Crazy and Red Economics

In 1913, James Couzens, Ford's GM back then, convinced Henry Ford to his 5$ a day wage idea. This was about 3 times higher than the industry standard and does sound like a completely idiotic decision at first sight but it had two implications
One, over a long period as Ford's attrition rate dropped its wage bills dropped and its productivity increased tremendously. Making Ford Motors the legend that it is today and increasing the labor productivity of Ford and later USA.
Two, it meant that the labor working in Ford and (again) later in the whole of US now belonged to middle class. Yes, not the lower class but the middle class and continues to be there. An amazing transformation which happened overnight.

In India where an industrial laborer still hasn't found himself included in the middle class, I wonder if he knows the reason.

Indian labor laws mean that the labor that is hired today can't be fired unless he or the company itself is dead. Hence 0% labor getting fired and 0%attrition and zero incentive for you to have any labor friendly policies beyond the ones prescribed by govt. regulations. Plus, the huge labor surplus means that this becomes an unstated axiom of doing business in India. There is no way that within the present labor laws the Indian industrial workman will ever touch the middle class strata.
Indian political parties (communists in particular) see businessmen as fundamentally evil who would not take any step benefiting a labor class even if it makes business sense. In fact they (communist parties) believe that places where the practice of treating labor like God (read the IT sector) is in place also needs their intervention to ensure the labor is not exploited! They are trying to set up unions (which have been remarkably successful in India in ensuring that labor stays where it is i.e. poor and largely unemployed) in IT companies.

As I said in my earlier post an idea doesn't need to be good for it to be popular, Communism is the best example of that.

Louder than logic

Why is rhetoric always louder than logic?
Recently I read 'Blink' which says something in context. It is not the quality of an idea, which makes it popular. An idea, a philosophy etc. may be adopted by many, despite being wrong, evil or downright stupid.
It is probably understandable that people in general are moved and driven by such ideas (in fact to understand it better read' the tipping point'). It is tragic that often those who wear the mantle of being the experts, the intellect of the society state opinions expressed as obvious truisms when actually they are pure and unadulterated rhetoric.
Weren't the dot coms of 1999,2000 amazing ideas which will change the world according to many intelligent people(some with MBA degrees from IIM A, Harvard, Stanford etc) . Wasn't Enron one of the most admired companies in World according to Fortune, a year before bankruptcy.
The lesson from these is that an argument backed by logic which needs least 'quantity' ( not just no. but overall how big or small these assumptions are) of assumptions are safer to go with than opinion of 'Experts' .
This is precisely why people like Dhirubhai Ambani, Richard Branson etc., without a MBA degree have been so much more successful than many others with one. Because, logic is more powerful than 'expert opinion' and that's what they are driven/guided by.