Saturday, March 20, 2010

The Days of Henry Ford and Tom Edison Are Long Gone

Last week, Lehman Brothers CEO, Dick Fuld, was in the news again when an investigative commission released its report on why Lehman Brothers went bankrupt. To nobody’s surprise, the investigators concluded that Lehman Brothers, under Fuld’s stewardship, went down in flames simply because Fuld and his company richly deserved to fail for their fraudulent business practices. Fuld may have been the poster boy for the 2008 meltdown, but the seeds of that fiasco go back more than twenty years.

The real story isn’t about Dick Fuld, but about the fact that America tolerates and nourishes a veritable galaxy of creatures just like him, men like Jeff Skilling and Ken Ley of Enron, and Roger Smith and Rick Wagoner of General Motors, and Hank Mckinnell of Pfizer. The list could go on and on, for there’s no shortage of men like these who took a highly successful company and drove it into the ground just for personal wealth and lazy unimaginative expediency.

Our problem in America is partly that our quaint and na├»ve love affair with Capitalism is based in no small way on our nostalgic admiration for industrialists like Henry Ford and Thomas Edison and Harvey Firestone and Walter Chrysler— primarily entrepreneurs, and then subsequently tycoons who headed successful business operations that produced and sold products that they, themselves, had invented or developed. That respected American entrepreneurial tradition continues to this day with successful businessmen like Bill Gates and Steven Jobs and Warren Buffet. Admiration for all of these men is justifiable.

But the essence of the greater problem is that most Capitalism-loving Americans can’t tell you the difference between a Bill Gates and a Dick Fuld, and it would be difficult to overstate the significance of that. The difference is that corporate honchos like Fuld and the vast majority of other corporate CEOS are definitely NOT entrepreneurs. On the best day of their lives, these men could never start a legitimate business from scratch and make it successful any more than your average17th Century pirate could design and build his own sailing ship. These modern pirates are top-feeding functionaries who rise to positions of incredible wealth and power with their internal corporate political skill, and usually nothing more.

Why is this suddenly more important than it’s been in the past? Because the true unemployment rate in the richest nation on earth is now closer to 20% than to the reported 10%, and most of the people without jobs will never go back to high-paying work because the jobs— first in manufacturing, and then accounting, and then customer service, and then research and development— all were exported out of the country by the honchos to make the bottom line look good in the shortest possible time without regard to long term consequences. Of course, there are apologists aplenty in places like the U.S. Commerce Department who tell us that the exportation of jobs was just a natural consequence of globalization, but globalization didn’t come with a rule book that mandated the export of jobs just to save labor costs. Those decisions were left up to the honchos running the companies, and their own self-serving interpretation of Capitalistic ethics gave them their roadmap to follow. What we have now, massive unemployment and financial misery at the bottom, and exploitation at the top for multi-million-dollar bonus checks, all of this is simply unrestricted free-market Capitalism at work, functioning just the way it was designed to function. I’ve written it before and I’ll write it again, Capitalism only works in a positive way within an ethical framework. The days of Henry Ford and Tom Edison are long gone.

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