And you are right. The state of the world is somewhat messy.
You worry that the $40 goes to higher profits. The way to cut profits is to free the market. For that reason the corporate monopolies are eager to keep the tariffs, quotas, and dumping regulations. The corporations do not want competition because it cuts their profits.
The funny thing is that the so-called radicals - the street walkers of Seattle - were supporting corporate policy as they opposed "free trade".
I don't even think that the corporates are responsible for the criminal economic behavior in third world countries. There, the problem is corrupt politicians.
Come to think of it, that may be the trouble everywhere.
Harry
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Ed wrote:
Harry, the production of the particular pair of shoes ends when they are in the hands of the consumer, but the production of all shoes produced by Hokey Shoes continues on and on. I don't know who gets the other $40 dollars. Some of it would go into taxes and some would go into taxes, some into normal wages and salaries and some into the inflated salaries and benefits of the CEO and his senior staff.
I wrote the Hokey Shoe piece after looking up some material on "holonic enterprises" on the web. It showed clusters of people here, clusters there, circles identified as resources in several places, arrows going thing way and that, information moving around like crazy, "mediators" ensuring that the right connections were being made and that the information moved to the right places. After looking at it for a bit, I thought, hey, wait a minute, it looks new and shiny, but isn't still all about making the highest profit at the lowest possible cost! I then remembered all of the stuff I'd been reading about jobs being moved offshore where labour is very cheap and the miserable conditions under which that very cheap labour works. I'm afraid that I got a little angry at the thought of professorlets and miniprofessors devising ways of making exploitation even more efficient and profitable.
And, yes, you are right. The cheap labour in India would not likely be in a different position if the shoe factory was not there. But I think that says something about the state of the world, doesn't it?
Ed
---------- Ed,
Production ends when the product is in the hands of the consumer. (That's Classical stuff, but surely the neo-Classicals don't think much differently.)
So, the shoe is put together by cheap labor in India. (However, don't complain about their low wages. They would get no more - or less - if the shoe factory wasn't there.)
So, a pair of shoes is made for (say) a dollar.
It's transported to Los Angeles by ship - not a particularly expensive way to move the goods - maybe adding 50 cents to the pair.
So, the shoes move on their way to Walmart, where I can buy them for $41.50. In my hands, production is finished.
We know the Indian workers get a dollar for the shoes. What producers get the other $40?
Harry --------------------------------------------
Ed wrote:
>I may be missing the point, but I really wonder how different "holonic >enterprises" might be from what is already going on in the current >corporate world. Might we not already have enterprises capable of lateral >thinking in the multi-national corporations of today? Take the Hokey Shoe >Company for example. The CEO of Hokey does not know how to make >shoes. He spends his time thinking, mostly linearly, about how to keep >the corporation solvent (or make it even more solvent) and about how to >keep his shareholders happy. He does not know much about branding or >marketing, so that is the job of another VP and his cluster of people, >mostly all linear thinkers. Responsible to him would be the people that >design shoes. They would have to know an awful lot about consumer >preferences, materials, etc., but, again, this is mostly linear stuff. > >Perhaps the most important person in the organization would be the guy who >coordinates everything, perhaps the CEO, but perhaps a VP of, say, >coordination. He might be a lateral thinker because he would have to know >something about shoe design, about branding and marketing, about people >who actually make the shoes and about the resources that go into >them. Information about all of the aspects of the enterprise would have >to be accessible to him because the efficiency of the organization as a >whole would greatly depend on the decisions he made. It would be up to >him to put all of the various aspects of the enterprise together in order >to produce the least cost and most satisfying Hokey shoes. > >Prior to the era of instant information and communication exchange (read >"Internet"), the shoes would probably have been made locally. Now they >can be made anywhere in the world where the price is right, perhaps India, >where labour is dirt cheap. In India, the VP Coordination would work >through a number of middlemen who would find women willing to work twelve >hours a day for peanuts and under continuous threat of being replaced by >someone willing to work thirteen hours a day for fewer peanuts. While >labour in India would be dirt cheap, the VP would still have to move >product to rich world markets, but improvements in global transportation >(and the growing glut in transportation capacity) would not make this very >expensive. > >A couple of decades ago, the shoes would have been made in Seattle or >wherever Hokey is located. The labour force would have been local and >unionized, and the shoe makers would only have worked eight hours a >day. Costs would have been relatively high, so, if improving technology >permitted it, it would make a good deal of sense to move manufacturing to >a low cost place like India where there are few labour standards. As for >the people who once made Hokey shoes locally, some might have found other >jobs and some might not have. Tant pis. > >Ed Weick
**************************************************** Harry Pollard Henry George School of Social Science of Los Angeles Box 655 Tujunga CA 91042 Tel: (818) 352-4141 -- Fax: (818) 353-2242 http://home.comcast.net/~haledward ****************************************************
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