This http://www.nytimes.com/2012/09/03/opinion/henry-ford-when-capitalists-cared.html” title=”Times”> Op-Ed from today’s edition illustrates where America was and what we can do to get back. Henry Ford, no socialist, realized that if his employees could afford to buy his cars it would help his business, other executives in a variety of sectors followed. Most making executives made “only” 4-5 times what their employees made, paid very high income and estate taxes, and viewed themselves collectively as pillars of their community and country. The idea of an American CEO making millions off the backs of American workers and consumers and then high tailing his citizenship to another country would have been anathema in another era and is common place today. Just compare todays Governor Romney to the Governor Romney in the 1960s who as a CEO made small, affordable cars right here in the US instead of just manipulating money like his son. The best quote from the OP ED
Riding the dynamics of the virtuous circle, America enjoyed its best period of sustained growth in the decades after World War II, from 1945 to 1973, even though income tax rates were far higher than today. It created not only unprecedented middle-class prosperity but also far greater economic equality than today.
The chief executives of the long postwar boom believed that business success and workers’ well-being ran in tandem.
Frank W. Abrams, chairman of Standard Oil of New Jersey, voiced the corporate mantra of “stakeholder capitalism”: the need to balance the interests of all the stakeholders in the corporate family. “The job of management,” he wrote, “is to maintain an equitable and working balance among the claims of the various directly affected interest groups,” which he defined as “stockholders, employees, customers and the public at large.”
And some countries like Germany still do this
In Germany, still a manufacturing and export powerhouse, average hourly pay has risen five times faster since 1985 than in the United States. The secret of Germany’s success, says Klaus Kleinfeld, who ran the German electrical giant Siemens before taking over the American aluminum company Alcoa in 2008, is “the social contract: the willingness of business, labor and political leaders to put aside some of their differences and make agreements in the national interests.”
In short, German leaders have practiced stakeholder capitalism and followed the century-old wisdom of Henry Ford, while American business and political leaders have dismantled the dynamics of the “virtuous circle” in pursuit of downsizing, offshoring and short-term profit and big dividends for their investors.
It is high time for the President to harness this spirit that drove Midcentury capitalism and the liberal political consensus-in both parties (when even the 1956 and 1960 Republican platforms called for socialized insurance, ‘progressive’ taxation and increased unionization) and highlight some of the companies that still follow this model-Costco, Mondragon Inc, the Evergreen Cooperative, In and Out Burger, and many others.