The progeny of greed

Johnathan slapped his paper closed and got up to join them at the dinner table. “Yep . The economy is looking strong. Unemployment is down, again, and we haven’t even seen the full effects of the tax cuts yet,” he half-grunted from a luxurious stretch that said “of course, that’s what I have been saying all along will happen.”

Neither of them responded. Antoinette felt uncomfortable with the self-satisfied finality with which he had said it. Justine just seemed too exhausted to bother.

Johnathan took his seat and gave Justine a “come on, admit it”-look. Antoinette saw the lines around their daughter’s mouth firm. She knew Justine strongly disagreed with her father on the course the government was taking under the new President, but she usually kept it to herself. She was quiet for a moment, then, mildly at first, but with building vehemence, “Yeah, maybe the economy is growing Dad, but it’s not making us richer. Look at me, for example. Three degrees, one of them a Masters in International Relations, and employed by one of the leading law firms in the country, no, one of the leading ones in the world, where I bust my gut every day for well over normal working hours, and after three years I can barely avoid having to move in with you guys to make ends meet.”

There was angry outrage in her remark. Antoinette felt a surge of compassion for her daughter. She knew Jonathan did too. Justine was twenty eight; she dearly wanted to own her own apartment instead of renting, but she couldn’t afford to buy one – not with the portion of her study debt that she and Johnathan hadn’t covered and she still owed, and the down payments on the car she had had to buy. They were both quiet, looking down, but Justine was not. The remark seemed to have triggered something.

“Fuck, he’s one of the robbers after all. One of the fat cats that are creaming off the profits  while their workers, the guys that must do most of the bleeding and dying to get the profit on the bottom line, are gradually impoverished!” She stopped and shook out her napkin with such force that they both looked up at her. Gone were the lines of fatigue. Her face was glowing and her eyes were flashing.

“But Justine, that’s exactly why we voted for the man. Don’t you think…” Johnathan began.

“No Dad, quite frankly, I don’t. He may be able to fool you and a lot of other people that don’t take the trouble to think,” she spat out the word, “but he’s not fooling me.”

“Now hang on, are you insinuating that you are the only one in this family able to, as you say, think?”

Antoinette knew what was coming. One of those storming rows between father and daughter that left Justine angry and frustrated and Johnathan withdrawn into himself, hurt and vaguely puzzled. She didn’t want that to happen. Not so close to his seventieth birthday. They would still not be talking on the day of the surprise party she was planning for him.

Justine’s outburst had reminded her of a blog she had read. The Strategic Non-sense of the Equality Gap, the guy had titled it. “Worker productivity has been steadily rising, but worker compensation has been stagnant since about 1970,” the guy had said. He was just an unknown blogger she had stumbled upon when she started the research for her article and he was writing only about America, but he was making some interesting points, and, it seemed well supported by data. And there was that other piece of research she once read that found that people in former communist countries that were asked if they were better off under a free market capitalist system, overwhelming said no, they were worse off. She had made a quick mental note that it might have been due to their transitory situation from one to the other system and not necessarily evidence of the superiority of one over the other.

But now she had to try and insert some sobriety into this volatile mix of strong personalities and strongly held views. A chart from the blog was still fresh in her memory. “Corporate profits have actually been climbing since the mid-eighties. We know that. Ok, with some ups and downs, but generally trending upwards.” She threw it in almost too loudly, to get their attention. “So where did the money go?” she now advanced tentatively,

She could see that the remark checked Johnathan. He had the high mathematical and technical  intelligence of an engineer, but he took little interest in areas outside his field, and he rarely held strong opinions about it. He probably felt uncertain of the facts she had based her remark on, and he wouldn’t feel confident enough to venture something in response to her question. She passed him the salad bowl with a collaborative “who knows” shrug.

But Justine seized on her remark. She had something of both of them. She often amazed Antoinette with her insight into both technical matters and social systems. She had it in her to become a formidable lawyer. “Exactly. Corporate profits have been trending up, and I’ll tell you where it has been going,” she cut in, her voice indignant. “Four places, mainly.” She had her elbows on the table and her left hand held up with palm away from them and fingers spread. “First,” and she folded in her thumb with her right hand, “share buy-backs.” She paused for a moment, nodding at them from under her eyebrows. “Second, mergers and acquisitions.” The index finger got folded back. “Third, increased dividends.” The middle finger. “And fourth, a steep rise in executive compensation. That’s where.”

Antoinette knew that Justine could well be right. She had seen various analysis that made the point of how most of the money poured into the economy by central bankers across the world after the great recession hadn’t really found its way into creating a basis for future growth, but had been used to gain short term financial advantages.

“Of course it makes a lot of sense to the guys that decide where the profits go,” Justine was saying. “First, they vote themselves bigger and bigger packages so they have bigger piles of cash. Then they get the share price to rise by M&As and share buy-backs and bigger dividends, because part of their packages are share options, and, in itself it makes them look good. So the sad truth is,” and she paused dramatically for a moment, “that almost nothing of the increased profits are going to the guys that contributed the lion’s share in creating them. And the guy now riding to their rescue, the guy painting himself as the champion of the oppressed, is part of the cohort that have been depriving them of due compensation. The tragedy of it is that a lot of them are actually believing him!” “Ha!” she spat in disgust.

She was now in full cry about an issue that had clearly been high on her aggravation list. “You know, if it wasn’t that I don’t want to credit them with that much intelligence, and the gods have mercy on us if I am underestimating them, I’d have argued that they deliberately manipulated the evidence to make it look like their own greed was actually the greed of someone else; the Chinese, or some other nation. Even some of the poorest are blamed. Like Mexico, can you believe it. But anyway, fear not, because they, he, is riding to the rescue. Of the oppressed. It’s bloody cynical. And it’s disgusting.”

Antoinette wasn’t sure where Justine was heading now. What evidence?

Johnathan was even more lost. “What on earth are you on about?” There was a slight sneer in his tone.

Justine somehow managed to ignore it. “I’m talking about all this bullshit about globalism and unfair trade practices and shit trade deals being responsible for the relative decline in wealth of the middle class and lower middle class. Fact is, profits have been trending up. If those guys were right, it should have declined because of all of those reasons.”

Johnathan put down his fork. “So are you now saying that China is conducting fair trade practices? And they don’t manipulate their currency and don’t steal trade secrets?” he said, a hint of derision in his slight smile.

Justine barely suppressed a snort of disdain. “Dad, every country conducts unfair trade practices or protects their currencies at one time or another. They haul each other before the WTO all the time. That’s not what I said. What I am saying is that China and Europe and Mexico and god knows who else is not responsible for the relative impoverishment of the middle class of this country. Its own corporates are.” She was looking at him keenly. “And I’ll say this. Anyone that, even tacitly, subscribe to those kinds of views, and that trade barriers and tariffs and melodramatic tearing up of trade agreements and the like will make the difference is a fraud. And sick!”

Antoinette could see that Johnathan was now out of his depth. He wanted to defend the President, somehow, but he was uncertain of how, in the face of his daughter’s intellectual onslaught. She herself felt the President deserved credit for some things. For one, she liked his shear contrarianism, his non-conformism. And there was some validity in several of the issues he riled about; it was just that he made it come accorss like a reality show designed by half-wits. But she knew that it would be futile to put forward those perspectives now.   It would be better to just change the subject – yet again.

She had to get them away from politics to something where she could control the conversation better; where they were both at a bit of a disadvantage versus her. “You know, in my opinion, not investing a good percentage of profit in human capital, and that includes attracting, retaining and developing people, and instead squandering that money on other areas of short term gratification is strategic corporate sabotage. In the long term it will return to haunt the ones that do those things,” she said sagely.

Johnathan the industrial engineer, picked up the cue. “I agree. You can put down a beautiful factory, architect-designed exterior, industrial engineer-designed interior, all stainless steel and dials and control buttons,  and  processes worked out to a tee, but if you don’t have the right people with the right attitudes and the right knowledge and the right skills to run it, it’s worth becomes no more than the perceived value of a heap of steel and wiring to a scrap dealer – that is, if you can find one that’s interested,” he said keenly. This was an area where he felt confident.

She was a bit taken aback by his pragmatic translation of her remark. “People are a strategic resource. If you don’t invest in them, you are almost certainly going to lose your competitive advantage over the long run to those companies that do,” she said, involuntarily directing her remark at Justine.

“Hmm… The impression I get is that with a few exceptions, most companies are trying to get away on the cheap as far as investing in their human resources are concerned. The ones that do, stand out. I mean, look at Google, for example, or Tesla,” Justine said.

Johnathan leant forward with a raised finger. “Look, if you are talking about getting away with cheap workers, then automation is probably the most important emerging trend. I think more and more, lower end job pay is likely to come under pressure as humans have to compete with robots. Ultimately they will lose the battle and get pushed out completely, in my opinion. It’s inevitable. It would widen the inequality gap even further – a few super rich owning and controlling the robots. Probably there will be huge numbers of lowly employed or unemployed,” he said smugly.

As was often the case, Antoinette was struck by the linearity of his thinking. “Hmm…, it’s more your field. I think I have to agree on the competition with robots, but I’m not so sure about the inevitability of it all. The thing is, the affected people are unlikely to take it all lying down. They will protest. But the Haves are greedy and they are likely to cling to their riches. So I think the have-nots will become the seed beds of populism and revolution. They are already far in the majority, and their numbers will be growing, if what you say is correct. Politicians of the type we have now, and actual revolutionaries and anarchists will exploit their grievances, as they are already doing, to push their own agendas. If it all remains peaceful, which is nowhere near clear, then at the very least democracy itself is likely to ensure that populists come into power. If that happens it might not be good for either the haves or the have nots.  Populist systems are typically authoritarian and destructive, especially to the rich, but also, eventually to the less rich. Just look at the latest examples. Venezuela, Egypt, Turkey, Russia – us, for that matter. Heaven knows where we will end up after four years of the bumbling idiocy we are seeing now.”

Antoinette pushed back her plate. As she had been reading up for her article, a proposition had started to form in her mind. She was hesitant to put it forward, but she might as well. After all, this was family. Not a collection of formidable socio-political analysts. “I dunno, but one could almost glimpse the destruction of free market capitalism in liberal democracies, even in the limited forms we have managed to achieve it so far. Dictators and revolutionaries are not typically keen on fair democratic processes, and they are prone to intervene in the free market capitalism to support their popularity. In fact, they are almost forced to.”

Antoinette looked over at Johnathan. He seemed dubious, but unsure of himself.

“Ha, the ultimate irony,” Justine snorted with wry mirth. “Even as the great captains of industry and their cohorts are wallowing in their riches, they are creating the Frankenstein that will ultimately undo them and the system that has made them rich.”

“I think this imbalance in wealth will have to correct at some point,” Antoinette said soberly. She paused and then, thoughtfully. “Maybe something else will happen. As unlikely as it seems right now, a really strong leader or leaders might emerge that can straighten the system. It’s definitely not too late yet. Or we might have a war…”

“Yeah, but the President is…, Johnathan ventured, but Antoinette cut him short “A populist. Make no error.” He kept quiet, pouting his mouth, but she ignored him now. She was feeling enthusiastic about the direction the discussion had taken. “You know, some years ago a certain Francis Fukuyama argued that free market capitalism in a liberal democracy was the ultimate form of socio-cultural development and that all nations must eventually and inevitably adopt it.”

“Jees,  that sounds quite arrogant, even by American standards,” Justine said, still in her cynical mode.

Antoinette shrugged. “Maybe. Marx made the same kind of claim for communism out of Europe in his time. Something like that capitalism would eventually collapse into itself, and communism would replace it. Maybe he is going to be proven right. We are going to end up with some variant of communism…”

“That will be the bloody day. Over my dead body,” Johnathan cut in forcefully.

Antoinette smiled at him. “It may not be in your hands my dear. Like with the environment, we ourselves may have allowed forces to come into motion that are developing a dynamism of their own. They will be very, very difficult to undo.”

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