When we consider risk in business, we should consider not only the investors who only risk their money, but the people who risk their lives and livelihood everyday. To do otherwise establishes a group of haves and have nots in our minds, even if we deny it with our lips and in our hearts.
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"With some the word liberty may mean for each man to do as he pleases with himself, and the product of his labor; while with others the same word may mean for some men to do as they please with other men and with other men's labor. Here are two not only different, but incompatible things, called by the same name, liberty. And it follows that each of the things is, by the respective parties, called by two different and incompatible names--liberty and tyranny." Abraham Lincoln; 18 April, 1864; Speech in Baltimore, Maryland.
“We’ve no use for intellectuals in this outfit. What we need is chimpanzees. Let me give you a word of advice: never say a word to us about being intelligent. We will think for you, my friend. Don’t forget it.”Louis-Ferdinand Céline (1894–1961), Examining doctor at Ford auto factory in Detroit, where the narrator Ferdinand Bardamu (and Céline) worked, in Journey to the End of the Night (1932; translated 1934; p. 196).
“What does it profit a man to gain the whole world, if it is at the cost of what makes him human?”A paraphrase of Mark 8:36, adapted for both the secularist and the faithful.
There is a great deal of talk these days about risking our nest eggs in the stock market, hedge funds, commodity futures, real estate, and the myriad other methods that have come into existence to not only protect, but to grow our wealth.
Most Americans have, in absolute financial terms, a paltry amount of money at risk: perhaps a few hundred thousand or even a million dollars, if they are lucky. Barely enough to merit a return call from an assistant accounts manager's assistant at a major brokerage if you are feeling nervous about your investments. In personal terms it is the whole world, but compared to those who have accounts in the tens or hundreds of millions of dollars, you are just small potatoes.
These people with tens or even hundreds of millions of dollars to invest are the so called “investor class.” Under the theories of “supply side” economics, these are the people who make the economy happen; it is the risk of their fortunes that is the straw that stirs the drink that is our economic prosperity. Because they are the ones who risk their fortunes, they deserve the greatest rewards of our economic system.
Why then do the many non-investor class risk takers in our economy who, risking something other than simply their fortunes, receive no consideration or serious mention in these economic discussions?
I am writing not only of the worker being told to produce ever increasing volumes of product for a stagnant wage paid by a multinational corporation. I am writing of the shopkeeper who is one accident, one serious illness, one junkie with a gun from ruin. I am writing of the small factory owner who turns out a superior product; yet has trouble competing with a foreign competitor, who turns out an inferior product for a much lower price. I am writing of the small construction company who has paid its carpenters, plumbers, masons, electricians, etc., a good union wage for building homes for years; which can no longer compete against the nationwide home-building franchises that use illegal and cut-rate, non-union labor to build their inferior quality homes with marvelous façades.
The small business owner, as I have described above, does not necessarily have huge amounts of investor—or perhaps even personal—capital tied up in his business. The value of their businesses has not risen through stock offerings, hostile takeovers, using volume buying to undercut the prices of their local competition to force them out of business, or treating the people who work for them like indentured servants. The value of their businesses has increased through “sweat equity,” by building a good reputation among their customers, and by making do when they had no other choice. There is, unlike the investor class, little difference between the small businessperson and the people who work for them. It was both the small businessperson and the worker of whom Abraham Lincoln wrote (in his message to the Congress 3 December 1861), “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
The small businessperson, who works beside his employees, taking most if not all of the risks of his employees, plus the risk of his business failing, is rightly considered a paragon in America's economic system. The members of the investor class who buy an initial stock offering, and then play with the various shares of stock they own like poker chips in some half mad game of chance, are not paragons, but at best necessary evils.
So, we must ask whose risk is actually the greater: is it the investor who has bought stock as an investment which capitalizes the opening of a mine he never sees. Or is it the people who toil beneath a million tons of rock five days a week; working for a company that may lose their pensions if the company is taken over by another corporation or if it goes out of business; doing work in a fetid and sometimes poisonous atmosphere, using explosives and dangerous machinery which can easily maim and kill; in short, the miners who risk their lives as well as their futures when they actually work that mine? I think you can guess my answer.
The conflict between oligarchic plutocracy and democratic freedom goes back to the founding of the United States. Alexander Hamilton wanted an oligarchic republic with a mercantile economic system. Thomas Jefferson (speaking through James Madison) wanted a democratic republic with an agrarian economic system. The Constitution was a compromise between these two extremes. Neither side could have dreamed of our modern representative democracy with its post-industrial, information age, economic system. However, I feel that Jefferson and his world view are far more applicable to our modern political system than Hamilton.
Americans must learn that there are limits to the lessons the Founders and Framers—as well as other thinkers of the Enlightenment—can teach us, particularly in terms of economics. For example, the Scottish professor who founded the “dismal science” of economics, Adam Smith, wrote his book The Wealth of Nations, in part as an answer to the complaints of the American colonists against the British Crown at the inception of the American Revolution.
The capitalism that is taught in American schools—like the socialism that is taught there—is very one dimensional and propagandistic. It is one part Horatio Alger, one part social Darwinism, and one part win at all costs. That cost includes, but is not limited to: family, friends, self respect, bending or even breaking the law, and your basic humanity.
The propagandists for this system neglect to mention one of the great lies of this form of capitalism: the struggle is not between management and labor; it never has been and it never will be. So-called management has no real power to make anything other than short term decisions; i.e., one year or less. The real power lies with the owners—or holders of large blocks of stock—who actually control the corporate entity in the long term; having the ability to sell it, move it, change it or dissolve it. Management is nothing more than workers with fancy titles and better benefits. Their job is keeping their fellow workers under the thumb of the owners, and taking the fall when things go wrong.
A perfect example of this is the Ludlow Massacre here in Colorado in 1914. No one blamed John D. Rockefeller, Jr., whose family owned controlling interest in the Colorado Fuel and Iron (CF&I) coalfields where twenty-one people, mostly women and children, died. He was thousands of miles away at the time. The blame fell instead on the managers of CF&I, the Governor of Colorado, and the State militia. Only a few radical newspapers dared claim Rockefeller had anything to do with the Massacre, and no evidence of his involvement has surfaced to this day.
If he was at all responsible, it was a scenario that might have been written by Machiavelli in The Prince. The condottiere does his prince's will, and when the savagery of the act is revealed, the prince, “outraged,” fires the mercenary captain, while making certain that the condottiere receives a large bag of gold to go far away and not trouble the prince or his lands. In modern parlance, managers give the owners “plausible deniability,” when someone needs to get their hands dirty.
This is the great tragedy of what I call “antisocial” capitalism. It is a system of absentee owners, and managers who are frightened to death about losing the little piece of limited, temporary power that they have attained. The owners play a dishonest little game of management against labor (divide and conquer), to avoid dirtying their investor class hands. Both management and labor are employees (workers), who should be working together, in opposition to the owners, in matters which negatively effect the workforce, e.g., cutting wages and benefits.
I would like to propose that there are two general types of capitalism: the antisocial and the social. Antisocial capitalism is that endorsed by Herbert Hoover, Ayn Rand, Milton Friedman, Grover Norquist and every other proponent of free market, social Darwinist, laissez faire capitalism for the last century and a half. It celebrates a freebooting, opportunistic, devil take the hindmost attitude exemplified in film Wall Street by Michael Douglas' character Gordon Gekko.
The laissez faire or antisocial form of capitalism is not an immoral system, simply an inhuman one. “[T]his science of wealth, is therefore simultaneously the science of renunciation, of want, of saving and it actually reaches the point where it spares man the need of either fresh air or physical exercise…[It] is a true moral science, the most moral of all the sciences. Self-renunciation, the renunciation of life and of all human needs, is its principal thesis. The less you eat, drink and buy books; the less you go to the theatre, the dance hall, the public house [pub or saloon as we Americans say]; the less you think, love, theorise, sing, paint, fence, etc., the more you save—the greater becomes your treasure which neither moths nor rust will devour—your capital. The less you are, the less you express your own life, the more you have, i.e., the greater is your alienated life, the greater is the store of your estranged being. Everything which the [antisocial capitalist] takes from you in life and in humanity, he replaces for you in money and in wealth; and all the things which you cannot do, your money can do.”
Thus wrote Karl Marx in his Human Requirements and the Division of Labor; from his Economic and Philosophical Manuscripts, written in 1844. (The words in brackets are ones I have modified or added for the sake of continuity or clarity.) I always hesitate to quote Marx to make a point, because of the automatic negative reaction that his name elicits. However, his observations on antisocial capitalism, or what he called “political economy,” seem to me in this case, spot on, and worth quoting.
Our nation's own Thomas Jefferson (in a letter to James Madison in 1797) I think spoke to the effects of such a system: "In truth, I do not recollect in all the animal kingdom a single species but man which is eternally and systematically engaged in the destruction of its own species. What is called civilization seems to have no other effect on him than to teach him to pursue the principle of bellum omnium in omnia [war of all against all] on a larger scale, and in place of the little contests of tribe against tribe, to engage all the quarters of the earth in the same work of destruction. When we add to this that as to the other species of animals, the lions and tigers are mere lambs compared with man as a destroyer, we must conclude that it is in man alone that nature has been able to find a sufficient barrier against the too great multiplication of other animals and of man himself, an equilibrating power against the fecundity of generation." (The Complete Works of Thomas Jefferson, Memorial Edition; Volume 9, p. 360; 1904).
To have a “war of all against all,” we must first designate then denigrate all of our potential rivals and adversaries. Then we turn this human opposition into things rather than people either directly or indirectly by declaring some inhuman goal—whether abstract or concrete—that is more important than those people who might get in the way of that goal. At the instant we turn people into things, or place the acquisition or maintenance of things ahead of people, we have made our first strides down the slippery slope of inhumanity. This is accomplished by the expedient of dehumanizing ourselves and others for no reason other than the acquisition of more power or material wealth.
There is perhaps, in the broadest sense, a moral system to the unbridled acquisition of wealth and power, as well as the remorseless exploitation of your fellow human beings in attaining these ends, as Marx states above. However, if philosophy and its many branches (especially moral philosophy or ethics) are to be something more than some sort of perverse zero sum game, then it must reinforce and reward the best of our humanity, not replace it or render it moot.
There is one further problem with antisocial capitalism and its evolution towards a concentration of wealth in the investor class, whose sole interest is increasing its wealth regardless of the human cost. This was pointed out by Paul Kennedy in his book The Rise and Fall of the Great Powers. When a nation's primary product becomes financial services, not manufactured goods or raw materials, history shows that nation is in a state of decline. It happened to Imperial Spain, the Dutch Republic, and the British Empire. It is now happening to the United States of America.
So, why does this decline occur? I think that part of the answer is the fact that a nation who does not have some direct control over the form and quality of the goods it manufactures, produces, and consumes; lacks control over its own future. This idea was at the center of Gandhi's daily acts of non-violent resistance to the British Empire, from weaving his own cloth to making his own salt. This same idea also played an important role in the American Revolution, which was as much against the trade monopoly of the British East India Company as it was the British Crown.
The other part of my answer for the decline lies in the very nature of the remaining types of employment that exist when a nation no longer produces a physical product; only numbers on a balance sheet.
Human beings like to feel that the work (as well as other activities) that they do has some meaning, some permanence, makes some sort of difference to the world they live in. The alienation which we feel—first discussed by Hegel and at the core of every existentialist philosophy since Kierkegaard—is due to the lack of these qualities, the disconnection which we feel with our work, its product, our society, and its political and economic systems. The investor class has promoted this alienation, telling us that it, and the accompanying frustration, anger, and depression is “normal,” in their attempt to maintain power.
I am going to quote Karl Marx once again, this time from Volume I of Capital, (Part VII, The Accumulation of Capital; Section 4: Different Forms of Relative Surplus Population, The General Law of Capitalist Accumulation), because he stated it so clearly, “...within the [antisocial] capitalist system all methods for raising the social productiveness of labour are brought about at the cost of the individual labourer; all means for the development of production transform themselves into means of domination over, and exploitation of, the producers; they mutilate the labourer into a fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of charm in his work and turn it into a hated toil; they estrange from him the intellectual potentialities of the labour-process in the same proportion as science is incorporated in it as an independent power; they distort the conditions under which he works, subject him during the labour-process to a despotism the more hateful for its meanness; they transform his life-time into working-time, and drag his wife and child beneath the wheels of the Juggernaut of [antisocial] capital.”
My concept of social capitalism is regrettably not yet fully developed. It is, as its name implies, a hybrid. Its true essence is much more about first changing our hearts and then changing the system. It is about reducing then eliminating the alienation we feel in our lives, in our jobs, and towards our fellow human beings. It is about changing the way we compete with each other at every level of our lives. No longer will it be the “war of all against all,” a death match that destroys the humanity of both victor and vanquished. It will be a system where the real measure of your success is in the degree of your humanity.
Social capitalism is not about making everyone economically equal, or eliminating private property. Nor is it about the government micromanaging the economy, or eliminating the risk taking entrepreneur. It is about the government acting as equipoise to the power of corporations and the wealthy, rather than their tame lapdogs. It is about preventing the plutocrats and their corporate surrogates from becoming so powerful economically and politically, that they become a threat to the liberty enjoyed by We the People, as well as the institutions that represent us. It is about supporting the little guy against the colossus, defending the weak against the strong, and speaking for those who are mute against those who shout at the top of their lungs.
Perhaps this is all a utopian dream. But to attempt to make it even partial reality is infinitely preferable to the dystopian nightmare that looms before the American people.
Authors Bio:
Richard Girard is a polymath and autodidact whose greatest desire in life is to be his generations' Thomas Paine. He is an FDR Democrat, which probably puts him with U.S. Senator Bernie Sanders in the current political spectrum. His answer to all of those who decry Democratic Socialism is that it is a system invented by one of our Founding Fathers--Thomas Paine--and was the inspiration for two of our greatest presidents, Abraham Lincoln and Franklin Roosevelt, who the Democrats of today would do well if they would follow in their footsteps. Or to quote Harry Truman, "Out of the great progress of this country, out of our great advances in achieving a better life for all, out of our rise to world leadership, the Republican leaders have learned nothing. Confronted by the great record of this country, and the tremendous promise of its future, all they do is croak, 'socialism.'