Newspaper article St Louis Post-Dispatch (MO)

People Do Matter

Newspaper article St Louis Post-Dispatch (MO)

People Do Matter

Article excerpt

Richard Gephardt, the Democrat minority leader, gave a truly important speech before the Economic Policy Institute recently when he called for corporate "best practices."

Opponents, typically, dismissed it as another regulatory, big-government approach. They asked how a member of Congress, of all things, could call for corporate standards.

Yet, although he did not use these words, Gephardt did nothing less than stand for a new economics, for getting rid of the Adam Smith straitjacket that the economics discipline has been struggling with for years. For centuries, economists have said "the factors of production" were land, labor and capital. Gephardt argued, in effect, that people are not just a factor; they count. He cited corporations that had discovered this - and thrived.

Nobody except miners, farmers and environmentalists talk much about land these days but, thanks to House Speaker Newt Gingrich, the nation is aware of the Three Wave analysis. The First Wave was agricultural production; the Second Wave was the industrial revolution; the Third is the information society.

It is a catchy but flawed analysis. The first two waves are basic forms of production; the Third isn't. What it does prove, however, is that what economists a bit uncomfortably call "human capital" does exist. People do matter.

The best that Gingrich, Majority Leader Dick Armey and other critics can do is rally around Adam Smith's "invisible hand" and the bottom line, which says in all too many instances that money matters, people don't.

Along with pseudo-science mathematics, many modern economists fall back on an old analysis of the difference between management and labor, which is a polite way of expressing the industrial age distinction between capital and labor, between money and people and their communities.

Both labor unions and managers have found comfort in the old distinction, in the war between labor and capital.

What Gephardt understands is that the distinctions do not apply to firms that have discovered and profited from working with their workers, rather than ignoring or fighting with them. H. Ross Perot knows this, too.

As the minority leader noted, firms with a long history of violence can leave discord in the past and profitably move into the future and worldwide competition by viewing employees as humans and partners, not enemies. …

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