trickle up?

trickling uphill

Not to put too fine a point on it, but Ford's example is striking. And didn't require government intervention to make use of it. Paying people more money or offering more money/benefits induces higher quality workers to come and work at a company. Or it induces otherwise lazier people to feel like the company actually gives a damn and thus work harder; if for no other reason than that they might get fired if they don't (and then have to find a comparable job with comparable pay in a competing firm). What Ford did then was not pay his workers so "they could afford his cars", but pay his workers so they could make him rich by working harder, innovating, etc. The net result was Ford made a pile of money so obscenely high that even his idiot progeny currently running the company haven't run out. There are other examples throughout the corporate landscape. Home Depot skyrocketed upward until they sort of abandoned this corporate model (take care of employees first). The investment made in better workers or better working conditions usually pays off. Mark Cuban, in running the Dallas Mavericks, has spent a pile of money on perks and better facilities to entice free agents and to keep his core players happier. He still runs a profit despite one of the highest payrolls in the league. This goes on at some length; several of the top grocery chains run this way. Credit unions usually do. Etc.

There are really two problems with this. One, it only divests into human capital by companies who structure their business around human capital. Plenty of companies treat employees as replaceable or interchangeable assets; the expendable warm bodies plan. These companies tend to operate on very low costs of labor and extremely high turnover rates, in order to keep from paying anyone that much. With the bulk of the labor market being dominated by both unenlightened employers and employees who are disillusioned and thus unproductive, no peace accord where more employers treat their work force with dignity is likely, particularly when the economy seems to be going south and labor will shortly become more competitive (as even crappy jobs become easier to fill). So the actual problem is that money is not distributed to create human capital by a good many corporate/business entities, even when it naturally benefits a company to produce sophisticated consumers/employees. They can sell either more goods or more high quality goods (often with fewer higher quality employees) instead of relying on thin profit margins created by selling lots of low quality goods with lots of low quality employees.

Maybe that's just not the American business model, but it seems to me that there are enough examples out there to make it a legitimately competitive model. Particularly when the alternative is to have government seize profits and funds (even from those firms which do invest in human capital) and distribute them without effective concern to actually creating human capital (namely, by spending on ineffective educational programs, wars, pork, etc). I'd rather know the money is going to fund the college education (and training) of a well-regarded employee (or their children) than to bankroll some politician's latest scam. Some insistence in knowing what precisely our tax dollars are being spent on might encourage more anger and diligence on the part of the citizenry.