Captialism Reconsidered

This is just thinking out loud. I don’t have this all worked out. In truth, I’m not smart enough to suggest a solution.

Like many people, this current recession has me rethinking free market capitalism. The central flaw in the system is that it counts on people to act morally. The motto has been, “what the market will allow.” As we are now learning, the market will allow a lot, especially if no one is checking the books.

What destroyed my faith in free markets was the demonic greed of banking executives. I honestly can’t comprehend the mindset of a person who insists on being paid a quarterly bonus after their company has taken public funds to survive. It’s rare that I find a fellow human’s action that disturbing, this disgust me to the deepest levels of my being.

Any system that fosters this mindset isn’t broken, it’s shattered. It needs to be replaced. We as a society can’t afford to let this continue. It’s time to stand up like the prophets of old and call that which is evil, evil. I wish people still have the virtue of shame, because then we could hold these people before public scrutiny and have them repent for what they did. But today, we revel in our iniquities and celebrate our twisted souls. (This all goes to further illustrate my point that morality needs to be part of our public conversation in all aspects of our lives.)

What should have happened when companies applied for public bailout funds was the CEO, the board of directors, all presidents, all vice-presidents, and most senior staff should have been fired. No golden parachute, no severance, just a final paycheck and an escort to the door like any other employee fired for failing to do their job. They should also have been forbidden from taking another corporate leadership position or being on the board of directors of any company. Essentially, they are forced to retire and live off all the millions they made running a company into the ground.

The next step would be to hold public hearings on how to restructure these corporations to make them financially stable and to foster a morally responsible mindset by the executives. Since my money is being used to bail this company out, I should be given a say in how to they’re run until they are off the public dole. It’s asinine that we allow them to continue on with business as usual, since business as usual is what got us in this mess.

There’s a French company, whose name I can’t find at the moment, that is worker owned. In the corporate bylaws the CEO can only make 15x the salary of the lowest paid employee. Also, the CEO has the same bonus and retirement package as everyone else in the company. THAT’S DOING IT RIGHT!! If the CEO wants a pay raise then at least one other person in the company has to get a pay raise too. See the CEO and board of directors shouldn’t be the ones to write the rules and the paychecks. This is the kind of foundation level rethinking we need to do about companies.

We need a way to police companies to make sure they are conducting their business in a financially sound and ethical manner. The problem is that the only way to currently do that is by giving the government more control. I don’t want to do that. The government is just as prone to excess and abuse as everyone else. We use to have social structures that had a real voice to confront corporations and the government, to add a moral voice to the public discourse of this country. We have render those structures mute.

I’m talking about churches, poets, journalists, private social welfare agencies, etc. All these we have stripped of their place in the public square. We don’t want to get our hands dirty by having priests and pastors quoting Old Testament prophets on our moral responsibility to help each other and not exploit each other. What do poets know of business and financial matters? Let them go off and write artsy things about flowers, they have nothing of use to say to the businessman. Social worker?! Come on, get serious! They just want us to give jobs to any schmuck and give money to lazy people. They don’t know what it takes to make a business successful, if they did they’d be in the corporate trenches. Now journalists we can use. Our PR department is always looking for an adept wordsmith to help sell our message and brand to the public. Tell them to give up on the so-called public good and come get a nice paycheck with nicer benefits.

This is my conundrum, how do we hold corporations accountable without creating a new monster? Part of the solution might be decentralizing government. Trying to maintain control of 260+ million people is turning out to be impossible. I suggest stronger state governments that are supervised by a federal government. Yes, in other words, a pre-Civil War model of American governance. Also, I would make it mandatory that corporations have and maintain their central offices in the state in which they are incorporated. The most successful run European countries have a population of less than 10 million. The government in these countries is able to maintain a watchful eye on its citizens private and corporate much more efficiently. It’s a lesson we need to learn in here in the US.

I would emulate the French worker-owned model and do away with executive privileges and astronomical salaries. I would also like to insist that members of the board of directors NOT own any stock of the company for which they sit. Also, the board of directors should include a random assortment of people, just fellow business men. I’d like to see janitors, stay at home parents, the unemployed, etc. all be sitting on boards. All the companies would pay into a common fund to reimburse the board members from that fund so no member is directly paid by the company. All board members of all companies would get the same compensation. Also, it would be ideal to simply have a random drawing of all adults in the state that company has its headquarters to determine the board members. Board members would serve for no longer than two or three years. Because, if you can’t explain your finances to the laymen, then maybe there’s something wrong with the books. So the board would serve as a true outside oversight committee.

These are all ideas just off the top of my head. It would take time to work out a proper system of corporate governance and outside independent oversight. But we need to get the dialogue started. We need to wipe the slate clean and rethink the corporate model from the ground up. We can’t rely on business men and women to be decent people acting in a morally responsible way anymore. It didn’t work and doesn’t work. We can’t be that naïve to the truths of human nature and our unquenchable desire to pervert everything we touch.

Honestly, when I think about the current state of corporate affairs, I want to run off to a cave somewhere and forget the world exists. I want to be a hermit and figure out a way to make enough money to buy food, clothing, and books. Let the world rot while I watch from a safe distant. However, I don’t think is the answer, but I really wish it was.

Update: Co-worker pointed me to this http://news.yahoo.com/s/ap/20100203/ap_on_bi_ge/us_aig_bonuses
Thanks AIG. I hope you rot in Hell. (Man, I'll have a lot to confess this work.)

Update 2: Look at this http://news.yahoo.com/s/ap/20100203/ap_on_bi_ge/us_aig_bonuses_feinberg Here's my response. You're the federal government. What are they going to do sue you? Who they going to get to enforcement the judgment if you lose? China? Yeah right. You can tell them no. You should tell them no. You must tell them no. It's not that complicated. Quit being a wuss. Man Up.