We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
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Thursday, October 13. 2011
I’ve been a big shot in several giant corporations, several smaller ones, and a consultant on finance, business operations, HR and employee benefits to many more, aside from running my own business.
I’ve never seen a situation where excessive labor demands or behavior was not the fault of poor management. Once launched on grievance and then power seeking by labor, a downward spiral ensues. Sometimes management reforms, often not. Eventually, the business fails and all suffer.
When there are more effective competitors, that process is speeded.
Surviving US companies have met that competition by becoming more efficient in their processes or by sending manufacturing abroad for cheaper labor, or both devising better processes and sending it abroad to foreign factories or outsourcers.
US labor unions used to be very effective in developing free unions in poorer countries, as a bulwark against exploitive communist unions and to defend our prosperity in a freer world. Today, they are adamant against foreign outsourcing while refusing to become partners in US efficiencies, but have lost their position in all but government unions and similar where they can exert a monopoly granted by paid-off politicians. They do fight for fairer labor standards in free trade agreements, but mostly to impede outsourcing rather than to encourage free trade.
Free trade should not be an issue, as all benefit, us from cheaper products and focusing investments where we have a comparative advantage, foreign workers from getting a leg on the ladder to better living conditions than in rural drudgery and exploitation by local thugocrats.
We are not in the early 1900s, and shouldn’t blithely feel that eventually foreign workers will be in a better position. And we are Americans and do not believe in undue exploitation of others. We are in a faster, communicative world which does not wait decades and, further, the image of the US is more important when native populations and not just their elites are our audience and affect our own economic and national security interests.
Added: Child Labor and Chocolate
US companies have frequently seen their seeming advantages of outsourcing abroad be transitory, leading to jumping to another country to be more exploitive or back to the US to be more effectively run. Others have continued to be profitable and have stable operations abroad. The latter are those with American sensitivities to labor standards, which also tends to result in superior products, rather than just exploitation.
A US businessman is not a “great man” – regardless of media puffery -- if he just gains profits or mouths platitudes, whether liberal or laissez faire. A ‘great man” is one who brings value to labor, investors and the US lasting prosperity and decencies. That requires more than a fast buck, or wonder technology. That requires the vision and work to respect workers, wherever they be. Anything less is self-defeatingly exploitive, of others and the ideologically gullible who don't pay adequate attention to our values or short and long term interests.
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Nice piece --but somebody is gonna have to define ''exploit'' before any such guidance can be as useful as it deserves to be.
It's a verb; it describes an action, that action is a 'trans' action --two entities are acted upon.
Absent force, both sides of the transaction must freely agree or else it will not happen, therefore the description of it as 'exploitive' has to be supplied by a party uninvolved in the transaction.
For this third party to be credible, he must be an expert witness. An expert witness must understand the market in which the transaction occurs. Thr transaction cannot be evaluated except within its context.
The above sounds like rationalization, like bad behavior apologia, because it often is just that.
Nevertheless, it is important to say these things, in that where the word shall be flung indiscriminately, 'moral' capital will tend to avoid that market --thus to open it to 'immoral' capital, which will be so because in intending to exploit, it is unconcerned with the pejorative nature of the mere word.
Excellent point, Buddy, particularly the latter.
I didn't include my view that there should be some "policing", perhaps among US based multinationals, in a voluntary pact, to some standards of good practices enforced by no purchases from those who are acting below them. Far from perfect or airtight but still powerful. US multinationals, and even moreso if European multis join in, have enough weight to pull it off.
Right, it's a blunt instrument but on defense with no choice it might have to do.
I just read something remarkable, and remarkably akin, in the passage so directed, to your fine thesis statement above.
Yes, it's Krude Karl, Karl Denninger, an unabashed Cassandra/Diogenes apparition lo these several years from his perch at Market Ticker.
But this piece is different --it's not a rant, it's a scalding shower of an offer by example of a rebirth of cognition about the whole ball of wax re the direction our system has taken.
It's worth the 20 minutes, and probably ought to be sent around to one's interested circle.
My only comment about this article is that there is very little different about the OWS and the Tea Party, in terms of what they are protesting. The Tea Party started as a movement opposed to crony capitalism as defined by TARP and TBTF.
Their solution was correct - smaller government.
The media defanged them, calling them extremists and radicals and demonizing them.
The OWS movement is far less focused, and offers no solutions, but people are paying attention to them and call them "viable". Why? They aren't any different or better. In fact, I'd argue they are worse because all they do is air grievances and offer no solutions. Not to mention that they have the wackiest of the wacky Left and Right down there.
As I've stated in my previous posts about OWS, I don't think they are illegitimate or wrong. I think coverage of them is, though. It has misdirected the discussion and, as the article you linked to states, the problem is the government.
Which means the Tea Party (which I do not support) was closer to the truth than the media cares to admit.
This doesn't mean I support the banks or corporations. I just believe they didn't "take advantage" of anything - they were given 'free stuff' by the government. So they took it. Who wouldn't? We all try to make sure we get what we feel we deserve back on taxes.
One very interesting point in that article is the 10% growth projections. I lived this. I worked for a company that had us all read an article which stated, in the first paragraph, "Every company has the potential to grow by double digits each year."
I didn't get past that line. I immediately raised my hand and said "does anyone truly believe this?" Everyone said yes.
I replied, "well, it's a flawed concept. If every company has the potential to grow 10% a year, every year, then GDP has the potential to grow 10% a year, every year. Does anyone believe a mature economy has the potential to do this as it approaches Pareto Optimality?"
Not a single hand was raised.
At that point, I said "I'm not opposed to articles which seek to drive us to a better place with better ideas, better processes, and better management. But I will not accept a premise based on nonsense. If we're going to have to improve ourselves, let's be honest about what we have available to us and where we need to go."
Sadly, there are still people who believe a 'stretch' budget is the normal budget. Having worked for GE, I can't tell you how many times I've had to tell managers that even Jack Welch said you need to have a budget which is attainable, and a stretch budget which, if reached, would offer benefits to everyone on the team.
I agree wholeheartedly.
There are issues with outsourcing. Not major issues, the sort which lead to one saying "it should never be done, we must fight it."
The issues are related to how the returns are calculated and measured, as well as to how human capital is utilized at home and abroad.
No company's management is perfect, and on the flip side no company's labor is ever pleased. We read stories every year about the "Best Companies to Work For". I've worked at two companies who were in the top 5 on different occasions. Believe me, as 'happy' as some people were, there is always the natural human desire for more which leads many to be dissatisfied and disgruntled even at the best companies.
To keep workers completely happy, more will always be needed. Google claims to be a company which provides more. We'll see how long that lasts when their profit growth slows down. In the meantime, go meet some of the Google workers and hang out with them. Nice people. But sometimes you gotta wonder how much Kool Aid they are drinking.
Many years ago, I had an EVP who was giving a pep talk to the Sales team and he talked about the latest management productivity book he'd read (he loved pop management books).
It had taught him that you need to 'get the people on the bus' in order to reach the company's goals. He followed that up with another book which said not only do you need to get the people on the bus, but "it has to be the right people", and he was going to start determining who the 'right' people were immediately. By describing a person on the team, finally naming her by name, and completely undermining his leadership position.
This is the problem all corporations face, putting people in positions where they are incapable of managing well. And it is those people who, ultimately, define the corporation when something goes wrong.
By and large, US corporations have been a force for overall 'good' in the world, in the broadest sense of improving living conditions. That doesn't mean perfect, it just means that things are better today, for a higher percentage of people, than they were many years ago.
Is there room for improvement? No matter how good we get, I think there's always room to improve.
I'm all for incrementalism. The mathematical part of America's economic problem only seems intractable because we have yet to reverse the trend. As long as we're heading into ever-worsening shortfall on promises made, the urge to 'get mine while I can' will only intensify.
If we can make a turn, 'reform' will suddenly inherit 'revolution' as the dominant ethos --and America will at that point be 'back'.
Where we are is less important than where we're going. Location is jolly mutable when direction is true. When direction is not true, it becomes a fight just to hold onto a position which is in addition to being lousy is always becoming more indefensible. Demoralization becomes only a function of time --because it's the only honest condition, and honesty will find expression somewhere.
I'm with you, Buddy. Incrementalism is usually fine, as long as one is going in the correct direction. Otherwise, it undermines both the direction going in as well as distances from the correct path.
Of course, stark changes can often lead to many problems of its own, aside from transitional, but if going in the correct direction can then be appropriate for incremental improvement.
Milton Friedman, fielding audience questions at some affair back when Free to Choose was was sweeping away Carterite 'free to lose', was asked something along the lines of how he could be certain of the direction of the 'invisible hand'. His answer: "Trees grow".