Hello and thank you for your replies in advance.
I often read reports that proudly boast about Company X or Business B choosing a particular municipality in the Commonwealth of Massachusetts in exchange for something from our government, either in a tax break or some other tangible monetary gift to the business owners.
In exchange, we, the working class citizens of the Commonwealth get “jobs”….but there is no qualification as to what the jobs are, how much they actually pay, or any of the nuts and bolts that a guy like me would be interested in, if they exist at all. I have asked in the past only to heat that the jobs “pay well historically” or other such smoke, but again, no details and what seems to be a lot of “trickle down”.
Way back in the early days of our nation, President Washington gave tax incentives to New England cod fishers to rebuild their fleets after the Revolutionary War on the condition that the captains and the crew sign contracts ensuring broad-based profit sharing among all workers. On February 16, 1792, Congress passed and Washington signed a new law mandating that three eights of this allowance would go to each vessel’s owners and five eighths would go to the crew. Allowances would only be paid if the shipowner had a written profit sharing contract with the sailors before the voyage covering the entire catch. The shipowner could collect his allowance from the government only if he could produce this agreement.
Was there any such provision in the tax allowance given to General Electric, or proposed to Amazon, or included in any such arrangements our state government has entered into with business owners (like the casino owners?)…if not WHY NOT?
“Economic gardening is an entrepreneurial approach to economic development that seeks to grow the local economy from within. Its premise is that local entrepreneurs create the companies that bring new wealth and economic growth to a region in the form of jobs, increased revenues, and a vibrant local business sector.”
More information at https://www.nationalcentereg.org
I mentioned this idea to one of the Baker administration’s innovation people at the beginning of the first Baker term and she was astonished, “Oh, there’s a name for what I was doing in Western MA!!!” I sent her more information but never heard back.
Thanks for the resource. Gee, you never heard back…..I am shocked.
Let’s face it. both political parties in Massachusetts don’t give a rat’s behind about the plight of the working class, unless they want votes on election day. Apart from that, it’s the wealthy ownership class that matters.
I see no one has replied to my post with any information regarding a shared government benefit to business owners AND the working class.
I think the basic issue is that any job is better than no job, and in general, nobody could/can do what Washington was able to do. It was a new nation and he had quite the honeymoon in terms of legislation and the bully pulpit, but I think if you dig deeper even he didn’t have carte blanche. To expect a representative to impose conditions on one business who is seeking to expand or move into an area is a bit naive. The process of negotiation (aka schmoozing) goes on behind closed doors and requires a lot of energy and flattery, vague promises and other such seductions. To leapfrog to the end of the process and say ‘it should have been a better deal’ is exactly what Trump does. You make an accusation of ‘its not good enough’ void of context or process.
Every business is at risk of failure, and nothing makes that risk higher than expansion and taking on new debt or overhead. The “incentives” are actually an attempt at risk reduction. They don’t really work because taxes are not that powerful a medicine for solving any problems, but we seem to be stuck in the delusion of their magic power.
Your post does bring up the deeper issue of equality between the worker and owners, but the broader issue, in theory, is that the subsidy was created by the workers through tax revenues. So which is it? Are the workers subsidizing the building of ships through their own taxes, or are the business subsidizing themselves through their own activity? Likely both are false, because the underlying economic dogma and rules of modern finance are all false. There is no natural distinction between workers and owners, since the division of labor in society is a normal thing. What is unnatural is the divide between the rich and the poor, the powerful and weak, the privileged and oppressed. Washington, despite owning slaves, opposed slavery. So which was his most overriding characteristic? Hypocrisy or courage to self-sacrifice? Workers and owners today have the same struggle to deal with. Nobody really wants to make a contribution to the greater good without some form of return. If the workers want ‘more’ and greater financial security, then is it unreasonable for the owners to likewise want ‘more’ and greater financial security?
Washington was right that a 5/8 split in favor of the workers was better than a 4/8 split, but couldn’t it just as easily have been a 7/8th share? What is the magic number and percentage? Does it exist? What exactly is the problem we are trying to solve? If society is better off for having a fleet of new ships, then how do we build them and use them for best effect? This is a fundamental question of leadership and stewardship. While I think our society has failed on many levels, it is far too easy to create a false scapegoat and miss the bigger and deeper issues.
For example, who will be paying the profits that will be divided between the workers and owners? Every act of consumption pays for all the profits in the supply chain that brought the item forward to its point of consumption. How can the consumer afford to pay for all these profits? He does so by creating a similar profit chain on a different commodity. In this vicious circle of economic activity chasing economic activity, what is happening mathematically is perpetual volatility, inflation and wealth concentration/depletion. This cycle is far more enduring and destructive than tax incentives, tax collections/redistribution or profit sharing can overcome. Nobody can really get their numbers to work.
Today’s boom is tomorrow’s bust, and so the blind and reckless pursuit of the boom takes precedent because their is no broad understanding of how the economy actually functions. The scapegoating of King George for his alleged failure to regulate the economy of the colonies properly is the same scapegoating that occurs today between democrats and republicans. And, just as some defended the Crown, you are likewise looking backwards to some golden age of Washington which never really existed. Trump likewise does that, too. Trump is president because his economic ignorance, pride and fears are actually widely common, both today and historically. Democracy works perfectly. The blind follow the blind, and we reap what we sow. If we don’t like what we have reaped, then we need to figure out what we did wrong and how to fix it. Over hundreds of years, the smoke has certainly gotten thicker.
Adam Smith wrote that a nation with the highest rate of profit goes to ruin the fastest. So profit-sharing isn’t going to be good solution if the rate of profit is high, regardless of how you split the profits. Today’s focus on invisible hands and free markets turns Adam Smith on his head, much like killing in the name of God turns religion on its head. Hypocrisy and doublethink are widespread and have a thousand faces. Look at your question about GE for example. Why did they even move? What were they to gain? The decision by the former CEO was just a bad decision. The company is clutching at straws for a solution, thinking that a change must be an improvement, but it is just as easy to go from the pan into the fire. Representatives, in general, are always afraid of ‘losing’ and going from the pan into the fire, so institutionally government is as timid and misinformed as the people. The leaders of industry are likely worse, since their ability to fool themselves is acute.