As further grist for the mill of your thinking as Tuesday's election approaches, I offer the following, from Robert Reich by way of Bill Moyers. It's an interesting analysis of a movement that Reich characterizes as "stakeholder capitalism," as distinguished from what he calls "shareholder capitalism."
Stakeholder capitalism, as described in the examples Reich provides, may not seem all that unique or even special to most of you. It simply refers to the practices of companies that essentially view themselves as "partners" with other related constituencies--their clients/customers, their employees, the communities in which they operate, and so on. At its heart, it requires the capitalists who practice this approach to understand that they do not operate and make money in a vacuum--that how much they make, and how they make it, have an impact on people both internal and external to the enterprise who depend on it in one form or another, and has a concomitant effect on the enterprise's ability to exist.
To me, this is not something that requires a special label such as stakeholder capitalism. I don't know about the rest of you, but I'm pretty sure that there was a time in the not-too-distant past where this basic philosophy would have resided neatly under the label of common sense. If John Dunne knew all the way back in 1623 that no man is an island, why should the rest of us not know it, too?
The problem, unfortunately, is that the so-called "Reagan Revolution" launched the beginning of the idea, promoted heavily by Milton Friedman, that the proper application of capitalist principles to an enterprise meant the naked pursuit of the business' fair market value in dollars. Nothing else mattered, and every constituency that could be shafted to create more of that value, by any means necessary, could and should be shafted. And, to create that "value," at least for a limited time, shaft they did. They bought out competitors. They laid off millions of employees. They devastated, in the process, the economies of thousands of cities and towns, dozens of states and, ultimately, the nation as a whole.
And they did all of this through so-called "leveraged buyouts" of what were in many cases perfectly viable businesses. Thus, even the "value" that they were creating was little more than an accounting illusion, one that left the liabilities being created for the future to sort out. We are living in that "future" now, and we are sorting it out by devoting the lion's share of our productive resources to paying down the debt that was created.
In light of all this, it seems fair to question whether shareholder capitalism can truly be justified on the grounds of efficiency, the grounds that, as Reich notes, are often cited by its defenders. Where is the efficiency in depriving the marketplace of competition? In depriving consumers of meaningful choices, not only of where to spend but also of where to earn? In saddling our economy with massive amounts of debt that, as was the case in 2008, threaten to destroy the entire country and required massive government intervention to stop (which in turn, deprived the government of resources needed to fulfill its own obligations)?
Shareholder capitalism has, in fact, no justification by way of efficiency. Nor does it have any justification in morality. If capitalism has any morality at all, it is the morality of failure. Honest work and service are rewarded; dishonest, inefficient or corrupt conduct is punished. At least, in theory, that's the way it should be. That's the morality of Adam Smith, not Milton Friedman. But how is the morality of failure even possible in a world that encourages a handful of sharks to borrow their way into seemingly uncontested control of the economy, with the politicians they've bought along the way backstopping them at every turn?
On the other hand, stakeholder capitalism, by virtue of its design, restrains corruption, enriches everyone, and ensures a world of honest competition in which everyone, to varying degrees is empowered. Thus, it is actually the more efficient approach. And, certainly, the more moral one.
Again, when it comes to a partisan analysis of which party is aligned to which approach, the choice could not be clearer. And staying at home isn't one of them.
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