Category Archives: Business
One of the most challenging issues facing the United States in the 21st century is how to cope with the consequences of economic globalization. Free trade agreements along with the adoption of free market principles in communist countries such as China and Vietnam have resulted in rapid and dramatic changes in the U.S. labor market, generally to the detriment of those at its lowest levels. Beth Macy looks at this challenge by focusing on how one industry centered in southwest Virginia and northern North Carolina coped with these changes
The furniture manufacturing industry that was formed in this area, founded largely by a small cadre of families in the early 20th century, grew and thrived based on an ethic of hard work, innovation, luck, connections and ruthlessness. Macy concentrates her story on the businesses spawned by one family – the Bassetts. Descendants of an old Virginia family, John D. Bassett, Charles Columbus Bassett, Samuel H. Bassett, and Reed L. Stone started Bassett furniture in 1902. From that time until the 1980s Bassett Furniture and the companies spun off from it grew to be the largest furniture manufacturers in the United States, and one of the largest in the world. Bassett,VA, where the company was formed became a company town, with the Bassett family and the Bassett furniture company providing not only jobs but virtually all the other institutions and services required to service its population, including schools, banks, places of worship, and housing. This arrangement helped keep Bassett furniture supplied with steady labor, while at the same time providing its employees with a comfortable level of stability. This arrangement began to crumble however as the balance of trade began to favor formerly closed societies that were implementing capitalist economies.
By the beginning of the 21st century Asian manufacturers found ways to produce furniture of competitive quality with that produced in the United States at a much lower price. Eventually American companies, unable to compete, began importing furniture and furniture parts from these manufacturers, resulting in the rapid closing of their plants in the United States. Bassett Furniture was no exception. For the workers formerly employed at these plants, globalization was beginning to look like the apocalypse as thousands lost their formerly secure jobs. In an economy where the quarterly bottom line was becoming the yardstick by which success was measured, their plight was of little concern to mzanagement. One man, however, tried to buck that trend.
John D. Bassett III had spent his formative years learning the furniture industry working for his family’s company and believed he would one day be its chairman. However, as time went on it became apparent this would not happen. He left the company his family built and eventually took over operation of the much smaller Vaughan-Bassett furniture company in Galax, VA. That company had become moribund, set in its ways, and saw its sales shrink, and the quality of its offerings decline. Bassett turned the company around, instituting a hard charging attitude that saw the company adopt among other things an express service that allowed retailers to get rapid delivery of orders in less than a week, something Asian suppliers could not compete with. This allowed retailers to minimize the inventory they had to keep on hand, thus reducing overhead costs. Despite this and other innovations however, by the early 2000s Vaughan-Bassett was beginning to slip behind, unable to keep up with the low prices offered by his Asian based competition; prices he believed that were not in line with the cost of their manufacture. Bassett was sure the Chinese were dumping cheap furniture into the American market in order to drive out competition.
In the two decades after the death of Mao tse Tung China became one of the top exporters in the world, eventually surpassing Japan and South Korea as the main trading partner of the United States. In 2001 they became a member of the World Trade Organization, a compact set up to “review and propagate … national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy-making.” Among these policies was an agreement not to dump cheap goods subsidized by government funding into foreign markets in order to drive out competing businesses. In 2003 it became apparent to Bassett that China was indeed dumping cheap furniture into the American market in violation of this obligation. Rather than accept this as the natural result of evolution in the marketplace as many American manufacturers and retailers who were benefiting from these low prices were willing to do, Bassett formed a coalition of manufacturers and successfully fought China, winning a large settlement which he invested in his manufacturing operation, thus saving his company and the seven-hundred jobs that went along with it. For this action he is regarded as a hero in his adopted hometown of Galax, VA.
I really did enjoy this book for the most part. The first half or so recounts the genealogy of the Bassett family, their entry into the furniture manufacturing business, and the inevitable conflict that results when a company stays in one family for so long. In many ways the Bassetts were not all that likeable. They could be condescending to their employees, did everything they could to keep unions out of their factories, and in general behaved as you would expect good old boy millionaires from southwest Virginia to behave. They were just really full of themselves, a trait I find very unattractive.
The sections of the book that dealt with John D. Bassett III’s fight against the Chinese, and his effort to save his company and the jobs it provided was riveting, and it really gave a human face to the consequences of globalization. Where labor used to be viewed as an asset, it has now simply become another cost center to be trimmed, with little thought given to the effect that trimming would have. As a result we are going through a massive shift in what kinds of jobs workers are trained for, and are reorienting how our economy relates with its trading partners. As Bassett showed however, manufacturing in the United States can survive as long as it stays nimble, combative, innovative, and has leaders who are unwilling to view its existence solely in terms of its bottom line.
Bucket Source (Outside Recommendation)
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Don’t let the title fool you, while the focus of the book is the great 1927 flood (an event overlooked today), this is a book about the Mississippi River and man’s attempt to live with and in some cases tame it. Full of rich descriptions of men and women whose lives were shaped by the river and the 1927 flood, and of powerful men who tried to control and profit from it, including one who became President, this book really grabs you from the outset.
Starting with early attempts to erect bridges over it, to map its courses and devise ways to keep it from hampering economic growth in the Mississippi Delta, through its role during the Civil War, and how it affected economics, culture and race relations in the south, the Mississippi River itself is a character in this story, with a personality all its own. This is expertly brought to life by Barry.
Most fascinating for me was the many ways in which the 1927 flood so profoundly changed the character of the deep south, and how in many ways it set back nascent progress on race relations. In order to combat the flood blacks were forced to work, shoring up levees, hauling supplies and digging trenches, all at gunpoint and without adequate food and shelter to sustain themselves. In many places (particularly Greenville, MS which in many ways was the epicenter of the flood), white leaders, aided and abetted by the Red Cross virtually re-instituted slavery. Prior to the flood, through the cooperation of local blacks and the relatively enlightened views of its leaders, particularly LeRoy Percy (a central figure in the latter half of the book), race relations had seen improvement. The flood, and the reaction of the white leadership to it nearly destroyed all that.
It also profoundly reshaped the labor system in the South. One reason why white leaders were so eager to keep blacks under foot during the crisis was to prevent them from leaving the Delta where they were the primary source of labor. However, once the waters had receded and it became apparent promises of restitution from local leaders and from the federal government were not going to be forthcoming, many blacks began migrating to the north. This caused a huge problem for large landowners who relied on the labor blacks provided, and from their percentage of income from sharecropper activities. It certainly helped hasten the transition to a de facto free labor system which had only existed in name only up until that time; a transition that continues to be a very painful one for the region.
Also interesting is the affect the flood had on presidential politics, and on the eventual shift in the relation between the federal government and her citizens that we saw under President Franklin Roosevelt. Herbert Hoover, Calvin Coolidge’s Commerce Secretary of Commerce was tasked to coordinate the government response to the flood. It was his work, and the positive press he received from it that propelled him to the White House.
Hoover was tasked by Coolidge to coordinate the efforts of mostly private organizations as they attempted to deal with the enormous human suffering that was the result of the flood. Coolidge himself refused to set what he considered a dangerous precedent by providing the type of government disaster relief we take for granted today. As a result he was the focus of extensive media and public criticism for what was viewed as a heartless reaction to the crisis. All the while Hoover was being lionized in the press as the only member of the administration willing to do something about the crisis. Coolidge’s opposition to government relief, however, was a policy with which Hoover totally agreed. However, it also foreshadowed the disastrous way he reacted to the Great Depression.
In hindsight the resources brought to bear by Hoover were wholly inadequate, and in many case failed to provide even minimally adequate relief. It was this same strategy that he used as President, to try and relieve the suffering experienced by so many during the Great Depression; a strategy that failed miserably and gave rise to FDR and the more active governmental role he implemented. It was also the beginning of the end of the alliance between African-Americans and the Republican Party.
I found very little to criticize in this book. Occasionally Barry provided a bit more detail, particularly about financial matters, than was probably necessary to make his point, but that is a minor quibble. Overall highly valuable book, about a significant even in American history that is often overlooked. Highly recommended!!
Bucket Source (Francis Parkman Prize for American History and Biography)
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An absolutely brilliant book. Stayin’ Alive: The 1970s and the Last Days of the Working class expertly describes the transition of the working class in America from it’s zenith as a powerfully cohesive labor movement after WWII, through its fragmentation as economic, social and political factors put stress on that cohesion, to what can now arguably be called a post “working class” period in our history.
Incredibly dense, but incredibly readable Jefferson Cowie expertly weaves the different strands of social, cultural, economic, and political change that eventually caused the virtual death of the labor movement and its place as the spokesman for working class, into compelling narrative. What is beautiful about this book is that it is so tightly organized that despite the enormous amount of information Cowie throws at you, you never get lost.
It is clear that Cowie feels the end of the working class as a cohesive force in society is a bad thing, but he spares no punches in placing much of the blame on the unions and workers themselves. As they moved further from the heady days after WWII, unions began to grow content and bloated, unwilling to rock the boat lest they lose what they had already won. In many cases unions grew corrupt and bureaucratic, with many of its leaders more interested in accumulating power than in revitalizing and expanding their unions.
He is also critical of workers unable to resolve issues surrounding the politics of identity. Union membership often resented the inclusion of heretofore excluded groups including blacks, Hispanics, and women. Rather than try to incorporate them into the union structure and modify it to accommodate this new reality, they withdrew into resentment and apathy, eventually forming the core of the group known as “Reagan Democrats.”
On the other hand Cowie spares no criticism for politicians more interested in preserving and expanding corporate power than looking out for the workers that allowed those corporations to thrive in the first place. Eventually workers, tired of having both the government and corporations working to defeat them, became apathetic, and rather than try to find a new paradigm under which they could organize and regain some of their lost agency, became more interested in looking out for their own interests…forming the core of what became the “me generation” of the 1980s.
I especially enjoyed Cowie’s weaving of pop culture into the narrative, looking at movies, TV and music as reflections of this change. From Archie Bunker to Merle Haggard to Bruce Springsteen to Devo to Tony Manero to Norma Rae pop culture is often very prescient in reflecting what was going on in the wider culture. Cowie brilliantly includes this in his analysis.
I am not doing the book justice here, it really is one of the most effective and brilliant works on American History that I have ever read.
Highly, highly, highly recommended!
Bucket Source (Francis Parkman Prize for American History and Biography)
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