Human Non-Resources

At the time of writing, the Germans are shortening the working week of their skilled labour, the men and women who make their world-class capital goods; while the Americans are firing theirs. Even ‘The Economist’, normally in favour of anything that enriches managers and owners at the expense of labour, does not think the latter procedure a terribly good idea, on the grounds that corporations may not be able to get their workers back in an upturn.

This puts me in mind of a story told by a man I know, who worked in a knowledge-intensive industry. The owner of the company, a narcissist and megalomaniac, had re-invented the wheel by cobbling together his own invoicing program using Word macros; and, according to an IT expert, doing so in a highly dysfunctional manner. The staff unanimously abominated the result, whereupon he fired for insubordination all of those who had not already resigned. Many lawsuits resulted, all of which he lost; but he never for a moment betrayed any regret for having destroyed his own company overnight, nor even any comprehension of having done so. Indeed, he thought of his misbegotten DIY invoicing software as the crown jewels of the company, making it worth millions more than otherwise; with which no one else agreed. The price he set on it was created not by what people were prepared to pay for it, as in the economics textbooks, but by his infinite self-love. What then was the skilled labour of its professional staff worth? Apparently nothing, since he regarded himself as well rid of all of it.

The delusions of this maniac appear peculiarly consonant with the prejudices of Anglo-American capitalism in general: namely, that the meat of a company resides in all its fixed assets other than the biological kind – its plant, its tools, its financial instruments, its office suites, its limousines, its documents, its procedures, its rights, its software and its lawyers, but never, ever in its technically skilled labour, which it contemplates exclusively in terms of unnecessary “costs”. In addition to the normal economic imperative of paying labour as little as possible, we may suspect additional, emotional reasons. We may accordingly wonder whether the class structure of English society rendered its owners, rentiers and editors – and those of their colonial offshoots – incapable of understanding the very concept of skilled labour. They appear to see the world in terms of their genteel selves versus a faceless mass of the interchangeable common people. When faced by a strike of industrial workers, they seem to be thinking in terms of simple human automatons, like Huxley’s Deltas, manning the owners’ expensive equipment; one wonders how well they, the owners, would do pouring steel, machining parts or even driving a train.

We may expect the German perception of skilled engineers and mechanics as valuable assets to be a thorn in the side of the American money-men. Perhaps there will have to be a Global War on Mechanics.

Posted on March 10, 2010 at 22:54 by Hugo Grinebiter · Permalink
In: MONKEY BUSINESS, Management As Cargo Cult

2 Responses

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  1. Written by dwasifar
    on January 14, 2011 at 18:00

    You’re skirting Ayn Rand’s territory here, Hugo. 🙂 A favorite thought exercise for Objectivists goes like this: Imagine the nation split in two. One half gets all the physical infrastructure (factories etc.), the other gets all the people with the knowledge to build and run them. Fast forward ten years. Which half will be self-sufficient? True, you’re substituting technically skilled labor for technically astute owners in your argument, but the gist is still the same. Though I don’t count myself as an Objectivist, I’ve said many times that the slash-and-burn eat-the-seed-corn short-term-profit model currently favored by American business has nothing to do with Rand, who would have found it irrational. She’d spin in her grave to see her name attached to it.

    If you want an example more familiar to American readers, I’d suggest the case of Circuit City, an electronics retailer that plummeted from the #2 position in the market to bankruptcy and ultimate dissolution in a few short years. This was the result of a disastrous executive decision to fire all their most experienced sales staff and replace them with minimum-wage clerks. It became impossible to get correct information about the products or post-sale support. I gather the management didn’t anticipate that by driving the customer research process out of the store and to the internet at large, they’d drive the sales there too. Their stores mostly still stand empty everywhere you go. But they saved a lot of money in the short term, and that’s what’s important, right?

  2. Written by Hugo Grinebiter
    on January 14, 2011 at 22:41

    The Rand parallel never occurred to me, because while in her world, the owners could perfectly well design and make the stuff single-handed (being supermen), in the real world, owners generally don’t know any trade other than that of the con-man. The modern shipowner couldn’t con a ship, let alone build one, because he’s a MBA, not a skipper risen to greatness.

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