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CAPITAL vs LABOR |
rffrydr
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 Posted: Tue Jan 17, 2006 1:22 pm Post subject: CAPITAL vs LABOR |
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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
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rffrydr
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rffrydr
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rffrydr
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| Posted: Tue Feb 07, 2012 1:34 pm Post subject: |
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Maybe the final and highest form of irony come when this capital cycle feeds on its own:
Goldman Sachs: paying through the nose
| Quote: | The investment adage that you’re better off working for a bank than owning shares in one is mostly true. Indices of global banks, including sexy developing-world lenders, have gone exactly nowhere over the past decade. Ditto the stock price of the mighty Goldman Sachs, which released full-year results on Wednesday. Over shorter periods, bank returns are uglier still.
Yet Goldman, for example, has paid its employees $125bn during the past 10 years (doubling along the way), twice what it made in net profits. Hence, some hope that a possible route to boosting low bank returns on equity is a structural cut to industry compensation ratios. At Goldman, again, lowering 2011’s full-year wage bill by a third would have increased its ROE from 7 to 12 per cent, all other things being equal.
But is that realistic? Bankers, of course, talk about the war for talent and the potentially devastating effect on morale and top-line growth if compensation and/or headcount are slashed. It is true that most bankers have next to no loyalty, especially the really well-paid ones, who, to be fair, mostly earn their keep. What is more, flush shadow banking institutions, such as hedge funds, are also constantly circling.
The reality, however, is that banks also support a thick layer of second tier executives, as well as legions of pen-pushing, meeting-loving, middle- and back-office workers who are paid multiples of their worth and contribution, especially compared with other industries. And market dynamics matter. If the whole financial sector started paying less, the bargaining power would fall for even star employees. Perhaps such a change is happening. Goldman reduced its compensation bill by a fifth in 2012, and global headcount by 2,300. Yet those remaining are hardly queueing for the exits, nor will the thousands of graduates who apply every year think twice. |
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rffrydr
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| Posted: Wed Jan 25, 2012 1:10 pm Post subject: Re: CAPITAL vs LABOR |
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| rffrydr wrote: | 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.....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.....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 labor is reasserting itself where it wasn't supposed to exist: China.
....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
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." |
--Nope, the "pinnacle" came at the teet of TARP.
When I originally posted this old marxist warhorse there were chuckles. What do we have today?
"The future of free enterprise was discussed today at the start of the World Economic Forum’s annual meeting. The opening panel featured Carlyle Group LP (CG) co-founder David Rubenstein, Bank of America Corp. Chief Executive Officer Brian Moynihan and Sharan Burrow, general secretary of the International Trade Union Confederation.
Rubenstein said the Chinese-style “state capitalism” model “will prevail” if the U.S. and Western European economies don’t fix their debt problems."
http://www.bloomberg.com/news/2012-01-25/capitalism-seen-in-crisis-by-investors.html
| Code: | The financial industry also comes in for criticism in the quarterly poll. About two-thirds see at least some truth in the argument that bankers’ actions are driven by greed and harm the economy. More than four in five voice some sympathy for the contention that top bankers get large bonuses even when their firms don’t do well. And only 14 percent completely disagree with the statement that banks need to be regulated so that they’re not too big to fail.
“There’s too much power, it’s time to reset,” Burrow said at the Davos panel. “If you’ve got a group that is too big to fail, what it means is that you are the biggest bullies on the planet. The financial sector has lost its moral compass.” |
P.S. A mexican factory worker is now cheaper than Guanzhou china.
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rffrydr
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rffrydr
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| Posted: Sat Oct 29, 2011 8:40 pm Post subject: |
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"Class Warfare"...hangin' in there:
http://www.npr.org/templates/transcript/transcript.php?storyId=140874613
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Marx and Engels wrote in their 1848 "Communist Manifesto": The history of all society up to now is the history of...
And that's where things get complicated. In the original German they wrote Klassenkampfen, which means class struggles. But some of their critics rendered it more belligerently as class warfare. That was the stock label they put on the bearded socialist agitator in political cartoons. And some socialists actually did use the phrase, while others tried to turn it around to describe the capitalist oppression of labor. But warfare more readily suggested the disorderly violence that broke out from below. It conjured up the red flags, cloth caps and barricades of "Les Mis," not the measured operations of the parliaments and law courts on the side of the bourgeoisie.
It was those violent overtones that endeared class warfare to the right and spared it the fate of Marxist jargon like proletariat, class struggle and the masses. Even the left has bailed on those expressions. They're only about a quarter as common in the pages of the "New Left Review" as they were in the 1970s. But class warfare has been on a tear in the language of the right - it's used five times as often in The Wall Street Journal now as it was 40 years ago. In fact, the phrase has actually become more frequent as the marginal tax rates went down. It's sort of a revenant, a specter that haunts the English language whenever appeals for making the rich pay more are heard in the land. |
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rffrydr
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| Posted: Thu Oct 27, 2011 6:43 am Post subject: |
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Of course the first to "jump on board" the Occupy Wall St. was the very Teamsters Union whose buses were commandeered to haul protesters away. It's now become a rallying cry for a new generation, out of college, all loaned up, and nowhere to go.
There right here in this post, scorned when first put up here in '06.
Most forget that Debt, the 8% guaranteed to company bondholders through thick or thin, was the key dogma behind those those evil Mr. Burns'. The cycle continues.
http://www.bloomberg.com/news/2011-10-27/anthropologist-graeber-turns-radical-side-loose-in-zuccotti-park.html
| Quote: | | We are watching the beginnings of the defiant self- assertion of a new generation of Americans, a generation who are looking forward to finishing their education with no jobs, no future, but still saddled with enormous and unforgivable debt,” Graeber wrote in a Sept. 25 editorial published online by the Guardian. “Is it really surprising they would like to have a word with the financial magnates who stole their future?” |
"Forgive us Our Debtors...." This is a very religious country.
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rffrydr
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| Posted: Mon Oct 10, 2011 8:19 am Post subject: |
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Speaking of irony, leave it to the wellspring of all insidious things Union, Italy, to take on the UAW (which has just stepped into the 99% movement).
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rffrydr
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| Posted: Mon Oct 03, 2011 5:47 am Post subject: |
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Bill Gross raises the Capital vs. Labor specter today as protests, laughed off by media last week, spread to isolated points across a half-dozen cities. "We are the 99-percenters. We are too big to fail."
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rffrydr
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| Posted: Sun Aug 21, 2011 7:15 pm Post subject: |
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Oddly, yet appropriately enough, the supermarket is on the front line:
http://www.economist.com/node/18710280
| Quote: | | Increasingly, supermarkets have become proxies for modernity itself, and not in a good way. Eager to soothe anxious, recession-hit voters, as well as those squeezed by globalisation, politicians have turned nostalgic, talking up old traditions as a response to the anomies of 21st-century British life. They pledge to look beyond economic growth and worry more about well-being and the survival of small shops. There is much talk of family life, and of resetting the work-life balance. |
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rffrydr
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| Posted: Sun May 08, 2011 10:04 am Post subject: |
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Republicans now fully committed:
http://www.bloomberg.com/news/2011-05-05/republicans-rally-behind-boeing-over-u-s-labor-board-complaint.html
| Quote: | A group of 19 Republican U.S. senators demanded in a separate letter to Obama the withdrawal of the nominations of Solomon and Craig Becker, nominated as a Democrat to the NLRB and criticized for his ties to labor unions including the AFL- CIO, the largest U.S. labor federation. The senators also criticized the Boeing complaint in a letter yesterday.
“We consider this an attack on millions of workers in 22 right-to-work states, as well as a government-led act of intimidation against American companies,” according to the letter from Senator Jim DeMint, a South Carolina Republican, and 18 colleagues. |
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rffrydr
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| Posted: Mon Apr 11, 2011 11:54 am Post subject: |
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From IKEA of all places!
http://www.latimes.com/business/la-fi-ikea-union-20110410,0,5341610.story
Far from the evil portrayed I see this a living breathing proof there are local economies that can be maintained at $15/hr. $8/hr is only a base rate as the article takes no pains to mention. There's competitive structure right at the bottom. That all but four of the vacation days are pre-determined shows just how far just-in-time is embedded in modern manufacturing. Yet there it stands, untrained manufacturing for inexpensive goods right here in the US of A.
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rffrydr
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| Posted: Sat Feb 19, 2011 11:07 am Post subject: |
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Capital vs. Labor, played out on a much grander stage. The '08 story reemerges with a new twist--scraping the bottom of the barrel:
http://ftalphaville.ft.com/blog/2011/02/17/491041/richard-koo-goes-unconventional-on-china/
There will for the foreseeable future be a mass of rural poor ready to move where the money is. I need to see more demographics to convince me otherwise. However, mercenary cultural (dare I say, buddhist?) tendencies to sell out company loyalty for the next renminbi and the huge "FDI" from coastal east to west over the global depression--all combined with the winnowing of quailified laborers needed for ever higher skill base makes the china short intriguing. Food inflation is the icing on the "cake." Is that not the compound problem of "developing" investment in Brazil, India et. al.? Russia, E.E. stands out here. Back to education--by that I don't just mean memorization.
Still, this nation-body is driven by this very knowledge. That this is "their" time and that they have one generation to make the "great leap." And, maybe as an individual there is "no" savings--but health and savings (they go hand-in-hand) I suspect still runs deep in china. In the city as well as the country. And this should be measured by the "family." If you didn't dare bet against 'em in '08 I'm sure you better your chances now. Chanos is learning that.
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rffrydr
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| Posted: Mon Feb 07, 2011 9:24 am Post subject: |
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Revolution turns on the crony capitalists--and with it, so does the government trying to save its own head.
http://www.nytimes.com/2011/02/07/world/middleeast/07corruption.html?_r=1&hp
| Quote: | ....On paper, the changes transformed an almost entirely state-controlled economic system to a predominantly free-market one. In practice, though, a form of crony capitalism emerged, according to Egyptian and foreign experts. State-controlled banks acted as kingmakers, extending loans to families who supported the government but denying credit to viable businesspeople who lacked the right political pedigree.
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