The Business of America Is Class Warfare
by 355424
Even a broken clock is right twice a day. Despite all the self-serving fairytales of the mainstream press, occasionally the truth is told. The business press in America are sometimes honest about the nature of capitalism: that it is far more concerned with class warfare than with maximizing profit. In other words, the business of America is _not_ business.
The proof comes from the April 12 issue of _Business Week_, in a piece called, "The Costco Way," with a highly accurate sub-title: "Higher wages mean higher profits. But try telling Wall Street."
The article makes the point that Costco recently posted a 25 percent profit gain, as well as a 14 percen revenue increase. Yet Wall Street punished Costco's stock, pulling it down 4 percent in the recent financial quarter.
As the authors report: "One problem for Wall Street is that Costco pays its workers much better than archrival Wal-Mart Stores Inc. does, and analysts worry that Costco's operating expenses could get out of hand. Not that they are currently. Wall Street "experts" absolutely will not tolerate any company which isn't being sufficiently brutal in the class war. "At Costco, it's better to be an employee or a customer than a shareholder," says an analyst with Deutsche Bank.
The article compares Costco to Wal-Mart's Sam's Club, the unit with which it directly competes. Costco, which has about a 20 percent unionization rate, pays workers 40 percent more than Sam's Club and gives them comparatively superior benefits (for example, health care and profit-sharing plans) to Sam's Club.
Now ask why. That is, why doesn't Wall Street live up to the dictum of Calvin Coolidge? It's not that hard to figure out, especially if you already believe in the reality of class warfare. Many wage slaves doubt the reality of class warfare, simultaneously clinging to the belief that the profit motive is king in America. But it just ain't so. And it's simply inaccurate to say that Wall Street doesn't care about things like the relatively better working conditions at Costco.
They _do_ care, although in a negative way. Put simply, the noble souls of Wall Street like and recommend companies that are willing to expose workers to lousy conditions. Profitability is, at most, a secondary concern.
The higher profitability of Costco vs. Wal-Mart is directly related to the sharply lower turnover rate and a far higher rate of productivity at Costco. Yet Costco virtually matched Sam's Club's annual sales last year but with one-third fewer employees. Only six percent of Costco's employees quit each year, compared to 21 percent at Sam's. Costco's operating income was higher than Sam's Club, as was operating profit per hourly employees, sales per square foot and even its labor and overhead costs.
This sort of observation is nothing new for _Business Week_. They were honest enough about the greater profits for the U.S. auto industry when the big three would operate a factory in Ontario versus Detroit. But the Canadians got much better pay and working conditions. The U.S. reporters there were honest enough and pointed to the much better system (then, alas no more) of Unemployment Insurance Compensation. The financial numbers were better for those companies, but it was heresy to recommend that more investment in Canadian manufacturing was warranted.
The article was, of course, widely read. Just as this one will be, it's reasonable to predict. But my guess is that it will be confined to fast sinking down the memory hole, which is already filled to overflowing with other unfortunate truths. The Americans (and we're hardly better as Canadians) are astonishingly good at not admitting our own weaknesses and crimes. The easiest thing to do will be to forget about these problems.
Incidentally, GM, Ford and, formerly, Chrysler were also really disliked by Wall Street analysts until they really started playing class warfare much more seriously. These people don't care about profit primarily. It's whether or not you're dedicated to class warfare.
Other cases, such as the recent strike/lockout of grocery workers in California, allow the same conclusion. So what should we do? Not what the liberals would do-they'd buy Costco, sell Wal-Mart, and go back to sleep. A more minimally intelligent approach would be to start ranking our enemies and being selective about which branches of capitalism should be smashed first. Even wiser would be joining the IWW.
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