think about it


THE VIRTUES OF CAPITALISM


by william e. kelly


Dare to suggest mutually benefiting labor, employers and investors is necessary to a sustainable economic balance and you are likely to be accused of being a socialist or communist. But, a review of recorded history tells a greater and more poignant truth. Centuries of feudalism, indentured servitude, slavery, the Industrial Revolution and Information Ages have brought us to the high-tech economy of today. Yet the sustainability of an economy where employees and employers maintain a mutually beneficial relationship without friction remains imperfect. When either faction perceives they are having something unfairly denied them they push back. In 1928, Republican President Hoover’s campaign promised “A chicken in


every pot and a car in every garage” insinuating that everyone would prosper if he were elected. Hoover won, the stock market crashed in 1929 and The Great Depression that followed lasted 10 years. Fast forward to the Great Recession 2007-2009 and what has transpired in


the nine years since. The American people and government are more deeply divided and growing increasingly so. A decade-long shift towards partisan politics combined with changing demographics, technology, societal values and laws have produced a fast-pace American landscape that has delivered to our door steps an increasingly dysfunctional and less supportive government. Offering a less dependable economic environment and a more divided citizenry, which portends more gridlock and instability. In reflection, I grew up in an era when unions formed to counter the abuses arising from the excesses of economic greed. As a young adult, I watched collective bargaining become what it had fought against, the excesses of greed. Employees went from demanding what was reasonable and defendable to insisting on compensation packages that grew increasingly unreasonable and unsustainable. Union busting ensued and the pendulum swung the other way. Until my last breath I will argue a sustainable healthy economy requires a healthy marriage between investors, employers and employees. Democrats favor trickle up economies, i.e. buyers not the sellers, investors and inventors of goods and services determine the economies and Republicans favor trickle down economies which believes profits of the sellers, investors and inventors determine the strength of the economy. Hence, a them versus us division. The rudder that guides a democratic, free enterprise and capitalistic economy is supply and demand. Human greed and unreasonable demands on both ends


of the employee/employer continuum are counter-productive. Realistic profit/ cost sharing formulas would be ideal but are seemingly impossible to maintain. Accordingly, the pendulum of a strong sustainable economy continues to automatically seek a balance between those financial rewards sought by employers and investors and those sought by the contributing labor force. Despite the mix of periodic highs and lows and the human conditions that bring them about, the U.S. economy, however unevenly, progresses forward. The history of our economy suggests stability is based upon employment and


a return on investments. So, what is missing that prevents the nation from creat- ing a sustainable economy that makes it desirable and possible for investors to invest, employers to employ and labor to work? Keeping it humming requires mutual effort. Both the trickle-down or trickle-up models should seemingly work but the imbalance between demands and expectations prevent it. I submit that a LinkedIn post, “Why Millennials Skip Retirement Savings,”


offers plenty of food for thought. It states that economics have changed in the past three decades and big business, in collusion with the government, has sys- tematically dismantled the worker benefits developed in the 20th century. That fact leaves people with no right to work, no pensions, no collective bargaining power, astronomically high insurance costs, no training, no job security and no future. An $80k annual income in 1995 adjusted for inflation has not kept pace with skyrocketing costs and too many struggle to meet even basic needs. In the thread of the discussion, a participant shared that student debt contrib-


utes to the problem, but, living beyond one’s means because of an entitlement mentality is the larger issue. Paraphrasing, too many coming out of college demand high paying entry level jobs, buy $700 phones, lease luxury vehicles and eat out for every meal and think the government is going to take care of them when things go south. I conclude, that the challenge is not the “opposing” economic models, but


rather how the labor force and the job creators define a sustainable, balanced economy. On Facebook I recently asked my followers to share their definitions of a sustainable balanced economy. Here is a paraphrased reply: “What is miss- ing is any invented economic philosophy that allows for a sustainable balance. As long as one person is willing and able to exploit another for economic gain, there is going to be issues. The secret lies in how the issues are mitigated.”


THINK ABOUT IT. APRIL 2018 | RAGE monthly 39


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