The answer is; it’s both, and can either be used to exploit or benefit the country and it’s people depending on how it’s applied.
A titan of American industry and a die hard capitalist believed this to be the best system for Americans;
“There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible”. Henry Ford
Ford believed that when everyone shared the profits generated this form of “social” capitalism allowed everyone to prosper; from the bottom up. And, as a result, the country to grow more wealth which would continue to be shared by those who created and in turn promote perpetual growth.
“Social” capitalism is practiced when it looks like this; as reported in the NYT in 1914…….. you can read the entire article here;
Ford to Run Automobile Plant 24 Hours Daily in Profit-Sharing Plan
MINIMUM WAGE $5 A DAY ($22.00 in today’s dollars)
No Employee to be Discharged Except for Unfaithfulness or Hopeless Inefficiency
Special to The New York Times
Detroit, Mich., Jan. 5. — Henry Ford, head of the Ford Motor Company, announced today one of the most remarkable business moves of his entire remarkable career. In brief it is:
To give to the employees of the company $10,000,000 of the profits of the 1914 business, the payments to be made semi-monthly and added to the pay checks.
To run the factory continuously instead of only eighteen hours a day, giving employment to several thousand more men by employing three shifts of eight hours each, instead of only two nine-hour shifts, as at present.
To establish a minimum wage scale of $5 per day. Even the boy who sweeps up the floors will get that much.
Before any man in any department of the company who does not seem to be doing good work shall be discharged, an opportunity will be given to him to try to make good in every other department. No man shall be discharged except for proved unfaithfulness or irremediable inefficiency.
The Ford Company’s financial statement of Sept. 20, 1912, showed assets of $20,815,785.63, and surplus of $14,745,095.57. One year later it showed assets of $35,033,919.86 and surplus of $28,124,173.68. Dividends paid out during the year, it is understood, aggregated $10,000,000. The indicated profits for the year, therefore, were about $37,597,312. The company’s capital stock authorized and outstanding, is $2,000,000. There is no bond issue.
About 10 per cent of the employees, boys and women, will not be affected by the profit sharing, but all will have the benefit of the $5 minimum wage. Those among them who are supporting families, however, will have a share similar to the men of more than 22 years of age.
In all, about 26,000 employees will be affected. Fifteen thousand now are at work in the Detroit factories. Four thousand more will be added by the institution of the eight-hour shift. The other seven thousand employees are scattered all over the world, in the Ford branches. They will share the same as the Detroit employees.
Personal statements were made by Henry Ford and James Couzens, Treasurer of the company, regarding the move.
“It is our belief,” said Mr. Couzens, “that social justice begins at home. We want those who have helped us to produce this great institution and are helping to maintain it to share our prosperity. We want them to have present profits and future prospects. Thrift and good service and sobriety, all will be enforced and recognized.
“Believing as we do, that a division of our earnings between capital and labor is unequal, we have sought a plan of relief suitable for our business. We do not feel sure that it is the best, but we have felt impelled to make a start, and make it now. We do not agree with those employers who declare, as did a recent writer in a magazine in excusing himself for not practicing what he preached, that ‘movement toward the bettering of society must be universal.’ We think that one concern can make a start and create an example for other employers. That is our chief object.”
“If we are obliged,” said Mr. Ford, “to lay men off for want of sufficient work at any season we purpose to so plan our year’s work that the lay-off shall be in the harvest time, July, August, and September, not in the Winter. We hope in such case to induce our men to respond to the calls of the farmers for harvest hands, and not to lie idle and dissipate their savings. We shall make it our business to get in touch with the farmers and to induce our employees to answer calls for harvest help.
“No man will be discharged if we can help it, except for unfaithfulness or inefficiency. No foreman in the Ford Company has the power to discharge a man. He may send him out of his department if he does not make good. The man is then sent to our ‘clearing house,’ covering all the departments, and is tried repeatedly in other work, until we find the job he is suited for, provided he is honestly trying to render good service.”
Looking back, history consistently shows that this form of capitalism is “good” for America.
Now, compare this with today’s system of “crony” capitalism; and we can see that the results speak for themselves.
In addition to literally destroying the countries economy and it’s middle class we are left with a debt estimated to be around $6 trillion which future generations of Americans will be saddled with.
This is how “crony capitalism looks;
The richest 85 people in the world own more wealth than the bottom half of the entire global population.
Yes, that equation works out to: 85 > 3,000,000,000.
Before we dig into the document, a programming note about wealth inequality. Wealth isn’t income. Salary is income. But investments—stocks, houses, or equity in a business—build wealth. Wealth comes from the money you don’t immediately spend. Since poor people spend more of their income immediately, and rich people save/invest more of their income immediately, it’s predictable that wealth inequality be much worse than income inequality.
That said, the document is full of figures that will make your head explode if you are about income inequality. Here are five.
1) Seven in ten people live in countries where inequality has increased, and the United States is leading the wave. This graph from the report looks at nationalincome (not wealth) accumulation to the top one percent, but it makes a clear point that inequality is rising everywhere, but nowhere more than the U.S.
2) The richest 1 percent saw its share of income rise in 24 out of 26 countries for which Oxfam collected data between 1980 and 2012. Again, the story here is the U.S. leading a global trend.
3) Related to the graph above: In the US, the wealthiest one percent “captured 95 percent of post-financial crisis growth since 2009,” Oxfam reports. The bottom 90 percent actually lost wealth.
4) Every high-income G20 country is experiencing rising inequality except for South Korea. Meanwhile, numerous Latin American countries, including Brazil, Mexico, and Argentina, are seeing inequality levels decline thanks to a combination of income graph and high taxation and public spending.
5) The wealth of the one percent richest people in the world amounts to $110 trillion—15x more than the wealth held by the bottom 70 percent.
The rise in wealth inequality isn’t a measure of the poor getting poorer. It’s a measure of the rich getting fantastically richer thanks to the cascading benefits of privilege and the tremendous growth in stock wealth in the last decade. (Even in the U.S., 75 percent of household wealth is held by the richest 5 percent.)
On that note; if 75% America’s household wealth is in the hands of 5 percent of the population it’s painfully obvious that Ford’s idea on how to grow America and make it great has long disappeared from our marketplace.
Now, the question is; which form of capitalism do you want in America? Which one is good for you, AND the country?