I have previously said that, if capitalism has any morality at all, it is the morality of failure--the idea that, if a provider of goods or services doesn't do a good job of providing what the public wants at the price the public wants to pay, the marketplace will push that provider out of the way, thereby giving someone else a shot at succeeding (and do it again, should that "someone else" do no better than his or her predecessor). That, after all seems fair in any case, but it specifically ensures a certain level of integrity in the business practices of a nation, or even of a global market place. You're on your own, the market system says. No one will save you. Learn how to swim in the direction that the market is going, and you'll be swimming in cash, perhaps for a long time. Failure to learn, however, takes you to the market equivalent of Davy Jones' locker.
Unless, that is, someone is willing to throw you a life preserver, perhaps one designed to operate in perpetuity. And, by someone, I mean the government, the segment of society charged to operate in a manner benefiting all of its members, and not just a favored few.
If you study enough history, and economic history in particular, you may reluctantly come to the conclusion that George Bernard Shaw's wry observation about Christianity should be paraphrased with respect to capitalism: the only thing wrong with it is that it has never been tried. In the case of the United States, the country's entire history has in large part been a struggle between government intervention of behalf of the whole nation, or government intervention on behalf of a fortunate few under the pretext of benefiting the whole nation. In the case of our current stage of economic distress, you need only think of two words that illustrate this second form of intervention and explain succinctly how we got here: "Ronald Reagan."
Somehow, I always thought that we would be smart enough as a people to not let Reagan's badly misguided view of the relationship between the public and private sector take us all the way back into the nineteenth century, to the days when child labor was ruthlessly exploited and, if a child lost a finger in the terribly unsafe machinery, that child was reminded that he or she still had nine more (unless, of course, this was not his or her first accident).
If there's one thing that the so-far brief T**** era has done for me, it has disabused me of that fantasy. Perhaps forever. No, we don't have children working in factories, at least not in this country. But, sometimes, I wonder how far away we are from it.
Consider, if you will, the case of Dennis Muilenburg, the now-former CEO of Boeing.
He is the now-former CEO because he presided over the disastrous launch and failure of the 737 Max plane, two of which have crashed and killed 346 victims. That launch included a pattern of covering up failures in the development of the plane that should have been caught and repaired, but instead played a role in the crashes. And, though his employment with Boeing has ended, that did not happen until a public outcry against the company that effectively took the decision out of its hands.
And even when it did happen, it turned out that Muilenburg, who did voluntarily forfeit a portion of his executive compensation upon his departure from Boeing, will still receive--I am not kidding--$62.2 million in stock and pension benefits to which he is contractually entitled. And, according to the linked article, he's not alone: another Boeing executive, also being terminated in connection with this tragedy, is getting a payout of $14.75 million.
You have to wonder what kind of contract would entitle an executive to an amount higher than zero in the wake of a human tragedy of this scale. It's bad enough that executives can run a company into the ground financially and still, despite doing so, merit (contractually, again) a severance package that runs well into seven, eight and even nine figures. It's obscene that an executive can preside over the loss of innocent human life on this scale and still walk away with this much money, based solely on a contractual obligation. In contract law, a contract can be found to be unenforceable as a violation of public policy. That should certainly be the case in a situation like this one; compensation contracts should have clauses that forbid payouts in severance cases where the executive in question bears responsibility for a loss of human life. Frankly, it should do so in cases where the executive's mismanagement has contributed to the company's bankruptcy or other financial failure.
And, to make matters even worse, its not even the company itself that's doing the actual paying out of these unjustifiable sums. In effect, it's the workers, who bear little or no responsibility for either the tragedy or the levels of compensation awarded to executives. On the same day that Muilenburg's eight-figure payout was announced, 2,800 employees in Boeing's supply chain were laid off. If you think that's a coincidence, please come see me sometime about this bridge I own. Somebody's got to pay for that pricey pink slip. Might as well be the ones with the least amount of legal and political power.
Which brings me back to Reagan and our backwards-in-time trip toward the nineteenth century. Reagan and his political allies came up with a way to convince all of us that economic power should not, must not, be shared, but rather given over entirely to the investing class that already possessed the lion's share of that power in the first place. Why drag them down at all? Why not give these Very Fine People (to borrow a phrase) a chance to make even more of the wealth they've already created, and then it'll all trickle down so that everyone can enjoy it?
Now we know why. When you give one segment of a society the goldmine, the only thing they're willing to part with is the shaft. And the shaft is what workers have increasingly received over the past 40 years. It's finally reached the point at which the vast majority isn't even getting a trickle (and wasn't that little enough to promise them in the first place?). Instead of a trickle, we've all been tricked--that is, all of us who allowed ourselves to be led into the sucker's paradise.
And, instead of an unfettered, unaided marketplace that functions like a true meritocracy, we have a society in which the haves have rigged everything in their favor, and against the have-nots. This isn't what capitalism is supposed to be. At least, not the capitalism of Adam Smith. Instead, it functions more like the capitalism of Karl Marx, who, as it turns out, ultimately did a much more accurate job of describing how human nature works when investors rule the economic roost. They don't hate the government at all; they simply buy it out, and use it to oppress the majority of the people it's meant to protect, while keeping the difference from the payout for themselves. It's not just workers who lose in this arrangement; it's also small shareholders, usually in pension or retirement plans, who see their dreams of saving for the future disappear in a puff of green-and-gold smoke.
On top of all of this, it's not as if the federal government doesn't have some leverage here. Boeing is a major defense contractor that benefits tremendously from selling its products to the Pentagon. It's worse than unbelievable that the White House has not used that leverage to send Boeing a message that neither any repetition of the deaths or the related payouts will be allowed to occur, not without consequences for Boeing that should send shivers up their platinum spines. Of course, who am I kidding? Given the identity of the White House's current occupant, he's probably proud of Boeing for doing what he would do in the same set of circumstances.
With a set of facts like these, there is no possibility for failure. And, to come back to the being, what gives capitalism whatever morality it has is the morality present when failure is possible. The truth is that all real-world economies are driven by public and private interests. Ours, however, is driven so much by private interests at this point that the only possibility for failure lies in the hands of G-d.
And, if we're expecting any mercy from G-d, we'd better start fighting as hard as we can for a more just, more equal, and far safer society than the one we have now. Because G-d cares about us to the extent that all of us care about the rest of us.
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