The gains of capitalism

1914 was the famous year when Henry Ford began hiring employees at 5 dollars a day, double the wages of other companies. When I look at companies today, Elon Musk wants 101 billion dollars as pay. The gains of capitalism has been far removed from the rank and file employees and their managers. The CEO and senior executives work with the faceless shareholders to ruthlessly manoeuvre the corporate model for their personal advantage.

The results are obvious at the national level. Elections are won and lost just based on voters in the Midwest. The predation of jobs in the Midwest US in places like Ohio has hollowed US manufacturing. I lived enough in Ohio to see the hollowed-out ghost towns that remain. The economists trumpeted manufacturing abroad as a win-win situation. The losers of trade were never compensated. The coastal elites could now buy their second and third fancy homes. Every dollar bought an enormous number of cheap products. It was a "trip" that seemed to last forever. Meanwhile the people in the Midwest were economically ruined. All they got as compensation were a bunch of online programs wanting to teach them coding and software skills. A garish joke indeed.

Is there a way to reverse the clock. Sure, there is a one way forward. The support workers who add little value like bankers and lawyers have to allow their outrageous compensation to drop to a fraction it was before. Every American should pay dozens of times what they paid earlier for the same goods. Even that will not be enough. Even the most poorly paid US employee is paid much more than employees in other countries. You cannot have cheap goods and economic prosperity together. A great example is the car industry. Germany and USA used to laugh at Chinese technology. Now their cars are so advanced that the CEO of Ford only drives a Chinese car. Cars jam-packed with features better than Tesla are available at a fraction of the cost. In Germany, many of the famous car manufacturers have closed operations. Nobody wants their substandard products anymore. Solar panels are available at a fraction of the cost it did earlier.

The answer from powerful countries is short sighted and self-defeating. Tariffs and bans will ensure that more substandard products are built at exorbitant prices in the rich countries. Banning solar panels to prevent their adoption only highlights the extreme hypocrisy around climate change. No other country except India has met any of the COP agreements. Just a lot of lip service about the environment. Just keep on kicking the can down the road. 

What is happening today is a reflection of the chaos that is unleashed when society celebrates an unabashed embrace of materialism. Capitalism was all about making wealth, consumerism and keeping up with the Joneses. It was never about satisfaction or family or society. Not surprisingly, the richest people today have three characteristics: they are eternally dissatisfied, family life is typically in ruins and when they die nobody in society will miss them. When vice becomes virtue and everyone valorizes selfishness, it is a strange society we encounter. The shamans and priests have been replaced by economists and CEOs. The pagan gods have been replaced by money and power. Strange times indeed. The world we will not wish for our children is what we wish for everyone else.