2/10/2014

#39 Modern Economics (2000)

All Rights Reserved © 2000 Thomas W. Day

In the 1950's overstuffed corporations, managers were made to be the factory floor's enemy by design.  Any manager who was appreciated by the people he managed was denigrated as being "soft" and inefficient.  Nothing changed much through the 60s, except that we began giving up industries to Japan because management was so busy, patting itself on the butt for its lousy performance, that the ruling class didn't notice the water circling in the economic toilet. 

In the 1970s, bad management was usually blamed on the fact that technical folks who were being promoted to managers were not "people-people."  The good ole' boys laying this blame were non-technical managers who were not particularly skilled in any activity, except office politics which is only marginally a people-skill.  Entrenched management certainly wasn't skilled in personal relations, or any people-oriented activity other than sucking up to the next level of power.  Still, technical skills were generally turned into management liabilities and the powers that be kept on being what they'd always been. 

By the early 80s, management began to notice that the country had been in a recession for nearly a decade.  (That's the kind of mental acuity that comes with good breeding and higher education.)  Not that noticing the disaster caused them to reconsider their basic anti-labor assumptions or to accept any part of the blame for the recession, but it was a start.  Mostly, the nation's awful execs blamed business failures on "inefficient American labor" and went hunting for cheaper labor overseas.  That seemed like a successful tactic until Japan moved some of its manufacturing here and discovered that American labor was equal to any, including Japanese.  So equal that several Japanese manufacturers produced the best Japanese products in the U.S. 

Japanese managers walked around so much that they sometimes got in the way of the production line.  And the Japanese managers were very technical, mangling another MBA myth.

The American management solution was to focus attention on increasing middle management productivity.  Since upper management can rarely spell "productivity," this was a clever tactic.  The answer to our shriveling economy turned out to be painfully simple.  It was especially painful for the people who did the actual work.  What happened was that middle management became a two-for-the-price-of-one position.  Once again, middle managers were selected for their technical skills but there was also a minimal effort made to encourage development in the person-to-person aspects of management.  Labor managed to cut its own throat, politically, so that management was able to crank up productivity demands while reducing actual labor costs.  More than a decade of Republican-owned law-making helped push this management "advancement" along pretty brutally, too. 

Now, we're reaping the rewards of having let management pay itself in seven-figure denominations for four-figure competence.  Even the rich can only vote themselves rich for so long before the house of stocks and bonds collapses in a light breeze.  I keep hearing about the stalling economic recovery and Wall Street's confusion regarding why that recovery is moving so slowly (if you can find signs that it's moving at all).  There's nothing confusing about any of this.  The spread between the rich and the rest of us is measured in light-years.  If the government were to stop propping up the few profitable industries that still attempt to produce real products, the economy would fall flat on its face. 

April 2000

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