Friday, 13 December 2013
So, Who Is Winning The Economic Argument?
I'm no fan of Henry Ford. He was a racist with very definite fascist leanings. However, he had a deep understanding of the capitalist system and knew which side his bread was buttered on. When he set up his motor-manufacturing assembly line he paid his workers $5 per hour - twice the rate of any other manufacturer in the United States - and was at some pains to make his factories safe places to work in. Why would he do this? Surely paying more in wages and investing in safety must have cut into his profits. Well no, his business went on to become one of the largest of its kind in the world. He understood that his workers, with much more disposable income than almost any other worker in the US, would also be his best customers. He made the motor car affordable to ordinary people not only because of his ground-breaking assembly line system of manufacture but also because he paid his workers a living wage. Undoubtedly his accountants, when they saw what he was doing, were horrified. Fast forward nearly one hundred years to a world in which entrepreneurs like Ford have been largely replaced by accountants and financiers. They don't build businesses, they pour over accounts and, unable to summon enough imagination to be creative other than in dodging tax, they think only in terms of cutting overheads. The easiest overhead to cut is wages. That is why Jaguar and Land Rover are booming and small car manufacturers and shrinking. The accountants have now reduced capitalism to the rich selling goods and services only to the rich. Demand is falling across the world and the reason for this is the refusal of the short-sighted, selfish and unsophisticated who think they understand capitalism but, in fact, couldn't find their collective arse with both hands. So who is winning the economic argument? The neoliberals like Cameron and his fellow Eton thickos who have all but destroyed the world economy and are now intent on building the same jerry-built edifice with no foundations? What do you think?