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At Wine Enthusiast, we bring wine to life. Radical Personal Finance, Episode 13 Welcome to the Radical Personal Finance podcast for today, July 3, 2014. I'm your host, Joshua Sheets. On today's show, a continuation, a history of retirement. Is retirement actually about the retiree? Or is the idea of retirement actually intended to benefit somebody else?

Stay with us. So thanks for being here with us today for our episode number 13. I'm excited about today's show. Of course, I'm excited about every day's show, otherwise I wouldn't be doing this, right? What's the point of doing it if you're not excited about what you're doing? However, in today's show, we're going to talk about some things that I have never actually heard discussed in financial media.

And today's show is going to be a little bit different. Plan to be more of, I'll call it a working show. So the idea behind today's show is not to give a presentation with a specific agenda or to give a presentation with a specific conclusion, but rather to have a working show and to give some information.

And we're going to talk a little bit about the history of retirement. Why are we doing this? Well, let's start with the problem. Let me read a very short article here, and this sums up what you will see often in the news these days. This article, entitled "The Greatest Retirement Crisis in American History" by Ted Seidel, and this is written in Forbes, March 20, 2013.

"We are on the precipice of the greatest retirement crisis in the history of the world. In the decades to come, we will witness millions of elderly Americans, the baby boomers and others, slipping into poverty. Too frail to work, too poor to retire will become the new normal for many elderly Americans.

That dire prediction, which I wrote two years ago, is already coming true. Our national demographics, coupled with indisputably glaring insufficient retirement savings and human physiology, suggest that a catastrophic outcome for at least a significant percentage of our elderly population is inevitable. With the average 401(k) balance for 65-year-olds estimated at $25,000 by independent experts - $100,000 if you believe the retirement planning industry - the decades many elders will spend in forced or elected retirement will be grim.

Corporate America and the financial wizards behind the past three decades of so-called retirement innovations, most notably titans of the pension benefits consulting and mutual fund 401(k) industries, are downplaying just how bad things are already and how much worse they are going to get. Americans today are aware that corporate pensions have been virtually eliminated and that the few remaining private as well as the nation's public pensions are in jeopardy.

Even if you are among the lucky few that have a pension, you cannot rest assured that it will be there for all the years you'll need it. Whether you know it or not, someone is busy trying to figure out how to screw you out of your pension. Americans also know the great 401(k) experiment of the past 30 years has been a disaster.

It is now apparent that 401(k)s will not provide the retirement security promised to workers. As a former mutual fund legal counsel, when I recall some of the outrageous sales materials the industry came up with to peddle funds to workers, particularly in the 1980s, it's almost laughable if the results weren't so tragic.

There was the "dial your own return" cardboard wheel of fortune that showed investors which mutual funds they should select for any given level of return. Looking for 12%? Load up on our "government plus" or option income funds. It was that easy to get that level of income needed in retirement, investors were told.

The signs of the coming retirement crisis are all around you. Who's bagging your groceries? A young high school kid or an older retiree who had to go back to work to supplement his income or qualify for health insurance? The impending crisis will come in what I call "waves" as opposed to a tsunami hitting all at once.

With each successive wave, more elderly will be drowned. The older you are, the harder it is to recover from a setback. Wave 1. Retirees come back to work. Workers who retired post-2000 realized they cannot possibly live on their meager retirement savings, virtually no interest and limited health benefits, and conclude they must go back to work full-time.

For example, one of my clients, a sheriff's office, has already seen retirees coming back to work largely for health insurance coverage. While these retirees do have pensions, the cost of health insurance, when not subsidized by an employer, is far greater than they had anticipated. For those who are physically and mentally capable of going back to work and are welcomed by their former employers or other employers, this is a plausible survival strategy.

Wave 2. Workers delay full retirement. Many current workers realize they have not saved enough to retire and postpone retirement for a certain number of years. They still believe, however, that someday they will be able to retire and live off their savings. This strategy makes sense for workers who can hang on to their jobs at the same or better pay and are healthy enough to keep working.

On the other hand, older workers who are forced by employers to agree to demotions, pay cuts, or part-time status to stay on may feel demoralized. Wave 3. Full retirement is unachievable. Many current workers and retirees at some point realize that they can never fully retire, i.e. stop working altogether, and commit to working part-time for as many of their golden years as possible.

The problem is, of course, that each year more elderly people become too frail to work and fewer employers are interested in hiring them, even on a part-time basis. Remember those ads that said, "It's hell to be 40 and out of work"? Try looking for work at 70 or 80.

Wave 4. Drowning. At some point, lack of savings, lack of employment possibilities, and failing health will catch up with the overwhelming majority of the nation's elders. Let me emphasize that we're talking about the overwhelming majority, not a small percentage who arguably made bad decisions throughout their working lives. Given the certainty that a retirement crisis is headed toward our shores, you'd think that our elected officials would be hard at work preparing a response.

Of course, that's not happening. To the contrary, conservatives are trying to pare back so-called entitlements that will mushroom in the near future, and liberals have failed to acknowledge the crisis or propose any solutions. Eventually, the pain will be so widespread that the crisis will be impossible to ignore. For many, the challenge is to hang in there until help arrives.

It's a good outline of the problem. I chose it because it's a little bit sensational, but I don't think the author overstates the facts. We do have major problems with retirement, as I started to discuss yesterday. The problem is affecting and will affect every single American. Hopefully, my goal through the process of this show is to help guide people out of the problem and into solutions.

But it's first important to acknowledge the situation that exists. Demographically speaking, there are a huge number of baby boomers headed toward retirement. Financially speaking, those baby boomers do not have enough money to live on based upon assets, which is basically what every single TV commercial for every financial services company would lead you to believe.

You see the picture of the wealthy couple strolling down the beach. Does that happen? Yes. I have a few clients that are in that situation, but they are rare and unique. This is not normal. So we need new strategies that work in every situation. It's important to acknowledge the pressure that's coming.

Social Security, Medicare are woefully underfunded. Medicare substantially more than Social Security. We'll talk about that in detail at some point in the future. But this chicken will come home to roost in the future. This is going to create significant adjustments, and there are going to be significant adjustments in the systems that exist currently.

This is not abnormal. Social Security has been adjusted many times. We'll discuss that in a future show and kind of talk through how it's been adjusted. It will be adjusted again. And it's going to take some major changes to make things work. How it's all going to work, I don't know.

But we'll watch it as the years go by. Many people are of the opinion that the retiring baby boomers, as they spend down assets, that that will affect capital markets. We'll discuss that in detail at some point in the future. It's certainly going to affect taxes. Taxes certainly have to be adjusted, especially Social Security taxes.

The number of wage payers per retiree decreases and continues to decrease over time. So I've struggled, me personally, thinking through all these aspects of the problem. And I've looked, trying to understand answers. It's hard to find good answers. In the current society, it's very easy to read articles. I'll read a lot of articles in the show, as you can see from the past few days.

But articles, generally, what, four minutes to read it? It's hard to get an answer. So I've tried to figure out some of the history. Now, all the history, generally, as I was growing up, I was under the assumption that retirement was something that everybody was going to do. Retirement was something that everybody should be planning for.

And that this is going to be a reality for everybody. And if you would just be smart enough to save $100 a month, you'd be a millionaire and everything would be good. But I've learned that my viewpoints, I guess, were a little bit naive. And so I've gone looking for books on history.

And I found two. And today, we're going to be talking extensively from a book entitled "A History of Retirement." And the author of this book is a man named William Grabener. And I read this book, would recommend it to you. You can find it on Amazon. It's out of print.

So you'll have to look for it on the used market. It's substantially priced, if you look at it on Amazon. The book was printed in 1980, copyright 1980, by Yale University Press. And William Grabener is a college professor who -- the subtitle of the book is called "The Meaning and Function of an American Institution from 1885 to 1978." And when I found this book, I really soaked it up because it helped me to understand some of the history.

Now, as with any book on history, you have to figure out, is the book that I'm reading, is it history? Is it a revision of history? From what angle is the history? I'm going to basically ignore most of that controversy. Although I would point out -- I found an interesting review of this book.

I would point out that it may not -- that you have the author's point of view. Here's one interesting review. This is a review that was written by a man named James Patterson, who was from the Department of History at Brown University. And his review of this book -- "This vigorously revisionist treatment of ideas and policies concerning retirement manages to illuminate much about American economic and political life in the 20th century.

Grabener's interpretation, though not his tone, resembles that of Francis Fox Pivot and Richard Cloward, who emphasized the importance of corporate needs in the evolution of 20th century social programs. Indeed, Grabener seeks a legitimate radical critique of social welfare policies. With the development of corporate capitalism, he says, business leaders "become less concerned with immediate profit and more interested in long-term stability." The review continues.

When I read things like that, I always bristle a little bit. I'm not a fan of revisionist history. But I find it -- reading books like this to be a much more solid place, because then you have footnotes and can continue to seek it out. I'm still young in my journey of looking through this.

I'm very interested in finding good answers. Another book that -- I haven't read it yet, but there's another book entitled "The Evolution of Retirement in American Economic History from 1880 to 1990." This is published by the National Bureau of Economic Research. The author is a lady named Costa, Doris or Dora Costa.

Doris, Dora, something like that. This one is also available, used on Amazon. The price is pretty high. If you pull up the National Bureau of Economic Research, you can actually find it for free as a PDF, a downloadable PDF on their website. I will read this one and review it in the future as well.

But these answers are tough to find. "Yesterday I tried just to illustrate in my own way kind of the absurdity of the idea that everyone just wants to retire and play golf in Florida. Are there a lot of people who want to do that? Absolutely. But I've tried to figure out where did this idea of inactivity come from?

If Bill Gates and Warren Buffett and Tim Ferriss and Jacob Lundfisker -- and if none of these people retire, quote/unquote, kick back at 65 and play golf every day, then where did this idea that this is what we should be working toward come from? Why did the idea of retiring at 65 become such a universally accepted goal?" So this book -- I'm going to read some excerpts from it today, and that's going to be the bulk of today's show to provide you with those excerpts.

This book, I think, helps me to give a little bit of an idea. And what I'm learning is that it's far more complicated than is usual with most things in history. It's far more complicated than it would seem right at the front end. It's hard for me to figure out when I look at things like this.

It's hard for me to figure out whether the results are intentional or unintentional. Sometimes you look at the circumstances of a situation that we have today and you say, "Was this a conspiracy? Was this a group of people planning out what would happen? Or did this happen organically and it just simply wound up with these expected results?" And generally, I can't usually figure out the answer to that.

I can't usually actually figure out what the real answer is to that. However, this show is going to be my effort at kind of giving a little bit of the history. And I'm trying to give you a sufficient summary of the book to encourage you to read it, but I'm going to read enough of the passages here from the first two chapters and from the last chapter to give you a good overview.

If you're interested in the meat and potatoes, go back and read through the actual history of each of the major retirement programs that's listed here. So we begin with Chapter 1, and I particularly like the author's introduction here. And this section to give interest is entitled "Americans Confront Retirement, the Osler Valedictory." And this is a famous speech that was mentioned in several of those articles that I read yesterday.

So we will begin here. "William Osler was reluctant to leave Johns Hopkins, even to return to British soils as Regius Professor of Medicine at Oxford. His 16 years in Baltimore as physician-in-chief of the university's new hospital had been triumphant ones, full of rewards commensurate with his growing stature as teacher, medical scholar, administrator, and man of letters.

On February 22, 1905, Osler delivered a valedictory address, which he titled "The Fixed Period," after a novel by Anthony Trollope. Grateful for his contributions to the medical school, and aware of Osler's reputation as a public speaker, the audience was large and receptive. A serious and ingenious man, Osler took this opportunity to instruct, drawing a series of analogies between his own physical state and the human body on the one hand, and the health of the teaching and medical professions on the other.

Although Osler's career was to last another 14 years, the address had a "retrospective" quality, as Osler, extrapolating from his own history, discussed the universals of hard work, flagging energies, and the need for increased leisure. But his departure was more than the product of his own physical demands. "It may be asked, in the first place," he continued, "whether metabolism is sufficiently active in the professoriate body.

Is there change enough? Would not the loss of a professor bring stimulating benefits to a university? It is strange of how slight value is the unit in the great system. A mobile professoriate," he argued, "was essential. Change is the very marrow of a professor's existence. A new set of students every year, a new set of assistants, a new set of associates every few years, to replace those called off to other fields.

In any active department, there is no constancy, no stability in the human surroundings." Had Osler chosen to diffuse the valedictory at this point, he would have emerged relatively unscathed, having aroused, one would imagine, no small measure of anxiety on the part of the older members of the faculty, but avoiding public vilification.

This was not Osler's way. Instead, the lecture, for that indeed was what it had become, moved from the general to the concrete, and from problem to solution, as Osler delivered the lines that were to have a considerable impact on his reputation, and were to be associated with the eminent physician long after his death.

I am going to be very bold and touch upon another question of some delicacy, but of infinite importance in university life, one that has not been settled in this country. I refer to a fixed period for the teacher, either of time of service or of age. It is a very serious matter in our young universities to have all of the professors growing old at the same time.

In some places, only an epidemic, a time limit, or an age limit can save the situation. I have two fixed ideas well known to my friends, harmless obsessions with which I sometimes bore them, but which have a direct bearing on this important problem. The first is the comparative uselessness of men above forty years of age.

This may seem shocking, and yet, read aright, the world's history bears out the statement. Take the sum of human achievement in action, in science, in art, in literature. Subtract the work of the men above forty, and while we should miss great treasures, even priceless treasures, we would practically be where we are today.

It is difficult to name a great and far-reaching conquest of the mind which has not been given to the world by a man on whose back the sun was still shining. The effective, moving, vitalizing work of the world is done between the ages of twenty-five and forty. These fifteen golden years of plenty, the anabolic or constructive period in which there is always a balance in the mental bank and the credit is still good.

In the science and art of medicine, young or comparatively young men have made every advance of the first rank. My second fixed idea is the uselessness of men above sixty years of age, and the incalculable benefit it would be in commercial, political, and in professional life if, as a matter of course, men stopped work at this age.

In that charming novel, The Fixed Period, Anthony Trollope discusses the practical advantages in modern life of a return to this ancient usage, and the plot hinges upon the admirable scheme of a college into which, at sixty, men retired for a year of contemplation before a peaceful departure by chloroform.

That incalculable benefits might follow, such a scheme is apparent to anyone who, like myself, is nearing the limit and who has made a careful study of the calamities which may befall men during the seventh and eighth decades. Still more, when he contemplates the many evils which they perpetuate unconsciously and with impunity, one could, in short, tolerate the participation of the middle-aged, who were only uncreative.

The aged, however, were positively dangerous. They must be retired. Graebener goes on and uses this as a hook to pull us in, and I'm going to be skipping around reading just a couple of paragraphs here and there that I think will contribute. Osler's suggestion of retiring those over sixty provoked considerable comment, most of it negative.

Before retirement could be carried out on a mass basis, said the Brooklyn Eagle, a major redistribution of wealth would be necessary. Otherwise, no one could afford it. At Harper's Weekly, editor George Harvey thought Osler's notions of the productivity of those between twenty-five and forty scandalous, but found some logic in retirement.

"The end of life," said Harvey, "could be a pleasure time in which adequate preparation would be followed by a variety of frivolous and irresponsible, but ultimately satisfying activities. Resistance to such a concept," Harvey contended, "was deeply ingrained in the national character." "We are like Rolo. Our play is work, and it continues to be work in the case of most of us, just as long as our work is marketable." In 1905, the idea of pulling back was at odds with both the level of opportunity in the society and prevailing notions of work.

The Saturday Review counseled resistance. "Men shrink from voluntarily committing themselves to an act which simulates the forced inactivity of death." Thirty-five years later, with work increasingly scarce, especially for the old and middle-aged, and pensions, public and private, more readily available, this conception of retirement would fuse with Social Security and become a dominant ideology.

A society so intensely concerned with progress must also be vigilant against sources of decay. At this time, the perceived menaces to progress were, first, trusts and monopolies, which threatened to destroy opportunity and competition, the critical ingredients of capitalism, and, second, the new immigration, which would, many feared, corrupt the racial fiber and invitiate national strength and purpose.

Osler brought to the surface a third source of cultural anxiety, the specter of an aging population mired in its own demography. Socialists would focus on this idea some 40 years later, and in the process, create the profession of social gerontology. Continuing on through a section of retirement and the evolution of American capitalism, we move to Chapter 2, which is entitled "Retirement and the Origins of Age Discrimination." I'm going to read here a section on the problem of technology, and then also talk through how it was implemented and discussed in society.

The Problem of Technology Lee Welling Squire's Old Age Dependency in the United States, published in 1912, was an angry book. In it, Squire challenged the right of the individual employer to "engage men in an occupation that exhausts the individual's industrial life in 10, 20, or 40 years, and then leave the remnant floating on society at large as a derelict at sea." Squire implied that it was justifiable for an industry to wear out its workers.

Having done so, it must simply make provision for them, presumably through some form of retirement. But work was inherently consuming, damaging, and destructive, and that technology was the central agent in the work experience of middle-aged and older employees. By the late 1920s, technology was one of the most common explanations of the employment problems of older workers.

Herbert Hoover's Committee on Recent Economic Changes found the essence of the problem in a new job mix that placed a premium on youthful vigor. "Labor-saving machinery," commented the Commercial and Financial Chronicle, "had displaced men and reduced opportunity. Even in the midst of the Great Depression, when one would expect such an analysis of unemployment to have been overthrown by the sheer numbers of those without jobs and the collapse of the world economy, the technological argument remained influential, prompting a 1936 investigation of unemployment and technology by the House of Representatives.

By 1960, the centrality of technology had emerged as an article of faith among social gerontologists." The only legitimate early study of the problem, by English economist William Beveridge in 1909, took a diametrically opposed point of view. Machinery, Beveridge said, did not cause unemployment, for if machinery had been making labor superfluous, the price of labor would have fallen with the advance of technology.

In fact, the opposite had happened. Although Beveridge reduced unemployment to "specific imperfections of adjustment," including regular changes in industry, fluctuations in industrial activity, and the need for reserves of labor to meet incidental fluctuations in trade, he was well aware that older workers were not absorbed as easily as younger workers.

Since technology was not involved, the problem must reside in some characteristic of the older worker, which served to inhibit his employment. Older workers, Beveridge reasoned, lacked a quality essential in a rapidly changing society—adaptability. Beveridge had, in effect, reversed the technological argument, moving from an inflexible technology to the inflexible worker.

The printing industry offers some opportunity to test the technological theory in a historical context. I'm going to skip through a section here talking about the adjustments in the printing industry with the introduction of a new machine called the Linotype, and continue on to the commentary on the impact of that machine on the printers themselves.

The Inland Printer, voice of the employers, was torn between what it saw as the absurdity of superannuation in an industry in which brains, skill, and experience played such a major role in strength and endurance, such a minor one, and the inevitability and rationality of the whole process. The latter viewpoint was dominant.

Acknowledging that labor had been intensified by the introduction of the new machines, and that intensification was in some measure responsible for the problems of the older worker, owners located the source of this intensification in two factors. First, technology, which they labeled at once as benign and a mark of the "advance of civilization." Second, the reduction in working hours, for which, of course, the workers were responsible.

Technology produced superannuated workers because "the daily task is more exacting." Shop owners had also developed a more tractable labor force. The "old-time prints" were irrepressible drinkers who might at any moment quit work and leave the shop for the companionship of the saloon. The sober, well-educated, and quick-witted young men who replaced them had lost the drinking habit.

The victims of this reorganization shared with the owners a sense of the inevitability of what was happening to them, but their resignation emerged from an analysis of capitalist modes of production rather than technology itself. They understood that not the machine, but the demands placed on its operator by the shop owner, were behind the grind.

The old boy has to undergo today in order to hold his job. Although printers agreed that good eyesight and supple fingers were requisites of linotype operation, they would not accept the master's argument that the mere operation of typesetting machines damaged the nervous systems and general health of the worker.

"It was," wrote one typesetter, "the unnatural pace that kills." Employees did, however, acknowledge the claim of their employers that the capital requirements imposed on the industry by typesetting machinery entailed certain operating requirements. A $3,500 piece of machinery, the Mergenthaler, had to be operated efficiently, extensively, and intensively to be economical.

Continuing on, imperatives of the workday. Technological imperatives and labor force modifications are part of an answer to the conundrum of age discrimination. But why the speed-up? Why, in the last years of the 19th century and the first decades of the 20th, were American employers so interested in squeezing the most from their labor?

Behind the speed-up was a set of interrelationships that revolved around the shorter working day. Historians who have studied the politics of the working day have centered their inquiries on the Haymarket Riot of 1886 and questions of social order. For most employers and workers, however, the shorter working day was important, largely for its economic implications.

The modern phase of the agitation for a shorter working day began in 1886, when the 10-hour day and the six-day week were the common experience of American labor. A national strike in that year failed, but agitation continued, pushed by national unions. In the printing industry, working day politics had their beginnings in 1887, and within four years, the International Typographical Union, ITU, had secured agreements covering limited numbers of the nation's newspaper workers.

At the 1898 Syracuse Conference, representatives of management and labor agreed to extend the nine-and-a-half-hour day to most of the industry as of November 21, 1898, and the nine-hour day a year later. Through a strike initiated in 1905, the ITU and its companion unions reduced the working day to eight hours in some areas of the industry.

Aggregate data for other industries indicates that the printing experience was typical. Nationally, the decline in the working day was gradual from 1892 through about 1915. For 11 selected industries, a major decline of 0.6% occurred in 1892-93, and another of 0.9% in 1901-02. In presenting its case for the shorter working day, labor offered a number of rationales.

Shorter hours would mean more time for recreation, leisure, and education, as well as less toil before the machine. For the most part, however, these considerations were peripheral. The shorter working day was a work-sharing program that the printers, capital and labor, believed would help solve the threatening problem of technologically-induced unemployment.

This analysis was shared at least by cigar makers, painters, engineers, blacksmiths, machinists, iron molders, and silk weavers. Work-sharing was a goal of the major unions of typesetters and printing pressmen in 1898. In Dayton and New York City, for example, machinery installation had left a surplus of printers, and union officials expected the shorter work day to at least contribute to their re-employment.

Labor organizations were seeking to aid their unemployed, presumably an older group, through the mechanism of the shorter working day. There is also some evidence that particular groups of workers sought to share directly and personally in the productivity of labor-saving machinery. This was especially likely to occur in occupations, such as newspaper typesetting, where work was naturally concentrated in one period of the day.

In this situation, compositors argued, a longer working day would only mean additional hours of idleness. No matter how benign the intent of labor organizations, the major impact of the shorter working day was to intensify the pressures on older workers. Skipping through to a section entitled "Economic Rationale." During the late 19th century, economists labored to develop a theoretical framework that would tie the seemingly harmful industrial realities of the shorter working day and higher wages to the desirable goal of increased productivity.

Where capitalism had experienced these phenomena at an early date, as in England and Germany, the economic rationale was most developed. Gerhard von Schulz-Gabernitz used the classic case of the English cotton textile industry as evidence that high wages and falling work hours could be reconciled with productivity through the mechanism of age discrimination.

In an 1871 work on factory legislation, Ernest von Plainer, for the first time, raised the issue of the age of the workforce. Following the introduction of shorter hours, he wrote, "The operatives, especially the younger ones, no longer exhausted by excessive bodily effort, produced the same amount and frequently even turned out more in the shorter time, having, owing to the almost universal system of payment by the piece, a special interest in doing so." Skipping down, more than any other single work published in the late 19th century, Brentano's "Hours and Wages" provided the capitalist class with a powerful rationale for eliminating older workers who were inefficient and tradition-bound and for hiring younger workers with more muscle, more energy, and fewer ties to the past.

Several American economists contributed to this flowering ideology. Three years into the severe depression of the 1870s, Francis Walker suggested relieving the pressure on labor markets through legislation, prohibiting labor for all classes beyond the term which physiological science accepts as consistent with soundness and vigor. An interest in productivity rather than unemployment informed Jacob Schoenhoff's "Economy of High Wages" published in 1892.

A laissez-faire economist and low-tariff democrat, Schoenhoff traveled the world for the Department of State, comparing wage rates and productivity and concluding that productivity increases depended upon rising living standards. As an example of the relationship between low wages and low productivity, Schoenhoff pointed to the English nail industry where old and young, husbands and wives and daughters all work at nail-making from four or five in the morning until late at night.

An economy that offered labor to inefficient workers was not functioning properly. It remained only for the theory to be incorporated into the mainstream of American economics. That task fell to Alfred Marshall, dean of turn-of-the-century economists and author of a number of popular textbooks. In "Principles of Economics," Marshall, with Auslerian detachment, tied elemental physical characteristics to profit.

Health and strength were the basis of industrial efficiency. "In estimating muscular strength, or indeed any other kind of strength, for industrial purposes, we must take into account the number of hours in the day, the number of days in the year, and the number of years in a lifetime during which it can be asserted." Discussing Marshall's physical emphasis in an article written in 1906, well-known statistician Frederick Hoffman concluded that for the nation to maximize its productive potential, given the present capacities of its population, work should normally begin at age 15 and cease at 65.

Economic theory was linked to the workplace in an alliance detrimental to older workers and mandating retirement. Support from science and medicine. Science came to the support of capitalist economics in late 19th century studies of work and fatigue. Prevailing theories originated in the work of George Beard, a physician who, in the 1870s, popularized the idea of neurasthenia, a catch-all illness with an endless list of symptoms, including anxiety and fatigue.

The disease was hereditary and cumulative. "No two persons," writes historian Charles Rosenberg, "would be born with the same amount of nervous force. No two persons would be subjected to the same external pressures. Only those individuals whose endowment of nervous force was inadequate to the demands of daily life succumbed to neurasthenia." The closer one's contact with the new technology of the 19th century, the steam engine, the linotype, the sewing machine, even the telegraph, the faster one's supply of nervous force would be consumed, and therefore, to be replenished.

Work became associated with nervous strain, tension, anxiety, stress, and nerves. Workers were burned out, used up, exhausted, and prematurely aged. During debates over retirement legislation, each occupation, from railroading to teaching to mail delivery, would claim to be the most tension-producing and energy-consuming. In a 2012 study of old-age dependency, Squeer opened a chapter on transportation with a description that might well have been written by Beard.

"There is no part of the great national labor machine that wears out men more rapidly or subjects them to greater hazard than that which we call transportation. Especially is this true of those engaged in the operation of trains and vessels on time schedules, which require by day and night the strictest attention to duty and rules.

Every moment is fraught with danger. Brain, nerve, and muscle are all subject to the severest and most unexpected strain. The locomotive engines are of the most intricate device and require the keenest intelligence, quickest action, and oftentimes the most prolonged tension of mind and body." During their campaign for pensions, the public school teachers argued a similar case.

"The severe mental strain and high nervous tension under which faithful teachers work tend to make them apprehensive of the future. Small and insufficient salaries preclude those frequent and necessary relaxations which preserve health and elasticity of mind and body. Work itself rarely kills, but worry often does." Even bureaucracies not involved in the competitive economy shared this concept of work.

Writing to Pierre S. DuPont in an attempt to recruit youthful members for his National Civic Federation, John Hayes Hammond explained his inquiry with reference to the "high tension and complexities of our 20th century civilization." The import of such statements is independent of their scientific validity. In their various forms, these work-related ideas encouraged employers in their proclivity to select younger workers whose contact with the technological sources of nervous tension had heretofore been limited.

They led logically to the notion of a "work life" which naturally ended well before death, perhaps even in middle age, and they defined the older worker as one who had used up a considerable portion of his allotted nervous force. I'm going to read one additional section here that continues in this theme, and then we're going to skip through to some conclusions.

This is from the section entitled "Link to the Workplace, Scientific Management." For anybody who's studied business, you'll know that the scientific management movement was an extremely important movement in modern corporate life. I'm just going to read two quick paragraphs here. The idea of scientific management, if you're not familiar, is essentially, in my words, the idea of measuring each and everything that would be done.

It started with time and motion studies for workers and basically trying to apply the scientific method to the management of people. Really great in some areas, and then had, as anything, unintended consequences in many other things. "Scientific management demanded more of its workers than a heightened level of intensity.

It also required a certain kind of flexibility. If not exactly scientists, these managers and those to follow were experimenters, with the factory as their laboratory. Labor must be willing to cooperate, first in the process of experimentation, then in a reconstruction of its work habits. In the early 19th century, capitalists staffed their factories with children, in part because, as Englishman Andrew Ure wrote, "It is found nearly impossible to convert persons past the age of puberty, whether drawn from rural or from handicraft occupations, into useful factory hands.

After struggling for a while to conquer their listless or restive habits, they either renounce the employment spontaneously or are dismissed by the overlookers on account of inattention." A similar obstacle confronted the aggressive management movement and, to a lesser extent, most late 19th and 20th century capitalists. They used the same solution as their predecessors, recruit a young, flexible labor force, willing to play the guinea pig, unfettered by craft traditions and dysfunctional work routines.

William Osler would have applauded the virtual unanimity with which older workers were labeled "unadaptable." An industrial psychiatrist for the Metropolitan Life Insurance Company wrote of five kinds of employee crises. The fifth was the crisis of the older employee. "He is a touchy individual, and criticism of his actions is always hampered by the very human warmth and respect his long record generates.

Yet it is true that to grow old gracefully is a very difficult art. Time does indeed march on. Old ways give place to new, and the old employees cling to their time-worn ways, suspicious of the young men and their newfangled methods." Paul Cherrington, professor of marketing at the Harvard Graduate School of Business Administration, argued that American business was being strangled by a surfeit of old men and young men's jobs.

"The approach of middle age," Cherrington said, "could be observed in the appearance of such qualities as lack of adaptability, devotion to routine, reluctance to adventure, chronic impatience, and rigidity." Now I'm going to read one summary from the end of this chapter two, and then we're going to go to the end of the book and talk about solutions and observations.

Summary. "The battle for reform, as it was first joined in the late 1920s, was not so much a real contest, with the outcome in doubt, as a ritual struggle, with both sides aware of the identity of the ultimate victor. It could be no other way. The solutions that might have made a difference and made the conflict real-- massive job creation, a willingness to continue production with older forms of technology, a reduction in the operating speed of the technology-- were not considered viable options.

As William Osler had so clearly seen, a society that is dedicated to progress and allows its economic institutions to define its terms must learn to sacrifice the older generation for the younger. Retirement and age discrimination emerged as important phenomena at the same time, and not coincidentally. Retirement was one of several means available to a business culture committed to restructuring the age components of the workforce.

Workers might be fired outright, of course, but, as later chapters indicate, such a policy was difficult for most public and private employers to carry out. Retirement was impersonal and egalitarian in its application. It allowed the powerful turn-of-the-century impulse toward efficiency to coexist with a system of labor-management relations that was still permeated with personal and human relationships.

After 1915, a minority of employers found older workers attractive. Overall, however, discrimination did not diminish. Most employers continued to favor younger workers, and after 1925, retirement came to be seen as a realistic antidote to unemployment in depressed industries and in the economy at large. There are, between here and the end of the book, a number of important chapters, and clearly I can't create an audiobook out of this.

A, you're probably not ready for that, and B, it would be illegal. But it talks about efficiency, security, community, retirement in the federal civil service. It goes on, there's chapters on retirement and education. It goes on with retirement and the reconstruction of community, railroad workers and the New Deal, Social Security and the older worker, the triumph of retirement, the post-war years, the reconsideration of retirement in the 1970s, and then we come to the final chapter, the meaning and function of retirement.

I would encourage reading those intervening chapters if you're interested in the book, but I'm going to read now the summary, the final chapter, the meaning and function of retirement, and then we'll discuss some of the impact and commentary and comments as far as what I see as some ideas for how to integrate this history.

Chapter 10, the meaning and function of retirement. Retirement has had no single function in American history. From its beginnings in the private and public bureaucracies of the late 19th century, formal retirement has been a product of its appeal to institutions and social groups with disparate goals and viewpoints. Until 1930, economy, efficiency, modernization and depersonalization were the most important uses of retirement.

Since then, personal security and social welfare have so dominated our conception of the function of private and governmental retirement systems that we have forgotten retirement's origins in the economic and social milieu of the turn of the century. Having adopted this generic definition of social security, the ideology of the welfare state, we have become incapable of understanding the history of retirement and its place in our culture.

Retirement goals cut across the boundaries that presumably divided labor from management, the public from the private sector. Specific needs might vary, but leaders in education, government, business, and the trade unions found common ground in the pension as an institution of control. Henry Pritchett's intent to use the Carnegie Foundation for the Advancement of Teaching as a mechanism for restructuring and shaping higher education had its parallels not only in the public schools, where retirement was supposed to help maintain the teaching profession as a source of social stability, but in the trade unions and corporations, where pensions were expected to bind workers to one or the other of these institutions, and in the federal bureaucracy, where the potential for dominance inherent in the pension was of concern to labor leaders.

Because the pension could be used effectively to control dissidents, many workers came to favor contributory systems. While the Social Security Act of 1935 has been criticized for its contributory feature, the semi-contractual nature of the contribution has appealed to some employees for the freedom it implies. Moreover, the location of the system within the national government, rather than within the private sector, promised relief from the sporadic attempts of business, most common in railroading, to use pension systems to manipulate employees.

Retirement was also expected to induce progress and prevent social retrogression. This viewpoint was shared by Pritchett, William Osler, and a generation of high-level government officials, of whom the pension bureau's Gaylord Seltzgeber was a prototype, who were among the first to confront the potential of the debilitating effects of burgeoning bureaucracy.

Pensions also fulfilled a variety of microeconomic ends. Depending on the nature of the bureaucracy and its particular needs, retirement has made it impossible for institutions to replace inefficient older workers with younger ones and expensive salaried personnel with cheaper ones. The public schools and the railroads did so in the 1930s.

It has allowed institutions to defer wage increases and, in times of inflation, to lower salaries through deferral. Turnover reduction was a major goal of pension systems between 1910 and 1930, while recruitment of superior personnel was of lesser importance. Pensions have also met the need, common in all bureaucracies, but of special significance in declining industries and in periods of high unemployment, to maintain and provide promotional opportunity, the illusion, if not the reality, of personal progress and achievement.

Where retirement systems did not exist, as in the sales profession in the 1920s, age discrimination served many of the same functions. The post-1940 growth in pension plans was a product of changes in collective bargaining after 1949 and of the tax advantages available under World War II regulations and legislation.

Unions found that pensions satisfied their members in difficult times and opened up jobs in crowded industries and during recessions. Business still expected retirement systems to improve efficiency by making employees more secure and by facilitating dismissal. But as industrial relations became more sophisticated after 1930, corporations turned to other mechanisms of efficiency, control, and adjustment, and ceased to demand so many internal benefits from the pension.

Retirement also emerged from, and was a reaction to, the changing tone of employer-employee relationships. It was, first, an attack on the systems of permanence that employees had attempted to build into bureaucratic structures. These systems included tenure in teaching, seniority on the railroads, and the elimination of the spoils system in the civil service.

As workers sought to establish a property right to the job, managers, often joined by workers, turned to retirement as one of several mechanisms for diminishing the impact of that right. When the property right was allowed to exist for a decade or more and to become a part of employee expectations, a challenge to it could produce the high level of emotionally charged conflict experienced in Chicago over the relationship between tenure and retirement.

And in Washington, D.C., over general job security. In some sense, these contests pitted one impersonal bureaucratic mechanism against another. Second, retirement was a reaction against the continued influence of personal modes of behavior in institutions, in which personal relationships were increasingly seen as dysfunctional relics of the past. To a certain extent, the application of personal qualities to business affairs is inherently dysfunctional by capitalist definitions.

Employment practices should reflect economic rationality, rather than priorities established by family and friendship. Yet in 1890, in spite of mechanization and the rise of national competition, employment practices had not been fully rationalized. The economic and technological forces that made age discrimination a significant phenomenon in the late 19th century had not resulted in the complete elimination of protective attitudes toward older workers.

Corporations might seldom hire older workers, but they also seldom fired them. Some notion of personal or social responsibility remained. One can see it manifested at DuPont, within the aging railroad workforce, and in the civil service and teaching bureaucracies, where the inability to discharge aged employees coexisted uneasily with the new codes of efficiency.

Public and private bureaucracies had become old-age institutions, providing the money, status, and physical activity that would be dispensed a half-century later through social security programs, nursing homes, and old-age clubs and centers. Whether we choose to regard those workers who lived under the system as employed or retired, informally pensioned, as contemporaries said, depends only on how one uses the words.

It is more important to understand that work-centered retirement was a natural phenomenon in cities as well as rural areas and in large and complex bureaucracies as well as small firms. Many of the dislocating effects of mid-century retirement are not so much caused by retirement itself as by the destruction of an earlier version of retirement more suited to human needs for structure, sociability, and place.

The agent of this destruction was formal retirement itself. One of its tangible manifestations was the old-age home. Because it often separated the old from their families and geographical communities, the old-age home was an especially disruptive institution. Workers rejected it, even when it offered retirement with fellow craftsmen. Depersonalization was neither easily nor completely accomplished.

At least within the public sphere, the existence of a formal pension system did not guarantee a purely rational approach to employee relations. Pensions under the Civil Service Retirement Act of 1920 were not sufficient to overcome knowledge that employment officers continued to have of the personal details of employees' lives.

Bureau chiefs preferred to give extensions rather than discharge a clerk whose pension would not cover mortgage payments or decently provide for his family. Chicago school administrators eventually supported mandatory retirement when a voluntary system failed to induce retirement among teachers over 70. But even then, several school board members felt uncomfortable with the notion of subjecting faithful employees to an arbitrary system.

Private sector data is more difficult to obtain, but if DuPont's experience is typical, a formal corporate pension plan was no guarantee of impersonality. The relatively late development of mandatory retirement in the post-World War II period, following a half-century of experience with voluntary arrangements, suggests that mandatory systems were installed when voluntary ones failed to induce retirement at desired ages.

Third, retirement has historically been sanctioned as a form of unemployment relief. Older workers have been retired to create places for younger ones. This has been done most blatantly and most publicly in railroading, an industry of declining employment since 1920. But the same solution has been applied to other occupations, like typesetting, which were experiencing technological unemployment or technologically induced superannuation, a specific variety of the same phenomenon.

The shorter workday and the shorter work life shared this unemployment relief function. Particular elements of the federal bureaucracy-- Navy, Yard, and Post Office employees in the 1920s, for example-- advocated additional inducements to retirement and disarmament and technology, respectively, threatened job security. With the additional stimulus of the Depression, retirement as work sharing became a popular solution to national unemployment.

It was put into practice with administrative changes in the application of civil service retirement through the Railroad Retirement Act and in a necessarily limited form, given the resources available to the national government, in the Social Security Act of 1935. Retirement as a method of alleviating unemployment has been carried out with the support of the aged.

One of the most impressive aspects of the Townsend movement is the self-sacrifice of the old in the interest of jobs for the young. But this should not obscure the discrimination implicit in the mechanism or the felt need for such discrimination as a device for social order. When jobs were scarce in the 1930s, the Roosevelts, Eleanor and Franklin, ministered, relatively at least, to the needs of youth.

It was the young who threatened disorder and violence and whose political sympathies seemed most crucial. Sharing this perspective, the aged welcomed their own retirement and missed an opportunity to insist on the right to work, regardless of age. With the exception of the military pension, 19th century retirement was carried out by cities and states, trade unions and corporations.

Following a dramatic and frightening expansion in the bureaucracy of the nation-state in the Progressive period, the national government again asserted its preferences for youth and efficiency by creating a retirement system for its own civil service employees. During the Depression, the magic of retirement was applied to the sick industry of railroading, using the mechanism of federal law.

And in 1935, when Congress passed the Social Security Act, the national government affirmed the importance of retirement for much of the American population. Private pensions came under the direct supervision of the national government in legislation passed in 1947, 1958 and 1974. The Retirement Act of 1978 represents an attempt to roll back what was now seen as a very expensive, complex and inefficient instrument of public policy.

The emergence of the national government as the foremost arbiter of retirement parallels the largest history of government intervention in the economy. It also reflects the tendency since 1920 to conceive of the economy in national terms and to view retirement as an important ingredient in the broader macroeconomic picture. Retirement could become an instrument of national economic policy in the 1930s only if millions of workers could be reached by federal law.

Pension plans could prove a useful source of capital for business only if their use could be nationally restricted under Taft-Hartley and ERISA. Retirement could be utilized in the struggle to arrest the long-term decline in the American economy only if the rollback took place nationally. Older workers have generally welcomed the pension plan, if not mandatory retirement or the idea of retirement itself.

The active core of the Townsend movement was composed of persons over 60, working and retired. The Railway Employees National Pension Association, the equivalent of the Townsend organization on an industry level, was also buoyed by the enthusiasm of older workers. Teachers and civil service pensions went unopposed by any large segment of employees in either occupation.

Organizations of the retired, from the National Association of Retired Federal Employees to the more broadly based organizations of the 1950s, such as the American Association of Retired Persons, have adopted a restricted attitude toward retirement. Just as most American unions have concentrated on wages and generally avoided workplace issues, so have the retirement associations emphasized benefits and accepted the necessity of retirement, the absence of work.

Retirement proved only mildly divisive as an issue among teachers, more so among railroad workers. As a group, the young were seldom as committed to retirement, especially to voluntary programs that reduced job creation potential, as were older workers. Employed workers tended to be wage-minded rather than retirement-minded, unless they were close enough to the end of their work lives to appreciate the prospect of a pension.

If the railroad experience in the 1930s is typical, a substantial majority of older workers supported retirement amid the objections of a vocal minority who wished to continue working. Data from the 1950s indicates that once the extreme insecurity of the Depression decade disappeared, the desire to remain at work became more widespread.

This revival of interest in work helped make the selling of retirement a necessity for corporations and labor unions. In almost every industry and in every period after 1890, the middle-aged found retirement systems frustrating and ineffective. Too old to find work, too young to retire, the middle-aged worker of 55, 50, or even 45, was a constant embarrassment to the American economic and political system.

By 1900, a 60-year-old typesetter was considered superannuated, too old to operate the new technology. Yet he was also too old to retrain and too young for the union to retire. Thousands of railroad workers experienced the same anomalous circumstances. The Social Security Act of 1935 offered no old-age benefits to the worker under 65, no matter how long he or she had been unemployed.

Congress ignored the determined efforts of Francis Townsend and Ernest Lundin to serve this middle-aged constituency. In the 1950s, the middle-aged were reduced to writing bitter letters to Dwight Eisenhower and his cabinet officials, who refused to recognize the obvious. Retirement, permanent unemployment insurance, rather than unemployment insurance, was the only appropriate device for dealing with the social problems of the long-term unemployed middle-aged worker.

Although retirement was essentially a political device imposed by one group upon another, its imposition was seldom challenged. Why have American workers welcomed or acquiesced in retirement? Anxiety about social disorder, which the old associated with youth, provides part of an explanation and one of particular relevance for the critical decade of the 1930s.

On another level, it is possible to see the aged, indeed the majority of the population, as victims of a 20th-century redefinition of retirement. To some extent, this redefinition was a product of a natural inclination to accept the pension as a bounty, gift, or necessary financial reward. Even in 1900, during the early struggles over teachers and civil service pensions, the alternative to the pension was no pension.

The alternative to leaving work with this protection was not remaining at work, but rather leaving work unprotected. Retirement on pension also appeared reasonable to the machinists, printers, trainmen, and other workers for whom the alternative was the social isolation of institutionalization in an old-age home. Because employees needed the basic forms of security the pension could provide, and because this security component could not be isolated from the pension's efficiency and control aspects, retirement was never completely divorced from a notion of security, however defensive.

The view of retirement as a separate period of time in which one reaps the rewards of past service has always been a part of the conceptualization of the institution, but its salience, among other definitions of retirement, began in the 1920s with the arguments of leisure theorists that technological unemployment could be, and indeed had to be, converted into leisure.

Retirement was the inevitable result of the need to shorten the work life to spread available work. Although forced withdrawal from the workplace might have been interpreted negatively, leisure theorists chose to emphasize technology's potential for freeing Americans for new forms of leisure. At the same time, business made retirement and security difficult to separate.

Under the influence of Elton Mayo and other practitioners of industrial psychology, employee performance and security became closely linked, and the corporate world thus had a strong incentive to define retirement as a state of security. The massive insecurity of the Great Depression further obscured the historical origins of retirement. The development of old age security during a time of insecurity and dependency has made it difficult to see that some of the roots of social security were in retirement, rather than retirement having its origins in social security.

A complex program serving a number of social and economic functions, social security took on a singleness of purpose and a simplicity that its authors never intended, and that has never been descriptive of reality. Even the Railroad Retirement Act, so clearly drawn as a retirement measure to achieve efficiency, economy, and unemployment relief, was not impervious to the ideology of security.

In striking down the original legislation, the Supreme Court refused to accept the acknowledged purposes of the legislation as appropriate or operative, thus forcing retirement advocates into legal defenses based on security. Acceptance and enjoyment of the new leisure and of retirement itself required a definition of old age that minimized the need for the high levels of activity provided by the workplace.

Disengagement theory served that purpose. Disengagement became an important way of conceptualizing aging and retirement in the decades after the 1950s. Golden age clubs, developed in Cleveland in 1940 and widespread by 1950, provided a different kind of adjustment mechanism, one which combined disengagement with activity theory. The clubs were premised on disengagement theory in the sense that traditional work was not considered essential to a healthy existence.

They relied on activity theory, however, to the extent that their sponsors believed that complete disengagement was socially and individually destructive. Whether complete or partial, however, disengagement theory justified withdrawal from work and contributed materially to the creation of the mythology of retirement. Another link in the selling of retirement was forged in the late 1940s when insurance companies joined industry and labor in making retirement into a commodity.

By 1960, therefore, the meaning of retirement had been transformed. It was now a form of leisure, a way of spending time following the conclusion of one's work life. It was a stage of existence, inevitable but to be welcomed and even celebrated. Once largely a device for maximizing productivity in a bureaucratizing society, retirement had become a state of being, apparently benign, classless, and apolitical.

The almost universal adulation that has accompanied the reconsideration of retirement in the 1970s has further undermined our ability to understand it as an ingredient in the national political economy. Because the retirement legislation of 1978 was popular with liberal politicians, with labor unions, and with virtually every organization representing the old and retired, we have all too easily interpreted the law as a just, if belated, victory for those who want to work over those who would prevent them from doing so on the artificial basis of age.

This view of the legislation is both incomplete and flawed. It is incomplete in that it fails to take into account the costs that attend the elimination of mandatory retirement. Employees who remain at work occupy jobs that would be filled by others. In effect, the burden of unemployment has shifted from the retired to some other segment of the workforce.

If the labor market impact of the law is not expected to be very large, some 200,000-ish jobs, neither will the retirement impact be substantial. To the extent that the legislation works, it has no negative effects. To the extent that it fails to keep potential retirees on the job, it has no such impact.

But then, neither is it a law worth celebrating as the elderly's Magna Carta. The liberal view of the reconsideration of retirement is flawed because it confuses result and purpose. Although the new retirement law might well result in older workers enjoying a longer work life, this was not its sole purpose, nor even its most important one.

The act became a possibility only in the context of challenges to American economic hegemony, and only when influential elements within American capitalism had concluded that retirement, as then constituted, was unduly costly as well as inefficient in allocating labor. Once these conditions and perceptions existed, liberal reformers could have their way.

Given the American experience with retirement over the last century, one could hardly have expected anything else. Interesting, huh? I've got to look up that word--hegemony. Leadership or dominance, especially by one country or social group over others. Okay, so I wasn't familiar with that word. Kind of adjusts your perspective, doesn't it?

It changes things. As with almost anything, your preconceived ideas about something will affect how you perceive the reality of the situation. The example that I heard-- I don't know where it's from or I would cite it-- has to do with how you perceive people. For example, if I'm introducing you to my friend John, and I tell you John is just a wonderful human being.

He's salt of the earth. He's just the most kind, gentle, gracious, just wonderful, genuine, caring, loving person you're ever going to meet. And you meet John, and when you meet him, he's a little bit snappy and a little bit short and a little bit rude to you. You automatically discount that and say, "Man, John must be having a bad day.

"He must have just gotten some bad news "or something must be happening to him." But on the other side, if I tell you, "I'm going to introduce you to my friend John, "but listen, you've got to be careful. "He's not a real bad guy, but he's a little slimy.

"You've just got to be careful, because sometimes-- "Be careful." If that's all I tell you, and you meet John, and John is warm and genuine and just gracious and kind to you, immediately your defenses go up. And you immediately say, "Whoa, whoa, whoa, whoa, whoa. "Hang on a second, hang on a second.

"What is John after here?" So I think the same thing with just about any topic. If you go into-- Well, let's just stick with retirement. If we go into retirement and say, "Retirement is my right. "Retirement is my reward." You know, being able to retire and be at leisure for 30 years and to play and to fish and golf and do these things every single day, if this is my right and my reward, then it substantially impacts our experience of retirement.

If, on the other hand, we see retirement, as is kind of sketched out in this book, as in some ways a punishment, or in some ways a... a punishment, I guess would be the best way, or as a political tool would be another accurate way of saying it, then we say, "Wait a second, what's going on?" And so to follow along with the content from yesterday, you don't see-- And the people that can most afford to retire-- And yes, I cherry-picked some examples yesterday, but I see this everywhere.

And the people who can most afford to retire, you don't see them retiring. You see them just continuing on into a different phase. So in the show yesterday, Bill Gates has this video about how he's going to retire and he's going to play golf and he's going to record music and do all these things.

But in reality, what is he doing? He's still working hard, but he's working at different things. You see Warren Buffett doing work that he finds interesting. You see this with former presidents. You see this with former presidents. Are they just unengaged? Is Bill Clinton just sitting around playing golf every day?

No. He's playing golf, but golf is integrated into his life. And so these conceptions of retirement that we have, kind of fed by our culture and fed by advertising, are completely flawed. My thought is that the first way to really-- one of the first steps that I see is to really adjust our conception.

I've only been a financial planner for six years, but in that time I've watched some people make the transition to retirement, and I've read a lot about advisors who have worked with more clients than I have personally about that transition to retirement. At the moment, I'm personally convinced of this.

If you are retiring only from something, you've got a problem. If you are retiring to something, it's likely that it'll go successfully. So anecdotally, consider this. How many people do you know, or have at least heard of, who they retired from their job to come home, and after a year they were back at work again because they couldn't handle sitting at home?

They couldn't handle just sitting watching TV and playing golf all day. You play golf every day, and over time it starts to feel like work. It really does. I learned that lesson myself when I was in high school. I taught wakeboarding and water skiing for a summer camp. I had never been an expert wakeboarder or water skier, but I could teach the basics, and I learned to teach the basics to kids as part of a summer camp.

My job consisted of wearing board shorts and driving a boat on the lake all day, teaching wakeboarding and water skiing. By the end of the summer, I was so sick and tired of being in a boat. One person's dream--I want to buy a ski boat and go wakeboarding every day-- was mine.

I cannot stand to be in this boat again today. I am bored out of my skin. How we interpret things is very much driven by our viewpoint of it. But if you just hate the job that you have and can't wait to quit-- or excuse me--if you were doing a job that's okay, and you just quit and do nothing-- we all know anecdotally the guy who retires at 65 and can't wait to do it and then dies of cancer at 66, or the guy who gets so sick-- my grandfather--my experience with my grandfather-- he was the one who was a professor.

In his mid-80s, he was a young man. You would have thought he was 70 if you met him. But after about three years of being retired, he just sat down, and he was an old man. And it was so sad to see. And I wish that--you know, we tried to organize some tutoring and things for him, but I wish he had never quit working, because then he could have, you know, the later years of his life-- the later years of his life, he would have been much more engaged and just, I think, much happier.

So this is something that I think affects all of us. And I feel that there is a dramatic opportunity here with the prospect of financial planning, where instead of everything focused on, "Why do I keep doing this work that I don't like doing anymore "so that I can--so that I can, you know, quit someday?" Why don't we just skip that all and focus on doing work that we enjoy doing that we don't want to quit from?

You know, I think of--in these excerpts that I read from this book, I think of the idea of a craftsperson. And you had this change of somebody who was a craftsperson going on and becoming a factory worker. Is the life of a craftsperson actually that bad? What do you see people do in retirement?

I have a neighbor across the street, an older man who's retired, and he has a wood-turning machine, and he's out in his garage every day making bowls and wooden utensils and things that he just really enjoys. Don't you see this a lot with retired people, is that they reinstitute some hobby?

And I find it so interesting that in a world where we're disconnected from the results of our work, we're disconnected from being able to see a project through from beginning to end, that what we naturally gravitate to in retirement is producing that type of work again. So why don't we turn the whole conversation on its head?

And instead of spending all of our time talking about retirement, why don't we spend a good amount of time talking about designing the ultimate life and the ideal life that we wish to live, and not letting the financial planning get in the way of that, not letting the idea that I have to work this mind-numbing job for another 30 years just so I can retire.

Why don't we just quit and do something that we would be engaged with? Now, I do believe--and this is me personally-- I do believe there's a huge value in saving money. And I do believe there's a huge value in financial independence. I am not currently financially independent. I can't sit around and just do whatever I want to do and not make money.

I need to keep working and creating income. I think you probably only really know if you really want to keep doing what you're doing if you were financially independent. And sometimes I wonder-- again, it's always tough to describe reasons-- but I wonder if people would stay at their jobs so much if they were financially independent.

And my anecdotal experience and what we experience-- if you read surveys that show that 70% of Americans are unhappy with work, the answer is no. So just to point out a couple of details of this, when I design-- when I consult with a business owner and I'm designing a benefits plan with them as a consultant, then one of the primary things that we're looking to do is try to figure--we're asking the client, "What do they want?

"What are you trying to accomplish with your benefits plan?" And generally, the most common thing that an employer is looking to accomplish with their benefits plan is the idea of increasing employee stickiness. How do we keep the good employees? Because it's very expensive and very difficult to go out and find another good employee if you already have one.

And the way that you do that is you can create what we call in the business "golden handcuffs." There's kind of two aspects to benefits planning. You can create golden handcuffs, or you can create the golden handshake. And so the golden handcuffs is the idea of, "How can I keep the people that I want "working with my business?" You know how you do that?

Pensions. Pensions that have a deferred vesting schedule that give people an incentive to stay and work that goes beyond current situations. And this can be a win-win. It can be a win for the employer and a win for the employee. There's substantial tax benefits. The employee feels more engaged.

The employee has incentives to stay with that job. And the employer is able to retain those employees for a longer period of time. It doesn't have to go and search for new employees. But it's not necessarily a bad thing. But if you understand that my employer is trying to get some hooks into me, that I'm getting some golden handcuffs, it puts things into the proper scenario.

It doesn't mean you're not willing to go through with it. It just puts things in the proper perspective. On the other hand, consider the golden handshake. So the golden handshake is, "How do you usher the employees out of your business "that you no longer want?" You see this in the news a lot of times.

You see this with companies, or I think it was like the Postal Service a couple years ago was doing this, was offering early retirement. So we have here this whole paragraph that says that retirement was sanctioned as a form of unemployment relief. And so you offer retirement to reduce the size of the workforce.

And we offer retirement to reduce the size of the workforce to lower the unemployment percentages of people looking for work or people able to work. And we cut out all the retirees now. Well, that accomplishes a political objective, but we have to sell that. So you have to sell it with the concept of golden handcuffs.

So when you're offered an early retirement, there has to be some financial incentive for somebody to accept it. But it changes your mind if you realize, "Wait a second, they're trying to get me out." Now, you may again choose it. You may choose to take that and go and build something else, but they're trying to get you out.

Now, there's lots of other considerations to this, and I don't want to be overly simplistic. But I did want to walk through that history, because with that history, I think we can start to understand a little bit. And we can start to understand that these political debates, the political, you know, the use of Social Security as a tool, as a political tool, is not new.

From day one, it was intended as a political tool. There's an interesting aspect in this book. I don't know if I can find it quickly enough here to read it. I didn't mark it. But when Social Security went-- some information that I hadn't known is that FDR instituted and Social Security was instituted partly in reaction to another competing proposal that was a non-contributory system that was proposed by another politician.

Again, I don't remember these names. But that the other idea was a non-contributory system. It's that Social Security was issued as a contributory system where Social Security taxes would be contributed by the worker and then by the employee to fund the system-- the employer to fund the system. So I hope this has been interesting today, and I hope that you've enjoyed this contact.

If anybody knows William Grabener-- I'm trying to find him and get a hold of him. I'd really love to interview him, because this book was written in 1980, and that's 30 years ago. And so the context of this being written right after the passage of ERISA, the Employee Retirement Income Security Act, which I think, if my memory is correct, was '78.

It was late '70s anyway. So this book was being written, and clearly that's what he's talking about at the end. He's talking about the impact of ERISA legislation. And today, ask any person who is any practitioner active in the world of benefits planning, and ERISA governs much of what we do.

And ERISA has a huge impact, and you're constantly figuring out how to maintain compliance with ERISA. And I'm not going to talk about what's good, what's bad, whatever. It's been around for my entire working lifetime, and it just is, so you have to deal with it. But it's very interesting to have a little bit of historical context.

If anybody knows William Grabener, let me know. I would love to have him on the show. At some point in time, I will be able to read this other retirement book, "The Evolution of Retirement" by Dora Costa. I'm interested in reading that. And I'm also interested, if any of you are aware of any other resources, any other scholarly books on this subject that you think would be interesting, let me know that, because I'd be interested in reading about them.

I highly commend this book to you. I highly commend it. If you're interested in the scholarly research, I clearly didn't talk about the footnotes, but it's one thing to read an article that doesn't have a single footnote in it, and it's another thing to see the bibliography and the footnotes of an academic book like this.

So I would love to have some more people read it and discuss it. Let me know your comments on today's show. Come by the blog. Today's show is episode 13, so the URL is radicalpersonalfinance.com/13. Email me, joshua@radicalpersonalfinance.com. If I don't speak with you before tomorrow, have a happy 4th of July, and focus, with tomorrow being Independence Day, what this show is going to be about is basically how to create your own financial independence.

And hopefully you'll like the start of the shows this week. I'd love to hear feedback, and I will keep creating great content for you. But the neat thing about you as an early listener of the show, you have an opportunity to have a great influence over the direction of the show.

So bring on your comments and questions. Come by the blog, and have a happy 4th of July. Peace out, y'all. It's Super Start Battery Month at O'Reilly Auto Parts. Get up to a $25 gift card after rebate with the purchase of select Super Start batteries. Our professional parts people will test your old battery for free, and recommend the right battery for your vehicle.

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