Midwestern Capitalism
Midwestern Capitalism is capitalism which seeks to profit by developing and organizing its workers to be productive and have pride in that production themselves. It recognizes that each worker is also a consumer. It goes some distance towards recognizing that each worker is a fellow human being and not just a number on a balance sheet that needs to be reduced.
It is called Midwestern Capitalism in honor of Henry Ford, whose bright vision of what capitalism should be is in contrast to the dark world of the plantation. Ford introduced the Model T in 1908 with the aim of making a car cheap enough the masses could buy it. He is widely credited with inventing the assembly the assembly line but the truth is even more to the point. He led a learning organization whose employees Clarence Avery, Peter Martin, Charles Sorensen, and C. Harold Wills formulated the idea of moving a product through multiple workstations - the assembly line. Working as an empowered team, these men solved the problems of mass production. On a Sunday in Detroit in 1910 Sorenson towed a chassis with a rope over his shoulders through the Ford Plant to test his idea. Other workers added the parts. In 1913 Ford introduced moving assembly belts into his factories. The result of this campaign for improvement was skyrocketing sales and falling prices. The price on a Model T fell from $ 825 in 1908 to $ 360 in 1916. By the 1920's a majority of American drivers had learned to drive on a Model T.
In 1914 Ford raised the salary of his workers to $5 per day which more than doubled their salaries. This enabled him get and keep the best workers in Detroit. It also enabled them to buy the cars they were producing. At one level paying employees well is a sign of respect. Respecting your employees as people is a central theme of Midwestern Capitalism. Companies that place a high value on their employees, and empower their employees are practicing Midwestern Capitalism. Philosophically making a social pact with employees that if they work hard and are loyal to the company, the company will not dump them at the first opportunity to cut costs is fundamental to this.
At a macroeconomic level, Midwestern Capitalism is about paying workers enough to have a good life. This makes for better workers, better factories, and better products, better lives. It also has the potential to be a self contained economic system, because the workers are paid enough to buy the products, unlike plantation capitalism, where the workers are paid meager wages. While at the level of an individual business it sounds radical to pay your workers more, for a society to achieve greatness it is necessary. A higher paid more motivated and more carefully managed workforce will lead to better business practices and will unlock the potential of a society far more than oppressing the workers. Paying workers enough to buy products creates demand for the creative skill and artistic talents of a society so that rather trying to survive on potatoes people can go to the opera, buy new fashion, and learn to fly airplanes. Or whatever they want to do. Having a good life is a good thing.
This is also a stronger society. In crisis, this higher level of consumption can be diverted into the sinew of war. The US auto industry won World War II burying the Axis with planes, bombs, tanks, armaments, and munitions. The production levels weren't even close. Japan had 10 aircraft carriers, we built 100. Germany built 9000 Panzer IV, 4500 Panther, and 1350 Tiger tanks, the USA produced over 40,000 Sherman tanks. Ford's Willow run plant was producing a B-24 Liberator bomber every 58 minutes.
In the 1860's of course, Midwestern Capitalism buried Plantation Capitalism because the African American portion of the South had no motivation to fight for the defense of the system that oppressed them.
Stabilizing the workforce and having a loyal workforce is vital to implementing many of the lean processes in the Toyota in the Toyota Production System. It takes an empowered worker to stop the line when something is wrong. It takes empowered workers to create a learning organization.
Midwestern Capitalism has several elements:
1. It is a for profit operation.
2. It is also about community development because the workers are paid a good wage.
3. It is about product development because its people are paid enough to buy something if it has value. It assembles people in purposeful teams to solve problems.
4. It is about people development with an educated progressive workforce. The general level of education is high and the company is interested in pushing it higher. The workers are valued because they are important and highly trained.
5. It is about company development because the workers and management will make an improving developing company.
6. The main market is the workers although other markets are also sought.
7. It is competitive but the competition's centerpiece is not destroying the wage scale.
Midwestern Capitalism needs several things to survive:
1. It needs to maintain its internal market.
2. This market is largely determined by the salary scale. When this salary scale is threatened, immigration should be
restricted or foreign products should be restricted until salaries are returned to a satisfactory level.
3. It is vulnerable to parasitic infestation by Plantation Capitalism using the generous Midwestern Capitalism's consumption market to make profits by reducing workers wages either in situ by importing slaves, guest workers, or illegal immigrants or externally sourcing products made with poorly paid labor.
4. It needs a boundary that protects its domestic market, its workers, and its industry.
It is called Midwestern Capitalism in honor of Henry Ford, whose bright vision of what capitalism should be is in contrast to the dark world of the plantation. Ford introduced the Model T in 1908 with the aim of making a car cheap enough the masses could buy it. He is widely credited with inventing the assembly the assembly line but the truth is even more to the point. He led a learning organization whose employees Clarence Avery, Peter Martin, Charles Sorensen, and C. Harold Wills formulated the idea of moving a product through multiple workstations - the assembly line. Working as an empowered team, these men solved the problems of mass production. On a Sunday in Detroit in 1910 Sorenson towed a chassis with a rope over his shoulders through the Ford Plant to test his idea. Other workers added the parts. In 1913 Ford introduced moving assembly belts into his factories. The result of this campaign for improvement was skyrocketing sales and falling prices. The price on a Model T fell from $ 825 in 1908 to $ 360 in 1916. By the 1920's a majority of American drivers had learned to drive on a Model T.
In 1914 Ford raised the salary of his workers to $5 per day which more than doubled their salaries. This enabled him get and keep the best workers in Detroit. It also enabled them to buy the cars they were producing. At one level paying employees well is a sign of respect. Respecting your employees as people is a central theme of Midwestern Capitalism. Companies that place a high value on their employees, and empower their employees are practicing Midwestern Capitalism. Philosophically making a social pact with employees that if they work hard and are loyal to the company, the company will not dump them at the first opportunity to cut costs is fundamental to this.
At a macroeconomic level, Midwestern Capitalism is about paying workers enough to have a good life. This makes for better workers, better factories, and better products, better lives. It also has the potential to be a self contained economic system, because the workers are paid enough to buy the products, unlike plantation capitalism, where the workers are paid meager wages. While at the level of an individual business it sounds radical to pay your workers more, for a society to achieve greatness it is necessary. A higher paid more motivated and more carefully managed workforce will lead to better business practices and will unlock the potential of a society far more than oppressing the workers. Paying workers enough to buy products creates demand for the creative skill and artistic talents of a society so that rather trying to survive on potatoes people can go to the opera, buy new fashion, and learn to fly airplanes. Or whatever they want to do. Having a good life is a good thing.
This is also a stronger society. In crisis, this higher level of consumption can be diverted into the sinew of war. The US auto industry won World War II burying the Axis with planes, bombs, tanks, armaments, and munitions. The production levels weren't even close. Japan had 10 aircraft carriers, we built 100. Germany built 9000 Panzer IV, 4500 Panther, and 1350 Tiger tanks, the USA produced over 40,000 Sherman tanks. Ford's Willow run plant was producing a B-24 Liberator bomber every 58 minutes.
In the 1860's of course, Midwestern Capitalism buried Plantation Capitalism because the African American portion of the South had no motivation to fight for the defense of the system that oppressed them.
Stabilizing the workforce and having a loyal workforce is vital to implementing many of the lean processes in the Toyota in the Toyota Production System. It takes an empowered worker to stop the line when something is wrong. It takes empowered workers to create a learning organization.
Midwestern Capitalism has several elements:
1. It is a for profit operation.
2. It is also about community development because the workers are paid a good wage.
3. It is about product development because its people are paid enough to buy something if it has value. It assembles people in purposeful teams to solve problems.
4. It is about people development with an educated progressive workforce. The general level of education is high and the company is interested in pushing it higher. The workers are valued because they are important and highly trained.
5. It is about company development because the workers and management will make an improving developing company.
6. The main market is the workers although other markets are also sought.
7. It is competitive but the competition's centerpiece is not destroying the wage scale.
Midwestern Capitalism needs several things to survive:
1. It needs to maintain its internal market.
2. This market is largely determined by the salary scale. When this salary scale is threatened, immigration should be
restricted or foreign products should be restricted until salaries are returned to a satisfactory level.
3. It is vulnerable to parasitic infestation by Plantation Capitalism using the generous Midwestern Capitalism's consumption market to make profits by reducing workers wages either in situ by importing slaves, guest workers, or illegal immigrants or externally sourcing products made with poorly paid labor.
4. It needs a boundary that protects its domestic market, its workers, and its industry.
