Friday, July 9, 2010
Being Capitalists
Zorro, a frequent commenter, has shared a great article by Andy Grove,"How to Make an American Job Before It's Too Late." It deals with our misplaced emphasis on technology startups and their ability to create jobs. Think about it. How many jobs have Facebook created? Twitter? MySpace? So, we have replaced industrial jobs for technology ones that don't create jobs. This scenario ensures that the rich will continue to get richer and the poor will continue to get poorer. It is no surprise that the income gap between the rich and poor is the highest in 80 years. Being from Detroit, I have seen jobs disappear for many years so that the profit of corporations could increase through outsourcing. If we don't course correct, Lenin's quote will become true: "The capitalist will sell us the rope that we will hang them with."
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11 comments:
Judith,
Reading the article was indeed interesting, and for me, a learning experience. Scaling = jobs. Jobs = stronger families and communities. Blue collar jobs. Middle class jobs. Someone has to make the products that get sold and while I see how increasing costs and stagnant wages impacts working folks daily, this helped me fill in a few "gaps" in the bigger picture. Like everything else it seems we as a nation have been far to complacent and ridiculously slow to react to change...societal, economic, political.
Great stuff here...thanks Zorro! Nice to have you back Auntie "J"...
"Apple, meanwhile, has about 25,000 employees in the U.S. -- that means for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods and iPhones."
Would Apple be a great place to work if the majority of the people who are responsible for getting their product into the hands of customers were also asked about job conditions?
I'm sure this ratio is similar for companies like Zappos who products are imported from China. Zappos credo might sound great, but it covers only a small portion of the people involved in getting product to customers. All these companies do is outsource the part of the business that is the most difficult to manage. They outsource the types of jobs that used to go to people who were more interested in raising families than climbing the corporate ladder.
We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations.
Sounds like the kind of thing that other gov'ts do and I have Japan in mind, being a native of Detroit and remembering that country's rise as an automotive powerhouse, when I thought deeply about that sentence. May be something that I missed but it seems that there is an 'all for one' thinking that takes place in other countries and that goes up the corporate ladder as well.
I think that the myth of start ups creating jobs was busted in that article. After someone gets that inspiration for something they have to develop the relationships to bring their goods to market. Part of what builds jobs is having the manufaturing sector here, with decent pay and benefits for its employees.
As long as it is less expensive to create infrastructure and outsource from places like China where there are fewer regulations to manage and lower pay expectations, manufacturing will continue to be done there.
The tax idea on the face is sound because it would raise the cost of some products made overseas and I would think make American made products more competitive at the cash register.
Yet that is not capitalism practiced in its glory. Lenin was right and big business in the United States is bloated and greedy. Look at the tier system of pay in the Auto Industry. The profit aren't in creating and bringing a product to market but getting it created and sold in a marketplace that is being squeezed for every available dollar.
Dave - It appears that our reactions depends on what we're talking about. Laws are enacted all the time. It probably has more to do with power structures. If the issues impact these, solutions are found readily. Change occurs quickly.
Zorro - I think you are spot on.
"As long as it is less expensive to create infrastructure and outsource from places like China where there are fewer regulations to manage and lower pay expectations, manufacturing will continue to be done there."
Such things are all about laws that are passed. Devastation does not occur in vacuums. There are always systemic reasons. Arianna Huffington just sent me the galleys to her upcoming book which addresses many of the concerns in the article. It's a serious wake-up call.
And, Dave, it is always good to "see" you, my friend.
I think this brings up a whole bevy of individual issues (although all are interconnected). The most interesting to me is the fact that most Americans don't want to pay for expensive stuff. They want cheap stuff, which means outsourcing, since Americans insist on a decent living wage (rightfully so), and higher wages mean higher costs, which mean higher prices for the consumer to keep profit margins large enough for businesses to actually employ people.
So the issue right now goes along with the old maxim: "better, faster, cheaper-pick any two" except the metaphor would be something like: "American made, decent wages, or low cost. Pick any one". Or something like that. Just one small part of a whole big mess of issues! Great topic! Thanks, Judith!
I often hear that Americans won't pay for expensive consumer items. I'm not totally sold on that concept.
Yes, there are people who won't. And some who can't. However, I think that if America made more solid, home-grown products that provide value for the dollar, Americans would pay a more to know they're buying American and putting their neighbors to work.
It's a learning curve, and it's a choice of priority. People started making an effort to recycle, now that is the norm. People are making it a priority to buy "green" and organic because its being sold as better for your family. So green and organic are becoming easier to purchase (no longer relegated to specialty stores), which makes it an easier choice.
Wouldn't the same principle hold if we could get back to making products here that are better than imports?
I often hear that Americans won't pay for expensive consumer items. I'm not totally sold on that concept.
Yes, there are people who won't. And some who can't. However, I think that if America made more solid, home-grown products that provide value for the dollar, Americans would pay a more to know they're buying American and putting their neighbors to work.
It's a learning curve, and it's a choice of priority. People started making an effort to recycle, now that is the norm. People are making it a priority to buy "green" and organic because its being sold as better for your family. So green and organic are becoming easier to purchase (no longer relegated to specialty stores), which makes it an easier choice.
Wouldn't the same principle hold if we could get back to making products here that are better than imports?
What really hit me from Andy Grove's article is he goes back to the days when we sent the TV industry overseas and says that wasn't a good thing.
Also, what confuses me is this didn't make it to MSNBC. Andy Grove taking a stand against the idea of startups being the end all and be all of economic growth should have caused a very big stir.
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