Posts tagged wealth
23 October 2012
The Young and the Restless
By Jonathan Wood
Global analyst, Control Risks
Sky: Every time I see an article about the lack of jobs It reminds me of how little I understand about capitalism. Maybe this is because I just don’t understand the philosophy behind capitalism or maybe my beliefs are faulty. Capitalism means, along with a bit more here and there, free enterprise. You set up a business and sell for the highest price the market will bear. The objective of a free enterprise business is not to do kindness to others or provide jobs. Certainly not! The objective is to gather as large a profit as possible. So the profit is the motive for getting into business in the first place. As far as jobs are concerned, workers are a business liability. Intelligent bosses do with as few as possible.
This whole story is about to get a bit whacky. You see corporations trying to convince governments that they deserve and absolutely need tax incentives and breaks because after all, they supply the jobs people need. However, as the corporation grows and profits rise, there is more money available to purchase labour saving machines and robots to eliminate the people jobs. After all, the robot only needs a bit of oil here and there and diagnostics to ensure top performance – then maybe a software upgrade from time to time. But people! Well, we all know how expensive they are to maintain with their need for hospitalisation benefits, salary raises, life insurance and of course they are always coming down sick and getting paid when they don’t work. My somewhat twisted thinking has caused the emergence of what I call obvious common sense. The law of supply and demand also works with the workforce. In an era of a surfeit of job seekers, corporate personnel can double the workload for those they employ with impunity because they and the worker know that there are scads of jobless out there available immediately to fill the slot left open for a worker who bitches about the job environment and demands on their time. So maybe we shouldn’t be surprised to find that people are holding on to jobs they hate and performing to the minimum whenever they can get away with it. Loyalty, company loyalty? That went out about the time the dodo bird went extinct.
How did things get this way. Well, I’ll tell you a true story. Once in the dim past, I wrote a paper for a course in social history. We were able to choose our own subject. So, I set out to answer the following question. How did Josiah Wedgewood determine what to pay his potters? [as you probably know, Josiah was one of the first industrialists in Staffordshire, England] I dug up microfiche documents of newspapers and magazines of the era and guess what? The answer is bluntly: Just enough to enable them to buy bread and turnips. The prevailing attitude held by the lords and decision makers was that if one was to give the workers more than subsistence wages, they would just spend it on gin and tonics. [probable minus the tonic water] So is it any wonder that family wealth accumulated when markets were expanding and labour costs were trivial? You didn’t need lots of smarts to get rich very quick which is of course what happened.
I wonder how the founding fathers of the thirteen states would have reacted if one of them had suggested that a corporation be granted the rights of citizenship; just like a person? I rest my case with the following quote:
“We have set in motion an industrial machine of such complexity and such dependence on expansion that we do not know how to make do with less or move to a steady state in terms of our demands on nature. We have failed to control human numbers. They have tripled in my lifetime. And the problem is made much worse by the widening gap between rich and poor, the upward concentration of wealth, which ensures there can never be enough to go around. The number of people in dire poverty today—about 2 billion—is greater than the world’s entire population in the early 1900s. That’s not progress.” Ronald Wright
Portugal to face bailout review
27 February 2012
“Portugal’s austerity programme has sparked major protests.
Portugal will find out on Tuesday whether it has passed the latest test of its main international backers… Last month, it reached an agreement with unions and employers to cut holidays and the compensation paid when workers are laid-off. Under the deal, it was also made easier to hire and fire staff. There have been deep cost cuts that are hitting public sector workers particularly hard. Many will see their income cut by a quarter this year compared to 2010.”
The “well to do”, many “one percenters”, who work for and manage the lending institutions, banks and corporations are responsible for the irresponsible “deals” that resulted in the great crisis of 2008. Yet, these same organisations ply their management with huge bonuses, have mostly more than recovered – many boosted their net worth with “bailout” money – and have emerged better off than before.
Sadly, we see here, as in other countries such as Greece, that it is the relatively poor – workers they are referred as – who bear the cost. With 25.4 millionaires around the globe, just think about what a mere 1% tax increase, which they wouldn’t miss, would mean to “the workers.”