What's Wrong With American Business Culture And The Economy?

Started by fhdz, July 31, 2013, 01:50:37 PM

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garbon

Quote from: Admiral Yi on July 31, 2013, 03:41:22 PM
Quote from: fhdz on July 31, 2013, 03:24:32 PM
One of his specific goals was to make sure the people who worked on his cars could have enough money to buy themselves a Ford. It's a pretty clear example of increased wages going directly back into the economy - and not only back into the economy, but into his company as well.

Which he achieved in large part by building cheap cars in what had previously been a luxury toy market for the wealthy.  Besides, what modern companies produce products that their employees can't afford?  McMansion builders?  Yacht makers?  Maybe Apple (if you count Foxconn employees as Apple employees) and athletic shoe makers.

I can't afford to purchase a market research study. :(
"I've never been quite sure what the point of a eunuch is, if truth be told. It seems to me they're only men with the useful bits cut off."
I drank because I wanted to drown my sorrows, but now the damned things have learned to swim.

ulmont

Quote from: Admiral Yi on July 31, 2013, 03:41:22 PM
Which he achieved in large part by building cheap cars in what had previously been a luxury toy market for the wealthy.  Besides, what modern companies produce products that their employees can't afford?  McMansion builders?  Yacht makers?  Maybe Apple (if you count Foxconn employees as Apple employees) and athletic shoe makers.

I sure as hell can't afford my employer's legal services.

Savonarola

Quote from: fhdz on July 31, 2013, 03:24:32 PM
One of his specific goals was to make sure the people who worked on his cars could have enough money to buy themselves a Ford. It's a pretty clear example of increased wages going directly back into the economy - and not only back into the economy, but into his company as well.

McDonald's has done the same thing in a sense, their workers are too poor to eat anywhere else.   ;)

Ford was something of an idealist; but he also paid workers more because he wanted a stable (and sober) workforce.  Half the $5 a day was a bonus, workers had to be good Americans (by Henry Ford's definition) in order to get the bonus.  Immigrants had to learn English and wear American clothes.  Women couldn't get the bonus unless they were single and supporting a family.  Men whose wives worked outside the home couldn't get the bonus nor could excessive drinkers or gamblers.
In Italy, for thirty years under the Borgias, they had warfare, terror, murder and bloodshed, but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, they had five hundred years of democracy and peace—and what did that produce? The cuckoo clock

Iormlund

It's not just American business culture.

Here short-termism is endemic as well. For example, IT industry in Spain is dominated by a few big players that can outbid anyone else on big contracts. Salaries and conditions for employees are so bad they are collectively known as cárnicas (literally: meat processing factories).

CountDeMoney

Quote from: Savonarola on July 31, 2013, 03:50:36 PM
Ford was something of an idealist; but he also paid workers more because he wanted a stable (and sober) workforce.  Half the $5 a day was a bonus, workers had to be good Americans (by Henry Ford's definition) in order to get the bonus.  Immigrants had to learn English and wear American clothes.  Women couldn't get the bonus unless they were single and supporting a family.  Men whose wives worked outside the home couldn't get the bonus nor could excessive drinkers or gamblers.

Ford raised the wages for assembly line personnel because it was such repetitive work that he was seeing increasingly substantial turnover.  Increased wages equals increased retention.  Imagine that.

Savonarola

Quote from: CountDeMoney on July 31, 2013, 04:20:52 PM

Ford raised the wages for assembly line personnel because it was such repetitive work that he was seeing increasingly substantial turnover.  Increased wages equals increased retention.  Imagine that.

That's what I had meant by a stable workforce.  Automobile making was no more repetitive than any other sort of factory work, but it did have a learning curve.  A high rate of turnover cost Henry Ford money, which is one of the reasons Ford paid twice the going rate.

It's strange to see Henry Ford held up as an paragon of capitalism (though that is a central tenant of Mein Kampf.)  As I pointed out Ford paid a bonus to the right sort of worker, and paid the wrong sort of worker the going rate.  It was a paternalistic system.
In Italy, for thirty years under the Borgias, they had warfare, terror, murder and bloodshed, but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, they had five hundred years of democracy and peace—and what did that produce? The cuckoo clock

PDH

I have come to believe that the whole world is an enigma, a harmless enigma that is made terrible by our own mad attempt to interpret it as though it had an underlying truth.
-Umberto Eco

-------
"I'm pretty sure my level of depression has nothing to do with how much of a fucking asshole you are."

-CdM

Weijun

Perhaps CEOs receiving a large part of their compensation in the form of stock options and companies rarely paying dividends encourage short-termism.

Admiral Yi

???

Not paying dividends seems the exception, not the rule.

Weijun

Quote from: Admiral Yi on July 31, 2013, 09:53:17 PM
???

Not paying dividends seems the exception, not the rule.
I must be thinking Internet companies (Google, Yahoo, Amazon, etc.).  Guess that has less explanatory power, then.  Stock options do create perverse incentives, though.

DGuller

Quote from: Savonarola on July 31, 2013, 02:32:20 PM
Quote from: MadImmortalMan on July 31, 2013, 02:21:48 PM
Even Henry Ford had to get his peeps some training and practice before they could pump out as many cars per hour as he was shooting for.

Henry Ford had his own vocational school to train his skilled workmen; my Grandfather went to it.  It ran through what would have been normal high school years; and the students were introduced to every individual aspect of machine operation, production and the like and they picked a specialty at the end.  (My Grandfather was a draftsman.)

The reason he stopped doing that was it was cheaper for Packard to hire a Ford graduate than to start their own academy.   :bowler:
That's exactly the problem with any kind of training.  When you have externalities, even if positive, the resulting investment is suboptimal.

DGuller

Quote from: fhdz on July 31, 2013, 03:24:32 PM
Quote from: Admiral Yi on July 31, 2013, 02:41:16 PM
As to Henry Ford, I don't know if his motivation for raising wages to $10/day was altruism/teamwork/stakeholder value (although he does seem to have been kind of a dick as a person, so maybe not), but the upshot was that his workers worked harder than before to hold onto the fantastic wages, resulting in what economists described as an "efficiency wage."

One of his specific goals was to make sure the people who worked on his cars could have enough money to buy themselves a Ford. It's a pretty clear example of increased wages going directly back into the economy - and not only back into the economy, but into his company as well.
I've heard that very often, and it hasn't made any more sense with repetition than it did the first time.  Simply put, common sense tells you that paying customers to buy your product is not a winning strategy, and more complex analysis confirms that common sense conclusion.

viper37

Quote from: Admiral Yi on July 31, 2013, 03:41:22 PM
Besides, what modern companies produce products that their employees can't afford? 
Let's see.  All of luxury products, for sure.  I doubt anyone working at a Mercedes plant or garage could afford their cars.  Well, maybe the mechanics, as they are able to repair themselves these pieces of shit.
Aside that... just about any company will subcontract at some point, so technically, they ain't their employee.  But still... The guys who made my computer parts probably can't afford them, even if they work 7days a week in their country.

I don't do meditation.  I drink alcohol to relax, like normal people.

If Microsoft Excel decided to stop working overnight, the world would practically end.

Zanza

Quote from: Admiral Yi on July 31, 2013, 03:41:22 PM
Which he achieved in large part by building cheap cars in what had previously been a luxury toy market for the wealthy.  Besides, what modern companies produce products that their employees can't afford?  McMansion builders?  Yacht makers?  Maybe Apple (if you count Foxconn employees as Apple employees) and athletic shoe makers.
All luxury goods and services. People working at Neiman Marcus will not shop there. People working at the Waldorf Astoria will not sleep there. Etc.

EDIT: Eh, must have missed viper37's post.

fhdz

Quote from: DGuller on August 01, 2013, 01:12:33 AM
Quote from: fhdz on July 31, 2013, 03:24:32 PM
Quote from: Admiral Yi on July 31, 2013, 02:41:16 PM
As to Henry Ford, I don't know if his motivation for raising wages to $10/day was altruism/teamwork/stakeholder value (although he does seem to have been kind of a dick as a person, so maybe not), but the upshot was that his workers worked harder than before to hold onto the fantastic wages, resulting in what economists described as an "efficiency wage."

One of his specific goals was to make sure the people who worked on his cars could have enough money to buy themselves a Ford. It's a pretty clear example of increased wages going directly back into the economy - and not only back into the economy, but into his company as well.
I've heard that very often, and it hasn't made any more sense with repetition than it did the first time.  Simply put, common sense tells you that paying customers to buy your product is not a winning strategy, and more complex analysis confirms that common sense conclusion.

That's clearly why Henry Ford was such a huge failure, I guess.

God, you're an intolerable idiot. :D
and the horse you rode in on