Friday, November 14, 2014

Commitments

Social contracts made between entities of unequal power are always tricky, and they become even more so when the terms of the agreement don't really have a one-to-one mapping with the interests of one or both parties.

The social contract that "low skilled" workers of the baby boom generation thought that they were entering into seems to have gone something like this: "In return for labor and loyalty to the company's interests, the company will in turn take care of the workforce." And on a greater level, another agreement could be characterized as: "Work hard, play by the rules, and everything will be okay going forward." This arrangement worked well for some time. But as society changed, the companies (or rather, the people running them) found that their interests were no longer being served by that arrangement. There is always a danger, when one makes a commitment, that future circumstances will conspire to render either party unable or unwilling to live up to that commitment. And since the primary interest of any for-profit enterprise is (unsurprisingly) profits, as the opportunity to increase profits by moving jobs outside the company and/or outside the country presented itself, there was pressure from those people who stood to gain the most from increased profitability to take advantage of those opportunities.

A company here or a factory there doesn't make a national crisis. But when the greater society decided wholesale that the old agreement wasn't cutting it anymore, people started running into trouble in large numbers. Lacking any real leverage other than the social contract itself, they had no way of punishing organizations that reneged on the agreed-upon terms. Meanwhile, those above them on the social ladder, the college-educated professional class and knowledge workers, were too busy pressing for more cost cutting (in the name of making it easier for them to purchase their way into the appearance of affluence) or (although quite often, and) sneering unsympathetically at people who they chose to characterize as lazy and/or stupid - in any event, not as worthy as themselves.

The sending of jobs outside of borders can be a boon to a society, so long as the driving force is to shed those jobs that are "wasting" a portion of the workforce that would otherwise be available for "bigger and better" things. But often, the idea is to simply find poorer people to do the work, relying on more abject poverty, a relative difference in standards of living (or both) to lower prices, while at the same time capturing the difference, rather than passing it on to customers.

The Paradox of Thrift can be summed up quite simply - an economy that depends on a certain velocity of money suffers when enough people begin to hoard wealth, and even though individuals help themselves through such hoarding, the reduction or even cessation of income (due to others' hoarding) means that all but the independently wealthy eventually starve.

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