UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

May 5, 2009

CHRYSLER DEAL: END OF PROTECTIONISM FOR AMERICA'S TOP MANAGEMENT

Dean Baker, Truthout - At the end of the day, the new Chrysler is still likely to be producing most of its cars in the United States. What the new company will be getting from abroad is technology and top management.

This big story was so easily missed because it runs against one of the main myths that our elites have cultivated about the US economy: that the country has a "comparative advantage" in highly skilled labor. In this story, the United States will continue to lose manufacturing and other "less-skilled" jobs as its economy becomes more concentrated in highly skilled sectors.

This story was convenient for our elites because it meant that the decline of manufacturing was a necessary, if sometimes painful, part of a natural economic progression. It also justified the growing inequality in US society that benefited not just Wall Street bankers and CEOs, but also millions of doctors, lawyers, economists, and other highly educated workers. These people took their six-figure salaries as a birthright, even as the pay of less educated workers stagnated or declined. . .

Trade agreements like NAFTA were explicitly designed to remove any barrier that made it difficult to export manufacturing goods to the United States, thereby placing US manufacturing workers directly in competition with their much lower paid counterparts in the developing world. Most of these restrictions had nothing to do with tariffs. Instead the key issues were rules protecting investment in the developing world along with limits on the ability of the US to exclude imports through safety or environmental regulations.

The economists and the media somehow failed to notice that professionals were intentionally sheltered from international competition and instead just trumpeted them as the winners in the global economy. . .

The end result of this protectionism for those at the top is a bloated overpaid sector of top managers, which is what we saw at Chrysler. If we compare wages for assembly-line workers in Europe and the United States, there would not be much difference between the pay of UAW members and their counterparts in Europe. However, there would be a very large difference between the multi-million dollar pay packages of the top executives at the US companies and their European counterparts. The pay gaps persist among the more highly paid engineers and management personnel.

5 Comments:

Anonymous Anonymous said...

Do the smarter people sacrifice anything in order to be born smarter? Did they create themselves and wisely choose to be born with higher IQ? Do the lesser-gifted choose to be lesser-gifted?

Of course not.

Let's get really, really REAL. Here is the crucial thinking that has always been missing:

Adam Bright and Barney Average are born on the same day. God, or Mother Nature (or whatever it is you personally believe created people), does the work of gifting Adam with greater gifts than Barney receives in the birth lottery: higher intellect, better health or abilities, and/or more brawn, for instance.

While Barney received lesser gifts and Adam was better paid by their creator from the get-go, both sons have the same human needs: they must both feed their stomachs or die, they must both drink clean water or die, they must both sleep or die, both require a place (land) to put their feet while they are in human bodies, they must both shelter from heat and cold, get medicine when sick, get education - you complete the list of needs that all humans share in spite of their differing birth lottery gifts.

Now, remembering that ONLY the personal sacrifice of time and energies to working creates any wealth in the first place (ALL human work proceeds from the work Mother Nature or God did for free for us ALL), and remembering that individual sacrifice/contribution to the pool of wealth is finite, is limited, it's beyond obvious that the pool of wealth is also therefore finite. But, when Adam and Barney grow up and get jobs, despite the fact they both sacrifice roughly equally, working average hard for the same number of hours, Barney Average, who drives a bus and is responsible for the lives of all his passengers over the years (he drives safely and no one is killed on his busrides), is forced to take less pay his whole life long so that Adam Bright, who becomes a Wall Street broker-dealer, can be given more pay - the "reason" being that Adam is smarter: he was already better-paid by his creator than Barney was, even though neither of the two had any choice in the matter of who-won-what in the birth lottery. Neither sacrificed anything at all to be born the way they were.

We are all born with differing levels of gifts, but with the same human needs and the same nature-mandated limits (eat and sleep or die) and with the same number of hours in a day and with the same RIGHTS.

You must come to understand CLEARLY, that Adam's overpay has nowhere to come from but from Barney's underpay - again, because the pool of wealth is finite.

It is easy to come up with myriad "reasons" that Adam deserves to have overpay - our cultures and societies are awash in these rationalizations...the whole PLANET, the whole human SPECIES is awash in these rationalizations, BUT...

NO JUSTIFICATION CAN BE GIVEN FOR UNDERPAYING BARNEY to overpay Adam because none EXISTS.

Pay justice = equal pay for equal sacrifice of time and energies to working.

Nothing else is justice...and justice is a virtue ESSENTIAL to happiness, peace, safety.

You'd all call me 100% crazy if I suggested that people rightly deserve to be paid for having received a birthday or Christmas gift.

But just think about it: our current universal economic thought is exactly that crazy - we DO support people being paid for the fact of their having received better gifts in the birth lottery! We humans (the most hilarious species by far) DO think people who are sacrificing no more time and energies than everyone else somehow can deserve far more pay for having received gifts of better intellect etc. from mother nature or God.

This is global insanity, completely illogical, irrational and inexcusable and I challenge every human to bring a single sound, rational argument in defense of paying unequal pays for equal sacrifice.

Brains have always cornered more money for themselves BASED ON NOTHING BUT FANTASTICAL THINKING THAT THE REST OF US HAVE SWALLOWED.

Humans have acquiesced to the biggest farce possible - and overpayunderpay is killing us all and this planet. Overpay is quite literally LEGAL THEFT, and every theft comes with an angry person attached, and the violent struggle for justice is NOT going to disappear - it is ever-escalating at an exponential pace unto extinction in the nuclear age.

May 6, 2009 10:25 AM  
Anonymous Anonymous said...

"So far as I can see," said Edith, "the main business of the people's government was to struggle with the social chaos which resulted from its failure to take hold of the economic system and regulate it on a basis of justice." - from Edward Bellamy's book Equality

"The patience of the oppressed has always been the most inexplicable, as well as probably the most important, fact in all history." - Author Amos Elon from The Pity of it All

"If you do not specify and confront real issues, what you say will surely obscure them. If you do not embody controversy, what you say will be an acceptance of the drift to the coming human hell." - C. Wright Mills from The Causes of World War III

May 6, 2009 10:30 AM  
Anonymous Anonymous said...

We must define pay justice. How can we know how much people should have and should pay unless we have sound, fundamental ideas of pay justice?

James Madison said "The purpose of government is justice". The state built on injustice cannot stand - so to be democratic, for the people to do their job of ruling, to save the state, to be patriotic, to love your country, to love yourself, to pursue happiness (of which pay justice is a very important part), you need to be able to locate pay justice.

At the moment, many are saying: these people should have less, these others should have more. But how much should they have? What are the principles of pay justice? Happiness [everyone's everything], survival of the state, peace, order, satisfaction - all depend on justice. Those are 'pretty important' things, yet we look in vain for thoughtful study of where pay justice is. It should have been the focus of all education, from young age right through. People should have been very sophisticated about pay justice, able to pinpoint it by good principles. Instead, all the debate we hear boils down to: they should have less, no, they shouldn't have less; they should have more, no they shouldn't have more.

Pay justice is the great wallflower, waiting to give us the world average pay per hour, which is approximately US $40 per hour including paying housewives and students. Pay justice waits to give us peace and plenty - and give us our future back.

Pay ranges widely while no one asks how widely it should range. How are people going to be able to say: "This far and no further. This is the line between right and wrong, between fairpay and robbery, between fairpay and overpay-underpay."?

Children should all grow up knowing that overpayunderpay is the cause of the shaking of societies to pieces. People should worry about their society being shaken to pieces. People should know that every empire so far has been shaken to pieces by pay injustice. There is no subject closer to civic responsibility and pursuit of happiness - no subject more worth our care and mental labour - and it is utterly neglected. Vigilance is the price of liberty - but vigilance about what? Very few can answer that question.

"If there were but one person in the world, it is manifest that he could have no more than he could make and save." - Henry George

Proper pay is what a person's work would win them in a state of nature, plus an equal share of the benefits of division of labour. An equal share, since division of labour is a community effort, with equal contribution, so everyone should reap the benefits equally.
Pay justice is no pay for no work, pay only for work (= sacrifice), equal pay for equal work. Pay justice is taking out of the social pool of wealth (= workproducts = goods and services) as much as you put in, as your work puts in. [We pool the workproducts because of division of labour, and trade is ideally the exchange of items of equal workvalue, in order to remix goods separated by division of labour, job specialisation, to get the mix of goods everyone wants and needs.] The variety of goods we take out is ideally of equal workvalue to the workproducts we produced in our job. Anything more or less than this is overpay or underpay, and overpay-underpay is unjust, causing tensions which escalate endlessly as people try to get justice and people tug to and fro, causing violence, war, crime, weaponry growth - which has grown for 3000 years - and brought us to superextreme pay injustice and danger, and corruption, tyranny, slavery, wageslavery, disorder, undemocracy, falling states - all our gigantic problems.

The rich get richer and the poor get poorer means the rich are getting paid more and more per unit of work while the poor are getting less and less for a unit of work.

What things are there, that justify unequal pay per unit of work, unequal pay/hr, unequal pay/yr? ARE there any? Provided society pays students for studying, there are NO reasons for unequal pay per hour. Close scrutiny of the reasons given for unequal pay do not stand up to rational examination.

One common, universally accepted reason given for payment is personal gifts - he's really smart, she's especially talented - but reason says that these gifts are work done by mother nature. It doesn't take any work, any sacrifice, by anyone, to have these gifts, and using them doesn't mean the gifted person is sacrificing any more than a lesser gifted person does who uses the gifts he got.

No one got to choose greater or lesser gifts. No one who has lower intellect or more fragile health or lesser innate abilities chose that for themselves, so it is no part of justice to force the lesser-gifted to give up equal pay in order to give overpay to those who won greater gifts. Rationally, [as distinct from the irrational invalid fallacious argument to the authority of irrational but accepted ideas, in which people put such great reliance] pay for natural gifts is as irrational as payment for receiving Christmas gifts, which has not received the fallacious support of custom.

Personal sacrifice of time and effort spent developing one's gifts is different. Pay for developing gifts (of commercial value) is just, because developing gifts is work, takes sacrifice of time and energies. There is no *reason* anyone can give for payment for natural gifts, and no reason anyone can give for others having to fund this payment, and because the pool of wealth is finite, it is the underpaid who must take less for their sacrifice in order for there to be more to give the better-gifted. Everyone loves being paid for gifts, because they hope to benefit by them, but it hasn't worked out like that and it never will work out like that. 99% are paid less than the world average pay per hour. The downside of funding this payment is, for 99% of people, much greater than the benefit, but few are aware of this - of how they rob themselves by supporting this payment, of how they con themselves out of money by this, of how they open the floodgates of limitless overpayunderpay (and consequent violence and misery) by this support.

Again, and similarly, people support pay for experience - but cold, hard sense says that experience is gained at no extra sacrifice of time and effort beyond that made in doing the paid work that provided the experience. Again, people support it, defend it, although for 99%, the costs of funding this exceed the financial benefit to them. They con themselves out of their full rightful pay by mis-thinking that pay for experience gives them more money, and they thus open the floodgates to unlimited uncontrollable growth of overpay-underpay (and consequent unlimited uncontrollable violence, war, crime, weaponry ever-growing).

People don't want to look at justice because they fear it will mean less money - they never suspect that justice will mean more money and the destruction of violence.

How could stopping myself from getting pay for things like gifts and experience give me *more* money? It doesn't make sense to people - it doesn't make sense to people because they are looking at a tiny part of the picture - themselves only.

Not being paid yourself for non-work things gives you more money because it stops others being paid for these things at your expense. Overpay, pay for nonwork, is funded by work for no pay, underpay, by others. The overpay buys things other people have worked to make. Your participation in this injustice prevents you stopping others benefiting from this leak - the line is crossed, erased, and there are no principles of justice left to limit pay, to prevent unlimited pay/hr, hence we have pay per hour, after 3000 years' growth of inequality, from $10,000,000 to 1cent - an inequality violence misery war crime weaponry tyranny slavery undemocracy unliberty unfraternity corruption brutality torture state-terrorism private-terrorism warmongering cannonfoddering disinformation rights-trampling factor of one billion, and rising - to extinction soon, thanks to E=mc2.

Happy people have no history. We have heaps of history - and history is now accelerating exponentially.

Get the idea of pay justice, and we get a history-free golden age. Keep faith with pay injustice, and we get oblivion. The bombs are global. Global means every house. Culture is based on ideas. Our idea for 3000 years has been wrong - it has produced underpay misery for 99%, overpay misery for 1%, and violence for everyone.

Overpay is necessarily always happiness-negative, because 1. satisfaction waits on desire, overpay is just 3000 pairs of shoes for two feet, 1000 rooms for one body, etc., and 2. erosion of overpay (individual, national and imperial) (by both underpaid and overpaid) is myriad and relentless, so the labour of keeping it is constant and danger-fraught: the sense of justice is indestructible.

The same "logic whoopsie" governs the universal support for private inheritance. The heir has done nothing to deserve that money, done nothing to earn/create that wealth. People see themselves getting money from private inheritance, they don't see themselves funding this gift, impoverishing themselves, and they don't see they are thereby starting the evergrowth of inequality violence misery.

The same logical error governs the universal support of profits above fairpay for work. By definition, the owners have done nothing to earn profits above fairpay for work - others fund that gift. For various reasons, it is not good to interfere directly with this injustice. It can be controlled at the macro level by making everyone equal heirs of large deceased estates. Everyone has done the work that the overfortunes represent and buy, so overfortunes belong to everyone.

And the same logical error (seeing only part of the picture, imagining themselves gaining, not seeing themselves losing by funding the bigger gains for others, not seeing themselves opening the gates to ever-growing inequality violence misery, which gets to everyone, overpaid and underpaid) governs the support of capital gains. People do the work that builds cities or other infrastructure, but only landowners get the added value - and get it in proportion to their fortunes - for no work, for no sacrifice of personal time and effort to working.

We only have to see the reality, we only have to see the real enormous badness of pay injustice, and the real enormous goodness of pay justice, and human culture is changed forever, violence dies forever - [war is not human nature - human nature is unchanging and violence has grown for 3000 years - no correlation, therefore no causality. And so-called religious and racial wars are pay-injustice wars along religious or racial lines; where there are religious or racial differences without pay injustice, there are no wars - again, no correlation, so no causality.)

Culture is ideas. A change of ideas is change of culture. And the ideas are not hard to see.

No force is needed, just education, just epiphany - no evergrowing bureaucracy, but a massive reduction of bureaucracy (lower taxes, more money and freedom for productivity) - no group, just individual realization and tell your friends - no economic upheaval, just a little law with gigantic benefit - no restriction of ambition, just efficient prevention of evergrowth of pay injustice. Pay injustice is the vital justice, because money is the joker good, good for most things, including social power.
Justice causes happiness. We can secure far, far greater happiness for this whole planet, but not by pretending to believe in justice but by knowing the reality: pay injustice is theft, theft is injury, injury ricochets untiringly as atoms. As doormats, people are totally unreliable - every plutocracy has fallen. Where is Spanish Inca gold today? Honey attracts bears. The Golden Rule is ironclad: hurt people and they hurt back. Other-injury is self-injury; ask Hitler, Marie Antoinette, Ceausescu, Nero, Richard III.

Justice is not a cost, it is happiness out of the vast quagmire, at the cost of objective, patient examination of a new expression of an ancient idea, at the cost of ditching idols that have hurt us enormously, that are set to kill us - is the price too high?

May 6, 2009 11:02 AM  
Anonymous Anonymous said...

"To find out the true state of facts, to report them with fidelity, to apply to them strict and fixed principles of justice humanity and law; to inform as far as possible the very conscience of nations, and to call down
the judgment of the world on what is false, or base, or tyrannical,
appear to me to be the first duties of those who write." - Henry Reeve

"The rich have given to the poor a little food, a little drink, a little shelter and few clothes - the poor have given to the rich, palaces and yachts and an almost infinite freedom to indulge their doubtful taste for display; and bonuses and excess profits, under which has been hidden the
excess labour and extravagant misery of the poor." - Gilbert Seldes

"The oppressors do not perceive their monopoly of having more as a
privilege which dehumanises others and themselves." - Paolo Freire

"The modern English oligarchy does not rest on the cruelty of the rich to the poor - it rests on the unfailing kindness of the poor to the rich." -GK Chesterton

May 6, 2009 11:31 AM  
Anonymous Mairead said...

Superb posts. Truly superb.

Mes hommages.

May 6, 2009 2:06 PM  

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