Labor's Lost Story

A column about labor relations and automotive job losses.

Labor's Lost Story
Almost everybody right of center sees the job losses as inevitable, the result of the American auto industry's failure to meet foreign competition and the "excessively" generous wages, health benefits and, especially, retirement programs negotiated by Reuther's union.

The believers in inevitability inevitably cite the economist Joseph Schumpeter to the effect that capitalism "is by nature a form or method of economic change and not only never is, but never can be, stationary." It is capitalism's gift for "creative destruction," Schumpeter argued, that guaranteed new consumer goods, new methods of production and new forms of organization.

A different story is told left of center, though it will come as no shock that progressives can't quite agree on a single narrative.
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As medical costs rise, more Americans will need government help. More employers will need to offload the costs of medical insurance to avoid bankruptcy. Yes, that's "socialized medicine," just like Medicare. But don't tell anyone. The phrase plays terribly in focus groups.

For 60 years New Dealers and social democrats, liberals and progressives, turned Schumpeter on his head. They insisted that few would embrace capitalism's innovations if the system's tendency toward creative destruction was not balanced by public innovations to spread the bounty and protect millions from being injured by change. It's a compelling story. Walter Reuther knew it well. Too bad it isn't told very often anymore.

This is interesting both for the points it makes about the role of capitalism in social progress but also about the importance of narratives in political discourse.