This letter was published in the Waynesboro, Virginia News Virginian on May 20, 2016
Thanks and a special “Hurrah!” for Brian Carlton’s editorial of May 18, “Value of a
workforce.” It supports a lesson I learned long ago, before Corporate
America became so adept at concealing and denying it. The lesson is this:
Wealth is created by a vital partnership of capital, labor, and government.
This theory was severely tested during events like the Great Depression, but
the American Dream flourished apparently better than it does today. The old
theory deserves revisiting as we wrestle with current economic difficulties.
For those who forgot or never learned it, the gist of the theory is:
Capital provides investment needed to establish enterprises and furnish the
land, facilities, and equipment they need to do their work. Fair return on
investment is an essential incentive for obtaining capital, given the risks
Labor acquires knowledge and skills, and devotes personal time and energy,
sometimes risking life and limb, to perform human tasks. A fair share of
rewards provides incentive for professionalism and innovation, and enables
labor to purchase the products of business. Labor shares the risks of
capital, but at a personal level where adapting to change is more difficult.
Sweatshop-level competition deters professionalism, innovation, and denies
labor the ability to purchase products of business.
Government supports capital by providing infrastructure, supports labor
through education and social safety nets, and supports the entire enterprise
by providing regulatory guides, defense, and domestic law and order. The
Interstate Highway System, air transport facilities, the Internet, and
aerospace research and development are recent examples of enormous
opportunities for wealth creation that resulted from government action –
undertaken at times of higher taxes than we complain about today.
Support of this threefold partnership brought us the world’s strongest, most
innovative economy. It raised our standard of living. It created a sense
of national unity, of people working for common cause. All are sadly in
decline today. When we diminish labor and government, seeing them only as
costs to be minimized, we endanger the vitality of our economy and of our