08-29-09: BROKEN PARADIGMS: LABOR & OWNERSHIP

Since the dawn of man Homo sapiens has fought over who owns the farm, who works the farm and who receives the bounty?  The questions were finally resolved through the establishment of cultural customs and laws protecting private property rights, which then gave birth to feudal lords, peasants and sheriffs.  Woe the poor working peasant who poached a feudal rabbit or chicken for his family’s meager Christmas dinner.

With the advent of the industrial revolution the conversation changed in large part to who owns the factory, who works in the factory and who gets paid what?  The questions were pretty much the same;  the playing field became more urban;  and the outcome was pre-determined by the cultural customs and laws already in place.

The solution to this dilemma is to fairly incentivise both sides for success, not punish both sides thereby assuring failure.  More on this later.

The frustrating paradigm, which we have now lived under for hundreds of years birthed capitalism, communism, fascism, labor unions, progressivism, etc. and the mistaken belief among property owners that workers are basically ignorant and lazy.  The corresponding mistaken belief among workers is that property owners are manipulative and greedy.

It is a fact that both sides of the mistaken belief system as presented are some times correct.  It is also a fact that these mistaken beliefs are often not true, which is why I have chosen to refer to them as mis-taken beliefs, as a Metaphysical trap lies buried within the argument.

This philosophical construct of land owner versus peasant or business owner versus worker has unfortunately lead directly to an incorrectly rigid and adversarial mode of them versus us, whereby it is assumed that for one side to flourish the other must necessarily be punished or controlled.  An entirely false zero-sum conclusion.  In spite of more than 2000 years of Buddhist and Christian teaching suggesting we should love and support one another, we typically choose not to see it.

Today’s playing field generally consists of the capitalist owner’s bench attempting to benefit from his or her hard work and risk taking against the worker who has risked nothing and potentially poses some undefined threat to the owner’s well being.  The worker therefore must be effectively controlled and managed so as to keep him productively outputting for the corporation.  Conversely the worker’s bench, rendered largely impotent via the corporation’s larger playing cards attempts to promote a more just working environment and pay scale via whatever means available, but nearly always through some organized and punitive means (power through numbers), toward the owner.  Both sides are irrefutably correct as to the problem, but irrevocably wrong as to the solution.

Today’s playing field is littered with historical corpses heroically sacrificed in the endless battle of greedy owner versus hapless organized worker.  This has tended to be a more or less futile and often bloody struggle between two opponents each having the correct view and the wrong answer.  The late Malachi Martin, a brilliant Jesuit priest and by the way, exorcist, once said that a classic demonic trap is to present the tempted one (my words) with two clear choices, each of which is wrong.  The correct choice is to reject the two obvious answers and slip between them directly to the correct answer.  Many of us are skeptical as to the existence of demons or bad angels, but the wisdom is sound non-the-less.  The argument for social justice on both sides of the age old feudal landowner / peasant farmer conundrum is built on the disastrous foundation of falsely constrained choices.  It is a serious trap with failed escape attempts having lead to the murder and starvation of 40 million by Stalin;  70 million by Mao Se Tung, etc.  Thus far, the progressive cure has been more painful than the capitalist disease, with no honor and little success on either side.  Is it possible to rethink this in a clear way?

Today we are painfully subjected to the endless repetition of progressive union members and believers shouting down the business owner and thuggishly silencing opposition to their voracious appetite for social justice.  Social justice unfortunately has come to mean stealing from one to give to another, a solution both hopeless and immoral.  On the other hand, we have the business owner ceaselessly manipulating laws and governmental regulators so as to coerce the worker into more production at less pay;  also hopelessly immoral.

Under the Rule of Law business owners (property owners) hold all the aces and face cards at the poker table of life.  These face cards provide access to government officials, legislators, lawyers, etc., and to the privaledged abuse of power that ordinary workers do not have.  At the dawn of time the playing field may have been level, but once the game commenced it quickly tilted with money and power on the high side and everybody else on the low side.  We have the Rule of Law, but do we?

If I am a middle class, small business owner and I am taken advantage of by a significantly larger, wealthier corporation in an unfair or deceitful manner, there are laws to protect me.  The laws are real, are quite clear and can protect my interests.  However, the reality is, if I cannot afford my own $495 per hour attorney to protect me;  I in fact have no access to the law.  The big dog wins because the fight can never start.

Progressives, with the most honorable of motives have sought to remedy this imbalance of power by organizing labor along with true believers in order to gain at least a few face cards to play at the table.  Unfortunately the progressive strategy employed has been punitive and unsuccessful.  I suggest we at least consider the following.

Capitalism is living proof that incentives can motivate people in the pursuit of excellence.  Capitalism has the power to raise everyone regardless of talent to a better, healthier standard of living.  World War II is proof that people from varied backgrounds can work together in overcoming tyranny.  A greedy factory owner is a much less threatening tyrant than say, Adolph Hitler.  Working with each other rather than against each other may be hopelessly naïve, but it also provides the solution to an age old problem.

In short, capitalists must be willing to give up an element of control and progressives need to set aside their berets for a moment.  Together they can forge a system under which every worker when hired begins to accumulate an ownership share in the company in addition to salary.  The value of these shares can eventually exceed the value of salary.  The employee can then build an increasing ownership stake in the outcome of his or her labor and the continued success of the company.  With both employer and employee vested together in the outcome, they may disagree as to path, but are heavily encouraged to find a way as they are now team mates, not opposing forces.

As you can see I’m basically talking about a national corporate move toward ESOP (Employee Stock Ownership Plan) Plans or something similar.  In the past, ESOP Plans have been largely focused on “qualifying” for certain tax advantages and only secondarily on the idea of aligning employee interests with those of “shareholders”.  This has been an unfortunate, though understandable focus given the 65,000 pages of wholly ridiculous tax regulation we live with, but it is also a missed opportunity.

I believe it would be most helpful and rewarding for all concerned to consider creating the possibility for all employees in any company to earn ownership shares over time in addition to salary.  Uninvolved third parties are able to purchase ownership shares through the stock exchange.  Certainly those who actually produce the wealth ought have a similar, though simpler benefit.  This is not a perfect solution and does not solve all problems.  For example, does the janitor have the same vote as the CEO?  Is that practical?  Does the nurse have the same vote as the Doctor?   These things still remain to be worked out, but at least they can be worked out with all passengers on the same train headed toward the same destination.  A perfect balance of power will never be achieved as no two persons are identical in skills, talents, intelligence, education, character flaws, etc.  The Constitution of the United States guarantees “equality of opportunity” not “equality of outcome”.  Outcome is an individual choice.

Laws for creating ESOP’s could be streamlined and simplified so a small business of say five employees can afford to set up the program and accounts.  This is prohibitively complicated and expensive today.  Corporations of less than five employees should probably be exempt or at least the requirement could be optional.

Such a program put in place on a national level could reduce or eliminate the need for labor unions, which in itself would pay for the set-up costs.  The unions will make this idea unachievable, but hey, we can try.  Progressives have always looked to government control, regulation and even ownership (Communism) to level the playing field.  Given that government officials and labor union leadership can be every bit as greedy, self-serving and corrupt as corporate owners, this is a foolish road to become trapped on.  We don’t want the fox policing the chickens.  Government is not the solution.  We are the solution.  Government has no real ability to enhance the economy – it can only make it worse by introducing more elements to the table.  If you think it’s difficult to get two people to agree on something, just increase the number to three or fifty and see how that works out for you.

Good people in our country and elsewhere in the world are being damaged by the rigid liberal / conservative paradigm, which has been founded in part by the struggle for social justice, whether economic or otherwise.  Liberals and conservatives alike are capable of being lunatics.  At the least they are both flighty and unpredictable.  As I’ve said in other chronicles, this debate is the futile sound of one hand clapping.  No matter how hard or how fast one hand claps, nothing is heard.  The clap requires both hands with both sides working in unison.  Uncoordinated, alternate hand movements also produce no sound.  We are people, not liberals and conservatives.  Don’t allow a rigid non-yielding paradigm trap you into hatred.  Don’t become the silence of one hand clapping.

The struggle for social justice is fought on many fronts for many reasons.  Making progress in the realm of economic fairness would at least contribute to some lessoning of the battle on other fronts.  People working together are much more powerful than people working apart.  A number two lead pencil is easily broken.  Tie twenty-five number two lead pencils in a bundle and try to break that.  You won’t and neither will I.  Any corporation is strengthened by incentivised employees, not weakened.  The employee is strengthened by working for and owning part of a strong corporation.

We have all become trapped on one side or the other of a false choice leading to hatred, violence and the diminution of human dignity.  This sticky trap has stopped all constructive conversation.  Let’s see if we can, employer and employee together, find a middle path to health, prosperity and human dignity.  Sometimes even the risk taking, talented, highly motivated corporate mogul can learn something from progressive idealism, that may actually enhance the successful pursuit of personal goals and wealth.  Conversely, the progressive can learn from the multi-talented, highly motivated corporate mogul how to approach achieving social justice from a more creative, positively constructed view point.

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