E.J. Dionne Jr.: Unfettered Capitalism Can't Bring Prosperity
Decades ago, Walter Reuther, the storied head of the United Auto Workers union, was taken on a tour of an automated factory by a Ford Motor Co. executive.
Somewhat gleefully, the Ford honcho told the legendary union leader:
"You know, not one of these machines pays dues to the UAW."
To which Reuther snapped: "And not one of them buys new Ford cars, either."
The historian William L. O'Neill tells this story in "American High," his fine and appropriately titled book about the 1950s, a time when "autoworkers were the best-paid production line operatives in the world."
It helps explain why General Motors' layoffs of 30,000 workers, announced last week, have become a new litmus test in American politics.
Almost everybody right of center sees the job losses as inevitable, the result of the American auto industry's failure to meet foreign competition and the "excessively" generous wages, health benefits and, especially, retirement programs negotiated by Reuther's union.
The believers in inevitability inevitably cite the economist Joseph Schumpeter to the effect that capitalism "is by nature a form or method of economic change and not only never is, but never can be, stationary." It is capitalism's gift for "creative destruction," Schumpeter argued in the 1940s -- coining a phrase invoked more often these days than, say, "workers of the world unite" -- that guaranteed new consumer goods, new methods of production and new forms of organization.
A different story is told left of center, though it will come as no shock that progressives can't quite agree on a single narrative. The left is united in talking about rising health care costs and the fact that most of our foreign competitors have government-run health insurance systems that take the burden of health care off employers. The iconic number: providing health care for workers and retirees accounts for $1,500 in the cost of each American-made car.
...
For 60 years, New Dealers and social democrats, liberals and progressives turned Schumpeter on his head. They insisted that few would embrace capitalism's innovations if the system's tendency toward creative destruction were not balanced by public innovations to spread the bounty and protect millions from being injured by change. It's a compelling story.
Walter Reuther knew it well. Too bad it isn't told very often anymore.
Somewhat gleefully, the Ford honcho told the legendary union leader:
"You know, not one of these machines pays dues to the UAW."
To which Reuther snapped: "And not one of them buys new Ford cars, either."
The historian William L. O'Neill tells this story in "American High," his fine and appropriately titled book about the 1950s, a time when "autoworkers were the best-paid production line operatives in the world."
It helps explain why General Motors' layoffs of 30,000 workers, announced last week, have become a new litmus test in American politics.
Almost everybody right of center sees the job losses as inevitable, the result of the American auto industry's failure to meet foreign competition and the "excessively" generous wages, health benefits and, especially, retirement programs negotiated by Reuther's union.
The believers in inevitability inevitably cite the economist Joseph Schumpeter to the effect that capitalism "is by nature a form or method of economic change and not only never is, but never can be, stationary." It is capitalism's gift for "creative destruction," Schumpeter argued in the 1940s -- coining a phrase invoked more often these days than, say, "workers of the world unite" -- that guaranteed new consumer goods, new methods of production and new forms of organization.
A different story is told left of center, though it will come as no shock that progressives can't quite agree on a single narrative. The left is united in talking about rising health care costs and the fact that most of our foreign competitors have government-run health insurance systems that take the burden of health care off employers. The iconic number: providing health care for workers and retirees accounts for $1,500 in the cost of each American-made car.
...
For 60 years, New Dealers and social democrats, liberals and progressives turned Schumpeter on his head. They insisted that few would embrace capitalism's innovations if the system's tendency toward creative destruction were not balanced by public innovations to spread the bounty and protect millions from being injured by change. It's a compelling story.
Walter Reuther knew it well. Too bad it isn't told very often anymore.