Rich And Poor The United States is the most developed capitalist economy in the world. The markets within the economy provide profit-motivated companies endless potential in the pursuance of pecuniary accumulation. Throughout the twentieth-century competitive companies have implemented modernized managerial procedures designed to raise profits by reducing unnecessary costs. These cost-saving procedures have had a substantial effect on society and particularly members of the working class. Managers and owners of these competitive and self-motivated companies have consistently worked throughout this century to exploit the most controllable component of the production process: the worker. The worker has been forced by the influence of powerful and affluent business owners to work in conditions hazardous to their well being in addition to preposterously menial compensation. It was the masterful manipulation of society and legislation through strategic objectives that the low-wage workers were coerced into this position of destitute.
The strategies of the affluent fragment of society were conceived for the selfish purpose of monetary gain. The campaigns to augment the business position within the capitalist economy were designed to weaken organized labor, reduce corporate costs, gain legislative control and reduce international competition at the expense of the working class. The owners have gained and continue to gain considerable wealth from these strategies. To understand why the owners of the powerful companies operate in such a selfish manner, we must look at particular fundamentals of both capitalism and corporation strategy. Once these rudiments are understood, we will more clearly relate the perspective of the profit-seeking corporations of America. Legal discussion will also be included to show how the capital possessing elite operate through political parties to achieve their financial objectives.
It is the synergist effect of these numerous strategies that have lead to the widening income gap in America, persistent attempts of contraction in workers rights and increased corporate political influence. These campaigns have come at an expense to Americans and will only continue to benefit the affluent society. Creating Corporate Value The United States is a capitalist economy. In a capitalist economy individuals who wish to gain wealth can invest their capital into markets in hopes of future returns. If this investment gains in value then the investor has earned a return, which can be reinvested.
This creates a cycle of investing and reinvesting for potential future return. This wealth creating cycle is a fairly simple concept to understand, but wealthy individuals have learned to fabricate this cycle into different situations. A common form of investment is purchasing and selling of corporate stocks. The stock market works like all markets on the fundamental theory of supply and demand. The more demand for a stock the higher it is valued and conversely the less demand the less it is valued.
Corporations are legal entities which issue stock to investors who purchase them and become shareholders of the company. The risk taken by investors is that when they buy stocks it is possible that the individual company will not do well, or that stock prices will generally weaken. At worst, it is possible to lose entire investments, but no more then that. Therefor, shareholders of a corporation are not responsible for corporate debts. So, a corporation would be a very attractive type of investment for potential investors to consider. Corporations compete against each other in markets in the United States and around the world.
These corporations have employees who perform various functions that contribute to successful strategic goal completion. Corporations often will offer stock incentive plans strategically to employees in positions of importance. The enticement to employees is to work in a manner that will increase the value of the company and their shares of stock. These incentive plans were strategically developed by major shareholders because the corporate executives felt that people would be motivated to increase their own wealth. Most employees are motivated by money and will work harder when the chance is given for more money. The very nature of this strategy consolidates all the employees to act as one self-motivated entity in the pursuit of monetary accumulation.
In Piven and Clowards Regulating the Poor, this point is illustrated: “Capitalism, however, relies primarily upon the mechanisms of a market-the promise of financial rewards or penalties-to motivate men and women to work and to hold them to their occupational tasks” (4). The increased motivation of important members of the workforce by the enticing tactics of greed for wealth is a result of strategic planning by the major shareholders of the firm. The cost to these primary shareholders is the stock incentive plans needed additional stock to fulfill, which reduced the valuation of all stocks. The major shareholders know this devaluation is only temporary because self-motivated employees will act in a manner that will increase the value. The primary concept for discussion purposes is that self-motivated major shareholders have utilized the capitalist theory and thus, created a business compact with employees that will make self-motivated decisions on all levels.
The strategy worked and throughout the country employees are busy increasing the value of their stock, but most importantly, they are increasing the value of the major shareholders. We will see this investing concept throughout most this paper because the wealthy resist adverse conditions with money. The Grand Old Party The Republican Party remained dominant throughout the 1920s, remaining unaffected by factionalism that plagued the Democratic Party. The party continued to align its platforms with the southern whites, and owners and managers businesses. Even in extraordinary economic times of prosperity for the wealthy, the Republican Party continued to advocate industrial economic values.
The primary dilemma to republican business interests was the labor problem. “The Republicans finally concentrated their discussion on four broad approaches to labor problems: the progressive approach, the open shop approach, the efficiency-engineering approach, and the political approach” (Zeiger 11). Most businessmen resolved harshly to end labor activism and to quietly continue their profitable business interests. This behavior of this standpoint took the pattern of employer resistance to labor unions, but originally the open shop crusades proved to be the most fruitful in the short-run. The open shop crusade, now illegal because it gave employers the ability to hire prospective employees on the basis if they belonged or support trade union activities.
This restricted the employees ability to strike on a particular issue because they lack the power of numbers that a union possesses and could be replaced. Open shop enthusiasts were a major and vocal part of the Republican Party because of the financial resources they possess. Many republicans determined them intemperate and adherent, and their perspectives were damaging and extreme. “These open shop enthusiasts constituted a vocal and influential segment of the party. They often proved quite effective in their efforts to chastise organized labor, for many Americans shared their concern. Still, many Republicans considered them extreme and doctrinaire, and their views harmful and inexpedient” (Zieger 74).
It was these Republicans that lamented these controversial assaults on labor problems, such as Herbert C. Hoover who wished to devise a whole new style of labor relations based on the philosophies of efficiency and cooperation. By 1921 industrial engineers and other experts had developed the Taylor Society, the Federated American Engineering Societies. The Taylor Society was designed to improve the efficiency of a job-place in hopes of reducing severe factory working conditions. This in theory would increase aggregate production, which would lead to more available jobs and lower-unemployment.
The main points to be established is that the Republican Party was support by wealthy business owners. The worst opponent of the worker is the wealthy business owner within the Republican Party. These are the characters that advocate extreme hostile tactics such as the open shop crusades. Regardless, they support the Republican Party financially and therefor the Republican Party acts as their voice politically. The Industrial Revolution One component of the production process that can be controlled by management is automation. Regardless, the employee still performs a necessary function in the production process.
The taylorization theory states employers have an incentive to make a job function more efficient. The increased efficiency results in lower production costs, lower aggregate unemployment rates and higher company profit returns. The industrial revolution was characterized by the widespread replacement of manual labor by machines that could perform the job functions quicker and or at lower costs. The industrial revolution was the result of interrelated fundamental changes that transform smaller market economies into an industrialized economy. Many products that were made at home or in small work units were transferred to large factories. Since the factories could produce at lower costs the product could be sold at a lower cost.
This competitive advantage drove the smaller competition out of business. The people who profited from this effect were the owners of the mechanisms of production. This marks the beginning of an era where these wealthy owners would prosper over the working class. The aggregate effect of the increase production efficiency lead to the development of massive industrial parks. These parks expanded the scale of production dramatically and became concentrated in cities and large towns. Since traditional production relied heavily in the needs of local subsistence it gave way to the more market orientated production devices.
This economically forced large numbers of the rural poor who moved to towns and cities to become the wage seeking labor force necessary to run rapidly expanding industries. This extensive movement of communities had a considerable result on labor prices and ultimately constrained these people to become the urban poor. The effect of the Industrial Revolution on American society was substantial. Income following workers increased the population of large towns and cities severely. From 1860 to 1900 the number of urban areas in the United States expanded fivefold. Even more striking was the explosion in the growth of big cities.
In 1860 there were only 9 American cities with more than 100,000 inhabitants; by 1900 there were 38. Labor markets were flooded with eligible workers seeking employment and through pure labor competition they were willing to work in any environment for any wage. The environments factory laborers were forced to work in were considered by many Americans to be despicable. Regardless of the factory working conditions, many people were obligated to take the employment. Employment was necessary to generate income to support oneself and family.
As a result, the Exploited workers received no power to contract with the owners of production. Instinctively managers and owners of capital have contrasting labor interests then those perspectives of employees. Wages and profits incomes divide the value that production adds, so by definition, labor and capital interests often are on opposing sides of social policy that affects the price level of the real wage. “The real wage can be regarded as the price that equates the supply of and demand for labor”, (Foley and Michl 70). Owners and mangers of capital seek a flexible labor force, which is counter for the workers desire for stability and security in their employment and conditions of life.
At this point in history, the affluent society of the United States was generating immense wealth by capitalizing on the poorer workers needs for minimal financial requirements. The wealthy invested their capital into factory production devises, which drove out smaller competing business from the market place. This profit seeking strategy worked because it economically forced resource deficient workers into the cities. The supply for labor increased, which coerced many employees to work for the affluent owners at a corresponding cut-rate real wage rate. These events began to illustrate a scenario that would set the scene for modifications in workers rights. The laborers had to develop a strategy to counteract the poverty-stricken working conditions imposed upon them by the owners of the factories.
The Labor Market The labor market surplus further developed the workers dependency upon the self-motivated employer. Trade unions were formed to advocate alleviation of some dependency and support the workers efforts by gaining a quantifiable measure of power over their economic standing. Initially, the trade unions had limited success until they exercised the real true power workers have over employers: The strike. The strike in labor relations is a completely organized halt of work and production carried out by a large group of employees. The purpose of the strike is either enforcing workers demands that relate to unfair labor practices and or to employment conditions created by the self-motivated owner.
The response to labor unions by business owners was the use of open shop tactics. “Employers organizations and business groups commenced a vigorous campaign for the open shop. Armed with the then-legal yellow-dog contract, by which an employer could require a prospective employee to agree not to join or support a union” (Zeiger 20). The wealthy opposed the trade unions use of the concept of collective bargaining because it advocated the subject of workers rights. Collective bargaining is where individuals with interest in the matter negotiate their stipulations until a compromise is found.
The wealthy industrialists despise that their interests would are in constant danger by collective bargaining. In response, “Americas industrialist launched a well-financed general attack on the very concept of collective bargaining” (Zeiger 20). The use of collective bargaining proved to be an effective tool in bargaining with owners and managers. This meant that workers have finally developed a technique through labor unions that competently combats the proprietors regimen. The Strike During the 1920s and 1930s, strikes occurred as a natural feature of nationwide unions of the American Federation of Labor and other groups soon to be recognized as the Congress of Industrial Organizations.
Striking had become a major weapon in the labor movement and was threatening the profitability of the production owners. “The strikes and threatened strikes, the radical agitation, the sharp industrial depression, and the whole atmosphere of discord and unrest that pervaded the country endangered the Republic and demanded action” (Zeiger 74). The wealthy republicans had to promote an offensive campaign to end this threat. So as previously stated, they adopted well-financed strategies aimed at the courts to obtain injunctions, which would legally prevented strikes in specific circumstances. The success of these strategies is confirmed in Zeigers Republicans and Labor 1919-1929, “The 1920s marked the climax of antilabor judicial activities”. (260) The basis the owner persuaded the courts with was that their property was either damaged or threatened and that they were powerless without legal solutions. It was the possession of financial resources that allowed the wealthy to recruit and employ powerful and persuasive lawyers.
Legally persuading the courts of law with expensive lawyers was the sole purpose of the use of financial power to authoritatively force workers back into the production factories and produce profit for the owners. From the perspective of the wealthy, the application of financial resources to generate future income is honorable capitalism regardless of the situations context. The power of wealth even can influence courts of law through lawyers and thereby, give the wealthy extreme power in legislation during this period in history. The Rise of the Labor Party The Democratic Party during this era was experiencing outbursts of factionalism. The convention in 1924 was racial divided by southern whites and the northern urban blacks.
The future success of the party was depended on the need for a change. The strategy developed by the leaders was to begin the alteration of the Democratic Party appeal. The leaders of the Democratic Party realized that poor people could be a powerful voting coalition. The great depression of 1929 forced millions of people into unemployment and poverty. These unemployed workers practiced approaches of protest through disruption demonstrations.
These massive demonstrations help encouraged the working class voters hostility and defection of the Republican Party. The Democratic Party thus capitalizing on this realigned their platform to advocate the needs of poor people with the intent to gain votes. This re-alignment of party policy angered the southern democrats whose views were becoming more Republican. Having lost the southern support, the Democratic Party became the primary political instrument of vocalization and evolution of lab …