Saturday, June 30, 2012

Let's play an economic game

Here are the rules. I am going to present two economic scenarios. After reading and thinking carefully about each scenario, I will ask you to make a choice. Whether you share your preference is up to you. This experiment is for your benefit, not mine. If have read my blog, you already know what my choice would be.


SCENARIO 1


Unemployment is a problem. There are too few jobs for the people that need them to provide for their families. A major employer, say the head of an agribusiness conglomerate or an energy company, is hiring workers. A Human Relations (HR) specialist named Peter goes to town at the crack of dawn to interview applicants. In a matter of minutes, the positions are filled.

On the way back to the office, Peter sees a line of disappointed applicants hoping there still might be a job opening. He calls corporate headquarters and explains that he filled the open positions, but there are others desperate for a job to support their family. The order from corporate is clear. "Hire them."

Peter had one question. "What will they be paid?"

"Same as those you hired first."

Peter signed up the rest. By the time the paperwork was signed, sealed, and delivered, it was past noon. He headed to a popular watering hole nearby for a well-deserved glass of wine, fruit, and cheese.

It is past 2 in the afternoon when Peter heads for his car. On the way he is surprised to find people still looking for work.

"We heard a rumor that you hired many people this morning and were hoping for work."

Peter reached for his phone, but knew what corporate was going to say. "Hire them and pay our standard living wage." And off he went to hire all he could find. It was almost midnight by the time he finally pulled into his driveway.

On payday, the people that were hired first and worked the most hours were angry that those with less seniority and hours were given the same salary. The grumbling reached corporate headquarters. Mary, the company's CEO, called a meeting of all employees.

She looked out over the crowded auditorium. "Are you receiving a fair salary for the work you are doing for this company?" Every hand went up, although some were less enthusiastic than others.

"For those hired first, count yourself fortunate to have had security of knowing your family would be able to live comfortably. Be happy for your neighbors that they too can live without fear.

After the meeting, Peter asked if this policy was a wise business strategy. The boss answered. "Yes. I want our customers, employers, and stockholders to be proud to be associated with this company. I would rather have more employees than I need than have people living on the street forced to steal from the company or its employees. I would rather we live in a town where no one goes without food, shelter, and medical care. It is the just and moral thing to do."

If the story seems familiar, you may have seen another version. Here is Matthew 20: 1-16 (a denarius was the living wage 2000 years ago):
1“For the kingdom of heaven is like a landowner who went out early in the morning to hire laborers for his vineyard. 2 When he had agreed with the laborers for a [b]denarius for the day, he sent them into his vineyard. 3 And he went out about the third hour and saw others standing idle in the market place; 4 and to those he said, ‘You also go into the vineyard, and whatever is right I will give you.’ And so they went. 5 Again he went out about the sixth and the ninth hour, and did the same thing. 6 And about the eleventh hour he went out and found others standing around; and he said to them, ‘Why have you been standing here idle all day long?’ 7 They said to him, ‘Because no one hired us.’ He *said to them, ‘You go into the vineyard too.’
8 “When evening came, the owner of the vineyard *said to his foreman, ‘Call the laborers and pay them their wages, beginning with the last group to the first.’ 9 When those hired about the eleventh hour came, each one received a denarius. 10 When those hired first came, they thought that they would receive more; but each of them also received a denarius. 11 When they received it, they grumbled at the landowner, 12 saying, ‘These last men have worked only one hour, and you have made them equal to us who have borne the burden and the scorching heat of the day.’ 13 But he answered and said to one of them, ‘ Friend, I am doing you no wrong; did you not agree with me for a denarius? 14 Take what is yours and go, but I wish to give to this last man the same as to you. 15 Is it not lawful for me to do what I wish with what is my own? Or is your eye envious because I am generous?’ 16 So the last shall be first, and the first last.”



SCENARIO 2


The CEO of large company stands before the stockholders. There have been rumors something big is in the works.

"Welcome everyone. I am happy to announce a bold new vision for our company. These moves are expected to bring us rapid growth in profit by slashing costs. We are closing our domestic plants and setting up in places where we can pay people pennies. You should see big increases in stock value and dividends within a year.

A hand in the audience goes up. "What about our current employees, some of whom have been with the company for 30 or 40 years?"

"They will be given a few weeks to find another job. They can keep what is in their pension fund unless we decide to use that money to sweeten an arbitrage deal."

Another hand goes up. "Closing the plants will have a devastating impact on local communities."

"That is not our problem. And if these communities do not agree to cut our taxes, we will move our corporate headquarters to some island. Don't worry about the publicity. We have hired the best lobbyists in the country to bribe politicians, media companies, and religious leaders to support our moves or we will 'go Galt' on them.

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Let's talk


Scenario 1 sounds good in theory, but impossible in practice because most corporations do not have CEOs like Mary and a corporate culture that is socially responsible. In other words, social capital (aka, people, communities, nations) does not matter to most corporations. And despite the fact that the parable by Jesus has spiritual and economic ramifications, many Christians in our society are being brainwashed into picking Scenario 2, even when it is not in their own best interests and the best interests of their family, friends, and neighbors.

Scenario 2 is bad for everyone except executives and investors. Only the brain dead and zombies believe it contributes to a fair and just society.

Some will say that the parable told by Jesus was just about grace in the spiritual world. Wrong. "On earth as it is in heaven."

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