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Opinion Opinion

Posted on Wed, Nov. 12, 2003 story:PUB_DESC
From country with a heart to business without a soul
Economy now benefits corporate investors at the expense of workers

Special to The Observer

American capitalism was on a roll in 1962 when I started my management-consulting career. Our country had overcome a major depression, won and paid for a world war, created outstanding colleges and universities, financed advanced educations for millions of GIs, and built a huge number of effective corporations.

People remembered the wretched excesses of the wealthy and powerful of earlier times and, through enlightened politicians and legislation, created an economic system that was fundamentally fair to both investors and workers. Not only did investors become wealthier and more numerous, but a typical working-class American -- working only 40 hours a week -- could support a family of four.

Corporations were beginning to have a sense of moral responsibility. Progressive managers believed that loyalty meant something, and that it was earned and owed, by both employee and owner. Executives all across the country shifted their management strategy away from brute force, threats and intimidation, toward improving the quality of work life.

Since they felt they had a stake in the business, millions of workers put their best efforts into quality circles, productivity improvement teams and special task forces to help their organizations become more efficient and profitable. When they expressed concern that their greater efficiency might lead to headcount reduction, they were promised that, no, that wouldn't happen.

Management consultants like me, business owners and high-level executives explained that as productivity and profits went up, as technology improved and as the economy grew, everyone would benefit. After all, that had been the trend during the 1940s, '50s and into the '60s. We had become a modern, enlightened country. Honest work deserved to be fairly compensated.

Economists of the '60s agreed. They accurately predicted the explosion in productivity that we are seeing today, and mistakenly theorized that by the year 2000, workers would have a four-day, 32-hour work week, with more vacation time, better medical care and educational assistance.

Then the 1980s arrived with a vengeance. Apologists for the wealthy and powerful sold a new set of values to the voting public that allowed pro-business, anti-worker politicians to get elected. They, in turn, changed our economy from one that benefited both investors and workers, to one that now benefits investors at the expense of workers.

Once the balance of power shifted totally in their own direction, the moral values of politicians, business owners, investors and high level executives mysteriously changed -- back to the way it was pre-1930, when fairness and justice had no place in business decisions.

There's a corollary to Lord Acton's axiom about power: Greed erodes moral values, and insatiable greed destroys them totally.

The revered guru of modern corporate values, Milton Friedman, posed and answered his famous question: "So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer is, no they do not."

This is probably the most frequently quoted justification for greed that today's corporate executives cite. They not only feel no responsibility for how their actions and decisions affect average Americans or their local communities -- they sanctimoniously claim a moral superiority for holding such selfish values.

Since greed has now been proclaimed a virtue, investors can confiscate the wealth that workers, professionals and low-level managers have produced over the decades and invest it outside our country -- purely to benefit themselves, and with no regard for those who originally produced the wealth.

Workers have the same status as machinery and are steadily losing whatever human rights they once had. It's a ruthlessly one-sided arrangement. No matter how much workers improve equipment or work procedures, they don't share in the benefits.

It gets worse. As a work group becomes more effective, it increases the likelihood that some of their members will be fired, and those who remain will have to work harder than they did before, with incomes that don't keep pace with inflation. Workers are told that "competition demands it" -- despite record corporate profits and skyrocketing incomes for executives and investors. Of course, executives and stockholders exempt themselves from participating in the cost-cutting competition and get fabulously rich in the process.

Although we can't legislate morality, we can legally require behaviors that voters consider moral. We also can destroy the legislation that protects those moral values, and that is exactly what anti-labor politicians, both Republicans and conservative Democrats, have been doing for the past 30 years.

Chuck Kelly is a retired management consultant living in Tega Cay, S.C., and author of "The Destructive Achiever; Power and Ethics in the American Corporation" and "Class War in America." Write him at
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