The Dream Café

Steven Brust: “A masterful storyteller of contagious glee and self-deprecating badassery” —Skyler White

Bad People or Bad System?

| 14 Comments

It’s been forever since I’ve posted here.  Sorry, fighting off personal crap.  Anyway, I found myself making a long-ish comment on facebook, and I think I got it more or less right (enough qualifiers there?), so I’m going to copy it to here.  The issue was the claim by another commenter, and I hope I’m summarizing him correctly, that capitalists mistreat workers because they’re morally corrupt, whereas in my opinion the problem is systemic, not personal.  If I’m correct, it brings up the question: why, exactly, must a corporation treat its workers as poorly as possible while still keeping them coming back the next day?  If it isn’t greed, and I contend greed is more of an effect than a cause, then why is it?  Here’s what I said:

I’m going to take on your assertion that capitalists have a choice about how to treat workers, because it’s important. Please bear with me as I try to work through this.

The issue is competition. Not in the simple, straightforward sense (lower wages = lower prices = underselling the competition) because, in fact, the connection between wages and prices doesn’t work like that.

It’s a bit more complex. Lower wages (and the equivalent in reduction of benefits &c) put more money into the pocket of the capitalist. Some of this goes into supporting his life style, but for most of these people, that’s pretty well set. Instead, the extra money becomes capital, much of which, in practice, goes into the financial markets of pure speculation, some of which becomes investments in other companies, often competitors (the degree to which the major capitalists have their hands in each others’ pockets is mind-boggling), and some of which goes back into the business.

It can go into the business in various ways: a greater sales force, more investment in advertising and marketing, even research or new manufacturies. Maybe even a temporary massive “loss leader” (which looks like lowering prices, but the temporary nature makes it a different animal). In any case, all of these translate to the same thing: the fight for market share.

The fight for market share is brutal, constant, vicious, and, in the end, a fight for survival. A two percent loss of market share can send the board of directors into a panic. And, by their standards, it should: market share represents your power, your security, and your freedom to maneuver and take chances.

In short, a major corporation ( smaller companies, niche companies, or those like entertainment in which market share is less dependent on financial might can and sometimes do treat their workers well) that puts a significantly greater percentage of its working capital into labor than its competitors, is putting itself into a very dangerous position.  Thus, the constant drive to put less into things like health care, a comfortable environment, safety precautions, and, of course, wages.

This is one half of the class struggle. The other half, obviously, is the desire of the labor force to have as much as possible of those things. But the point is, that is why I disagree with your position that capitalists are free to treat workers as well as they want. And if you’ve stayed with me for all of this, whether you agree or not, you have my thanks.

skzb

Author: skzb

I play the drum.

14 Comments

  1. And your competitors will use their extra money to buy out your company. Or to bid up the value of whatever the critical resources for your business are. And you can’t keep up because they have more money to spend.

    Or am I just restating what you said already?

  2. My only problem with eliminating greed from cause and making it effect is the fact that the people at the top in these corporations tend to be fat cats who take incredible sums of money, not just “well paid” sums. How does this fit into what you are saying?

  3. Agreed. Or to be flippant: don’t hate the player, hate the game.

    Incidentally, @skzb, recently I encountered the name and a brief introduction to Mikhail Bakunin. I had never heard of him before. For anyone else as ignorant of him as I was until last month: he’s considered a major thinker or maybe even the parent of ‘anarcho-communism’ or maybe ‘libertarian socialism’. If the topic interests you, I’d love to hear you address his ideas on how to implement communism compared to those of Marx.

  4. skzb

    Captain Button: You’re expanding on it.

  5. skzb

    Sandy: I believe they feel entitled to those salaries because greed is encouraged–in some cases required–by the nature of production and distribution. I do not believe in “human nature.” Greed doesn’t come out of nowhere. It is learned in response to conditions. Every extant hunter-gatherer society proves that.

  6. skzb

    Mike S: Short answer, quoting Marx: “The anarchists believe that if you abolish the state, private property will wither away. We believe the reverse.”

    For a longer answer, here’s an earlier blog post: http://dreamcafe.com/2017/02/15/anarchism-and-communism/

  7. “The anarchists believe that if you abolish the state, private property will wither away. We believe the reverse.”

    It seems like the obvious solution would be to abolish them both, and then you can argue for eternity which one would have withered away if you hadn’t abolished it. And it won’t really matter who was right.

    That’s the kind of political argument I like to see.

  8. I wonder how much of competition is about winning, as opposed to value received. I see Trump appears to be much more concerned with whether he is perceived as a winner, and his competition as losers – than about what he wins. In order to win that way, someone else needs to lose.

  9. “The issue is competition.”

    Capitalist theorists tend to think of it like evolution. Or evolutionary ecology. Entities thrive by creating a niche for themselves that nothing manages to take away from them.

    They can lose the niche when something else fills it better than they can.

    Or when the niche goes away, if essential support is diverted elsewhere.

    Capitalists want to assign a moral value to that. As if each niche fills an essential role in the system which benefits the others. There is no particular evidence that there’s any morality involved, though.

    On land, there are more plants than anything else, and the animals eat them slowly.

    In the ocean it’s otherwise as this oversimplified picture shows. Everything depends on algae, and the algae get eaten real fast. But they grow real fast too. The whole complex structure balanced on them, and they grow and get eaten, grow and get eaten, over and over and over. But they can maintain their niche. When something eats them faster than they can grow, the whole system starves down to smaller numbers that don’t eat them as fast. The details depend on the rules of the game, and there’s no particular place for creating a “good” system in the rules for physics and chemistry and biochemistry etc.

    In today’s capitalist world, businesses mustn’t accumulate funds to use for future expansion, because that makes them hostile takeover targets. Somebody will buy the company, suck out the savings, and release the depleted company with a lot of junk bonds. They can only accumulate capital when they are too big to loot, or otherwise protected.

    Most entities in the system don’t get to do whatever their managements wants to do. They have to do what will let them survive.

    Maybe there are owners who can do whatever they want. Maybe they sit in their fortresses, protected from all attack, and they own so much that nobody can threaten them. There can’t be very many of those. There might not be any.

    Sorry if this is disjointed. I don’t have time to polish it a lot more.

    http://classconnection.s3.amazonaws.com/419/flashcards/5046419/png/aquatic_trophic_pyramids_-145D1412FD875859541.png

  10. I kind-hearted CEO could decide to enact policies that helped workers and hurt the company’s bottom line if he or she chose to. But the Board of Directors would immediately replace him or her, and that CEO would probably not only never be a CEO again, he or she would probably not be able to get any job at all.

  11. There is something of a self reinforcing cycle going on. The system lays out an attractive field wherein an easy path for someone who prefers power over caring about the results of hurting people can flourish.
    Taking advantage of workers is an easy path and there are a significant number of executives who enjoy doing just that.

  12. @skzb,

    Thanks for answering my question.

    I had skimmed that post when you first published it, but from early in my education all of the way through a few months ago I thought ‘anarchist’ = ‘someone who wants warlords and chaos, who thinks Mad Max and Twelve Monkeys are models for ideal society’. So I didn’t get past your opening few sentences.

    I’d say the standard use of the term anarchist is misleading. It may be deliberate, to link anyone criticizing the idea of rigid hierarchical authorities all throughout society to madness and destruction. But it may just be laziness or convenience.

    I’m sad to have an interesting school of political philosophy hiding from me in plain sight all these years, only to stumble across it in my 40s.

  13. Great string, great OP, great comments.

    Skzb, I know I commented that I thought companies had a choice as to how they treated their employees. At it’s simplest, the CEO could choose to take less money and give some of that back to the employees and “customers”. That is how the non-profits used to operate. There are few, real non-profits these days. Co-ops mostly.

    The market doesn’t force the CEO to take $25 million a year out of the corporation and invest it in off-shore accounts. That is his/her choice. But because all his “friends” are doing this kind of thing, it seems like the right thing to do. The proper thing to do. The “moral” thing to do (Melania’s jacket?). But he/she cannot see how this is actually hurting the company. I went through the spin-off of ATK from Honeywell. The obvious reason (to me) was that this generated an unguarded pile of cash, which went directly into the CEO’s pocket. To me, that looked like theft. It was the big fad among CEO’s at the time. It was not required because of the market. It was an opportunity for theft.

    That’s why I think that CEOs and other company executives do have some flexibility as to how they treat their employees.

    I will add that some CEOs and executives have little respect for their employees and some may even hate their employees at some level. It helps justify what ever harm they cause to their employees.

    Skzb, I know you believe that the capitalist system is inherently corrupt and that that is inevitable. You say it can’t be saved, so why try. But things could be improved. Trouble is, things won’t get better with the GOP owning (literally) the government and most media.

  14. I’ve been thinking about the problem with nice people, the sort who think that if everyone was nice, everything would be fine. Long ago, they thought feudalism could be nice, and now they think capitalism can be nice. They are like goldfish who think they could swim free if only the bowl decided to be nice.

    I’ve blogged a bit about this: http://shetterly.blogspot.com/2018/06/niceness-versus-civility.html

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