Cynics who say that Bernie Sanders, Elizabeth Warren and other critics of capitalist excess have no hope of changing how our society works are wrong. Just ask the Business Roundtable. The elite CEO club and lobbying organization recently announced that “profit isn’t the sole purpose of the corporation.” Quel surprise!
For a detailed discussion of this evolutionary step, or more plausibly pendulum swing, the “New York Times” podcast, “The Daily,” of August 21st, “What American CEOs are worried about,” is excellent. But here’s a brief summary and what the facts suggest to me.
After World War II much of the world’s productive capacity outside of the United States had been bombed flat, and competing economies were recovering from Armageddon. By contrast, America’s capitalist infrastructure was unscathed and had energetically produced enormous amounts of war materiel.
The conversion to peacetime production made us briefly an unchallenged supplier of the world’s needs. Boom times made amiable labor relations essential in order to to keep the furnaces and forges running hot. Thus was born as era of decent wages, three shifts a day, benefits including healthcare and pensions for workers, which in turn put money in the pockets of avid consumers and fueled profits for the corporations that fed their appetites, a so-called virtuous circle.
It couldn’t last. The so-called economic miracle that began in Germany and spread through Europe and Asia soon created a far more competitive environment and a more ruthless capitalism. Its worst instincts were justified by the laissez faire cheerleading of Milton Friedman who argued that the only purpose of business was profits but also that the only good government was the one that governed least. Markets unfettered would produce utopia.
The great squeeze of the following decades saw just the opposite occur. Union power was diminished, worker benefits were cut, and jobs eliminated. Consumers got lower prices, corporations higher profits, but workers with low wages and fewer benefits could only afford the products offered to them by taking on debt the usurious banks were happy to supply, a vicious circle.
Unsurprisingly, a dystopian society with huge wealth inequality, a hollowed out middle class, jobs lost to robots or foreign sweatshops provoked an inevitable backlash. Those who lost out in the new economy were mad as hell and demagogic media and politicians were only too happy to fuel their ire in exchange for votes. They are now busily selling trade wars, isolationism or socialism.
Is it any wonder the fear of aroused masses willing to listen to the idea of a wealth tax, a redistribution of assets from the haves to the have-nots, greater regulation of corporations to require them to act more like good citizens and less like Ebenezer Scrooge, or a president who ordrers CEOs not to engage in global trade has got the business class spooked?
So the question arises, are the 181 members of the Business Roundtable who signed on to the statement of principle merely paying lip service to reform? Are they practicing corporate PR or do they intend to change their ways? If they do, it would be not a revolution but a return to the good old days of the 1950s, beloved by nostalgic Republicans like Reagan and Trump.
The Roundtable communique is preaching the gospel of managerialism from the postwar era espoused by Peter Drucker among others. It argued that corporations owe a duty not just to shareholders who are fixated on profits at the expense of all else. So, The Roundtable declares “Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity.”
It goes on to make promises to all the other stakeholders. To deliver “value to our customers,” invest “in our employees” which would include “compensating them fairly and providing important benefits” as well as “training and education that help develop new skills for a rapidly changing world.” There are also promises to deal “fairly and ethically with our suppliers” and to support “the communities in which we work” by protecting the environment and embracing sustainable practices.”
There’s even a pledge to “foster diversity and inclusion, dignity and respect.” One might be inclined to suspect that such language may owe something to the fact that the seats at the Roundtable, while still overwhelmingly occupied by white males, do include ten percent women and another ten percent people of color.
Does all of this mean Warren and Sanders can pack up and go home — mission accomplished? Wouldn’t it be nice to think so. Unfortunately, automation continues apace. Foreign competitors, especially from autocratic regimes like China, do not recognize the rights of workers, communities, suppliers, or even customers to decent treatment. Markets still reward profits above all else.
The utopian notions of the progressives imagine a better world, but many of the forces arrayed against them yearn for the good, old, Gilded Age days when there were no unions, child labor laws, minimum wages, environmental protection, occupational safety and health laws, or Civil Rights protections getting in the way of a fast buck.
A century and a half ago, Matthew Arnold described a state of being similar to that in which our culture finds itself today —
“Wandering between two worlds, one dead,
The other powerless to be born…”
Is the statement by The Business Roundtable a step in the right direction or only an attempt to postpone reform for another election cycle? If the latter, it won’t work.
The men and women working two jobs for poor pay are too exhausted to listen to happy talk. The under-employed college graduates buried in student debt won’t be impressed. Those approaching retirement without pensions and at risk of cuts to Medicare and Social Security won’t be fooled. The disenchanted who fell for promises from globalists, isolationists, and socialists realize they are no better off.
The national anthem of today’s angry masses might as well be this, from Stevie Wonder:
“…we are sick and tired of hearing your song
Telling how you are gonna change right from wrong
‘Cause if you really want to hear our views
You haven’t done nothing.”
The crowd that shouted recently at a Governor after a mass shooting had it right when they demanded he quit talking about thoughts and prayers and “Do Something!” Is the Business Roundtable’s promise of change something or just another sweet nothing.