Economic Serfdom

November 12, 2008 by Bill Kumpe
Filed under News/Op-Ed

Henry Ford America is facing a 1929 style depression and it did not happen simply because the stock market crashed, the grossly inflated real estate market imploded and financial industry fell into the credit market black hole it had created for itself. The signs had been there for a long time. Every American airline of any size was operating in or just out of bankruptcy. American manufacturing jobs were streaming out of the country leaving no blue collar wage base to support the economy. American auto manufacturers were operating at or near bankruptcy before this all happened. And, America’s energy needs and energy policy simply could not be balanced without shipping much of the accumulated wealth of generations to foreign powers.

A few years ago, I taught a Bible study for Christian CEO’s. I used Larry Burkett’s Business by the Book as my textbook. I tried to teach them, among other things, that you have to pay your employees a living wage, not only because the Bible says so, but also because your employees and your fellow businessmen’s employees are the primary market for your own goods and services. If they can’t afford them then you have no market to sell to.

But, I could not disabuse these otherwise very smart executives of some very shortsighted attitudes toward their employees. Blinded by the short term numbers, many simply could not see that the GOP international free trade scheme could not work in the long run because there are other countries in the system that will not play by the rules. They will use slave or near slave labor to create cheap products to sell into your market while protecting their own. And, if you let them, they will even outsource your best service jobs and ship their unemployment problems to you to compete for the few remaining domestic jobs in your country.

Henry Ford was a controversial character. Sometimes on some issues he was just dead wrong. But, he understood the power and magic of the American economy better than any many living or dead to date. When his company was faced with a union problem and hot competition he took an unusual step. In a day when the average wage was less than three dollars per day he raised that of his workers to five. In a day when the average worker worked twelve hours per day he cut his workers workday to eight and ran three shifts around the clock to make up the difference. And, instead of continually raising prices on his product he continually strove to improve quality while lower price. The result was the American economic miracle that gave us the golden age of industrialism.

Henry Ford’s strategy worked because it was Biblically sound. He did not muzzle his ox and he treated his workers with economic respect. The result was that he created his own domestic market for his products and started the nation down a path toward the highest average standard of living on earth.

The American economy is a pyramid. The base of the pyramid is industrial workers. We no longer have that base. America imports its products now instead of making them. So, instead of investing in ourselves and our neighbors, we are supporting the base of other nation’s economies. Until American capital learns that the guy at the bottom of the pyramid is also the foundation of it, we are going to continue to enrich other nations while squandering decades of accumulated national wealth abroad.

The current American economic system is recipe for tyranny. As American jobs continue to be shipped abroad, chasing the lowest wages, the entire market for American and everyone else’s goods shrinks in America. We have been able to finance this imbalance until recently by spending the accumulated wealth of generations. But, that source of funds is now dry and the American lifestyle within one generation will look a lot like that of the nations we have shipped our jobs to. A few people will have become fabulously wealthy and the rest of the population will have become economic serfs.