Monday, September 13, 2010

Corporate Socialism?

General Motors Institute - an example of Corporate Socialism

There is a lot of talk today about "Socialism" in America.  But only a few decades ago, we lived in an era of Corporate Socialism.  Was that any better or worse?

The image above is of the hallowed, ivy-covered halls of my alma mater, General Motors Institute, a five-year co-op Engineer school in Flint, Michigan, now called Kettering University.  GM has downsized and running your own college was one of the first things they got rid of.

It seems so odd and quaint now, in retrospect - a major corporation running its own Engineering College.  And yet, back in the day, GMI was a well-respected institution, known for turning out smart and experienced graduates who had real hands-on experience in industry.

Did GM make money from this school?  Hardly.  While it did provide them with a steady stream of skilled Engineers, probably more than half who went there went on to work for competitors or other industries.  It was a luxury that GM could afford - a bit of corporate socialism from a bygone era.

And back then, most corporations worked this way.  For starters, most corporations back then offered what amounted to lifetime employment.  You got a job with IBM, you wore the blue suit and expected to work there for life - retiring with a gold watch, a pension, and fully paid-for health care.

Oh, yes, health care.  A big issue in today's national debate.  Socialism, the critics call it.  But back in the day, most major corporations offered "Cadillac" health care plans, particularly if you worked at Cadillac.  These plans paid for medical, dental, and even eyeglasses, with little or no deduction or co-pay.

And one reason health care costs have skyrocketed in this country is that most workers who got these benefits took it for granted that "everything was paid for" and thus had no incentive to shop medical services on price, where it was appropriate.

Our tax system, of course, encouraged this.  An employer can pay an employee more, in terms of benefits, as they are untaxed.  So a dollar in pay means the employer pays $1.18 with withholding and that the employee gets 60 cents, if that.  But a dollar in health care equates to a dollar in the employee's pocket, if they have a family and use the service.

It was corporate socialism, pure and simple.  The company would "take care of you" so long as you worked there and danced to their tune.  It insured loyalty from workers in return.  It was not such a bad system, in retrospect.

And corporate socialism went far beyond mere health care.  Many corporations back then had tuition reimbursement programs, which I took advantage of at United Technologies.  They paid me to go to school.

Similarly, most companies had retirement programs or investment programs, to allow you to save for retirement.   We also had a "bond drive" to encourage workers to save money by buying savings bonds.  And we did the United Way campaign every year, to encourage workers to give to charity.  In fact we did a lot of things, and occasionally got around to making cars.

When I was at GM, we used to call the company "Generous Mothers" as it seemed like a benevolent giant, taking care of us.  At age 18, we had health insurance, a retirement plan, a steady salary, a place to live and a job.  And on top of that, we got huge discounts on brand new cars.  We clutched the warm bosom of the almighty Generous Mother tightly.

Times have changed dramatically since those days.  Today, GM is emerging from bankruptcy, and instead of being a "Generous Mother" she is more of a spiteful child-abuser.  Not that GM is any different than anyone else in that regard.  Today, in order to "compete on a global basis" we have to slash benefits, salaries, and move work offshore.  GMI was sold off, and tuition reimbursement plans are largely a thing of the past at other companies.  Generous pensions and retirement plans have been replaced with self-funded 401(k) plans, putting the onus on workers to fund their own retirement.

And lifetime employment?  A joke, these days.  Most workers expect to be laid off or change jobs every  5-10 years.  No one expects to "retire" from a company after 30 years of service and receive a pension.  Only schoolteachers and government workers even have a shot at that - and even then....

And yet today, these same people who are getting the screw-job are the same ones down on the mall in Washington, protesting as "Teabaggers" that America is turning into a Socialist State!

No offense, but I respectfully disagree.  If anything, America in the 1950's through the 1980's was a Socialist State, and now is in the process of reverting to 3rd world status.  And yet the people most affected by this are cheering on our decline.  They want not a return to the glory days of the 1960's, but to make things even harsher for Americans - to toss people out onto the streets and deny them medical care.  In other words, how many 3rd world countries treat their citizens (or at least how they used to).

Gone forever are the cushy, lifetime jobs that companies like Xerox, Kodak, IBM, GM, and others offered.  Today, we are offered, at best, only part-time temporary employment, with no benefits.  Or you can become, like me, a self-employed "contractor" responsible for his own taxes, retirement, and health care, making little more than someone on the inside does.  It all sounds so glamorous until you realize that health care costs between age 55 and age 65 could top $10,000 to $20,000 a year.

The question is, how did we get to this state?  And why?  Why are the very people - the middle class - who were beneficiaries of the corporate welfare state, now pushing back against government "socialism"?

It is an interesting question, and I believe that it probably is another example of Baiting.  The teabaggers are upset, as their standard of living has diminished.  Their jobs are being sent overseas, because costs are lower.  They need a scapegoat - a culprit - to blame it all on.   So they seize upon "high taxes" and "socialism" as codewords.  Their problems, they believe, are caused by those "other" people on welfare, taking all of their tax dollars.  And we all know what those are code words for.

It is an interesting strategy by the powers-that-be, whose incomes in the rarefied brackets have skyrocketed during this downturn in the economy.  After all, like the plantation owners before them, it is much more profitable and safer to get the poor white trash riled up against the blacks, than to have them marching on the plantation, demanding their own share of the wealth.  Not only can you divert their anger toward a scapegoat minority, you can get them to go into battle and do your bidding - without them ever realizing that they are fighting against their own interests.

The rebel soldiers of the Civil War were not "heros" but fools - dying for a cause that was not their own, and fighting against their own self-interests.  The net result of the Civil war, was that the plantation owners returned to their plantations, decorated with medals and honors, while the fighting men - those that survived, returned to nothing but destitution and poverty.

Not surprisingly, many "teabaggers" also embrace the mythology of the rebel "cause" and "heritage" as a sacred sacrifice.  And today, we see history repeat itself as another ruling class cynically manipulates public opinion among this class of people to get them to work against their own self-interest.

Here's a hint to anyone wanting to take up a political "cause": Figure out whether it really is in your own best interests to take up someone else's banner, or whether, perhaps, you are being baited and riled up, in order to serve someone else's agenda.

The days of Corporate Socialism will probably never return in the USA.  It was a short era - perhaps only a few decades long.  I am glad I got to see the waning days of that era - an era of empire.  And I'm sorry I didn't appreciate it while it lasted.

It is gone forever, and what lies ahead may be very scary, indeed.

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