Tuesday, March 27, 2012

Like pre-Civil War slaves, workers' value increasing

Today's One Percent views workers much the same way as Confederate planters viewed their slaves -- as assets from which to extract as much profit as possible. So argues writer Mark Ames. He calls it "The 1% Doctrine for the 99%."

Here's Ames on the value of slaves, from Consortiumnews.com:
This graph tells the real story behind the South’s secession: the value of the South’s “slave stock”—the property of the ruling class — soared as secession approached, reaching an almost 90-degree angle in those final years before Harper’s Ferry. The South’s ruling class seceded to protect their riches, period:...
Like the worst wars and the worst of history’s villains, the Confederacy’s one percenters seceded and fought in order to continue profiting from their most valuable investment properties — their human slave stock...
As they showed, slavery produced huge profits for southerners who invested in slave capital — to the detriment of all other portfolio investments, as the value of slaves soared in the mid-19th century. By that time, by far the largest cotton-growing states’ wealth was in slave stock, not in real estate or other investments.
Ames concludes the Confederacy's one percenters aren't all that different from today's version. The graph, he writes,
...suggests darker things to come as we try to free ourselves from their vision of civilization, and our place in it...
He illustrates that dark vision by quoting a report by the management consulting firm McKinsey & Co.
...the report argues that the best performing firms in our increasingly financialized era are those companies that have learned to squeeze ever-larger profits out of each employee...
The McKinsey report looked at the world’s 30 largest companies between 1995 and 2005, and found that their return on human capital more than doubled, from an average of $35,000 profit per employee to $83,000, leading to this rather frank and nauseating conclusion:
“If a company’s capital intensity doesn’t increase, profit per employee is a pretty good proxy for the return on intangibles. The hallmark of financial performance in today’s digital age is an expanded ability to earn ‘rents’ from intangibles. Profit per employee is one measure of those rents. If a company boosts its profit per employee without increasing its capital intensity, management will increase its rents.”
(Wikipedia offers an explanation of what "economic rents" are: "excess returns" above "normal levels" that take place in competitive markets.)

Ames concludes:
Extracting rent from “employees” as a business strategy: This is supposed to be the language of feudalism, not modern advanced capitalism — and yet this is the cutting edge in 21st century capitalist thinking, unashamed and unvarnished.
And he doesn't even get into dead peasant insurance.