For most of human history, masses of people have worked with their hands to be productive in order to survive. People around the world, throughout the ages, have labored for their daily sustenance. Laborers, who get their hands dirty and who take raw materials and make something of economic value, or who move or deliver objects from one place to another, have formed the mass and foundation of nearly every society ever known. The Pharaohs devised the construction of the Great Pyramids of Egypt largely as long-running public works project. They recognized the need of society at large for the common man to work.
The chain of command is the basis for the military as well as for commerce. Laborers do the most basic productive work. Managers tell the laborers what to do. Executives tell the managers what to do. Business owners tell the executives what to do. The wages that laborers, managers and executives earn is recycled back into the economy when they purchase goods and services. The economic organizational pyramid has been the framework of probably every successful society. It certainly is the historic framework of the contemporary American socio-economic structure.
That is why the silence and implicit disdain from economists and historians regarding the current rapid devaluation of the American workforce is so very astonishing as well as disturbing. Those American workers who made things with their hands historically have been the bedrock of our economy and of our society. The sometimes cavalier downsizing of thousands of workers by big corporations, in the name of efficiency and profitability, puts society at large in danger.
This country’s economy historically has been based upon the value of the labor of its people, from bottom to top. The 1865 victory of the North over the South in the Civil War recognized human labor as a human right owned by human beings; human beings cannot be owned as commodities by capitalists. Now, labor is being outsourced by American companies to developing countries around the world – as a commodity owned by capitalists.
No country in history has survived when its workers could not earn a living, as in France in 1789, and Russia in 1917. Perhaps the financial crises of 2008 ultimately served to prove to us all that economists and historians, like politicians, have an aversion to telling the general population hard truths that they do not want to hear; and, Americans do not want to hear that their old factory jobs are never coming back; that technology and a global work force lower the cost of labor; that the days of high-wage labor are over; that the days of mass employment are over; and that, in the 21st century, smart, able-bodied, ambitious, people who want to earn a living will have to find ways of making money on their own.
Most people worked on the land before the Industrial Revolution. Then, in the 20th century, large numbers of people left the land and worked in factories for steady wages. In recent years, as American factories closed, the word from the experts was that America was shifting from an industrial economy to a service economy. This is akin to telling the patient that one of his lungs has failed, but he is okay because he still has another lung remaining. He is left to wonder what will happen if his other lung shuts down.
In 19th century England, the Luddites were displaced textile workers who understood the problem to be the machines. So, they smashed the machines. Criminal destruction of property cannot stop the advance of change. However, if technological advances and global competition continue to erode American jobs in the industrial sector and the service sector, then the question becomes how to employ the discarded masses of people who are not going to start-up the next Microsoft, eBay or Google. More likely than not, the answer will come from the local level, not the national level. In any case, the social imperative must be realized: we cannot have masses of ready, willing and able workers left with no source of income for the rest of their lives simply because their jobs became obsolete when their factories became obsolete.
I have not heard much about this from Tom Friedman lately. This is not surprising. He traveled, the world, mostly at his own expense, before he wrote, The Lexus and The Olive Tree and The World Is Flat. He was one of the great proponents of “the global economy,” and the benefits that it would bring: “anybody can make anything anywhere.”
If Friedman and Jeremy Rifkin, (author of The End of Work), were to have a televised conversation, it would be great theater; something akin to the irresistible force meeting the immovable object; theory versus reality, with the reality being that most workers are laborers, not small business entrepreneurs, and they have no training or experience, and, thus, no capacity or desire to start and run a business of any kind on their own making anything anywhere.
There are some people who are smart, or talented, or diligent, or motivated, or gifted, or all combined, who will go out into the world and, with personal and financial support, create something new, i.e., an extraordinary new business. They tend to be privileged, well-educated and well-bred and spring from careful nurturing.
Then, there is the rest of the population: the people who scrape together coins to get to work at manual labor jobs in towns and cities all across the country. They are the mass of laborers who buy most of the bread and butter in this country. They are our economic base. They have rough hands. They have not been nurtured or trained to create the next new tech company. They never have been in a Starbucks. They are getting desperate.
Bad politicians always follow two simple rules for success: 1) tell the people what they want to hear; and, conversely 2) never tell the people what they do not want to hear. These politicians make enormous promises that are impossible for them to keep for an enormous number jobs for and to an enormous number of people. Then, after they are elected, they shift their focus to some shiny object or “The Other Man” for distraction: “Hey, look over there!” It’s The Other Man! He’s the problem!”
A politician tells the voters that he is going to create huge numbers of factory jobs just as soon as he is elected. The voters are adults. They are supposed to think for themselves. However, the politicians of today know that large numbers of voters today want simple answers to complex questions and do not read anything of substance. Above all, do not think for themselves. They want the politician to do their thinking for them. They want remote control government. They just want him to tell them what they want to hear so that they can pretend to be smart and know which button to press. Thus, his name becomes the answer to all of their problems.
However, the voters are also workers. They listen to the politician because he is telling them exactly what they want to hear. The Rainmaker tells the farmers that he has vast experience with rain, and that he can end the drought by making it rain – for a modest fee. Some farmer in a drought cannot ignore the promises of the Rainmaker when the fee is so modest.
So, the voters who hear the promise from the politician will never stop to think that politicians do not establish factories. They do not think about the fact that the lead time from when a business person who wants to produce something first has the idea, to the time when workers show up for work on the factory floor, is usually measured in multiple years, not multiple days.
They do not think about the fact that, in the aggregate, it would take hundreds of companies to create the thousands of factories that would create the millions of jobs that the politician boasted that he could create by himself, because, of course, he knows The Secret to creating jobs that no one else knows. They never think to ask the politician to identify the hundreds of business owners who will build the thousands of factories for the millions of jobs that the politician says that he will create.
Moreover, the worker, (who wants to get paid $25.00 per hour), does not consider that the employer who wants to produce a product can pay competing factory workers $1.25 per hour in Country A, (China), or $0.62 in Country B, (Indonesia), or $0.33 per hour in Country C, (Bangladesh) to do the same work.
The post-war American economy of the 20th century was built upon the reality that America was the industrial powerhouse of the world; and, as result, its workers could command top dollar for their labor. Two or three generations of Americans have benefitted from that paradigm. This is the end of the gravy train.
At some point, the man-behind-the-curtain is exposed and harsh reality sets in. Charlatans are effective because their stock in trade is hope which, unfortunately, they encase in hyperbole, or fantasy, or self-delusion or, ultimately, outright deceit.
When I was schoolboy, everyone referred to China as, “Red China,” or “Communist China.” We learned that it was a dirt-poor country run by a cruel, totalitarian government that banned religion and private property. They certainly had no Ivy League graduates or leaders of Fortune 500 companies running their economy.
Yet, during the last two or three decades, China has, almost miraculously, returned to its ancient past as a global trader; and, has become the fastest-growing industrial power in all of human history. As American industrial cities have declined, Chinese industrial cities have grown and prospered. As American factories crumbled, Chinese factories expanded and new Chines skyscrapers glisten in the clouds. Today, three of the five richest corporations in the world, (2, 3 and 4), are located in China. The United States has a $347 billion trade deficit with China; and, China and Japan each now hold more than $1 trillion in American debt.
While there has been political debate about China manipulating its currency and taking American jobs, there has been little or no explanation by politicians to the American people as to how or why this all happened, especially how it happened so quickly and so thoroughly. (Ted C. Fishman’s book, China, Inc., is worth reading).
What most people do not realize is that, with great speed, China and Japan have changed the world for the long-term. They have reorganized global economic power; and the global redistribution of productivity and financing from America to Asia means the global redistribution of wealth from America to Asia for the next century, or longer.
Unless American leaders make the American people and American companies more productive and competitive in order to turn things around, the next five generations of Americans will have decreasing qualities of life – while those in China will continue to grow. Unless we act, 100 years from now, our great-great-great grandchildren will be looking for hour-to-hour jobs, and spending their paychecks for products made by everyone but other Black people, and wondering why money is so scarce.
These are forces that have, and will continue to have, an impact on the lives of every Black man, woman and child in America; but, there is little or no discussion among Black people. Many Black people think that there is no solution. They think that there is nothing that can be done. They think that global economic forces are too great for us to change. That is not correct.
There is no mystery in numbers, and wealth a numbers game. The numbers indicate that, to a large extent, in order for American workers, including Black American workers, to increase their prosperity, China, and other countries that have trade surpluses with the United States, must purchase products made by small American businesses.
Several years ago, during a talk at Columbia about my book, African American Economic Development: A Plan for Black America, I spontaneously said, “No one is driving the bus!” What I meant was that there is no person or organization that is overseeing the economy of Black folks. The so-called “free enterprise system” never has been completely open to most Black people. (See, The Tulsa Race Riot Of 1921). To a large extent, as the economy continues to shed jobs, and distractions come one after another, progress is measured in negatives.
Joel Kotkin’s book, Tribes, was a very important work that described how the global tribes work to manage their own economic destinies. Most Black people never heard of the term, “economic structure.” The answers for most Black people are, “jobs,” “education” and “the democratic party.” Beyond that is mostly vagueness.
The day of reckoning is approaching, for people of all races. Robots are precise and efficient and are effective for the supply side of the economy because they are productive; but, they are a drain on the demand side the economy because they do not purchase goods and services. Masses of human workers, who are displaced by robots and other automation, want answers. They want to know where to go to get jobs that come with good paychecks. At a certain point, even the most staunch conservative Republicans will support some sort of federal “effort,” not “program,” that will put people to work starting a 9:00 a.m. the next Monday morning; probably extra manual workers hired by existing corporations.
One of the unique characteristics of African Americans is that, unlike most other people in the work, we have little or no experience walking into a store of any kind and being able to choose and purchase products made by Black-owned companies from the shelves. The American Revolution ended in 1781. The Civil War ended in 1865. However, as a result of the harsh and bitter end of Reconstruction in 1877, Black America is largely an economic colony in the country in which we are officially citizens.
I estimated several years ago in my book that Black Americans have a trade deficit of $2 trillion per year with the rest of the world: we buy things from them; they buy almost nothing from us. Inequality is not a mystery: it is an equation. Every penny that every person spends is a commercial vote for someone’s wealth.
Inevitably, beyond “jobs,” the conversation must turn to small-business creation and the issue of local value and market share. Once it starts, it cannot stop. Once local voter-workers demand a fair market share for local goods they will be able to compete with their global competitors.
In City A, voter-workers will demand that a fair share of all of the products sold in all of the stores are to be from local companies. In City B, voter-workers will create public markets as an alternative to local stores that stock products from around the country and around the world. In City C, voter-workers will establish local e-commerce stores to compete at the local level against Amazon, eBay and whatever is next.
Perhaps the next source of economic growth will be Bed-Stuy, not Shanghai. Whatever happens, there must be some solution to value the masses of American workers who are the foundation of the American economy and who need jobs now.
Copyright 2017 Hwesu S. Murray