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Krugman Versus Marriott: Employee Treated as Commodities

Paul Krugman, an MIT economist, states, "At the heart of capitalism's inhumanity-and no sensible person will deny that the market is an amoral and often cruelly capricious master-is the fact that it treats labor as a commodity." (The Accidental Theorist, Norton, 1998,p.15) Is it true that capitalists employers treat their workers as "commodities"? In what sense is the marketplace "cruelly capricious"? Give examples.

Contrast Professor Krugman's views with those of Bill Marriott, president of Marriott Corporation, who said: " One of the important things...is [to] counter the notion that big corporations are faceless machines...When employees know that their problems will be taken seriously, that their ideas and insights matter, they're more comfortable and confident. In turn, they're better equipped to deliver their best on the job and to the customer. Everyone wins: the company the employee, the customer. The philosophy of putting employees first is particularly important in our industry, because Marriott is in the people business, not just the service business...I've said again and again that our associates [employees] are number one. It wont hurt to say it one more time. Whithout the hard work and dedication of our team, Marriott wouldnt exist. Period. That's why taking care of our employees is a top priority for the organization." (The Spirit to Serve, HarperBusiness, 1997, pp. 5, 35, 126-127)

Are employees treated as "commodities" at Marriott? Is their labor policy "cruelly capricious" or "caring"? Is Marriott the exception to the rule among big companies?

Solution Preview

It is true that capitalist employers treat their workers as "commodities". The workers are mistreated, abused, and driven to work. There are rules in place that force employees to work as hard as they can, meet production targets, and do monotonous work. To the capitalist the workers are simply a cost that must be reduced at all cost. To reduce cost, the capitalist uses harsh rules, strict supervision, and exemplary discipline measures. The workers fear the supervisors, management, and the system. The capitalist simply balances production with the cost of workers.

The marketplace is cruelly capricious because it selects workers that help it fulfill market demand. The customers' needs change from time to time. There are shift in demand and those workers who are having different skills are discharged. A new set of ...

Solution Summary

The answer to this problem explains how employees are treated as commodities by capitalists and how they are treated differently in the service industry. The references related to the answer are also included.

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