Super Profits: Dirty Currency
- Jorge Gomes
- Jan 11, 2023
- 7 min read
The profit ratio of many companies is absurd and most of their employees live in inhumane conditions...
In the fifth century, an incredible work known as "The Politics" (and other works) by the philosopher and teacher of Emperor Alexander the Great, whose work was dedicated to investigating politics and bringing proposals for a happy life, both individual and collective. In one of his books, Aristotle defended the use of money as a means of facilitating transactions, since exchanges would be costly. He saw currency as an object that naturally developed in society. It thus plays a useful role in society. However, he believed that the coin had its unproductive side when it charged interest and profits. The philosopher believed that natural wealth comes from acquiring property, as we need it for survival, and unnatural wealth comes from profits and interest. The means of exchange changed over time, from gold bars, metals and even the arrival of coins. There was no longer any need to measure the object of exchange, as the currency had a corresponding built-in value.
"As soon as the importation of commodities and the exportation of surplus goods began to facilitate the satisfaction of needs across national borders, men inevitably resorted to the use of coinage. Not all the things we naturally need are easily carried (...)". (ARISTÓTELES, 1913).
He pointed out that the advent of money promoted economic development; what seemed to be something spontaneous and harmless, resulted in a form of excess, in commerce where men were more interested in discovering how and where they should produce more profits and, consequently, accumulate assets, harming full human development. He defended the profit coming from agriculture and not from commerce because that would be the natural way to make profits: from harvesting and raising animals.
The Greek expansion stems from the need to find fertile land because the predominantly mountainous soil (geologically recent) of ancient Greece becomes fragile as a result of climate change. With landslides, floods, among others, the fertility of the land is put in check, bringing significant losses that emerge in socioeconomic problems. On a smaller scale, there are lowlands called plains; the regions that had geographical barriers made it difficult for the Greek communities to unite.
In addition to the need to seek land and precious metals, Greece needed to allocate rural workers who used other regions as dormitories; these changes favored the development of trade in Ancient Greece around VIII a. sacred coins and exchange of products, for the agreed currency and with its own value.
In 1776 Adam Smith's Book I, an investigation into the nature and causes of the wealth of nations, was published. In this first work, the author shows that productivity increased due to the division of labor that brings more agility in the production of goods. Before, the craftsman had to build a pot by himself, look for clay, paint the utensil with ink extracted from the Toá stone, had to sell it, etc. Then, with the division of labor, each person became responsible for assembling a part of the pot.
The complexity extends beyond the industry. For example, the first process is mining, which consists of extracting ores from the earth's crust, such as aluminum, which is extracted from bauxite. The second process is the refinery in which bauxite is subjected to a heated solution and caustic soda, which forms an alumina. The third is the reduction of aluminum that occurs in a procedure known as Hall-Héroult – which consists of placing the alumina in electrolytic vats in order to reduce the calcined alumina. This is one of the ways to obtain materials for the construction of some goods.
In the next phase, we enter the production system that presents three forms:
• Continuous production system;
• Intermittent production system;
• Production system for large projects.
The first way is the traditional way, which seeks to produce more products in less time; it is a detailed production, usually happen in automotive industries. The second way is batch production of goods; they produce according to the order, with predictability. The third is the production of large projects; Generally, the prices of objects produced are higher due to the customization required, such as aircraft parts.
There is an effort to develop industries, businesses, refineries, among others. Responsibility consists, first of all, in bearing the expenses of the business with possible risks. For example, intellectual investment in industries, how to manage infrastructure, knowledge such as Just in time, Kanban, Six Sigma, 5S, etc.
In the case of a trader (such as a supermarket owner), for example, he will first need money to invest and risk. There is a concern with the location, with renting the premises, details on health surveillance, operating licenses, tax issues (ICMS, ISS, etc.), specialized training programs – in some cases – assistance from marketing, layout development, setting up service counters, luggage storage, supermarket checkout, frozen food counter, storage furniture, on-site security, among others.
The difficulty increases when hiring employees, as the payroll includes charges, such as INSS and FGTS, and rights, such as paid rest, vacations, among others. The company will pay around 70% more than the employee's own salary; if the person receives R$ 1000, the boss will have to spend R$ 1700, in addition to contributing food or meal vouchers; transportation with a 6% employee discount on the payroll. This ends up making it difficult and discouraging many people to undertake.
On the worker's side, there is an exhausting working day. Workers often work all day, plus their commuting time (round trip), assuming they wake up at 6:00 am and need to be at work at 8:00 am, and leave work at 6:00 pm and arrive home at 8:00 pm, imagining that should sleep regularly 08 hours a day, there would be only 02 hours of your "free" day, in which you will have difficulty practicing physical activity and difficulty concentrating to have a more productive learning; and often without time for himself and his family, earning a meager salary, justifying that the work he does does not require much capacity, even knowing that the boss earns more than double on what he produces.
Adam Smith himself realized that the division of labor, which takes place in this production system, leads to the alienation of the subject because he cannot have the notion of the production of the whole, but only of the part that he is responsible for executing the task, which is the duty of the State to provide Education.
In Smith's light:
“Society can force the vast majority of citizens to obtain those most basic elements of education, requiring them to pass an exam or internship to practice their profession or open a business in the commercial center of a neighborhood or city”. (SMITH, 1776).
In 1867, sociologist Karl Marx inaugurates one of his main bibliographies: Capital I. The work brings fierce critical analyzes of capitalism, especially the mode of production, where it divides society into producers x workers. In this case, because he does not have capital, the employee needs to sell his workforce to survive. Before, people worked to solve their basic needs, but later, the need to produce for profit arises.
Let's look at the following sentence:
“In manufacture and handicrafts, the worker uses the tool; in the factory, he is a machine servo”. (MARX,1867).
Known as D-M-D, money is used to produce a commodity that will be sold in order to obtain more money. This equation is what leads to the accumulation of capital, according to Marx. Still, the thinker is in line with Smith when he points to alienation in workers for moving away from the final product and not being able to measure the value of their work.
In the same work, Marx denounces the inequality between what the collaborator produces in relation to what he receives, using the term “surplus value”; for example, in a cookware industry, he manages [together with his work team] to produce around 300 products per day and with this result, he manages to turn around R$15,000 per day. However, together they receive around R$ 7,000 and the rest of the days worked go entirely to the entrepreneur.
In 1956, economist Ludwig Heinrich Edler von Mises, in one of his works (The anti-capitalist mentality) discusses the functioning of capitalism and why society created aversion to the economic system. He claims that the capitalist system is the most effective economic doctrine for social mobility, where people from lower classes can rise to higher classes. In the same way, rich people can become poor people. Contrary to the concept of added value, profit serves as a motivation for entrepreneurs. He defends profit because the entrepreneur assumes risk when setting up a business, as well as assumes all the administrative work that requires more effort than the simple worker who has his salary guaranteed at the end of the month.
Unlike Marx, the economist fired:
“Capital does not generate profit”. (MISES, 1956).
Capital goods, as such, are dead things that do nothing in themselves. If they are used according to a good idea, profit results will follow; if they are used according to a mistaken idea, no profit or loss results. It is the entrepreneurial decision that creates profit or loss.
Therefore, the profit comes from strategies created by the entrepreneur who takes a risk in a certain enterprise and the salary is the value reduced to the employee who did not create the entire complex structure. Many criminals in the past are not taken into account, who are rich [until the present day], because their families exploited some groups in every possible way. Here I point out the entrepreneurs who conquered their heritage through incessant struggle, constant research and self-responsibility.
From my point of view, in every situation of building a company, the entrepreneur must earn more than the employee who arrives later and just reproduces a service. However, the profit ratio of many companies is absurd – which I don't see as noble – to the point that most of their employees live in inhumane conditions and without any expectation of growing in a career plan. Enriching absurdly is more important than favoring the quality of work of its employees.
According to Oliveira Vianna:
"The poverty of the pioneer caudillos doesn't matter; never mind the absence of luxury: all warrior aristocracies have always been disdainful of wealth and luxury. Such was the Greek aristocracy of the Homeric era. Such was the Roman aristocracy of the republican era. Such was the feudal aristocracy of the Middle Ages. Such was the peninsular aristocracy of the Reconquest era. It was like this, among us, the warrior aristocracy, leaving the cycle of the Platine wars (...)". (2019).
Therefore, the high profits of "big corporations" (not small ones) must also be reapplied to their collaborators, in a career plan, in working conditions, how to provide more resources (uniform, food, rest, etc.), make working hours more flexible work, education incentives, strategic meetings in order to reduce psychological problems acquired in exhausting work, even though it is difficult to measure the work value. It is clear that large companies earn excessively from their workers and therefore, it is necessary to have harmony from the big positions to the small positions, as there is no sense in a billionaire company having employees who are exploited to the fullest.
Jorge Gomes.
Pedagogue.
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