Consequences Of The Broken Balance

Guest post from John Wilder at Wilder Wealthy Wise.

“Ummm, I’m gonna need you to go ahead come in tomorrow.  So if you could be here around nine that would be great, ummm kay. Ahh, I almost forgot ahh, I’m also gonna need you to go ahead and come in on Sunday too, kay. We ahh lost some people this week and ahh, we sorta need to play catch up.” – Office Space

Would John Henry have upgraded to the iPhone® 12?

There have been some pretty significant trends of dehumanization of the workforce.  It might seem like dehumanization is a story right out of 2021, but this trend isn’t new.  The legend of John Henry, that steel drivin’ man that raced a steam drill shows that the fear of machines replacing people and changing the way they work dates back at least as far as the 1800s.  At least John Henry’s performance review only ended with his heart exploding.

I blame Materialism, but more on that in a bit.

There are more and more jobs where each second of employee performance is analyzed and optimized and timed.  I’ve written (some) about this previously (How To Beat Any Computer At Chess*).

There are more people today working under deep surveillance at work than ever before:

• Don’t perform as well as the computer metric says you should in customer satisfaction surveys?
• Bosses that are upset that people get sick on Wednesday and never on Saturday or Sunday? And employees blame their weekend immune system.
• Don’t move in the optimum path from one place to another to pick an item off of a shelf?
• Bosses firing people with the worst posture? Well, we all have a hunch who that is.
• Take too long per item to ring out a customer?
• Not enough keystrokes per minute on the company computer?

These are jobs that are created that use humans as interchangeable parts – ones that wear out or are defective and that can be replaced.  Of course, jobs like this have existed since, well, jobs existed.  Mining comes to mind.  Building railroads probably wasn’t a ball of fun, either.  But in both of those, at least, the job had room for innovation, thought, and human ability.

These children actually worked in a coal seam.  Child labor laws back then weren’t a miner issue.

I think the biggest problem is that people have forgotten that businesses exist for the benefit of society – society doesn’t exist for the benefit of businesses.  In my younger, more libertarian days, I missed that point.  Even though I love freedom (still!) I was always skeptical of the power of big business.

Also, I was always concerned about businesses that produced nothing.  I didn’t have the framework to explain it then, but I do now.

Businesses exist for three reasons:

To benefit society by creating value.

A business can easily fall short of this if it’s an abusive monopoly or makes its profits based on political pull and persuasion – an example would be solar scams during Obama, and military scams, well, any time.  What’s an invulnerable weapon system?  One that has parts made in every Congressional district.  Even if the military doesn’t want it.

No, creating value isn’t the same thing as government forcing money at a company.  Creating value is a much deeper concept – it’s where someone makes something and society gets better.  It doesn’t even have to be a physical thing, the words written by an author aren’t physical, but they create value when enjoyed by an audience.

Of course, physical items are awesome, too.  PEZ®, anyone?

Z3d looks like “Zed.”  Thank you for attending my Zed Talk.

To benefit employees by providing meaningful, necessary work.

When mass business first started, Henry Ford did an amazing thing:  he doubled the wages he paid his employees.  Why?  First, to get a good, stable workforce.  Second, to increase the productivity of that workforce.  Assembly lines were new, and getting a good workforce was crucial.

The experiment was successful, and helped Ford increase production while lowering overall costs.

Today, when you’ve got a good job, you know it.  You’re working on tough things that are right at the limit of your capability.  You’re engaged.  You’ve got support so you don’t sink.  You know what you’re supposed to be working on.  And you’re part of a team.

That sort of work is fun.

To allocate profits to shareholders and owners.

This is also required.  Winners make profits and get more opportunity to manage bigger businesses.  Losers don’t, and their businesses fold.  In a well-functioning society, those profits accrue to those who are creating value, which in turn allows them to create even more value.  I don’t know about you, but I’ve never gotten a job (in business) from a company that had less money than I did.

The most profitable part of the lemonade stand I had when I was growing up?  Selling the antidote.

These three things are a delicate balance.  Too much emphasis on any one of the three is poison to the system:

• Collective farms in the Soviet Union attempted to “create value” in society by creating awful jobs for people who had no real incentive to do a good job. Result?  Tens of millions dead, followed (much later) by the collapse of an entire country.  But the Soviets did develop an impressive system to stand in line all day.
• Government, where often it’s set up for the benefit of the employees. What business would you go to where the customer (you and I) has to park farther away than the employee?  That wouldn’t happen at almost any business looking to make a profit.  But does your local police department save the best spaces for citizens?  Does your local DMV?  If so, you’re not the customer.  They are.
• Hedge funds, high-frequency traders are an example of a business that does, in many cases, literally nothing to help the economy outside of extracting wealth. That’s it.  It’s a casino view of the world, where vampires that produce no value game the system for profit.

Why don’t hedge fund managers ever have problems with ticks or mosquitos?  Professional courtesy.

Imbalance in any of these features leads us to a dystopia.  Our current dystopia in the United States comes from the employee-centric Federal government.  Call it The Swamp or call it the Deep State, it’s all the same.

Even now, the function of some government agencies is so impaired as to be comical –  we have a Securities and Exchange Commission (SEC) that wants to put Internet traders in jail and a Bureau of Alcohol, Tobacco and Firearms that sells none of those things.  Also?  It’s nearly impossible to fire a Federal government employee.

Unless they’re on the Right.

Hedge funds and other Wall Street hangers-on don’t care about creating value for society.  They don’t care about employees of the firms they buy and gut.  They just want profits, and want them now, please.  Thankfully the SEC will regulate them.  What?  Oh, sorry, the SEC will protect them.  My bad.

Almost all of the horrors of the world are an imbalance between these forces, and each produces its own, unique dysfunctional society.

My friend told me that Biden was going to build a monument to George Orwell.  “Where??”  “Well, pretty much everywhere.”

The root cause for this imbalance is Materialism, the idea that only physical things matter, and a loss of the idea that there is a higher purpose.  Materialism is the very foundation of both Marxism and Libertarianism, and, when applied strictly, is the separation of morality from culture.

I can even prove that Materialism is in complete control in 2021:  Is there a higher crime in society than standing up against something that is morally wrong?  Well, in a world where the rule is “do as thou wilt” saying something is wrong is the highest crime.

I’d call that Materialist.  In fact, I’d bet $10 on it.

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