Monday, March 4, 2013

Capitalism Model - A Crock

My old mate Loti used to regularly tell me the politics is a dirty game and as it turns out, his work is somewhat political, but not in the sense of parliament - much in life has an element of politics.
Myself, I'm not so interested in politics but I believe in good fiscal management and sensible policies giving the majority a fair go. Maybe that sounds air-fairy and a bit socialistic but we are after all a society.

The drivers in the world economy at present are China, USA, Great Britain, Europe (Germany) and increasingly, India, Indonesia as well as Japan.
Little old New Zealand is stifled under a MMP system  that in theory should provide balance but in fact is like driving a Model A on the Auckland motorway.
And we have this thing called a 'global economy' where it seems economic sense to transport raw materials to China, have goods manufactured there, and then transport them back here to be sold.
It is also thought good economic sense to for companies here to have call centers in Manila to solve problems encountered in this country.

I have long espoused the belief that there are too many people carrying out 'unproductive jobs' but are earning huge money. There is disparity.
To go back to my old nursery industry: There is a limit to the number of trees one person can plant in a day - physically - and there is a limit to the price customers are willing to pay for a tree. So in fact the customer dictates the earning capacity of the nursery worker.

Now, take the past CEO of Telecom. He was being paid 7 million pa and the question I have is, 'What was his daily production?'
So called corporates [or their boards] seem to think that 'if you pay peanuts, you hire monkeys'. That is not so at all and there is plenty of evidence that expensive CEO's do not always deliver, and then the corporation has to pay a fortune to get rid of them. And of course there are the bonuses.

If you look at a case that I know of: A man with a family business of market gardening - producing food. He had to sell up because his business became unviable as - because of the global economy - those same vegetables could be imported at a lower cost of production that he could deliver.
Oh that's very good for the consumer! Yes but what about the man and his family and the care of them on the taxpayer - oh yes, that's the consumer!

So, back to the high-earners of the world. How come people in the entertainment industry are so rich? By entertainment, I mean all, from sports stars to movie stars to music artists.
How come some of these 'reality stars' end up having so much influence and become rich, simply by displaying themselves on the television?
Do they produce food, do they build roads, carry out water project or carry out sanitation work?
So what makes them worth so much money?
Well I can't answer that - the population seems to have a thirst for this sort of thing and of course the advertisers pay for them to display/recommend their product.
Just have a look at a TV series called 'Cribs' where you are shown around celeb's houses. Clearly most have more money than they know what to do with it.
I guess as long a folk want to gawk, these people will be too highly paid.

I really do not believe that politicians understand the importance of jobs.
During the Labour Party's governance that saw the corporatisation of government departments in the period around 1987, there was a mass loss of jobs, especially manual jobs. A government would call those jobs, 'unskilled' and that is the first error they made.
But it is arguable that the economy was in such a bad state that drastic measures had to be taken.
It is the government's job to manage the economy, so if the economy was failing, who's fault was that? Then who was it that lost their job?
But was the economy in such a bad state? Or was the corporatisation a theory in a government by individuals - a personal agenda?
Anyway, I wrote to my Member of Parliament pointing out that they should check their sums because those people employed contributed to society and the government was in fact changing the basic fabric of society.
Pride would disappear, more police would be needed because of high unemployment and disillusion within effected groups. I pointed out that the jobs returned 25 -30% back in tax and another 10% (then) in gst. Around jobs there is a required infrastructure - schools, shops and the like.
The lack of jobs in the rural areas would cause movement to the large centers creating problems there.
Unhappily, I was right.

I was gobsmacked when I saw a documentary about a car manufacturing plant in India. They were making these dinky, small cars mainly for local sale - huge numbers of them.
The factory was totally automated! In a country with a huge population and a low wage economy, they automate a car factory? Financially the project will be profitable but where is the social, human responsibility?

So the global economy and the capitalistic model we are currently in has sent jobs off shore and tends to carry out policies that are acceptable to 'bean counters' without looking after the welfare of  citizens.
In New Zealand, we have this thing called a social welfare system. This system was designed to 'help the people who fall through the cracks'. All well and good but there is a lot more to well-being than just enough money to live on! For certain I don't really know what goes on and some rip the system off, and others have to fight for their rights.

Modernity (now there's a word) has resulted in many manual jobs being made redundant by technology. And it is difficult to find people to do manual work. But I have done my share of hard physical work and there is a satisfaction to be gained through achievement. There is pride in your work - if you are happy with your employer - the second thing I mentioned in my letter to my MP. Pride in what you do is a major motivator and sadly it is lacking in many areas of New Zealand today.

They called the 1987 model 'Rogernomics'  and his theory was pretty much that of 'trickle down' - where the wealthy are healthy because their expenditure generates jobs and the poor therefore prosper. Clearly the theory has failed - it was nuts to start with - the wealthy (other than a few philanthropic individuals) tend to look after themselves and nothing much trickles down.

The social structure was changed by Rogernomics but especially in the job market. Today the 'work ethic' is lacking and the more manual jobs are filled by temporary workers from overseas.
You will find a work ethic among builders, plumbers, mechanics, electrician - that is where there are apprenticeships. Why? Mentoring. Before the wholesale dumping of government jobs, the older guys mentored the younger guys, kept them in order and taught the skills. All that was lost.

And the theory that privatization made a business model did not quite turn out to be correct. The rail service had to be bought back by the government!
And look at Solid Energy - the management looked after themselves financially, with bonuses, and in comfortable office space so the workers have been put off and the company owes millions.

We can't turn back the clock and 'things will never be as they were'. But have any lessons been learned? I have no answers but the only accountability politicians have is through the ballot box - is that enough?

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