Are You Even Capitalist Bro?
Choosing What To Do With Value Capture
For many years, the Forgotten Men and Women who build, maintain, and protect America were ignored as elites built empires on their backs. For decades, the threat of globalization and automation threatened their jobs. They spoke up, but not enough people listened to words such as these:
We don’t expect you to understand who we are. But we ask you to hear us, and beyond that to listen to us when we tell you we will not be having our jobs taken away and given to robots. We will not have you take away our right to work and earn a decent living. And lastly, and most importantly, we will not allow you to take away our dignity!
Oh wait, those aren’t the words of a blue-collar worker. That’s wealthy actor Bryan Cranston of Breaking Bad fame. You see, actors and writers are on strike partly to protest the threat of AI to eliminate their jobs. The next economic revolution is going to hit white-collar workers hardest and they finally know it. As the Forgotten Men and Women say, welcome to the party pal.
The upside is that we can finally have a conversation that’s decades in the making. But simply complaining about how elites act is not enough. We need to articulate how our business leaders should act, or more importantly how we would act if we owned all the means of production.
So, how would you act?
You: The Factory Owner
Imagine you own a furniture factory in North Carolina. Something like this:
You make high-quality couches for $400 each and sell them for $1,000. Your factory currently runs at capacity, you pay your people an above-average wage with benefits, and after paying your operating expenses you turn a small profit of $100,000.
You hire a management consultant to see what improvements you can make to the operation. She presents you with two opportunities to make those tables for $200 each. Same materials, same quality, same sales price. Just lower costs.
Option #1: Close your American factory and open one in Vietnam where labor is cheaper.
Option #2: Install automation equipment in your existing factory and lay off half your workers.
Both options initially cost $500,000 but your annual profits multiply to $500,000 as well. One year of profits pays off the whole investment and the rest is yours to keep going forward.
What would you do?
Your answer says a lot about the type of capitalist you are. And what type of capitalist anyone is pretty much determines our future as a country.
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