Tuesday, December 9, 2008

Some Questions.

Here are some questions (loosely themed) that have been provoking some thought that I thought best to just propose:

1. What happened to the symbiotic relationship between employer and employee?

2. Related to above, why has society allowed this relationship to degrade?

3. Is there a happy medium between the two extremes of hyper capitalism and hyper socialism?

4. If fidelity to the prosperity of our children is a stated ideal of our morality, then why have we as a society knowingly let it slowly degrade over the past decades?


Pat Jenkins said...

prog how could you ever consider capitalism to be extreme?

Progressive said...


There are extremes to everything. Let us remember capitalism is an economic theory, of which there are different shades. I am not saying anything bad (you digress from the questions), just stating that there are, largely, two justified economic theories (not government structures - something I think people mix up) that are practiced worldwide, of which each country chooses a mix of both.

Sue said...

1. Symbiosis is perhaps not the best term to describe the relationship between capital and labor in a capitalist economy, but it will do for the moment. In a capitalist economy one has owners of the means of production, those with capital to invest, and one has those without ownership whose only choice for survival is to sell their labor power to the owners. Old fashioned Marxists insisted that capitalists (owners of the means of production) needed labor (workers) as much as labor needed capitalists, but they never imagined a time when computers would exist that could build other computers, and robots that could build almost everything else. Indeed in today’s technology, only computers can build other computers, because the degree of miniaturization of computer chips makes it impossible for humans to construct them. The essence of capitalism in the pure abstract is the private pursuit of profit, therefore a capitalist economy and any capitalist enterprise is driven by the profit equation: Profit = Revenue minus Costs.
In that equation all wages, salaries, and employee benefits fall under the category of costs. Declining revenues require cutting costs. Stable revenues prohibit any rise of costs. Rising costs can only be tolerated when revenues are also rising. However, in today’s global economy even rising revenues do not mean a lack of concern with costs. When capital is as fluid as it is today – people are able to easily invest their capital in China as in the U.S. (see those “E-Trade” adds), there is huge competition between enterprises to attract investment capital. The only way to attract investors is to offer more profit than other comparable enterprises. In most enterprises costs of labor (wages, salaries, benefits) are the single largest component of costs. Finding ways to cut the costs of labor becomes the single easiest, quickest route to cost cutting. Labor costs can be cut by: finding new, less expensive labor pools; using the threat of new labor pools to lower the wage/benefit demands of existing labor pools; using legal and extralegal means to reduce the bargaining and negotiating power of labor; replacing labor with technology; and deskilling labor through technology thus expanding the labor pool.

2. Again, “allow” is perhaps not the best word for this. Most people are utterly ignorant of how economies actually operate. The founders of the United States created a government of checks and balances which was very specifically designed to prevent challenges to the prevailing distribution of resources and power, and to prevent class based parties to develop. As a result we have developed a legal structure which places the rights of property above other rights. Even the most important legal interpretations of the 14th amendment were to establish the rights of corporations as “persons.” As a consequence in the United States the governance of corporations is legally invested in a board of directors whose only legal constituency are the shareholders (investor/capitalists) of the corporation. While we have seen in the past decade that it is possible for CEO’s, through lying and creative accounting to subvert (for a while) the interests of stockholders, there is nothing in the legal governance of corporations in this country to incorporate the interests of workers into the basic decision-making processes of the corporation. This is not true in many other countries. In nation’s with democratic parliamentary institutions (England, Canada, France, Germany – indeed almost all of the rest of the industrialized world), the political interests of labor have had a stronger voice and created legal institutions more conducive to providing workers with a greater say in economic decisions. In most of these other nations, the laws governing corporations require that boards of directors include representatives elected by workers as well as representatives of investors/stockholders. Thus when decisions need to be made, profit is not the only consideration.

3. Of course there is a happy medium. It already exists is dozens of modern industrialized nations – most of Europe, Canada, Australia, New Zealand, Japan, etc. Can we in the U.S. achieve this without a parliamentary government? I don’t know.

E. R. Dunhill said...

Regarding 1 & 2, I'm inclined to think that the present relationship between employer and employee in the US (and in much of the industiralized world) enjoys a fairly positive condition. Compare with ongoing conditions in developing nations, or the kinds of excesses that were the norm in urban factories and oil fields around the turn of the 20th century (Sinclair, Tarbell, &c). People were disposable commodities.
Concepts like human resource management didn't exist a century ago, but became widespread during the latter half of the 20th century. This realtionship works fairly well.
In answer to 3, I think the US largely enjoys a happy medium. This country samples liberally from both capitalism and socialism. However, there's no perfect balance between the two ideologies you reference, nor the zillion other ideologies that don't get as much attention. People change, the natural environment changes, the systems and institutions we create change, and the realtionships between all of these things remain in constant flux. There is no aha! of government or economic philosophies that will yield equilibrium. Our strategies must continually adapt and strive to improve.
And 4: This really isn't new. Future generations are simply our economic vassals du jour. People have been profiting at the expense of someone else, basically everywhere and as long as we've cared to make a record of what we do. We've kept slaves, subjugated people in foreign countries, exported undesirable jobs, turned a blind-eye to abyssmal working conditions, fomented war, robbed graves, and stolen land. Granted, such (contemptibly) passive interest in the wellbeing of our children is a new twist on this pattern, but it's only one more variation in a sad theme.

Pat Jenkins said...

prog i haven't strayed. i just worried about your loaded question. if their any failings with how you may see the shape of our world i would suggest it is related to the character of mankind and not the idea we are ruining ourselves by allowing a free market to survive!