Who produces “wealth”?

industrial-revolution-textile-factory

Once Fabian, then Labour, then Tory and having now ditched all parties, your humble blogger is not unlike many of you. However, certain things one reads still produce a “grrrrrrr”. One of these was the inimitable and esteemed JD, who wrote:

the workers, the very people who create his wealth*

That flabbergasted me as it’s straight out of Das Kapital. Pardon me but the boss is just as much a worker and is the catalyst for the wealth to be produced, at least in medium and small businesses. I’m not referring to major corporations here.

Having set up a few businesses which did actually do OK but I was committed to other things which won out, I’m damned if I’ll accept that the people I employed were the only ones to produce “the wealth” [which is another giveaway term used by the left]. It suggests that “the wealth” is something disembodied, some national nest egg which appears, to be distributed by a small elite above.

In my screenprinting business which expanded so quickly that I couldn’t cope with that and other commitments, the capital was arranged by me, the business plan was submitted by me, the projection for the first three years was done by me. The risk was entirely mine.

I stood to lose all or gain some. The first year was projected to be a loss and yet broke even.

I employed two girls to help and their skill level meant further orders. So yes, they most certainly had a share in the wealth creation. No one’s denying that. But to say it was just them and that somehow I was making money on the backs of suffering workers is sheer bollox.

That’s why when I see the assumption behind the statement quoted above, I see red.

Those girls, with that skill level and my reference among other things, could have left and gone to other work and well done and good luck to them. But they took few risks apart from having to find work again if the business folded. This is not to say they weren’t appreciated – they were the edge which gave us the orders. I was technically OK but slow – they were quick. I was otherwise occupied, I tried to keep them happy.

Now we get into how much the boss should take out. Well, first of all, if he’s decent, he plows back into the business which in turn gives added protection to the workers, he gives himself a reasonable salary but he also ups how much they receive. That’s only good business – they stay happy, he’s happy, customers are happy, the business does well.

Unfortunately, in this country, there are two things going on in this area, one pathetic and the other iniquitous.

The pathetic one is the British business culture which really does seem to be about ripping off employees and filling their own pockets or coming up with grand ideas and having neither the skill nor effective business plan – see Shoreditch. Or allowing HR to run this tickbox/bit of paper tyranny which excludes good workers, particularly potentially good ones.

Examples abound of really appalling so-called “businessmen” in this country.

The iniquitous part is, as I said to JD: “The way they’re operating today, when a shopworker needs a PhD and must be a jack of all trades, all for the part-time minimum wage, where 1000 workers go for one job and the iniquitous HR act like god on people’s futures – all of that is iniquitous, as said. IDS’s carry-on about anyone finding work who wants it shows he hasn’t a clue. It’s tough for workers right now.”

And the salaries – they are grotesque. Five figures for penpushers who don’t even take risks and are excused if part of the Narrative when it all goes pear-shaped? And the parachutees on big money while workers are reduced to part time on minimum wage and have to pay council tax out of that, while utilities companies rip people off for huge amounts whilst taking home out-of-all-proportion-salaries … that is punishable.

And Tories saying anyone can live on X wage and so on – I’d dearly love to see them try. As part of the vast employee class now, I’m quite mindful of how skill sets are just being squandered up and down the country these days.

Plus employers taking on job scheme layabouts as well as good workers for no money to save them salaries – that should be punishable.

Having said all that though, it is still not right that it is entirely the workers who produce the wealth. Much as we might detest the brash start-up entrepreneur, unless it was taxpayer money, then he did take that risk and if he employed people, they are there because of him. Whether he stays in business may well be because of them.

Plus the worker who has employment law behind her [or him] who has no intention of giving her labour [or his] fairly – fair wage for a fair day’s work. Plus the impossibility of sacking feckless workers as they’ll have Human Rights down on the employer.

And I asked the CAB what to do if I had workers who were not doing as contracted? Sorry, not our area, they said. But I’m a citizen, I said. Sorry, not covered by social policy.

QED.

Seems to me it comes down, in the end, to people being honest – doing what they agreed to, including all employees in the company.

If I employ two people, leaving aside employment law for the moment, then we have a clear agreement over the wage, written down if necessary. Or else they agree to share in the profit, via their wages increasing, should we do well . But if they agree the latter, then they also agree sharing the losses. They can’t have it both ways – flat wage agreement, irrespective of profits or incremental but if incremental, then incremental both ways.

The left speaks of “fairness”. Surely that is eminently fair.

Example is a sub-manager in a cafe who was moaning about her wage and by the way, I think she had good cause. The owners offered her a partnership. No thanks, she said, she didn’t want that responsibility [meaning liability]. OK, they said, be a manager. No thanks, she said. Same reason – too much responsibility if anything happens. And it did – a cooker caught on fire.

………..

* Lest I be accused of taking something said or written and then “constantly misconstruing or misrepresenting” what was said, JD’s original comment is viewable and in it, he was taking on Tim Worstall, his views and practices. I can’t comment on that, not knowing what Timmy does, which is why I said in that thread that it’s the general notion I’m looking at, not as specified about one person. Saying workers produce the wealth, it’s a fair summation that that excludes bosses and other users. It’s that assumption behind the comment I’m zeroing in on.

6 comments for “Who produces “wealth”?

  1. amfortas
    April 9, 2013 at 10:23 am

    As I said elsewhere: It also has to be acknowledged that the ‘workers’ are the ones who benefit MOST from all the ‘wealth’ they create more than any other. Their wage bill is usually the largest ‘outgoing’ by far, delivered weekly and well before the ‘profit at the end of the year. Next is ‘Society’, mainly in the form of Tax, taken from all by the Government and again, well before any ‘profit’ is realized or even calculated, as well as after. Then the Local Government with its hefty Rates and charges, licenses and ‘approvals’ fees, fines for minor contraventions, taking pre-profits to pay to a legion of bureaucrats who have contributed nothing but obstacles to the business and its ‘workers’.

    Vale the Screenprint girls. They produce. But by God they would be able to get far better reward if ‘Government’ and the legion of rent-seeking scum didn’t take from them and their boss.

  2. Greg Tingey
    April 9, 2013 at 10:25 am

    Same as “British” manufacturing firms, with the same workers & same trades unions are doing quite well … with Indian & German & Japanese “higher” management.
    Funny that, isn’t it?

  3. Voice of Reason
    April 9, 2013 at 1:47 pm

    James;

    Yet again, we agree on something. I would point out that the more modern perspective, especially in big companies, is that the workers produce NONE of the wealth, and are fungibles, easily replaced. This is not a functioning long-term model for success.

    • April 9, 2013 at 9:11 pm

      Yes, it’s a problem.

  4. April 9, 2013 at 6:51 pm

    Damn good post James.

  5. Furor Teutonicus
    April 10, 2013 at 11:03 am

    EXACTLY!

    The firm goes bust, the “workers get “Bru”. The OWNER???

    Looses house and home, can, in extreem cases, end up doing time.

    And the “OWNER” is the bad guy”????

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