Sunday, March 11, 2012

Altruism May Be Good For The Top 1%

Jared Bernstein observes behavior within the top 1% that may affect its potential future gains. Henry Ford believed that paying higher wages to his employees enabled them to purchase his cars. In our global economy that is no longer true. Multinational corporations are not as dependent upon on the incomes of domestic employees as was Henry Ford. Profits in their international subsidiaries are increasing as a share of total profits. That may make them less concerned about what happens domestically, but it may be short sighted. He uses some data on altruistic behavior from biology to support his appeal for corporate altruism, but I doubt that this will provide many converts to his cause. We may be engaged in a self destructive game, but unless the rules and the incentives in the game are changed the game will continue to be played as it is now.

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