3 ms·
Robert Reich had a piece on NPR's Marketplace the other night [1] that seemed to contribute to this idea: the notion that while some were accepting 9% (rather t
by firebones 15y ago
Robert Reich had a piece on NPR's Marketplace the other night [1] that seemed to contribute to this idea: the notion that while some were accepting 9% (rather than 6%) as the "new normal" in terms of unemployment rate, this was a calamitous development. If you imagine a correlation between unemployment and economic inequality, then at one end of the spectrum, high unemployment and economic inequality leads to anarchy; as you slide down the scale, you pass through revolution, civil unrest, and malaise.
Let's assume that the optimum is farther down the spectrum (somewhere around "sustainability" but not so giddy as to be in "bubble" or "artificially-crafted giddy delusion"). Then what are the forces at play to drive us there? From a political standpoint, it's electability; yet if we're too far into the inequality part of the spectrum, the fixes take more than an election cycle, and therefore require strong political leadership or near dictatorship (think FDR and no term limits as a model; think Japan and its many prime ministers over the last decade and stagnation as the counterexample). That's not promising since it may mean only the Senate, with its six-year terms and only 1/3 of the membership up for re-election has a long enough time-frame to do what's needed.
But what about from a business perspective--what incentives and forces are there today in business to try to close that income gap? Henry Ford allegedly paid well and understood that he needed to create a market for what he made, yet the auto industry today can't close that gap alone. If Apple's prominence in the economy is comparable to Ford's, what hope is there that the jobs they create in China will create a positive feedback loop of income equality? Perhaps with a global perspective it will.
Therefore, I come to the conclusion that the Ford Motor of the 21st century will be a company that is able to further its own market by empowering its customers (and the common, untrained person) to become value creators from an economic standpoint. You see Google and Apple and even eBay nibbling around the edges, but who is going to emerge that harnesses and transmutes that latent economic power?
[1] http://marketplace.publicradio.org/display/web/2011/09/07/pm-the-new-normal-not-so-normal/ http://marketplace.publicradio.org/display/web/2011/09/07/pm...
- WalterBright 15y ago>Henry Ford allegedly paid well and understood that he needed to create a market for what he made, Ford paid well because that was the only way he could attract workers to do the relatively boring assembly line work. The idea of paying people to buy your products is simply not a viable business plan. Ford created the market by making the cars cheap so ordinary folks could afford them.