Sunday, November 20, 2005

The Human Imperative

From Status Anxiety by Alain de Botton

“…the rationale for almost all commercial organizations can be broken down into a simple and arid equation:

Raw materials + Labor + Machinery = Product + Profit

To maximize output, every organization will strive to obtain its necessary raw materials, labor and machinery at the lowest possible cost and combine them to turn out a product that it will then attempt to sell at the highest possible price. From a purely economic perspective, there is no distinction to be made among any of the elements on the input side of the equation. All are commodities that the rational executive will seek to source cheaply and handle efficiently in pursuit of profit.
And yet, troublingly, there is one difference between “labor” and other commodities, a difference that conventional economics does not have a means of representing or giving weight to but that is nevertheless unavoidably present in the world: that labor feels pain.

If production lines grow prohibitively expensive, they may be switched off and will not cry at the seeming injustice of their fate. A business can move from using coal to using natural gas without the neglected energy source jumping off a cliff. Labor, by contrast, has a habit of reacting emotionally to any attempt to reduce its price or its presence. It sobs in toilet cubicles, it drinks to ease its fears of underachievement and it may choose death over redundancy [being fired].
Such emotive responses alert us to two divergent imperatives that coexist within the arena in which status is accorded: the economic imperative, which dictates that the primary task of business is to realize a profit; and the human imperative, which causes employees to hunger for financial security, respect and tenure.
While these imperatives may for long periods coincide without apparent friction, all but the most deluded of wage-dependent workers knows for a certainty that whenever a company is faced with making a serious choice between the two, it is the economic imperative that will always, by the very logic of the commercial system, win out." (100-101)


MC said...

Sounds a lot like what Stiglitz was saying in Globalism and It's Discontnets. Social cost sand social welfare so often take a back seat to economists at the IMF and for certain with corporations as de Botton illustrates here. Free market capitalism isn't the only economic system around, but I don't see it going anywhere.

Eric said...

Yes, but there are types of capitalism other than the "free market" style.