Taughannock Falls

Taughannock Falls
from: althouse.blogspot.com

Saturday, August 21, 2010

Henry Ford

Henry Ford was no communist. He went into the business of producing automobiles to make a profit. Indeed he amassed a huge, world-class fortune through providing a sought after product to an expanding market. Yet Ford was routinely accused by some of his fellow industrialists of recklessly endangering the survival of the capitalist system. Why? Because he paid his workers more than many other blue-collar workers were paid at the time. Interestingly, he didn’t claim to do this out of some religious or humanitarian impulse. Rather, he defended his policy in strictly capitalist terms. He argued that well-paid workers would not only work harder, they would become customers as well. Automobiles were relatively expensive, and only workers paid a living wage could afford to buy them.

Incredible as it may seem, many of today’s capitalists seem to have forgotten how Ford was proven right. Workers in the U.S. are among the most productive in the world. Yet many American companies have chosen to reward this hard work with cut wages and benefits. Even worse, some companies have outsourced jobs to low-wage countries like Bangladesh. Since workers in Bangladesh are often making only 10 cents per hour they will not become new customers. Thus companies chase a short-term bump in profits at the risk of permanently shrinking their pool of potential customers. The obscene compulsion to drive down labor costs is so strong that it distorts the owner classes’ understanding of their own actions.

There are some who argue we shouldn’t worry about the disappearance of so many decent blue-collar jobs, workers simply need to “retrain for the 21st century.” Some workers who took that advice made sacrifices to learn about computers. They were lucky to land jobs at major companies that sold software or hardware. Of course, these companies try to handle technical customer service through computerized, non-human means. Yet some customers stubbornly spend an hour or more on the phone until they reach a live person. Maybe it’s one of those displaced workers? Not any more. Thanks to the aggressive colonizing history of Great Britain, there are millions of underpaid, well-educated English speakers throughout the world for Microsoft to exploit.

Very few occupations are completely secure from the risks of downsizing and outsourcing. Even creative writers and actors who work for television have seen their employers cut costs by producing more and more “reality shows.” The truth is, there is only so much demand for “21st century” skills. While biotechnology firms may well enjoy considerable growth going forward, their labor demands will be modest. Many millions of people have lost manufacturing jobs. They won’t all be able to find work cloning sheep. Most of them will have to settle for working at a Burger King or a Walmart.

We are now definitely moving in the direction of becoming an economy more like that of the third world, with an ever-smaller middle class. Apologists for Wall Street like to characterize this as becoming “more competitive.” Yet what does it mean for us to win this competition? Millionaires and Billionaires can pay less for their domestic help, like they do in Brazil? We already know that the situation today is untenable. Yet the super-wealthy needn’t fear the dismantling of the system that sustains them. Many of us in the bottom 98% would be content to see the return of a little common sense, like that shown by Henry Ford.

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