The Occupy Wall Street (OWS) movement has seemed to tap into a deep-rooted sense discontent in the American populace over how capitalism has gone wrong. Criticism has not come just from the Left, but also from the right, as recently discussed on the excellent new MSNBC show Up with Chris Hayes:
The discussion begins with a quote from Newt Gingrich asking “Is capitalism really about the ability of a handful of rich people to manipulate the lives of thousands of other people and walk off with the money, or is that somehow a little bit of a flawed system?” To which Chris Hayes cheerfully responds, “Well, yes, Newt it is.” The discussion that follows is typical of the many thoughtful exchanges that make this show such an absolute “must watch.”
Early in the discussion, Prof. Anne-Marie Slaughter of Princeton University, asks “What’s the opposite of ‘predatory capitalism’?” and chuckles about whether that means a kind of “kinder, gentler capitalism.” Alexis McGill Johnson of the American Values Institute frames the issue as a sort of nostalgia for something lost, and David Roberts of Grist opines that “democratic nostalgia is for a set of laws and regulations that used to restrain capitalism; the republican nostalgia seems to be for nicer corporate titans, to an era of public-spirited rich people.” Vincent Warren of the Center for Constitutional Rights, questions whether the system has adequate benefit for workers, noting that the only thing workers get out of capitalism is jobs, but they don’t get economic benefits or any control of the direction companies take.
It all begs the question: What changed?
My immediate thought on that question came from having listened to the book The Betrayal of American Prosperity by Clyde Prestowitz. In the book, Prestowitz offers the following account that struck me as simply extraordinary:
In effect, Prestowitz is noting that this is a recurrence of the old joke
“If you dropped your keys over there,
why are you looking here?”
“Because the light is better here.”
If I’m hearing him right, Prestowitz is making the bold claim that the reason we stopped caring about people other than shareholders was it was just too messy to do the accounting of worrying about other stakeholders, such as employees, customers, and community. It was administratively simpler and cleaner to only worry about stockholders, and so one day business just quietly decided to do that instead.
Or that was the stated rationale, anyway. Let’s not overlook the outside chance that those pushing for this change fancied themselves the potential later recipients of “gobs of stock options” as CEO of some company operating under the newly proposed rules. No point in mentioning that rationale out loud during the debate when they could stick to the altruistic-sounding story of how this focus on clarity of measurement would just be good for business. “Let's give them gobs of stock” sounds so much more business-like and less self-indulgent than “Let's give ourselves gobs of stock.”
Imagine if we took that “clarity” approach toward our justice system, saying it was too hard to measure justice so why not just measure, let’s say, cost? That wouldn’t fix old-fashioned Justice but it would create a form of NeoJustice that was so much easier to measure, allowing us to be sure we were being successful at it. But to what end?
Really that’s what happened, too. Not with criminal justice but with economic justice. We just let it go, without even knowing it. Without any real notice to or approval by the large community of American citizens affected by the change, American Business just quite literally stopped caring. It’s pretty obvious, at least to me, that this timeline Prestowitz mentions dovetails precisely with the downfall of American society so evident all around us.
A war was fought in a “quiet room” somewhere, without anyone firing a shot, and we’re now living in the aftermath of our unwitting capitulation. No wonder we’re confused about how we got here.
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Possible Follow-up Actions
Putting things to right could begin by undoing the Supreme Court ruling in Citizens United, and eliminating from the law any notion of corporate personhood. Senator Bernie Sanders is pushing for a Constitutional amendment doing so. You can sign his petition supporting this amendment.
Another concrete action is to learn about stakeholder theory and start to ask questions about why it’s there and whether we could change it. It was changed before, and it seems to me it could change again. I don’t know the process by which that would happen. But I think it needs to.
The Betrayal of American Prosperity by Clyde Prestowitz covers additional issues, particularly those of US trade policy, in addition to the matters I’ve discussed here. In some ways, this was just a peripheral aspect of his main point. But it’s an excellent book either way and I very much recommend it. I listened to it as an audiobook from audible.com.
I also highly recommend Naomi Klein’s excellent book The Shock Doctrine: The Rise of Disaster Capitalism, in which Milton Friedman and the Chicago School (a.k.a. the “Chicago Boys”) play a critical role. I listened to it as an audiobook from audible.com.