September 5, 2012 Leave a comment
“There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.”
RALEIGH—A friend of mine posted a link to an Op-Ed in the New York Times. The Op-Ed was by Hedrick Smith and entitled “When Capitalists Cared“. I read the article and responded on facebook. I enjoy a discussion about economics and politics, but in this instance it appears, like a Window Salesman, I have overstayed my welcome. Because I enjoy his friendship and do not wish to bombard my friend with more on his facebook page, I have taken this discussion on to American Missive.
To put it simply, I disagreed with the Op-Ed. I do not think I went over the top and turned into a partisan yahoo on the matter. (There was no name calling, and my blood pressure never rose during my reading or commenting on the article. Though, I should know, when the “see more” link starts showing up in your facebook comments, you have probably typed too much.) I just found Mr. Smith’s opinion to be factually lacking and based on false premises.
The reason I read the article was largely because of the title. I consider myself to be a capitalist, so I was curious as to when it was I cared and when it was I stopped caring. Unfortunately, I learned all these events predate my existence so it turns out my heart has no say in the matter. Apparently I am a Capitalist without any colleagues, in a cold, lonely land, with one of two options for a path forward, curl up with time and wither into the shadows, or prey on the less fortunate and rob them of their dignity.
As to the Op-Ed and the facebook discussion, I stipulated that Mr. Smith was presenting a false premise on potentially two fronts. The first would be juxtaposing total aggregate wages against the profits of a minority of businesses employing only a small fraction of the total American Labor pool. And the second was rooted in his conclusion:
“step beyond political rhetoric about protecting wealthy “job creators” and grasp Ford’s insight: Give the middle class a better share of the nation’s economic gains, and the economy will grow faster.”
On the first premise, I found the opinion to be based on a simplistic view of historical economic events. Mr. Smith gave little weight to the invention of the microchip, demonstrated a misunderstanding of economies of scale, a seeming lack of knowledge of German apprenticeships and governmental economic policies rooted in austerity, and the disregard for the scale of impact the 2 billion workers India and China poured into the labor market in the 90′s. His simplistic view of economic history was coupled with a gross misrepresentation of for whom the vast majority of the American middle class works. Or at least, would work if they were not unemployed or working part time.
Finally, Mr. Smith urged the reader to move beyond the political rhetoric, as my friend noted:
“My worry is that for American job creators, all the uncertainty is turning to fear that this toxic environment for job creation is a permanent state.” “Job creators in America are essentially on strike.”
“The president’s latest bad idea is to raise taxes on families, job creators and small businesses.”
—Andrea Saul Romney spokesperson.
There is just a sample of the rhetoric the author is talking about. I can only assume he is referring to the Republican plan to lower corporate tax rates when he speaks of protection.
And that is the root of the second false premise I believed to be in Mr. Smiths opinion. I agree with my friend. I believe Mr. Smith was referring to the Republican platform and arguing against it. However, I think it is incorrect to use Mr. Ford, and his quote, as a reason to argue against corporate tax cuts. I say this because, as Mr. Smith phrased it, Capitalist cared. Not Government, nor politicians. It was Henry Ford, the private citizen and leader of his company, who made a statement about what he does with his own money by his own free will. If the goal is for companies to pay employees more, raising taxes on companies is not the means to that end. Henry Ford did not state:
There is one rule for the industrialist and that is: Have a centralized government increase corporate taxation and mandate worker wages.
The political rhetoric of the current campaign cycle has little to do with the current corporate practices regarding wages.
The main reason this Op-Ed bothered me is that such an opinion offers no alternative opinion any credit and tends to regard those who disagree as harbingers of malice. Perhaps Mr. Smith does not believe all capitalist care not for those around them, but such generalizations as found in his title and in his overall opinion do nothing to further a needed debate on policy. It is impossible to have a serious talk about a plan for this country, or for a company, or for that matter a family, if one of the members in the discussion believes the motives of the others are born out of evil, hate, or whatever other malicious root can be conjured up.