The town of Widgetville, in the state of Equilibrium makes widgets. The owner of the factory, Jones, lived in WV with his family. All the workers in the widget factory know Jones; their children went to school together. Jones pays his workers a good salary. They have enough money to buy a widget now and then, pay taxes, buy a home, a car, clothing, food, and send their children to college. There is even sometimes a little left over for their savings account. Not everyone works in the widget factory. The butcher, the baker and the candle stick maker sell things to and provide services for the widget factory workers. The workers taxes pay for the policemen, firemen teachers and road improvements.
Now and then, Jones and his workers come up with a new way of making widgets that is faster and improves their quality. Now and then, Jones finds a machine that improves the process and product some more. The result is that Jones makes more money but he shares with the consumer and workers by charging a little less for the widgets and paying the workers more and/or gives them more time off. The result is that Jones sells more widgets in town and some to workers making gadgets in the nearby town of Gadgetville. Everyone is happy.
Unfortunately Jones dies and his widget factory is purchased by the Superwidget Corporation. The owners of the factory are called shareholders and they live elsewhere and the managers of the factory are called CEO’s. The owners of Jones factory don’t care about Widgetville or its citizens. They really don’t care if the factory makes a profit. They make their money by selling their ownership to people who may live even further away and care even less about the town of Widgetville or even the state of Equilibrium. The CEO is concerned primarily about two things: his salary and bonus he gives himself for making a profit on the widgets the people in Widgetville make.
He improves his profit by paying the workers less and making them work longer hours. His shareholders are happy because the value of their shares are going up and the board of directors are happy because they share in the profits with the CEO they hired.
The only problem is, the workers can no longer afford to buy a widget so sales fall off. The workers pay less taxes because they earn less so the town council, which primarily reports to the CEO of Jones’ factory, fires policemen, teachers and firemen. The butcher, the baker and the candle stick maker are also affected. In spite of what measures he takes, sales drop off and the widget factory is losing money. The board of directors approves a bonus for the CEO and, knowing that the factory is going to declare bankruptcy sell their shares while the price is high. The bulk of the shareholders, the ones who don’t live in Widgetville or even in the state of Equilibrium, lose their money.
The CEO sells to an international widget corporation and they move the operation overseas to the Republic of New Equilibrium where the workers don’t have such high expectations as the workers in Jones’ widget factory.
So what happens to the citizens of Widgetville? We shall see.