Profits Without Honor

In his book One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy (2000) Thomas Frank takes to task that particularly bloviated group of individuals known as “creative destroyers.” These are men like Tom Peters, who published a popular series of books in the 1980s and 1990s beginning with his book In Search of Excellence (1982). Peters peaked in popularity with his book Liberation Management (1992). What is the gist of these books? Simply put—easy to do with such pabulum—Peters argued that management needed to set their employees free so they could thrive in an environment of “chaos,” a word bandied about at the time because of the popular concept of Chaos Theory. Peters even wrote a book called Thriving on Chaos (1987).

On its face this new managerial movement toward chaos and the decentralization of decision-making seemed to be a full-fronted assault on Taylorism—also called Scientific Management. Taylorism was the formalization of time-motion studies meant to improve productivity in the factory system of the early twentieth century. Frederick W. Taylor had started examining piece-work productivity in the mid-1890s and by 1911 had developed a full-blown theory that he laid out in his book The Principles of Scientific Management. Coming as it did at the height of corporate concentration and the attempt to maximize profits through the use of vertical monopolies and the assembly line, Taylor’s ideas were not only a response to conditions on the ground but also a catalyst for even greater corporate growth. This would all eventually give rise to what James Burnham in 1940 called a “managerial revolution,” by which was meant a system of capitalism controlled almost exclusively for the benefit of those who managed it.

So, Peters and others seemed to be challenging the power of management, but in a perverse twist of fate this movement of the “management gurus” which was intent on freeing the corporation from bureaucracy only ended up strengthening it. However, this newly strengthened management now could engage in a Kafka-esque attempt not only to control the movement of employees but their minds as well. Barbara Ehrenreich has wonderfully chronicled this perverted system of rewarding management not for actual achievement but merely for the appearance of achievement. Particularly relevant to this discussion is Ehrenreich’s book Bright-sided: How Positive Thinking Is Undermining America (2009). In it we learn how people are threatened with termination not only for smiling too little but for smiling too much. Apparently, there is a happy medium, but only the management seems to know what it is. Anyone who has ever read George Orwell’s 1984 will feel a chill run up there spine as this new management style takes on an eerie similarity to the “doublethink” and “newspeak” of Orwell’s dystopian future.

The relationship of labor to management and capital, no matter how we try to sugarcoat it, is ultimately a relationship of exploitation. Unions, which came into their own in the 1930s, made some progress against the corporation and management as they shifted a greater share of the gains of capitalism to labor. However, no sooner were those hard-won economic advantages being enjoyed by laborers then the capitalists struck back, weakly at first, because during the 1950s and 1960s productivity and profits were growing fast enough to make sharing profits less onerous. However, in the late 1960s, when the shift from manufacturing to service industries made it impossible for productivity and profits to be sustained, there was a need for capital to look for greater returns. So, an ad hoc, three-pronged attack was devised to meet the crisis of profit-making: the breaking of the unions, the creation of a “new Protestant ethic” toward work, and the financialization of the economy. This began the modern system of “profits without honor”—not that it was ever too honorable to begin with.

What is meant by the phrase profits without honor? It means that the economic system under which we live violates a central tenet of economic thought established by medieval scholastics, that of the just price. In the modern age the “just price” is the “market price,” the rate of exchange established through a “free market,” in which there are no major impediments or manipulations of “market forces.” Unfortunately, we talk a lot about free markets or supply and demand, but we fail to pay attention to all the forces that intervene to skew the markets. Often the forces that skew the market are obvious. OPEC is one example of an obvious manipulation of supply and of prices since this organization can manipulate both with just one meeting. Others are less obvious, like the ability of employers to drive down wages through the introduction of workers from outside the natural labor pool, the establishment of policies that engender fear among workers ignorant of their rights, or the direct intimidation of workers through policies that intrude into their personal lives.

Unions once served as a way for laborers to fight against the power of the corporation and management, but the modern worker has been thrown completely on the mercy of the government, which is more often than not controlled by elected officials who are more friendly to capital than to labor. This is understandable since the capitalist allows the politician to get elected through his donation to campaigns and can also determine the political and economic fate of an area by simply deciding to build a plant in a particular community. In this way the capitalist keeps the worker and those who are supposed to represent their interests ready to sell their birthright, which is the right to an equitable share of the income that results from their labor. Today, though, labor exchanges this right for a bowl of pottage, which once gone leaves them worse off than before. They are then subject to “core values training” and the fear that smiling too eagerly might “weird out” a client and lead to termination.

In the end, it is an imbalance of power between labor and capital that contributes to a system in which those at the high-end of the economic spectrum “profit without honor.” They can do this because they use their ever-growing power to make those who labor not only less politically relevant but less economically relevant. What is even more insidious is that the wealthy capitalist achieves his aim not only through legislation but by convincing the worker that the system can still benefit them, if they will only maintain the right attitude, and smile—but not too much. This ensures that the laborer will be marginalized in every way: economically, politically, and, finally, socially.

There is no power that an elite group can acquire that rivals the power of convincing a majority of the population that their own lives are completely a product of each individual’s initiative. Once a majority of the people are convinced of this proposition, it justifies not only the excessive wealth of elites it also explains why the less successful should simply accept their fate. It was no fault of society, family, education, genetics; it was their own lack of grit and willingness to work hard.

Today, the worker is even more hard-pressed. Not only have tens of millions been largely stripped of their ability to negotiate for a living wage, they have also been convinced it is all their fault. So, they work their minimum wage jobs and struggle along as best they can, often resorting to high-interest loans for cars, homes, and even the consumer products that fill those homes. In this way the laborer, especially the low-wage laborer, is thrice victimized by a system that is at its heart Darwinian, lacking almost all moral restraint, except in extreme cases—and often not even then!

Is there any hope things will change? No. Even a resurgence of social conscience would not eliminate the cold reality that in order to enjoy the level of wealth that we enjoy in this country requires that someone be exploited. Our only objection comes when the offenses of capitalism are particularly egregious. Fortunately for the sensitive American consumer’s conscience, we keep the most hideous exploitation hidden from them, far away in the third world or in the shadows of a market for the labor of illegal aliens. You would think that the middling classes would understand that once everything has been extracted from the poor that the “one percent” will turn their greedy gaze to them, but like any good dictatorship it is made clear to everyone that getting involved only imperils one’s self; there is no recompense in standing up against “the way it is.” So, we close the curtains and hope they never come knocking at our door, and if and when they do we hope the TV is loud enough to drown out the pounding. Maybe they will just go away?

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