Capitalism has a potential for much good

PS. As I re-read this. I realize that what I am talking about is not capitalism in its pure form, but social democracy that uses the market to drive its economy. Unfortunately, a more insidious, pure form of capitalism has convinced people of an untethered market agenda, and bought off politicians. The word “market” has replaced capitalist in this edit.

A controlled market model has much potential for good, but it needs to be re-imagined by leaders who understand the social implications of profitability, and who care to make their community (province, country?) a better place. The current situation in North America suggests that most leaders and investors either don’t understand, or don’t care.

If we could imagine the wealth of a successful corporation being completely redistributed among the workers, we could imagine a world where people’s well-being truly would be put first, where daycare would be completely subsidized, and where wages would be such that most people would have an improved standard of living.

Such imaginings are a bit of Pollyanna, no doubt. Profits lead to investment. Without a profit incentive, who would risk investing in new initiatives, many of which fail? But North America is a world where huge corporations are making huge profits, and not redistributing them at all. In fact, they are doing the opposite. They are constantly looking for efficiencies, which translate into wage cuts, poorer working conditions (including lower safety standards), and outsourcing, while CEOs and board chairs make unconscionably high wages.

The current scenario begs the question, “How much profit is enough?”

Most economists these days recognize an erosion of the middle class and an increase in the wage gap between rich and poor. One example can be seen in my school district where the district, forced because of  funding shortfalls to look for efficiencies, is seeking to reduce benefits for part time employees (read “mothers”), in order to balance budgets. At the same time, student to teacher ratios are skyrocketing, meaning that teachers have bigger workloads and students have less access to teacher help. The only way to remedy this situation is to increase the tax burden on those who can afford it, i.e. take a chunk out of profits.

This type of scenario is not unique to the public sector. Another far more disturbing trend can be seen in the private sector, where because of the time and financial constraints imposed by “efficiencies”, safety standards can be overlooked. In the past year, there have been some serious accidents in North America: saw mill explosions due to fine flammable particulate not being properly removed from the air, a terrible train derailment and explosion in Lac-Mégantic, and a horrible loss of 19 young firefighters in Arizona. In British Columbia, the safety standards for forest firefighters, rather than being studied at the ground level and applied as necessary, have been imported from other industries which don’t have the same safety issues that arise in a burning forest. No amount of profit is worth the preventable death or injury of one person.

A particularly egregious example of a corporation’s attempt to defray the cost of safety and worker compensation is American Airlines’ outsourcing of aircraft mechanics to third world workers – thereby offloading danger onto people desperate for work, and killing jobs in the corporation’s own country.

At a far less severe degree of importance, but important just the same, is the issue of worker dignity. There seems to be a growing disconnect between the goals of the labourer and the goals of the manager. A small example of this can be seen in school districts that use a database called Enhanced Student Information System (ESIS). This is a very powerful tool for  government ministries. It allows schools to collect and archive virtually any kind of student information imaginable in one database – everything from attendance to achievement to ethnicity. It can even generate school timetables. It’s easy to see how ESIS could have value for education managers. The problem with ESIS is that at the input stage (used by teachers, school secretaries and school administrators), it is clunky, unintuitive and time consuming, disrupting the flow of school administration and lessons. There exist many similar software systems that are designed with the daily user in mind, but for the sheer magnitude of the database,(and likely security interests), ESIS is the program of choice. This kind of disconnect is frustrating for users, who begin to ask of the managers, “Don’t they understand what we do?” After all, the goal of education is learning, and not data collection. There are countless examples of this disconnect that is born of efficiency culture.

The result is to lower morale in the workplace. But morale is not something that is easy to commodify into dollars and cents. At the shareholder level, worker morale doesn’t seem like something worth losing profits over.

At the heart of the matter is the question, “What are we trying to achieve as a community?”. If profiteers truly care about their country, and not just themselves, they will gladly accept lower profits, and pay higher taxes in order to facilitate a true trickle-down economy. It’s hard to imagine a scenario in which people would be convinced of such a radical idea. It is inherently socialistic, and it assumes the best motives of the work force AND of the profiteers.

Greed gets in the way, of course. For this reason, the solution must be found in policy – social policy that aims to benefit the people and society as a whole, and not just the profiteers. It’s time for political leaders to reconnect to their mandate of government for the people.

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