A friend and I were reflecting on the challenges of our current time this week. As I pondered the adverse climate on three fronts—corporate America, the government, and the economy—I also reflected on what may be the most effective response from “We the People” to these camps. How might we, the majority, act now to effect the most positive change in these days of adversity?
First, perhaps at least some explanation of the adversity needs to be presented. After all, doesn’t corporate America promise us prosperity and efficiency loaded with lots of new technologies and toys? Isn’t a strong corporate economy a necessity? And the government continuously elaborates on making our world a better place for each and every citizen. What is wrong there? And the economy? Well, we all want a better economy. Yet the prognosticators preach that it is getting better and better. The stock market is strong, unemployment is decreasing, housing starts are up, and inflation is low. The economy is just grand! Is it?
This is the first post in a series of three that will discuss possible real solutions—things that “We the People” can do to make a real difference. These posts are intended to create hope and action. This is the good news; the encouragement.
But first, the bad…Why is corporate America a problem and what should “We the People” do about it? First, corporate America is necessary. A strong economy depends on the goods and services that corporate America provides. It would be easy to sling mud at the very corporations that provide us with energy, phone service, entertainment, and even food. But I am not going to do that here. To be clear, we need the corporations. What I will do though is point out some failures in our general corporate systems that are creating national challenges for “We the People”.
Corporations have leveraged volumes of scale that have allowed them to provide goods and services at affordable prices. On the surface this has advantages. We can buy more stuff at better relative prices than in times past. But corporations’ super competitive mass production methods have made it increasingly difficult for small, local businesses to make their required margins to keep the doors open. So, the smaller, local businesses have struggled or closed shop in droves. This means that towns all across the US have seen a real economic drain on Main Street. The big corporate chains have replaced the mom and pop shops, and now the money spent on goods and services in these towns does not stay in the local economy. Rather it feeds the often gluttonous corporate headquarters and investors. This creates a centralized economy that reduces the personal liberty of “We the People” and increases the powers of the few.
This has farther reaching impacts than just the loss of local economies and personal liberty. Once the small businesses close, where to people work? For the corporations, of course. Please take a moment to understand what I am about to say. The rules of profit and loss create pressure—even a momentum—to keep costs low and productivity high. This rule of profitability is neither good nor evil, but just a mathematical reality. Now bring in human nature. We like profit. We also like to care for others we know. In a small company where the owner knows all the workers on a personal level, there is a natural accountability. The owner will feel the pressure of the rule of profitability and he or she will also feel the pressure of caring for the workers, his/her friends. This accountability tends toward integrity.
Now the corporate model does not have this natural balance. Rather the executives govern from a distance, often living in another state, and may never meet the majority of the employees. These executives have the same pressure of the rule of profitability with the additional pressure from the board of directors to keep the stock prices high and the investors happy. Matter of fact, it is the primary job of the executives to do just that. But where is the balancing force of relationship with the workers? Hmmm…. The executives don’t know the workers. The workers don’t know the executives. The balance is broken.
Most corporations have kept pay raises below the inflation rate for decades now. As a result, workers who get a small raise each year find they are actually earning less in real dollars than the year before. Inflation, while low, is still the cancer that has allowed the corporations to decrease the compensation of the employees while the revenue from their products has kept pace with the inflation rate. This increases top-level profitability. It also creates a real pinch for “We the People”.
The natural “check and balance” that would keep this dynamic from getting too extreme is that in the USA we have the right to quit our jobs and work for someone else. Companies then have to compete for productive employees, so they have a pressure to keep salaries competitive. But wait, where are all these other companies? They used to be on Main Street. Now these jobs are held by a much less diverse group of corporations who also feel the same pressure to maximize profit. It has become the employer’s market. Great employees have less leverage now to successfully vote with their feet. Matter of fact, they have become expendable.
To make matters worse, the corporate world has another rule of business. It is most profitable to create systems that will allow the least skilled (read least expensive) employees to accomplish the required tasks. Advances in technology and other business systems have made this more possible. So there is an additional pressure that increases profit of a corporation by replacing great, experienced employees with less expensive ones.
These are just a few of the dynamics in our current system of business that reduced liberty and opportunity for “We the People”. But there are real benefits that come from this system, too. These large corporations really do have the resources to achieve great things. Not many mom and pop shops would ever afford the exorbitant research and development costs associated with creating complex products and getting them to market. Corporations have made it possible for amazing and otherwise too expensive products to be available to the common people.
To be clear, before we criticize the corporate world too heavily, we must take time to recognize the many benefits that we enjoy due to these corporations. We do not need to declare battle against corporate America. Such an effort would be rather futile and largely unsuccessful. What’s more, attacking corporate America could easily damage our fragile economy making matters much worse.
So, now for the good news. What can “We the People” do to improve the situation? Well there are a few hundred million of us that can make little choices each day that help to return liberty and opportunity to the people. We can create grass-roots, Main Street economies–not to attack the corporations, but rather to create hundreds of thousands of alternatives. It is a challenge to start a new business in this corporate climate, but that is our necessary mission. And it then follows that these businesses that pump new life blood into communities, that provide local jobs, and invigorate local economies are deserving of our business. Know the owner of the shoe store where you buy your Nikes. Know the farmer who grows your vegetables. Know the rancher that raises the cattle for your steaks.
And the new business owners then must take concrete, effective actions to grow and advance employees; to train and empower them to advance their own careers not because it is the most profitable approach for the short term, but because it is the most profitable long term methodology to foster robust local economies and work forces. This in turn creates more market for the goods and services the new businesses produce and provide. And it rejuvenates a system that maximizes personal opportunity and liberty. This is what “We the People” must do. Bring some business home. Regrow small town America.
And as we do, we need to take another step. Successful businesses need to form consortiums where resources are provided to help others start new businesses. Start-ups need financial, logistical, and educational support. These consortiums can provide for these needs and more. And as more businesses gain a foothold and begin to flourish, the local economy again grows; providing more cash flow and more revenue for all the businesses.
Accountability is restored. Local economies become the energy that empowers “We the People”. Liberty is reclaimed. Opportunity is enlarged. The job market becomes robust. Jobs come home. America is rejuvenated. And all this because “We the People” wake up, take action, and support our own. Remember, our nation is not the government. Our nation is not the corporations. Our nation is not the bankers. Our nation is “We the People”. It is time for us to take personal responsibility and get to work. Are you ready? Roll up your sleeves and prove to the world that you have what it takes to make a difference. Real change.
As a side note, we at 180 Tack, LLC have committed to these principles. As our business grows we are dedicated to creating opportunity for our workers. We are committed to keeping our manufacturing and jobs here in the USA. We create and market products of elegant simplicity that not only help people in the tough times, but provide for really fun times now too. Sustainability. Reliability. Dependability. Fun. That is 180 Tack. Need a natural fuel emergency stove? Go to www.180tack.com. We are doing our part for “We the People”.
My next post will be about challenges we see in government today, and what “We the People” can do to turn this ship around.