LO and Big Layoffs LO5728

John Conover (john@johncon.johncon.com)
Mon, 19 Feb 1996 18:11:07 -0800

Replying to LO5705 --

OrgPsych@aol.com writes:
> In 5628 Bill Hobler wrote
> Ah, yes, the lost lessons of history. I read, a short time back, a number
> of articles which talk about the development of a Have's-vs-Have-Not's
> society in the US. I believe that this phenomenon is reflected around the
> world. This is a very serious dynamic and issue which I feel we have an
> obligation to address globally as well as locally.
> Capitalism is much touted as the superior form of society on this planet
> by those who are benefitting from capitalism. However, I have to question
> the premise of this viewpoint when I consider the increasing numbers of
> homeless people and the unemployed in this country.

Actually, it may be a "Religious" argument, in sight of what Kenneth Arrow
(economist/game-theorist,) has formalized and published, (and won a Nobel
for, BTW.) Usually, such "ism's" provide a distinctive means of
prioritization of issues and agendas, (ie., it is "better to distribute
wealth by competitive means," v.s. "wealth distribution needs to be
centralized in market controls, like policies and planning," etc.) Arrow's
work presented some mathematically formal arguments that such things can
not be argued, at least in a rational or logical fashion. What the
interpretation of this statement is depends on who is telling the story,
but it is probably safe to state that there is no such thing as a perfect
economic, (or social,) system, and no way of establishing a logically
consistent set of metrics by which one could decide which of the economic
systems under scrutiny is superior. (Of course, one can alway argue a
belief system, but in doing so about economic systems, one could not rely
on logical or rational arguments-only beliefs. FYI, Arrow's work
specifically addressed the optimization of the social welfare function.
His, so called, "Impossibility Theorem" states that it is impossible to do
that-strange name for the theorem. Now, consider the issues between the
Presidency and the Congress ... case in point.)

> Someone mentioned our low unemployment rate in a previous posting. This
> reminds me of a story told by Tom Peters about an executive who stood
> during one of his "speeches" and informed Tom that their company was not
> doing anything that everyone else was [not] doing, too. They didn't
> deserve to be talked down to by Tom because they were no worse than anyone
> else in their business.

Perhaps there is a misconception on the function of capitalism and its
relationship to job creation. I have never seen a definition of capitalism
that includes job creation as a priority, (until now!) The definitions I
have seen, (which are narrow, formal, statements, of economic axioms,) are
concerned with the generation of wealth, (which may, but not necessarily,
create jobs-not that this is the way it should be, mind you, but
capitalist theory doesn't expand too much on job creation. In point of
fact, Adam Smith's "Wealth of Nations" may have been the first diatribe on
efficient utilization of resources to control costs, which could be
interpreted as the minimization of the work force.)

There has been some game-theoretic work published on the systematic
outcome of capitalist market places. These tend to conclude (depending on
who is telling the story,) that in a capitalistic market place with
multiple players, the inevitable outcome is that the market will
degenerate to an agenda where the players operate with zero profit. And,
that is not good for job creation-nor any other "infrastructural" agendas,
(like R&D, etc.) So, how do we ballance all of the agendas? Go back to
the first paragraph ...



John Conover, 631 Lamont Ct., Campbell, CA., 95008, USA. VOX 408.370.2688, FAX 408.379.9602 john@johncon.com

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