Thread by @Hamiltonianist

#NowReading Profits Without Production (1983) by Seymour Melman

Whatever the maneuvers for financial and market control that went on in the boardrooms of industrial capitalism, no one doubted that investing in and efficiently operating the means of production, especially those of basic industry, was the high road to wealth and fame.

Melman

By the 1960s the ideal type had become the financier-strategist, the shrewd, nimble operator who combined disparate firms into conglomerates that maximized the short-term profit-taking opportunities afforded by tax laws, securities transfers, the milking of production assets

SM

The money-making strategies of private management, combined with the enlarged power of the state managers, result in the looting of the productive capital of the system on behalf of short-term money-making and military-political power.

Melman

The shoe factories of New England are closing and their machinery and tools are sold abroad—well, in the post-industrial society, Americans should be concerned with high technology and not with demeaning work like shoemaking that can well be done in less developed countries.

SM

The U.S. machine tool industry practiced cost-minimizing, the managers and engineers acting to offset increases in their own costs by improving their own productivity. As a result, the prices of their products, the basic machines for all U.S. industry, rose more slowly than wages

For leading firms of the machine tool industry, those best able to do research and new product development, the relationship with the Department of Defense became an invitation to discard the old tradition of cost-minimizing.

Melman

With the new technologies, productivity of capital becomes more important in terms of cost than productivity of labor. Optimum results are obtained, not by maximizing manual dexterity or physical exertion, but rather through sustained optimum use of the capital equipment.

Melman

By their resolve to maximize money profits and managerial decision power, American corporate managers have set in motion the deindustrialization of entire regions of the United States. The closing of thousands of factories is the central feature of this process

Melman

Ordinary maintenance and new investment are dispensed with, the better to accumulate capital funds for investment in new industries, new products, new locations. Then the factories so deprived are finally shut down on grounds of high operating costs, inability to compete, unions

What is described in economic theory as mobility of capital translates into shattered lives, decaying communities, and a net loss of production competence in the nation as a whole.

Melman

Through US tariff code regulations 806.30 and 807.00, US-owned corporations could assemble products in a virtually tariff-free 12.5 mile strip of border zone and import them into the country paying duty only on the cost of cheap Mexican labor

Melman

The social cost of the military economy of the United States from 1946 to 1981 amounted to not less than $4,000 billion. This is a combined money measure of resources used up and economically useful output forgone.

Melman

When we take into account both the resources used up by the military as well as economic product foregone, then we must appreciate the social cost of the military economy 1946-1988, as amounting to about twice the “reproducible assets” of US national wealth.

Melman

Unemployment insurance funds have been designed to cope with temporary layoffs, not with the termination of enterprises or the displacement of whole occupations.

Melman

Comparative advantage loses clear meaning when one considers the array of products in which West Germany and Japan have come to excel. What is particularly “German” about many classes of machine tools, or of the electric trolleys (“light rail vehicles”) that enjoy a world market?

A castoff nation is created when its working people—all grades—are progressively discarded by decision-makers determined to make money outside production, outside the country, and by military work that contributes no life-serving product.

Melman

A far-reaching and sustained industrial effort for reconstruction requires a firm ideological commitment, to assure people that the desired economic renewal can actually be achieved, and so to maintain the will and drive necessary to carry it through.

Melman

Private and state managers have been schooled to an inability to carry out the basic task of organizing people for work.

Melman

Organized workers must face the problem of making finance capital arrangements to take over ownership of productive enterprises whose conventional managements do not find an adequate rate of return on investment to justify their further participation.

Melman

When managers are oriented to serve production and reject the idea that a workingman is “. . . more or less of the type of the ox,” then the way is open to viewing production work as important and honorable.

Melman