Sometimes here in the Forum I see a comment like this one that is deeply embedded in a recent thread ostensibly discussing something other than the merits of capitalism: “Capitalism’s best friend is a secure, healthy and well educated workforce.”
There are many problems with this statement, although to be fair it captures a sentiment most of us can agree with. After all, a secure, healthy and well educated workforce would be the “best friend” of any economy.
For a capitalist economy, however, such a workforce is just one of several types of capital. Other types of capital include land, plant-and-equipment, technology and money/financing, to name a few broad categories.
Capitalism’s real best friend is capital. Which brings us back to the sentimental notion I am highlighting. Capitalists certainly acquire and improve land; they certainly acquire and improve plant-and-equipment; they certainly acquire and improve technology; and they certainly acquire and improve money/financing.
Why should anyone assume that capitalists don’t acquire and improve workforces?
I get it that the narrow interest of one single businessman might only improve the security, health and education of a hamburger flipper in terms of flipping hamburgers, but I’d argue that that’s enough. It is probably more than enough.
14 thoughts on “Who/What is Capitalism’s “Best Friend”?”
“Why should anyone assume that capitalists don’t acquire and improve workforces?”
They acquire, but not necessarily improve workforces. Paying a living wage to the people who put all of that capital (resources) to use would be a good start. Also, “home growing” their future managers is something that does happen, but maybe not enough.
Ignoring the one resource (or piece of capital) only provides for the C-suite denizens and the stockholders. The workers who do the LABOR need to be invested in as well.
RE: “The workers who do the LABOR need to be invested in as well.”
Why? And how much?
If you do not invest in Labor it is akin to not investing in any other resource to grow and improve your business. When you lose labor to other, better paying positions, your business can remain static.
Why not invest in keeping and professionally growing your labor force in the same way you would purchase land and material to grow?
AS far as how much. It is hard to say. But anything that keeps pace with the cost of living in a certain location would be a good start.
I get so tired of hearing this “living wage” nonsense that lefties love to use as some sort of gauge of labor value. I bet you can’t even clearly describe what a “living wage” is nor what anyone else thinks a “living wage” should pay for. Johnny next door just wants his phone and daily Uber eats paid for while Suzy and Mark across town will settle for nothing less than a Porche, 5000 sqft house and dinner out every day by some “living wage”. It’s an impossible number to nail down and certainly would never represent the actual value of a person’s labor. That’s why lefties completely fail in economics and rely on socialism to steal from producers to pay for lazy non-producers who will vote themselves free money.
Another hate-filled rant from our most notorious bigot.
Don’t you ever tire of saying really stupid stuff? Please point out anything hateful or bigoted that you always accuse others of. It’s the first ignorant go to words muttered abt anything not to your liking. Sad really…
Do you think that capitalism does as well in a nation of poor, sickly and illiterate people?
Over time, probably, if the companies or the government either raise the quality of the labor pool or import workers. Or just outsource the work or even moving to another nation.
Either way, the importance of a quality labor pool will mean investments in education, healthcare and some safety nets to avoid starvation or homelessness in recessions and depressions.
Stability in a nation is an attractive feature for capitalists. Constant civil unrest, corruption, lax Rule of Law and even poor executive safety are not insignificant problems. Oligarchies solve those issues by force. Democracies by elections and efforts to fund quality of life issues.
The question then becomes, how long can a dictatorship last if most of the population has little to lose by a regime change. Invariably, those changes are ugly and all to often end up as another dictatorship loosely based on communism or state socialism.
This not a threat. Not even a warning. Just a fact of life in so many countries. Venezuela, the fav whipping boy of the right is a perfect example. Chavez didn’t takeover because everyone was happy and well fed. Rather, the plight of the majority was terrible as oligarchs relied more and more on government force to maintain a very uneven status quo that was incredibly corrupt.
Most of Central America has a similar tale.
Any economic system has to work for both the owners and the workers. Workers are not just labor, they are also buyers. Not only that, but in a free market, those buyers can also become owners that hire labor. That makes them as integral to a successful economy as anything else. After dust settles, economics is simply the study of the human construct called exchange of goods and services.
Let capitalists be capitalists…within certain rules like labor safety, environmental considerations, tragedy of the commons mitigation, taxes to pay for infrastructure that also includes education, healthcare and safety nets, even retirements. That is, the costs of doing business in a stable, free society.
A few decades ago, companies invested in China. Labor was cheap, oligarchs compliant and unrest was impossible.
Now, some are relocating because the labor advantage is overridden by corruption, even arrests, and shipping becomes a factor.
I think all people, janitors to CEO’s, prefer a peaceful, predictable and Rule of Law environment. That is the point in my view.
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RE: “Do you think that capitalism does as well in a nation of poor, sickly and illiterate people?”
That’s a little like asking if capitalism does as well with less capital.
RE: “Let capitalists be capitalists…within certain rules like labor safety, environmental considerations, tragedy of the commons mitigation, taxes to pay for infrastructure that also includes education, healthcare and safety nets, even retirements. That is, the costs of doing business in a stable, free society.”
In your words I hear someone saying, “Let capitalists be capitalists, as long as I get to control them. In particular, let me add to their costs as I see fit.”
I’d prefer to hear some recognition of the point of my post: that capitalists prosper by managing well all the different forms of capital they employ.
“In your words I hear someone saying…”
Your hearing is suspect.
“Capitalists prosper by managing well…” That is fine. Just don’t dump your sewage in our rivers because it is more profitable.
Capitalists are fine. And the smart ones know how to work within the rules that Americans have decided are needed for worker safety, training, health in addition to environmental concerns, fair trade, etc.
Labor and management have had, and still do have in many instances. a very contentious relationship for over a century.
Not necessary in my view. After all, workers and investors have the same goals: keep a company solvent, relevant and prosperous. Investors for the ROI and workers for the paycheck. This makes labor different from capital goods and raw materials. A pile of iron ore doesn’t care if it is used now, last week, next year or never. Only in the context of labor to transform it into saleable goods and investors to pay the labor does the iron gain a profit margin.
Which is why I puzzle at the idea that concern for labor and its health, education and welfare is considered a threat.
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I get your lecture, but you mistake politics for economics.
From an economics point of view it is illogical to assume that labor (human capital) is different from other types of capital. There once was a classical economist (Marx) who theorized that labor was different from other types of capital, but his theories were proved wrong in every way a long time ago.
Concern for “labor and its health, education and welfare” is not a threat. It is, however, a political, not an economic issue. It was to make this point that I created this thread.
Capitalism doesn’t need friends, it needs to be left alone.
The role of government in a truly capitalist economy is to exclude force and fraud(including external costs) and otherwise to let people transact among themselves. We have never experienced that in our lifetimes. As soon as government escapes those limits, cronyism and the tyranny of the majority poison the free and open trade that give capitalism its power.
Currently, we have a labor shortage, and it has made minimum wage laws moot.
Were capitalism to be given its head, there would always be a labor shortage and the disparity between executive and line labor would be greatly reduced. It is ONLY because we have failed to trust in capitalism that the shortcomings attributed to it prevail most of the time.
Of our $21Trillion dollar GDP. government at all levels, including transfer payments, consumes $10.7 trillion. Imagine the boost to the economy and investment if that were cut in half. There is nothing government does that would equal that boost to the general prosperity.
RE: “It is ONLY because we have failed to trust in capitalism that the shortcomings attributed to it prevail most of the time.”
That’s fair. I would say, too, that critics of capitalism often expect too much from it, then disapprove of capitalism for failing to deliver what they wanted.
Consider the quote I based this thread on: “Capitalism’s best friend is a secure, healthy and well educated workforce.”
Well, sure, but if the expectation is that capitalism should deliver those benefits, and it doesn’t (at least to the satisfaction of the critic), does that mean there is something wrong with capitalism?
No, it doesn’t. Obviously.
“Well, sure, but if the expectation is that capitalism should deliver those benefits, and it doesn’t (at least to the satisfaction of the critic), does that mean there is something wrong with capitalism?”
Capitalism won’t create those benefits, the nation that allows businesses to thrive should.
List all the “truly” capitalist countries and then let’s see how they fared.
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