EMC and Capitalism …

If you’ve seen Michael Moore’s movie, I hope you’ll check out my book, and vice versa … A reader writes …

I am currently reading “Everything Must Change” and was particularly interested in Chapter 23 – Capitalism As God. On page 197, FBI consultant Dr. Robert Hare is quoted as he characterizes corporations and how they approach how and where to produce products. It has disappointed me for years that we have not been hearing more about this subject in the media and in Washington, DC. I was pleased to see the subject being addressed, ever so briefly, in this book.
During the past 20 years our society has gone from having companies with a social conscience to companies with no conscience at all. As we have embraced globalization more and more, we have encouraged corporations to just chase the cheapest labor they can find to compete. I call it the “Wal-mart” mentality, where lower cost is the only thing that matters.

More after the jump …

Before the phenomena of globalization became so integral to our society, companies were encouraged to have a social conscience through regulations such as the minimum wage and through competition that forced everyone to compete for labor by providing benefits. To help balance things on a global basis, we had duties and quotas that helped offset low wages, exchange rate manipulation and lack of benefits in the third world; to help us maintain employment levels within the US. All of this was thrown out the door as the intellectuals convinced everyone that we were being protectionist.
Back in the late 80’s and up until 1998, I ran a highly successful vertical textile and apparel company. We were committed to “Made-in-America” production and died because of it. All of our over 3,000 employees had access to a good health care plan that was company subsidized, a 401K plan with an employee match and they all made more than minimum wage and had great working conditions. We used technology and automation to compete with lower labor costs overseas. When NAFTA came into effect I remember the head of one of our competitors saying to everyone that automation was a waste with the changing environment and cheap labor would rule. He was right and now all of our facilities are closed or being used for other purposes and the company is out of business. All of the competition has also closed their US facilities and moved elsewhere. Some of the remaining companies even moved their headquarters overseas to escape corporate income taxes.
From 2000 up until 2006 I tried to adjust and work with the overseas operations where products are now being produced. It always depressed me how the workers were treated and the depressing lives they have. By concentrating our production in areas with the lowest cost, common denominator, we have built up an out-of-sight, out-of-mind slave labor system where the goods get made and who cares how people get treated. And when you go to these countries where the work is being done, you see a disparity of income where the haves have it all and the workers basically have nothing. That kind of system will ultimately lead to collapse when people finally just have enough and give up hope.
One of the products my former company made was T-shirts, like the ones you see screenprinted with all kinds of personal messages. Ironically, some of the ones that I see regularly are for church groups, boasting of all the good work they are doing in the world. If the wearers of these shirts only knew how they get made and the pain and suffering that so often goes into them, they would probably stop wearing them. And the same goes for any other apparel products you buy these days. I know, because I used to be a part of the industrial machine that makes the clothes we all wear.
Hopefully, sometime soon we will begin to hear more about this subject and we will find a way to bring back companies with a conscience. I know the world would be better for it.

Thanks so much for sharing your story. I’ll bet some readers will be more inspired than ever to follow your example in seeking to form and lead businesses with a social conscience. Perhaps the recent economic meltdown, augmented with stories like yours, will prompt people to reverse some of the harmful economic policies of the last 30 years and begin to imagine capitalism 2.0 …