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Did individual businesses really pay their workers more because they thought it would prevent the country from becoming communist? Do you have evidence for that

by jules 9y ago

Did individual businesses really pay their workers more because they thought it would prevent the country from becoming communist? Do you have evidence for that claim? I find it hard to believe, because even if it is true that this would prevent countries from becoming communist, it is a free-rider situation. It would be rational for any individual business to keep paying low salaries because any individual business policy is unlikely to be the difference between becoming communist and staying capitalist. A more logical avenue of analysis seems to me to consider basic economic principles. Price is determined by supply and demand. Did we see increases in labour supply that were not offset by corresponding increases in demand? Yes: 1. Women's participation in the labour market didn't quite double the supply of labour, but it greatly increased it. 2. Companies offshoring their production to developing nations also greatly increased the supply of labour.

adventured 9y ago
> Did individual businesses really pay their workers more because they thought it would prevent the country from becoming communist? No, that didn't happen. Wages climbed rapidly over a century due to extraordinary productivity gains. Each worker could produce far more real dollar value output and their worth climbed accordingly. The reason Henry Ford could pay his workers $5 per day, was thanks to the very aggressive, spectacular productivity gains that his company's automation efforts delivered. The Ford Motor Company could produce more and more vehicles per worker, drive the price per Model-T down dramatically, and ramp the production scale into the millions, while yielding stellar profits thanks to the output gains and efficiency. Without the productivity gains in question, that wage jump (and it was quite the jump at the time) would have been impossible. Fear of Communism taking over had nothing to do with it. Ford's reasoning for going along with the big pay hike (it wasn't his idea) is public knowledge, you can read his thoughts on the matter, none of it had to do with Communism.
kesselvon 9y ago
Roosevelt's reforms had a very clear undercurrent of 'its either this or a socialist revolution'

by jules 9y ago

adventured 9y ago

> Did individual businesses really pay their workers more because they thought it would prevent the country from becoming communist? No, that didn't happen. Wages climbed rapidly over a century due to extraordinary productivity gains. Each worker could produce far more real dollar value output and their worth climbed accordingly. The reason Henry Ford could pay his workers $5 per day, was thanks to the very aggressive, spectacular productivity gains that his company's automation efforts delivered. The Ford Motor Company could produce more and more vehicles per worker, drive the price per Model-T down dramatically, and ramp the production scale into the millions, while yielding stellar profits thanks to the output gains and efficiency. Without the productivity gains in question, that wage jump (and it was quite the jump at the time) would have been impossible. Fear of Communism taking over had nothing to do with it. Ford's reasoning for going along with the big pay hike (it wasn't his idea) is public knowledge, you can read his thoughts on the matter, none of it had to do with Communism.

kesselvon 9y ago

Roosevelt's reforms had a very clear undercurrent of 'its either this or a socialist revolution'