The Permission Slip

Evidence They Can’t Defend — Essay 1 of 12

This is the second series of The Long Game.

The first — “The Evidence They Can’t Ignore” — proved that American industry systematically suppresses the intelligence of its own workforce. Thirteen essays. NUMMI to construction. Manufacturing to healthcare. The evidence was overwhelming: we’re not deploying the intelligence.

This series proves something worse.

Even the value that IS created — by workers whose intelligence is suppressed, whose suggestions go unasked, whose knowledge is treated as disposable — even that value gets siphoned upward rather than reinvested in the people who created it.

Suppression is the disease. Extraction is the business model that makes the disease profitable.

And it all started with one op-ed.

On September 13, 1970, the New York Times Magazine published an essay by Milton Friedman titled “The Social Responsibility of Business Is to Increase Its Profits.”

The argument was elegant and seemingly irrefutable: Corporate executives are employees of the shareholders. Their one obligation is to maximize shareholder return. Spending corporate resources on anything else — worker welfare, community investment, environmental protection — is taxation without representation. It is the executive spending someone else’s money for social purposes he has chosen.

In Friedman’s framework, a CEO who invests in worker training beyond the minimum needed for production is stealing from shareholders. A company that shares productivity gains with frontline workers is misallocating capital. A board that considers community impact alongside quarterly earnings is violating its fiduciary duty.

This was not merely an economic argument. It was a moral one. It gave executives permission — philosophical, legal, and eventually cultural permission — to stop thinking about workers as partners in value creation and start thinking about them as costs to be minimized.

Everything that followed was implementation.

Before Friedman, American corporations operated under a different moral framework — imperfect, paternalistic, but fundamentally different. General Motors in the 1950s and 1960s paid workers enough to buy the cars they built. AT&T invested massively in Bell Labs. IBM had a no-layoff policy. These weren’t acts of charity. They were expressions of a belief that companies existed within a social contract: shareholders got returns, workers got stability and rising wages, communities got investment.

The numbers reflect the social contract’s presence — and its absence. From 1948 to 1979, productivity and typical worker compensation grew in lockstep. When American industry got more productive, American workers got paid more. Not because executives were generous, but because specific policies — tight labor markets, strong unions, high minimum wages, progressive taxation — ensured the gains were shared.

After 1979, the line splits. Productivity kept climbing. Compensation flatlined.

What happened in between was not a natural economic phenomenon. It was a policy choice, enabled by a philosophical framework. Friedman’s framework.

The genius of the Friedman doctrine was that it turned extraction into virtue.

Before 1970, an executive who slashed training budgets to boost quarterly earnings would have been seen as short-sighted. After Friedman, he was fulfilling his fiduciary duty.

Before 1970, a board that authorized massive stock buybacks while wages stagnated would have faced questions about stewardship. After Friedman — and especially after the SEC’s Rule 10b-18 in 1982 made open-market buybacks essentially legal — buybacks became the responsible thing to do with “excess” cash.

Before 1970, a company that loaded itself with debt to pay dividends to investors while cutting worker benefits would have been accused of looting. After Friedman, it was called unlocking shareholder value.

The Friedman doctrine didn’t cause extraction. But it provided the moral architecture within which extraction could be practiced openly, defended intellectually, and rewarded financially.

Here is what Friedman did not account for.

He assumed that workers were interchangeable inputs — that their contribution was fully captured in their wage, and that no additional investment in them could create value that wouldn’t be better deployed elsewhere. This is Taylor’s assumption from 1911, dressed in Chicago School economics.

Let me put a name to that assumption, because I have one for it.

Jason Blackie started as a team member at the Lansing Delta Township plant, and ten years on he was still carrying the work of a supervisor — carrying it better than most of the people who held the title. He could build a car on any line in General Assembly with an ease and an aplomb I have rarely seen in thirty-six years on factory floors. He could talk a panicked new team leader off the ledge at five in the morning. He taught me my own mornings when I was a green shift leader who needed teaching. When the company finally opened a slot for a business unit manager — a leader of supervisors — it took an act of sheer doggedness on my part to walk him through the gauntlet of canned interviews the system used to decide who was “leadership material.” He didn’t have the degree. He didn’t interview well. By every measure that actually put cars together, he was one of the most valuable people on that floor.

Now ask me whether I could move his wage to match what he gave us.

I could not. Friedman’s doctrine assumes the wage already captures the worker — that anything beyond it is charity, a misallocation, a theft from shareholders. Jason was living proof that the wage captured almost nothing. His contribution was material, daily, and significant. His pay never came within sight of it. And the manager with every reason to close that gap — me