CapitalistMarks

Capitalism redux!

Posted on 13. May, 2009 by scott in Social commentary, economic daydreaming, political munglings

Today I make a seminal effort based on my current opinions. This may be long but I promise you it will be worth it (to me if not you).

My ideas have not come easily or quickly but they are the result of a lot of thought, observation and experience. If you had asked me just a few years ago about this I would have opposed it vigorously. How time and circumstances change things!

Here it is.

Capitalism has failed.  Plain and simple (well not so simple . . . it has taken a few generations).

The capitalism that I grew up with was traditional Adam Smith ‘laissez faire’ and it worked for a good long time.  No longer.  Too much laissez and not enough ‘fair.’

We have returned to the middle ages with a privileged ‘royality’ of overpaid selfish executives, stars, athletes and politicians and a vast middle class who are moving steadily down the economic ladder.  Capitalism has made it so.  It isn’t right, it isn’t American and it can’t continue.

The royalty of the twenty-first century are those born to great wealth (or power/influence) as well as those who reaped great wealth (power/influence) without genuine effort/sacrifice and have failed to use a good part of such wealth (power/influence) for the common good (charities, jobs etc).  For them life has become all about ’self’ and nothing about ‘us.’  Worse, this plague of selfishness is spreading further down the food chain.

Not far from my neighborhood are houses as big and fancy as medieval castles (one was even built to look like them!).  Too big for function and need.

So why?

Pride ? Singular distinction?  One-upmanship?  Keep up with the Joneses? You get the idea.

That is a big part of the problem.  Pride cometh before the fall.  Jealousy too.  Bad news.

The protestant (puritan) ethic of Adam Smith’s capitalism no longer exists.  Selfishness and pride have taken its place.   All you have to do is look around, watch TV, listen to the radio, go to a movie, shop in the mall.  The thesis that hard work along with social responsibility leads to true success have been replaced with the proposition that money is power and power is right and that both are good.

This is true in politics, in business and even in religion.  It has infiltrated the minds of retired grandparents living someplace warm and far from family responsibility, of adults with no desire for children or sacrifice, of teenagers whose greatest desire is fame and fortune, clergy who lust after money or power.

Jeez, Louise people!  Do you think Edison did what he did for money?  Did Washington seek out the great power he was given?   Bhudda?  Muhammad?  Christ?  Isaiah?  Krishna?

American businessmen and politicians are more like Russians of this century (think Putin and his fellow oligarchs — greedy, self-serving and egotistical).  Those who idolize, envy or look up to them are joining the madness.

Selfishness, selfishness selfishness . . . red is blue, green is black, taking responsibility for your own actions or words are things of the past.  We hear daily of entitlement for the masses and greater wealth and power for the elite (the rich and powerful).  And, we let it go on.

The wealthy democrats don’t really care, they are set for life.  The wealthy republicans just want more.  Where does it end?  Most of us fit in the ever growing middle losing hope.

I am well aware this sounds like Marx and Engels.  Shoot, I’ve read all their stuff.  Thought it was rubbish too.  They didn’t get it right but they sure as heck didn’t get it completely wrong.

Power corrupts and absolute power corrupts absolutely.  Sadly today power comes from wealth–not intelligence, compassion, capability or wisdom as it has in the past.

This is not to say all those with wealth are corrupt.  There are a few who at least try to demonstrate a modicum of gratitude and social responsibility.  But the others?  What do you expect when wealth is handed to you or taken (given) in immoral and dishonest ways?  If you don’t really work for something it has little or no value.  Give someone a hundred-million dollar salary and they won’t think cheating on a measly hundred-thousand dollar shower curtain is wrong.  Give someone a fortune for putting a ball in a basket four times a week and they won’t care about frequent indiscretions.

NO ONE. I REPEAT NO ONE, is worth what our public companies pay their CEO’s, what owners pay athletes, what studios pay actors, what talking-heads make on TV or radio.  It isn’t right when people are going hungry–not in Christian belief, not in Muslim belief, not in Hindu belief, not in Jewish belief, not in any sane person’s mind!

And it is not part of any capitalism that I want to engage in.

The uniquely American form of capitalism is a failed model as it now stands.  It worked magically when it was left to the masses.  Individuals, and small organizations, took advantage of opportunities.  When larger organizations (including the government) started joining the the ‘band’ things went haywire.

How did we come to the point that thinking executive leadership alone (decision making really) is the be all and end all?  Where is the work ethic?  What good can come from sitting in meetings or going to two-martini lunches all day?  Leaders for leadership’s sake leads to empty promises and misguided decisions.  At the top of ANY organization bigger than fifty people or so committee trumps executive decision ANY time.   I believe that literally anyone with an IQ in the normal range can run a big company–or a nation.

Adam Smith (Milton Friedman, John Galbraith and others as well) never contemplated incredibly enormous international corporations with revenues bigger than most nations (influence bigger too what with their PAC money, payoffs and such).  The founding fathers never contemplated a legislature hamstrung in partisan politics.

We ended up with a social/economic society that saw profits and money/power as the ‘only’ goal.  Individually and organizationally.  Large corporations started setting goals for execs that were measured in dollar terms and rewarded short-term.  Imagine anyone making over $100 million a year let alone the CEO of a publically held company.   The guy that makes a few decisions every so often but never,ever sweats about a house payment.

The very thought is obscene.

Who is the real boss?  Stockholders. Those with investments of hard-earned money that came from their own sweat and tears.  Not fancy Board of Directors or CEOs.

How did this happen?

What about so-called ’stars’ or athletes with incomes in the tens of millions annually?

Politicians who change parties or laws to get elected?

Marx must be turning over in his grave laughing at us.  Lenin is shaking his head.  The founding father’s are shedding tears!  I am sickened at what the last few years have shown us about our society.

Our large public companies and our politicians have NO social conscience.  And they have proven that they aren’t operating for the common good of shareholders or the public.  How could they create huge losses or deficits and they still pay gigantic bonuses or provide immoral perks?  They want only what is best for them such as higher pay, special treatment at airports, incredible retirement, private jets, big staffs and on and on and on.

It isn’t right.

Now the good news.  It doesn’t have to be this way.

It is time for capitalism to reinvent itself.  Capitalism II.  Capitalism redux.

Lets get back to basics.  If you want to get rich in this country lets make it possible to do it the old fashioned way.  Work for it.  Do it with innovation and job creation.  Do it with new and better products and/or productivity.  Don’t do it on the back of the middle/working class.  Don’t do it by transferring the wealth (what’s left of it) from the workers to the slackers.

If you want to get rich in corporate America do it as a shareholder or entrepreneur.  Don’t do it with huge salaries and undeserved bonuses . . . or with golden parachutes or back dated options.  Do it by earning it over a long time and do it honestly.

If you want to ’serve’ the country, do it for a few (very few) years and then get back to what you should be doing.

We have to change the background to make capitalism II work.  It will take (and I can’t believe I’m writing this) new laws that will limit (or tax) the amounts executives or stars or athletes make.

We have to have a political and economic environment where innovation, creativity and effort are rewarded.  We have to have a society where a person lacking legitimate skills can earn fortunes for ‘playing.’  We have to shun the idea that executive leadership (in business or politics) is deserving of inordinate reward.

We have to reward small business, entrepreneurs and everyone for honest effort.

It won’t be easy nor quick.

Here are some basic ideas to get the ball rolling.  I’ll confess I’m no angel but I can think at least as clearly as our best economists, politicians, and business leaders.  So can most of you.  Our country was not founded by geniuses.  It was founded by hard-working patriots who were also citizen soldiers willing to shed their own blood for principles they believed in.

What a great example.  How do we use it?   Simple and straight forward.  Those are things are leaders might not understand and so we have to make them do so.

Change will come from the bottom up and we are responsible for it.

So.

No public CEO or executive of any kind should make more in a year than the President of the United States of America makes during a four year term.  At least not in direct compensation. Allow such folk to earn more ONLY with legitimate stock options that last at least 5 years ( and put limits there too unless they buy stock with their own money!).

On top of that change the law so that the President makes about ten times the average wage of American workers (thus CEO’s can only make 30 times the average American wage).

As to ’stars’ and athletes and such?  Let them make what the market will bear, but tax the living daylights out of them and anyone willing to pay them more than ten times the average pay of American teachers of grades one through twelve (then use the taxes to increase pay for teachers, make classes smaller or improve our schools).

We have to loose the false vision of a privileged and royal class who are above the law and make sure everyone is a real part of our society.

Don’t get me wrong.  Wealth isn’t bad.  Live long and prosper, someone said.  I agree (and thank you Spock).

But, prospering doesn’t mean living like King Solomon while tens of thousands in America are homeless, or lack decent healthcare, or have no real education, or don’t have jobs etc, etc, etc.

Next solution.  A shadow government.  This creates jobs and will completely guarantee that Congress (and all politicians) will make better, if not perfect decisions.

It works like this.  Every single elected official must have three advisors appointed (by independent means to be determined, but randomly from all walks of life and subject only to the meanest of qualifications — i.e average joes).  They will be only from the general public of the politicians constituency and will take the part-time job for as long as the politician holds it (which should be no more than two terms in ALL cases).

Under this system NO politician will be able to cast a vote or make a binding decision unless the majority of these advisors agree.   They will be paid a salary nearly equal to one-half of the politician’s and will also have access to all his records and dealings (with PACS, influence peddlars, lobbyists etc.) to insure transparency.

That’s nearly 2,000 high-paying jobs for the Federal government alone!  Sure it increases the size of government, but it also increases the influence of ‘us’ on that government … for the people, by the people.

As a matter-of-fact we can do something similar for top executives of ALL multi-national corporations.  Wouldn’t that be something?  Hey, imagine if every single pro-team had to have a few average athletes and they had to play? Cool huh?  Man would this equalize the world!

We have to make America great again and don’t you believe it when some radio or TV knucklehead rants that it is going to come by free market economics or government control. Free markets as we know them have failed.  Now we have to try something else.

Let’s make individual self-reliance, effort and reward popular again.

Let’s find a way to ‘tax’ our way out of the incredibly huge deficit that Bush, Obama and those ‘gems’ in Congress have created for us.  Don’t believe it when you hear more laissez for big business will accomplish that.  Small business?  well that’s a whole different story.

Let’s end the coming class warfare before it starts.  Let’s not have any royalty or American idols.   All men were created equal (women too).  Let’s not change that premise.  Throw those who won’t play by the rules, the crooks, in jail be they CEO’s, Senators or janitors.

Real capitalism relies entirely on individuals.  We need a social/political/economic environment that both realizes and rewards that.

Capitalism II.

Capitalism redux.

Capitalism can rock again!

IF WE LET (make) IT!!

The picture is from flickr’s aussiegall

Tags: class warfare, congress, failed capitalism, free markets, free markets have failed, government, laissez faire dooesn't work anymore, larry kudlow, politicians, royalty