1945 and after

1945 and after

By Raymond Freeman 05/29/2014

In 1945, Winston Churchill led Britain to victory. But he was thrashed in the election afterward. Why? The masses had sworn to end the class system after the war. They were packed in like sardines on troopships, but found the officers had luxurious cabins.

The new Labour government was high-minded. It made important changes in healthcare, welfare, social ownership and education. Yet this was mostly tinkering with the underlying Victorian class system and economic structure. Inequality remained high. Industrial managers retained their lordly attitudes. This was a definite factor in the strikes that began to plague Britain. Poor management skills and union militancy accelerated its industrial decline.

Having won two wars, the British believed they were exceptional. They made important advances in jet aircraft, computers and science. But Britain frittered away its position chiefly because the masses didn’t see themselves in a morally based society granting social respect and economic justice. The inability to develop a fairer social contract became a problem. And it’s become a problem here.

In 1945, America’s Golden Age started. Productivity grew and wages grew. We followed Henry Ford’s recipe for success and paid workers well. This kept up demand, which kept the factories humming. It seemed a fair system. Everyone prospered. Then … we threw it away. Jimmy Carter didn’t have that vital “swagger.” An old movie actor did. Americans loved his jokes. Ronald Reagan’s vision was to cut taxes to unleash America’s energy. OK, the rich would get richer, but so what? Everyone would.

But it was pie in the sky. George Bush Senior called it “voodoo economics.” National debt soared (Sharper Focus, “Debt and Taxes”). Profits are now at record highs, but labor’s share of national income is at an all-time low. Wages have been stagnant since 1975 despite continuing productivity gains. The median wage is far lower than workers’ productivity share. This rip-off is now around $32,000 per year per worker (Sharper Focus, “Short of Money?”). This is money that doesn’t circulate around the economy creating more prosperity. It just piles up in the Cayman Islands. Consumer demand isn’t high enough. The superrich just can’t spend enough money. Mitt Romney doesn’t have 12,000 Cadillacs. Let’s say he has 12 BMWs. They’re German.

In 1945, Germany was destroyed. But the Germans buckled down. Germany’s new leaders insisted that workers get respect for their efforts. They passed laws that put trade unions in boardrooms. Labor unrest has been rare because economic justice was built into the social contract. German industrial policy promotes precision manufacturing with high profits and high wages. Nobody screams at paying taxes because everyone has a fair shot at success. Health care and further education are almost free. Germany has produced a healthy, educated workforce.

Get it? Taxes can create wealth. Cash flow reinvested in human capital yields a greater return for the private sector than cash flow taken out.

So laws based on economic and moral clarity produced Germany’s success. Germany diagnosed the root cause of injustice and cured it. Its economy grew because the masses saw themselves in a morally based society producing economic and social justice. The Germans didn’t copy America’s policy of worker-bashing. They realized they could hit bottom and still be unable to compete with China.

As a result, Germany’s the world’s second-largest exporter, yet it has only a quarter of America’s population. Volkswagen is the world’s largest carmaker. Germany’s car workers earn far more than America’s.

Today’s Germans use their brains. They don’t respect us. Wall Street’s supposedly safe “triple-A” investments cost Germans billions in the 2008 Crash. “Militias” with “checkpoints” are unknown. Wage theft is unknown. Union-busting is unknown. Their leaders don’t lie and squander trillions on stupid wars. Der Spiegel stated (Nov. 2012, “Notes on the Decline of a Great Nation”) that America is “plagued by an absurd level of hatred, the economy is stagnating and the infrastructure is falling into a miserable state of disrepair.”

We’re stagnating because fair play has been replaced by Republican policies designed purely to benefit the superwealthy. Even Newt Gingrich said this was “right-wing social engineering.” Republicans have been taking America backward to the Dark Ages of barons and peasants with only a tiny middle class. They only care about pampering the rich and bashing the poor. Christ preached this in the Bible … where, exactly?

America worked brilliantly until we lost our moral bearings and stopped using our brains. We showered money on the superrich and got “voodoo economics” in return. Fundamentally, America’s declining because it no longer has a morally based society producing economic justice. Just like the British 60 years ago, we’ve deluded ourselves into believing we’re “exceptional” and don’t need to change. Saying otherwise is heresy.

Be a heretic! In the next election, ask Republicans what they’ll do for America’s workers, “morally speaking.” 

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