CAPITAL vs LABOR

rffrydr · Posted: Tue Jan 17, 2006 1:22 pm Post subject: CAPITAL vs LABOR

Of course this the oldest and fundamental cyle when it comes to econmics--and it precisely because of this that the answers to questions of it's twists and turns cannot fully or finally be answered within its confines.

The ultimate direction will come, I think, from the greater worLd of politics and culture. While, doubtless, there are times when economics has held both within it's grip, i.e. the rise of japan in the 70's or, say, the french love of "hollyvooood." Ultimately, culture will decide.

Presently, in regards to the latest newsletter, we have the GM Chairman and his open "letter" to america. This may be dismissed as a Chrysler-like appeal for Washington to bail GM's fast ailing ass out (I, incidently bought their bonds a few weeks back) but it is framed in cultural terms, what we want as a society and how those values will (or can) be expressed our society's companies.

I would agree with you, Henry, that the american autos mark an ending in the cycle of cap vs labor. But I would say just the opposite. The Unions have been running GM for a long time: production has been set for at least these last years on employment balance rather to any regard for efficiency or profitability. GM and the american autos represent union power in its deaththroes. GM, for instance, allows for smoking on assembly lines and "ghost-workers." For christ's sake! the same company responsible for these guy's long-term (spiraling) health care!! The notion of an "economy" of the american auto has long-since collapsed under the weight of its own bloated worker. No amount of "offshore outsourcing" will save the Corvette (unlike the "american flyer" red wagon), captial and labor are bound by time, geography and scale. All things that "market-economies" don't handle well, if at all.

But yes, the cycle is turning, it is turning back in the direction of labor and it is turning exactly at the lowest rung in labor, where you would expect it to begin. The pinnacle of captial power is not GM but WalMart/Microsoft. The change is well underway. You mention the movies, the PR (Walmart now HAS to sponsor NPR, Katrina etc) on our side. But labor is reasserting itself where it wasn't supposed to exist: China.

Walmart doesn't site new manufacturing in coastal china anymore: good help is hard to find and even the assemblylines are not only not cheap anymore; they are beginning to cost. Agricultural reform, ironically price liberalization, is keeping more peasants on the farm and off the streets in Gunangzhou.

The first hint of this change was there for those who wanted to look 5 years ago when the 1billion plus dreamt cellphone distribution topped out at 250 million and China Mobile, the "darling" of "class A" shares went flatline. China now, as always, is bifurcated place, a land of those who can and those who will never be allowed to try. Those chinese who can make it work, make China the factory to the world, are in shorter supply than we imagine, and it's now becoming clear that limits are being pressed and costs going higher.

"Environmentalism" has come late and come by necessity in china. But it is now becoming a badge of western standards--a cultural marker. The proof is in the money: they are now hiring Vancouver companies to clean their water, for example. The most powerful symbol of all now driving China, the 2008 Olympics, is really all about acceptence, admittance, as western power--albeit a la japan! Can the transformation of labor from the country writing the greatest transformation of labor in the modern world be far behind?

It was in the concept of "shareholder" that chinese communism and western capitalism were united. Is there a more "communist" idea than this??? As capital has now found its resurgent power through this concept it has also, I think we are beginning to see, opened the door to its complement and opposite, labor.

And what of the "market," the ultimate driver of this capital investment. It takes more than a belief to fully exploit the labor/capital dynamic. It takes a complete infrastructure, all the little things that we in thw west now take for granted: the ability and right of transfer for real property, stable and fair legal framework for righting economic wrongs, a neighbor who wnats what you understand he wants etc. etc. etc. IN RE: Sachs vs. Soviet Empire

Take advertising (please!), the mother's milk of captialism, how much can you sell to those who can't read or write, what does "deoderant and tampons" mean to household without hot water?

It hasn't taken long for a generation of "little emporers" to appear in China. How much longer for a "fair and decent living."? Having a lot of poeple doesn't necessarily mean having and endless supply of labor. A means of production matching the modern needs of consumption I think will be self-limiting. --And come sooner than labor.

The pinacle for Capital in this cycle may have been marked by Microsoft and Yahoo selling out its represented western value of "free spreech" opening the door to cold Chinese cellblock for a few of its "customers." The reaction is already here (rembering Dow 1968-1982).

Next up: ROBOTS.
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rffrydr · Posted: Wed Jan 13, 2010 10:19 am Post subject:

It took a year and half but Businessweek zooms in on the Oracle-era labor "imput"--output.

http://www.businessweek.com/magazine/content/10_03/b4163032935448.htm

Key in all of this that a job returned will be an employee with disloyalty built in. If the economy goes large your turnover will go larger and all the higher-order corporate effects with it. I doubt that's in the spreadsheet.

For the last quarter-century now the dreaded "outsourcing" has put many, even those not outsource-able, on the back foot. It'll be interesting to see how this changes Wink

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rffrydr · Posted: Tue Dec 29, 2009 3:37 pm Post subject:

No it's not hippie Apple Records non-owner owenership nor United Airlines wallpaper of same. It stands to be a new "non-verticality"--the biggest test just may be in autos. We'll see if VEBA, and Trusts holdings square that very big historical circle:

http://downloads.bbc.co.uk/podcasts/radio/worldbiz/worldbiz_20091126-2030a.mp3
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rffrydr · Posted: Sat Dec 26, 2009 1:17 pm Post subject:

Chavez going for broke:

http://www.breitbart.com/article.php?id=CNG.d7cfbb0712c519a09438be51cd08b1b8.ef1&show_article=1

How much we owe this operatic counter-example!
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rffrydr · Posted: Mon Dec 21, 2009 7:33 pm Post subject:

More than one way to skin a cat. Ford offering buyouts of all UAW workers. New UAW head Bob King, who turned down new jobs model earlier with Ford, will be wondering what's left.

http://feeds.autoblog.com/~r/weblogsinc/autoblog/~3/nOyzbLEtCxo/
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rffrydr · Posted: Fri Dec 11, 2009 11:59 pm Post subject:

Ireland breaks its "social partnership":

http://www.economist.com/world/europe/displayStory.cfm?story_id=15073973&source=hptextfeature
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rffrydr · Posted: Fri Dec 04, 2009 8:39 pm Post subject:

http://www.brennende-autos.de/
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rffrydr · Posted: Thu Dec 03, 2009 9:29 am Post subject:

Bloomberg runs a story saying that pension funds are cutting equity exposure and buying corporate
bonds. Notes that JCP is dumping stocks from its retirement plan and gradually boost bonds to 100% of
investment from 20% due to federal requirements. Story says that GM and Goodrich have done the
same. Notes the Pension Protection act of 2006 encourages bond holdings. Two reasons noted:
o Discounts assets at a corporate rate causing players to want to be invested in that asset class
o Requires fully funded plans with penalties if assets fall below 60% of liabilities

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avWKxGSu0lOo

It's all about bonds babee.....right at the point of being about equity.
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rffrydr · Posted: Fri Nov 27, 2009 8:17 am Post subject:

Lightning Round (cont'd):

rffrydr · Posted: Tue Nov 24, 2009 10:34 pm Post subject:

Even the Madman must tiptoe around taxes:

Job Creation Requires Sacrifice

rffrydr · Posted: Fri Nov 13, 2009 6:26 am Post subject:

India shows a scarily familiar face:

http://www.bloomberg.com/apps/news?pid=20601109&sid=ai3wFJzFLlKw&pos=12

Trying and failing to balance just-in-time inventories in a global supply chain against a backdrop of perceived energy instability will be a theme long to play out. "Locally grown" is not just about vegetables.
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rffrydr · Posted: Wed Nov 04, 2009 4:03 pm Post subject:

....speak of the devil:

http://tinyurl.com/ye4zxye
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rffrydr · Posted: Wed Nov 04, 2009 3:54 pm Post subject:

The Two Germanys Which one is not like the other?:

http://tinyurl.com/y989sch
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rffrydr · Posted: Wed Oct 28, 2009 7:01 am Post subject:

Goldman Sachs taking on a new moniker: giant squid

http://ftalphaville.ft.com/blog/2009/07/16/62436/vampire-squid-illustrated-edition/
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rffrydr · Posted: Tue Oct 27, 2009 8:36 am Post subject:

Good 'ol UAW...that's what Ford gets for perpetuating this Wall St. fiction that they are independent.

http://www.detnews.com/article/20091027/OPINION03/910270324/1148/rss25
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HenryTo · Posted: Mon Sep 28, 2009 7:40 pm Post subject:

Saw a huge sign at UCLA today along the lines of "Communism is good; Capitalism is bad." Neither capital nor labor would be a good place to be going forward.