I've been looking forward to continuing the discussion here on The New Workplace. Dan's recent post definitely advances the topic by identifying a number of key dimensions to the issue.

First, a response to his reflections.

I basically agree with all of his clarifications. As I said in the original posting, "The New Workplace can be seen as built on a foundation that is entirely consistent with Catholic values." It is this consistency that, to me, is its most exciting aspect.

Dan also rightly points out that there was considerable support for the free economy (my preferred formulation) in Centesimus annus. But this support was remarkable in that it was the first move away from the labor/management taxonomy that has limited the application of Catholic Social Teaching [CST] to the workplace.

In retrospect, I guess my criticism of CST as being "behind the times" applies more properly to the "conventional wisdom" promoted by less authoritative Catholic sources: the USCCB, various religious orders, social justice organizations, and certain Catholic universities.

But if John Paul II opened a new door in Centesimus annus, where does it lead? A few thoughts here follow, including responses to Dan's closing questions.

The Right to Organize
A core theme of CST is the right of workers to association. This right is generally expressed as a right to unionize: the means of organizing the workers is the union. In opposition to this right stands the authority of the company, or management, or more precisely a collective bargaining unit.

But, again, this common formulation is flawed if it is viewed as representative of the norm. A little statistical information would be helpful here.

According to the Census Bureau's analysis of firm size (see Table 2d), there were 5,657,774 companies in the United States in 2001. Of those firms, about 83%, or 5,036,845, had fewer than 20 employees! Moreover, about half of all workers were employed in organizations with fewer than 500 employees, and only about 20% of the workforce worked at really large companies (10,000 employees or more).

Fact of the matter is that the economy, like the ecosystem, is mainly composed of lots of small entities. Blue whales may be impressive and garner lots of press coverage in National Geographic, but Antarctic krill have more biomass. Likewise, more people work for small companies than large ones, even though the Fortune 500 dominate the pages of Business Week.

Crucially, then, in The New Workplace the company is the means of organizing the workers.No separate bureaucratic entity is required to represent workers. They represent themselves, and they know management by name, as individuals. They have the freedom to switch companies at relatively low cost, and this freedom of the individual is the ultimate empowerment device. It also keeps management in check: it's one thing if a worker quits at when your firm employs 100,000 people, but if the firm has just 5 employees, that one worker represents 20% of the workforce. That is a painful problem, and most successful managers will be very flexible in trying to prevent such a departure.

In The New Workplace, then, the company must switch from being the means of oppressing a worker's (singular) aspirations to the means of enabling those aspirations - or the worker simply leaves for another company that is more focused on their needs. It's the good side of the market: if you don't like the service, you vote with your feet.

Of course, this description might lead you to believe that it's a dog-eat-dog, every-man-for-himself system. But nothing is farther from the truth. In fact, people feel more affinity for companies in The New Workplace, because they embrace and promote values that are more in tune with their own. Membership in the organization becomes a point of pride and honor. For instance, I recently attended a luncheon honoring companies named "The Best Places to Work in Houston." The turnout was amazing, and this honor was clearly prized among the attendees.

In order for this to work, however, work-life alignment is required. I will have more to say on this in a moment.

More Is Not Always Better
There has been a tense relationship between profits (and wealth and riches) and CST for millenia. Of course, there are scriptural reasons (see line 24) for this tension. But there's actually more here than meets the eye.

In the conventional formulation, profit is the end of economic activity. Indeed, much of microeconomic theory is built on the assumption that profits (or, more precisely, the expectation of future profits) drive increased economic efficiency. And, there is strong empirical evidence to support these assumptions.

But The New Workplace takes a different view of this. And the basis of this view is a simple observation: more stuff is not always better.

Consider water. If you don't have enough water (think of the Gobi Desert), you die. If you have too much water (think of Noah's flood), you die. In between "not enough" and "too much" lies a point where your happiness is maximized - you have an amount of water such that any more or less water makes you slightly less happy.

Another example. If you don't have a car, buying a 1979 Toyota Corolla makes you much happier. It enables you to have more flexibility in your schedule, more job opportunities, and better utilization of your time. Then, trading in the Corolla for a 2004 Toyota Prius makes you happier, but your increase in happiness is probably not as great as your original jump when you bought the Corolla. If you then trade in the Prius for a Lexus, again you might be a little happier (and a lot poorer), but the jump isn't as big as earlier jumps. And so on, until you decide to trade in your Mercedes for a Rolls-Royce, then several Rolls-Royces, then a whole garage full of exotic cars. At some point - let's say at 1,000 cars - each additional car starts to decrease your happiness, since it adds to your burdens, but you have no additional time to enjoy it. More cars makes you less happy.

These effects are all specific examples of a general phenomenon. They can best be expressed in graphical form, in something I (completely immodestly) call the Linbeck Curve:



The idea behind the Linbeck Curve is that more stuff can indeed increase your happiness, at least when you don't have much stuff. But at a certain point, more stuff actually makes you less happy. And while this point is different for everyone, it still exists for everyone.

Now, in a market economy, stuff is generally convertible to dollars, so another way to express the Linbeck Curve is in the following manner:



So, the point here is that more money does not always make you happier. This seems trite and obvious until you realize that much of economics is built upon a different assumption.

However, this doesn't mean economics is wrong; only that the range of situations in which it applies is limited. You may notice that on the left hand part of the curve more-is-better. But as wealth grows, incremental happiness decreases, until it peaks. It is also worth pointing out that for most of human history, we have been stuck on the left hand part of this curve.

But the times, they are a changin'. The great problems of the future are related to having too much stuff, not too little. To take just one example: likely for the first time in human history, the number of people who are overweight (1 billion people) exceeds the number of people who are malnourished (800 million people) [source: United Nations].

On the other hand, the demographic trends are all pointing to a shrinking developed world, and according to some models global population will peak sometime in 2070. In fact, if past trends are any indication, that date is likely to get closer, and the peak is likely to be less than current projections.

I believe this change has been sensed by John Paul II, and his vision for the future - including his warnings to the developed world - focuses on the dangers of materialism and the centrality of the human person. These are two of the hallmarks of The New Workplace: it puts people at the center of the organization and it makes profits a measurement, not an end.

The New Workplace, then, exists to serve people - clients and customers, employees, and owners. But in order to fulfill this mission of service, it must provide something to customers for which they will pay more than it costs the company to produce: in other words, a profit.

But it is not profit-maximizing; it is happiness-maximizing. This simple notion leads to a dramatically different set of business practices, practices that make the organization both more robust and more human-focused.

Dan's Answers
There is much more to say on all this, but I need to bring this post to an end. I hope to explore more of this notion in future posts. For the time being, however, I should wrap up with answers to Dan's questions.

"But on what basis is the decision made as to what is 'best'?"
This question is simple to answer, but difficult to implement. In principal, the decision criterion is the maximum happiness for all involved. Note that this sounds very much like a utilitarian framework, but it relies on the philosophical notion of happiness, rather than the economic notion of utility, which is tied closely to consumption.

Because of the Linbeck Curve, it is possible that the correct answer is one in which personal wealth (and therefore my utility/consumption) should decrease. As an example: let's say I am near the peak of the Linbeck Curve, and the other employees are half-way up the left side of the curve. Then, let's say we invest in some equipment which doubles productivity, creating an economic surplus of $1,000,000.

The question is who should get this surplus? Eventually, of course, in a competitive market the customer will get all of it. But let's say we start off by cutting prices so that the customer gets half. What about the other $500,000?

Now, since I'm near the top of the Linbeck Curve, the marginal happiness I receive from incremental pay increases is small. On the other hand, if that money is split among the other workers, that may move them quite dramatically up the happiness curve. So more people would each be much happier, so if the company is happiness-maximizing, they should not give me much but should push those benefits downstream.

In the end, this judgement is prudential. But it is critical to have the correct mental framework for making such a judgement. I think the happiness-maximizing in light of the Linbeck Curve framework a good one to use.

"Creative work is always an end in itself, but we also work to secure the goods and virtues of family life. These goods and virtues must come into play when employee and management discuss how best to drive productivity higher, or else the ethical dimension of the work is diminished. Dad may be bringing home a big paycheck, and may be personally fulfilled in his work, but the time required to increase his productivity, the transcience it may involve for the family, may be a huge price to pay for the pleasure."

True, but we must make allowances for differences of temperment. I don't believe that all happy families are the same (with apologies to Tolstoy). We are all called to find a balance between fulfilling our responsibilities to God, community, company, family, and ourselves. But that balance looks different for different people, and even for the same people at different times.

I made a decision a couple of years ago to dramatically curtail my travel, so that I can be at home more during this part of my childrens' development. But that doesn't mean mine is the only effective model. I have friends who work on off-shore oil platforms for a couple of weeks at a time, but when they return home they have a couple of weeks off as well. Again, different strokes for different folks.

However, it is important that some form of alignment between God, community, company, family, and self takes place. This alignment is at the core of what we think of as integrity, or a sense of unity of person and mission. When we abandon fundamental integrity, and fall into the trap of playing roles, we take a step away from God's plan for us, a plan for our salvation.

"So, one important question is: how much of the ethical life beyond the workplace is The New Workplace able to accommodate?"

I think the most important aspect of The New Workplace is that it recognizes that there is more to life than work. Work is important, to be sure, but it does not lay exclusive, or even priority claim on our time, talent, and treasure.

But the question of "accommodation" gives away the game before it starts. The ideal is a model in which each sphere of our activity - God, community, company, family, self - reinforces and supports the others because they are all anchored in a share set of values and principles applied consistently in all facets in our life.

To be sure, this is an ideal which is difficult to achieve. But it is all but impossible if we treat each sphere of our life as independent and non-overlapping and therefore in need of "accommodation." Properly understood, they are all part of the same human person: self-reinforcing and force-multiplying. I should be a better father by being a better worker, and I should be a better person by being a better Christian, and so on. Failure in one dimension will always have an impact on another.

Indeed, instead of being separate "roles" that we "play," these spheres are simply dimensions of what it means to be a human person, and therefore must be considered in ethical and moral terms, which is why "happiness" is the correct metric for all of these considerations.

The real trick, it seems to me, is figuring out what it means to "maximize happiness" in any given situation. But that will have to wait for another evening. For now, it's off to bed...