their debt.

[Rushdoony] Workers... workers are burdened when?

[Voice] When... when young people come out of college ...

[Rushdoony] Oh, yes.

[Voice] They borrow.

[Rushdoony] Oh, oh, yes. Oh yes. This is one of the most evil things that we are doing, the student loans. First of all, it does not cost 30, 35,000 dollars to go to these quality Ivy League schools. I am dubious about their quality, but that is how they are regarded. The colleges and universities get together and fix the prices. And if you are in the top level you get 30, 35,000 on down to the lowest level and they are told 5000. Now not many can pay that kind of money, neither the students nor the parents. So this necessitates student loans. A student winds up owing a tremendous amount of money for his education and he is going to spend the rest of his life paying it off.

A very, very fine young man on our mailing list I thought at first that he might be related to you, Douglas. But I asked him if he knew you and were related and he wasn’t. But at any rate, he was planning to go to medical school and specialize in a particular area of medicine. He found that to go through school in terms of today’s prices would cost him 350,000. He would be the rest of his life paying it off. And he said it isn’t worth it. I don’t believe in debt. So he did not go to medical school.

Well, all these students are going to be in debt for the rest of their life. So they get out of school. They have huge payments on their school loans. They buy a house and they have the immense loan that you referred to. What was it you said?

[Murray] Twenty three hundred to 2800 is the average in the Bay area.

[Rushdoony] In the Bay area of San Francisco, 23 to 2800 a month. Well, add that together and you have an enormous sum. It brings to mind one of the movies from the early Depression years. It was, I believe, a Carey Grant movie. And he was a debonair young rich man and the girls at this night club were talking about him and they said, “Oh, he is good looking and he is filthy rich. He makes all 5000 dollars a year.”

Well, in those days that was big money. And the difference today is taxation, inflation and debt. And that is what is destroying this country.

[Voice] That is right.

[Rushdoony] It is going to be paid for. It is going to take the country down the tubes.

[Murray] Well, the government has squeezed just about all it can get out of people. And historically when taxation gets to the 50 percent level or greater then there is a change in the government or at least in the form of government and people... a lot of people think that what this will happen in this country, this country will split up into regional economic...

[Rushdoony] Yes, some have said nine regions.

[Murray] Yeah. Some, for instance, in the northeastern part of the United States would probably go with Canada, because it is not going to work after a while. We can’t support the debt and we can’t support the rest of the world.

[Rushdoony] Yes.

[Murray] We can’t... as a matter of fact, we are not paying our debt t other United Nations, which I find interesting.

[Rushdoony] Yes.

[Murray] We were paying it all at the start of it. Now we are not paying any of it.

[Rushdoony] Yes. Well, our time is nearing an end. Would each of you like to make an additional statement? We have time for it.

[Voice] I just have…. It should come after what you just said, Rush... I ... what I see is that God’s law and the statist law are in conflict here. We see positions or anyone that has to borrow to get through school, having the option of denying the debt by bankruptcy of what have you once they have finished their education, but the people who actually pay for their school loans are the people out there. It is... it is a denial of an obligation that you incurred. I... I... and it the government encourages it, permits it.

[Rushdoony] Yes.

[Voice] ... allows it to happen.

[Murray] Well, all you... all you have to do is ... the formula is very simple. If you don’t want to work so hard or over work yourself, then lower your expectations a little bit and, you know, live ... live a little more frugally and you will live longer.

[Voice] I have a solution to this problem we didn’t have a chance to talk about. It is what the Bible teaches concerning the sabbath.

[Rushdoony] Yes.

[Voice] God does have answers to these problems with over work and one of them is the sabbath.

[Voice] Well, regarding that in the Bible you started talking about how men used to have holidays. And if you look at the ... the... the biblical principle, one year in seven was a sabbath year and every 50th year was a year of jubilee so you would have at least once in your lifetime, probably where you had two consecutive years where you went without work and you had various religious festivals throughout the year in addition to the weekly sabbath, of course.

So they had great opportunity to rest. It was... and people look at that and God’s commandments and any talk of biblical law, though you don’t want to oppose that on us, well, it sounds like pretty good to me.

[multiple voices]

[Voice] Take a rest.

[Murray] Where do I sign up?

[Rushdoony] If it had a sabbath year and a jubilee year every 50th year, every seventh year a sabbath year, when you were not a debt economy.

[Voice] That is right.

[Rushdoony] We don’t appreciate how costly debt is for society.

Well, our time is up. Thank you for all for listening and God bless you.