I’ve been away for a while, thoughts about innovation still rattle around my head. This post won’t quite get there. I was watching Seth Godin on Youtube once again. Have you stopped to check any of his videos? Do it now. Just leave this page and come back. Godin is that insightful. Recently, I notice something he said that I have had to sit through a thousand times if I’ve had to sit through it once. It is forever being said that capitalism depends on cheaper labor and faster machines. More vehement critics of the only system omit the machine part and just repeat incessantly the part about labor.
This seems true to me. I’ve pondered it for years. Do we really live in a system doomed to explode with those of us workers racing to the bottom and ruled by a few powerful overlords of industry?
In one talk, Godin uses the factory as a symbol of the stage in the economy which could only be changed by huge amounts of capital and an almost unseemly ability to organize complexity. Henry Ford is the symbol of this era. Godin fails to mention that Ford started out with nothing, but that wasn’t the point of Godin’s talk. He says that this revolution required cheaper and cheaper labor and faster and faster machines to sustain itself. Isn’t this true? Isn’t this why we outsource? Wouldn’t your boss hire someone cheaper if he/she could? Wouldn’t he/she replace you with a machine if they could?
This really is worth watching. I love it except for that one insinuation: http://www.ted.com/talks/seth_godin_on_the_tribes_we_lead.html
This comparison is comparing apples to oranges. Factories do not keep producing the same thing. We don’t need ever cheaper labor on a general basis. We pay premium prices for labor that produces. This statement is not true all things being equal. If everyone just kept making the same thing at the same pace, we could keep wages the same. This is not what happens, however. Why would we expect to do that? Is there anything you have that doesn’t obey the law of diminishing returns? Don’t answer that.
If I have one already, the second isn’t worth the same amount to me. Why is it capitalism’s fault that I want to pay less for that second thing?
What Godin and others are deeming bad, is actually a good thing. We should be bragging about this concept rather than using it to level criticism at the system we all owe our affluence to. We can reallocate resources which one can’t do so easily in an economy dictated from above. The ones we want to help need relative buying power. How can they get that? By getting paid more to produce the same thing? This implies that someone else trade less of what they are making for that old product someone else just keeps churning out. This is way too complex for any set of bureaucrats to manage. We need people to learn new skills and to keep working hard. What we need less of said bureaucrats having expensive meals in $12k dresses with socialist French presidents. What was traded for that $12k dress? Probably not a lot of old widgets….then again, maybe a very lot of them that she did not produce.