Human Beings and Capitalism

 

Musings About Human Beings and Capitalism

 

 

Another Musing, here.

Peter Drucker, often regarded as the father of modern management, was a bright spot in the corporate world of yesterday. While reading Managing in The Next Society (2002 – Book Review is here), I came across this gem:

 

“What is your critique [of Capitalism]?

I am for the free market. Even though it doesn’t work too well, nothing else works at all. But I have serious reservations about capitalism as a system because it idolizes economics as the be-all and end-all of life. It is one-dimensional.

For example, I have often advised managers that a 20-1 salary ratio is the limit beyond which they cannot go if they don’t want resentment and falling morale to hit their companies. I worried back in the 1930a that the great inequality generated by the Industrial Revolution would result in so much despair that something like fascism would take hold. Unfortunately, I was right.

Today, I believe it is socially and morally unforgivable when managers reap huge profits for themselves but fire workers. As societies, we will pay a heavy price for the contempt this generates among the middle managers and workers.

In short, whole dimensions of what it means to be a human being and treated as one are not incorporated into the economic calculus of capitalism. For such a myopic system, to dominate other aspects of life is not good for any society.”

I’m curious as to what he’d say about the state of things, today (he passed away in 2005).

For what it’s worth, I am staunchly pro-capitalism, too.

His words, however, deserve a fresh look in the rampant crony capitalism of today.

Capitalism, while the only system that works, has at its core the same thing every other economic model does: human beings. And human beings are selfish. They are greedy. They are exploitative. They can and will take advantage of others and situations.

Where I think pro-capitalists err greatly is simply ignoring this. Coupled with the rampant crony capitalism of today, you have a recipe for volatility.

When people feel the system has failed them (and it certainly seems that’s the case for a rising number of young people), is it any wonder they want to scrap it altogether?

Corporate price gouging has brought massive profits to companies. It’s hard to argue when they specifically report those same profits each quarter. Here, here, here, here, and here, are just a sampling of what’s out there to help identify this.

What’s more, this doesn’t address skyrocketing rent, or the paltry wages people are paid.

And the cherry on top? Economic slavery in the form of student tuition debt – to the collective tune of 1.77 Trillion.

Discerning individuals can see the forest for the trees, and understand this model cannot sustain itself when, in the words of Peter Drucker,

 

“…whole dimensions of what it means to be a human being and treated as one are not incorporated into the economic calculus of capitalism. For such a myopic system, to dominate other aspects of life is not good for any society.”

 

Don’t Depend on Laws

Lady Justice, where it relates to workers, is not blind

 

For decades, politicians (and pundits) have touted laws, regulations, and the like as the fix. But there again, those who are discerning know this isn’t true, either.

We’ve seen what should be the firm foundation of legality erode, often those in support of labor and employees. The table, while it may have been level at one time, has tilted significantly toward management. Here, and here are but a small sampling – with the most recent discussion centering around loosening child labor laws.

And the losers EVERY SINGLE TIME?

People. Human beings, who, as Peter Drucker rightly observed, are not considered AT ALL in the capitalistic theory – except, of course, how they can be squeezed for maximum productivity.

What’s more, prominent conservative politicians have taken note of this phenomenon, too. For Marco Rubio and Jeff Sessions – two of the most conservative members of the Republican Party – to say workers deserve a seat at the table was unthinkable 20 years ago.

Perhaps even more interesting is their understanding of the problem – complete with an acknowledgment of how America has come to this point:

 

“The defense of markets, though, has at times made us overly solicitous of businesses. As we advocate for owners and managers in their pursuit of profit, and celebrate the enormous benefits their efforts can generate for us all, we must accord the same respect to the concerns of workers and ensure that they too have a seat at the table.”

 

Organized Labor is the Answer

 

When people group together, have had enough, and are willing to take a stand, they are, by definition, organizing. America has been approaching a point where people are willing to throw the whole system away because they are convinced they cannot get ahead.

And to a degree, they aren’t wrong.

Under the current model and circumstances, they cannot.

Being pro-capitalism, however, is understanding that working in the system – by organizing – is as much of a tenant of the system as the corporate greed that’s run amuck.

It’s the counterbalance – and it can be VERY powerful, too.

What’s more, the favorability of unions has been on the rise here in America. Gallop said it was 71% back in 2022. Then in 2023, they reported Americans see unions strengthening – and that they want to see it continue. The Pew Research Center reported in 2023 that the decline in Labor Unions was seen as bad for the country.

The recent organizing campaigns – notably at Starbucks, Amazon, and Trades Joes – are but a taste of WHAT IS POSSIBLE – IF people stick together.

As it turns out, the old saying,

 

“United we Stand, Divided we Fall”

 

continues to ring true, today – especially where Human Beings and Capitalism are concerned.

 

What Can You Do To Help?

 

Communicate these truths with others. Have open and honest conversations. Listen to understand rather than to respond.

And share what The Wealthy Ironworker is doing – on the Website and Podcast.

The more people who are in the conversation, the better.