Capitalism’s globalism contradiction centers on cost savings in emerging markets.
Capitalism’s globalism contradiction centers on Executive’s and Board of Director’s obligation to maximize profits and their obligation to their employees, their communities, and the nations of their origin. Failure to consider the implications of this contradiction provides the left with a powerful criticism against capitalism. In the United States, this contradiction is exacerbated by our high labor costs and benefits, safety regulations, environmental regulations including environmental impact assessments that increase both the costs and time required to open a facility or project, financial system regulations, land use and zoning regulations, and past high corporate taxes. The relationship between profit and societal obligation is only one component of capitalism’s globalism contradiction.
Another aspect of capitalism’s globalism contradiction is the incredible economic success of western civilization, especially in the United States, since the start of the industrial revolution. Until the 1960’s or 1970’s, globalization was not a significant issue in relation to competition and market share for corporations in the western world. Consequently, costs associated with land, labor, and capital were comparatively inconsequential strategic considerations compared to today’s markets. Costs of doing business were evaluated only in relation to competition in the United States and other western industrial powers. For example, the big three US auto makers competed among themselves for US market share and labor. Labor union contracts for wages, benefits, and working conditions that often precluded effective discipline and quality control were virtually identical throughout the US auto industry. The result was high industry wide wages, benefits, and job security. As countries like China, South Korea, India, other Eastern Pacific rim countries, and parts of the old Soviet Union emerged as competing centers of industry, the cost of land, labor, and capital became a competitive liability for western industry.
Finally, North American and European capitalists are harnessed to strongly unionized labor forces unwilling to negotiate lower, more globally competitive wage, benefit, and work condition packages which could have slowed reductions in US manufacturing and plant closures. This issue is complicated by the success of western capitalism causing high costs of living and the expectation of high disposable income to finance the good life. These two factors make efforts to make our labor costs more competitive in the global market difficult. Western capitalism’s success also amplifies capitalism’s globalism contradiction when faced with emerging markets for our products and competition with our products throughout the world.
Capitalism’s globalism contradiction is profit versus support of the labor force that makes their products or provides their services and loyalty to the communities and countries of their origin. Interestingly, it is also the left’s globalism contradiction, maintaining wealth for our workers while redistributing wealth to developing country industries and workers.
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Capitalists capitalism’s problem is the result of the behavior of some capitalists throughout history, call them Godless immoral capitalists. The behavior of a few capitalists provides evidence for the need to control the raw nature of man according to Adam Smith in The Wealth of Nations. Smith observed that controlling this raw nature is one of the few reasons for government involvement in commerce and industry. Abuse of the labor force was the rule during the much of the Industrial Revolution. These Godless immoral capitalists abused child laborers, working women, and laborers in general who lacked viable employment alternatives. The result was a rapid rise in the labor movement which included Marxists who formed communist and socialist parties throughout the industrialized Western world. Over time, progressives and liberals combined forces with Marxists to form the modern political left.
Evidence for the statement, capitalists capitalism’s problem, in relation to socialism.
The behavior of Godless immoral capitalists is continually cited as evil and prima facie evidence that societies based on Marxist philosophy are better for humanity. Pictures of child laborers fill our textbooks as examples of the evils of capitalism. Factory fires where exits were chained on the outside to prevent laborers from taking unauthorized breaks resulting in extremely high labor casualties are cited as additional examples of the evils of capitalism. Unethical and often illegal business schemes such as Enron and Ponzi schemes like that of Bernie Madoff are also cited as evidence of the evils of capitalism. Unfortunately, in developing Third World countries abusive labor practices still occur.
Consequently, capitalists capitalism’s problem remain a major issue in the debate between capitalism and the Marxist alternatives of the left, socialism, and the progressive and liberal movements. It is interesting that while Godless immoral capitalist’s behavior is highlighted by the left as abuses of capitalism, the behavior the communist regimes of the old Soviet Union, now Russia, North Korea, China, Cuba and Venezuela, among others, are totally ignored by the left in these discussions.
The ratio of the corporate executive compensation to employee compensation within each corporation is an additional issue in which capitalists capitalism’s problem is paramount. Several internet sources indicate that the ratio was approximately 20 to 1 in 1950, 40 to 1 in 1980, 120 to 1 in 2000, and 200 to 1 in 2014. In a very few corporations, the compensation ratio now approaches 500 to 1. To put this in perspective, during the same period of time executive compensation increased 1000% while employee compensation increased only 11%. From the perspective of the left, the compensation differential is most concerning in the industrial manufacturing and service industries. This is especially true in situations involving labor unions or the desire of employees to join the labor movement. The following statement can be found in the online Bloomberg article, CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S. Law:
When CEOs switched from asking the question of ‘how much is enough’ to ‘how much can I get,’ investor capital and executive talent started scrapping like hyenas for every morsel, said Roger Martin, dean of the University of Toronto’s Rotman School of Management, in an interview. ‘It’s not that either hates labor, or wants to crush their lives. They just don’t care.’
The statement, They just don’t care concerning corporate executive’s attitude about the executive to employee compensation ratio seems to qualify as the raw nature of man. Such indifference could also be considered Godless immoral capitalist behavior, a prime example of capitalist capitalism’s problem.
During the formative years of the labor movement, the raw nature of man reared its ugly head in the form of riots resulting in property damage and human suffering. The Communist Party in the US was so deeply involved in the violence of the labor movement that federal law precludes participation in labor leadership by members of the Communist Party. This behavior included violence between competing labor unions for membership. Labor union violence continued past the middle of the 20th century. It is safe to say that Godless immoral behavior is unfortunately endemic to the human condition.
The phrase Godless immoral capitalism was coined for its relationship to our Judeo-Christian heritage. Contrary to popular opinion on the left, religion and morality have been essential in the rise of the United States of America to its position of prominence in the world today. In his Farewell Address to the Nation, the Father of our Country, George Washington, said:
Of all the dispositions and habits, which lead to political prosperity, Religion, and Morality are indispensable supports. “ In vain would that man claim the tribute of Patriotism, who should labor to subvert these great pillars of human happiness, these firmest props of the duties of Men and Citizens. “ The mere Politician, equally with the pious man, ought to respect and cherish them. “ A volume could not trace all their connexions with private and public felicity (happiness). “ Let it simply be asked where is the security for property, for reputation, for life, if the sense of religious obligation desert the oaths, which are instruments of investigation in Courts of Justice? And let us with caution indulge the supposition, that morality can be maintained without religion. “ Whatever may be conceded to the influence of refined education on minds of peculiar structure “ reason and experience both forbid us to expect, that national morality can prevail in exclusion of religious principle.
It will be worthy of a free, enlightened, and, at no distant period, a great nation, to give to mankind the magnanimous and too novel example of a People always guided by an exalted justice and benevolence, — Who can doubt that in the course of time and things, the fruits of such a plan would richly repay any temporary advantages, which might be lost by a steady adherence to it? Can it be that Providence has not connected the permanent felicity of a Nation with its virtue? The Experiment, at least, is recommended by every sentiment which ennobles human nature. “ Alas! is it rendered impossible by its vices?…
In my opinion, most of the current societal problems in our nation, including capitalists capitalism’s problem, are the consequence of our abandonment of Washington’s admonition about Religion and Morality.
Does the Judeo-Christian heritage of the Founders and Biblical Christianity substantiate the advice given to the United States of America by the Father of our nation? The Bible does provide numerous scriptures related to the source of wealth and the requirement to treat laborers fairly. Some relevant New International Version Bible scriptures follow:
But remember the Lord your God for it is He who gives you the ability to produce wealth. (Deuteronomy 8:18a).
Do not take advantage of a hired man who is (comparatively) poor and needy. Pay him because he is counting on it. Otherwise you will be guilty of sin (Deuteronomy 24: 14-15).
Honor the Lord with your wealth. (Proverbs 3:9a).
So I will come near to you for judgment. I will be quick to testify against those who defraud laborers of their wages, who oppress the widows and fatherless, but do not fear Me says the Lord Almighty (Malachi 3:5).
Cursed is the one who trusts in man, who depends on flesh for his strength and whose heart turns away from the Lord. (Jeremiah 17:5).
The worker deserves his wages (Luke 10:7b and 1Timothy 5:18b).
Now when a man works, his wages are not credited to him as a gift, but as an obligation (Romans 4:4).
Now we ask you, brothers, to respect those who work hard among you. (1Thessalonians 5:12).
The Godless immoral capitalist behavior, capitalists capitalism’s problem, previously described, including the corporate executive to labor salary ratios are inconsistent with the advice of George Washington and the cited Scriptures.
In my opinion, many of the Marxist left’s objections to capitalists capitalism’s problem are justified. Prior to the early 1900’s, treatment of the labor force, including women and children, was consistent with what I call Godless immoral capitalism. Similarly, the violent behavior of the labor force as they sought to organize themselves in their effort to secure better wages and benefits and working conditions was equally Godless and immoral. The behavior of both sides in the labor management struggles was the epitome of the raw nature of man. Nevertheless, the capitalistic economy that evolved in the United States developed into the largest and most successful economy in history. Our nation also became the most potent military, political and economic power of the 20th century. In the 21st century, everything from our Judeo-Christian heritage and constitutional capitalistic political economic system is being challenged by the left.
For the last 200 years, the philosophical leadership of the left has worked to gain dominance in virtually every form of communication in the Western world including the United States. The left’s first objective was to marginalize Christianity in society. Second, the left established an educational dictatorship in the entire public education system. Third, the left has learned to use both our United States and State judicial systems, which lack effective checks and balances, to thwart the will of We the People when the left is unable to accomplish their goals through the legislative process. Progressive ideology dominates all forms of the news media, telecommunication entertainment, movie and theater entertainment, and the advertising industry which is filled with subtle social, political, and economic messages. The cinema graphic industry produces works filled with stories of excesses and adverse impacts of capitalism on society and the environment. Millennials are probably the first generation that have been exposed to progressive curricula from preschool to PH.D. and the media generated progressive agenda.
In light of the fact that Bernie Sanders, who calls himself a democratic socialist challenged Hillary Clinton for the Democrat party nomination for president, the philosophically Marxist progressive agenda is gaining wide popularity with younger citizens. In polls, a surprising number of millennials favored socialism over capitalism. For millennials, capitalists capitalism’s problem is ingrained in their psyche. Wealth redistribution through heavy taxation of the œ1% is their answer to all their problems. The wealth of the 1% will pay for their higher education, eliminate their college loans, subsidize their healthcare, save Medicare and Social Security, and save the planet. They see corporate executives secure prescription monopolies for the purpose, in their mind, of securing drastic increases in prescription prices. They look at the rise in the corporate executive compensation to employee compensation ratio, stagnant or falling labor compensation compared to the unprecedented increase in corporate executive compensation; and millennials are revolted. Finally, millennials hear statements regarding the executive compensation to employee salary ratio indicating that these executives no longer ask the question, How much is in enough? but now ask How much can I get? When millennials are told that corporate executives just don’t care, they conclude that capitalists capitalism’s problem is a good reason to reject capitalism as a fair economic system.
No one can actually speak for them; but, based on remarks from his Farewell Address to the Nation, that George Washington and the other Founders as well as their Biblical Christian morality would indicate that capitalists need to make real changes in their behavior. In light of the fact that the Marxist or socialist, progressive, liberal agenda dominates all aspects of culture in the United States, it seems that capitalist leaders should begin evaluating their decisions and behavior in relation to solid moral and ethical standards.
Although it is the fiduciary responsibility of corporate executives to maximize profits for shareholders, it might be appropriate to start asking do our decisions benefit both our stockholders, and equally important do our decisions benefit our employees as efficiently as our executives have benefited from their compensation. This change in attitude toward employee management relationships would provide a positive employment atmosphere and could even have a positive effect on productivity. Asking the question, is this decision moral and ethical could also lead to reductions in potential environmental problems caused by manufacturing, energy production, and reduce land, air, and water pollution. To accommodate this change in approach, corporate boards of directors would also have to allow executives latitude to affect change.
The system of constitutional capitalism that has evolved in the United States since the Revolutionary war has given our nation the most potent political socioeconomic system of governance in history. Unfortunately, conservative and capitalistic institutions have failed to recognize the all-inclusive and pervasive influence of the left in our society. The left is now the dominant force training and evangelizing the youth of the United States of America. The cultural mores and ideology of the left dominate our education system, information system, and economic ideology of our young people.
Donald Trump is not a conservative. Conservatives cannot become complacent simply because he is a Republican. He was a pragmatic, innovative, populist. Capitalists, corporate executives, and conservatives cannot assume that the results of the last several elections, the dramatic shift to Republican office holders, indicates movement towards conservative and Republican principles and ideology in our nation. Polls regarding the attitudes of millennials show a strikingly different philosophical and ideological attitude of the next several generations of voters. Conservatives and Republicans cannot assume that these voters will always be undependable Democrat voters in the future. From the perspective of young voters completely immersed in Marxist and progressive philosophy, capitalists capitalism’s problem is a reality in their mind. The welfare of the middle and lower classes will determine the political socioeconomic future of the United States of America.
A relevant question is, How can conservatives and capitalists change the negative populist perception about capitalism that prevails in the minds of a growing percentage of current and future and young voters in the United States? The answer to that question will determine the future of the United States of America.
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