Class Warfare Blog

March 16, 2012

Why Not Try . . . Democracy?

Last night I watched “Richard Wolff: Can We Afford Capitalism?” a Link TV original production. Dr. Wolff, an economist argued in his presentation that capitalism is quite probably fatally flawed and that it is time to explore alternatives.

One of the strongest points in his presentation concerned his opinion that it is a mistake to try to regulate powerful business enterprises! Dr. Wolff’s argument is that all regulations become are a target for the affected industries to chip away at and neutralize. He used the example of the Glass-Steagall Act (the Banking Act of 1931) which came about as a way to regulate banking abuses that led to the Great Depression. Shortly thereafter and through its history, the banking industry chipped away at the Act, getting it amended in their favor. Finally in 1999 President Bill Clinton signed the bill repealing the Act in front of a smiling bipartisan group of legislators. Eight years later, a mini Great Depression happened destroying trillions of dollars of wealth from which the big businesses were bailed out, right on schedule. Glass-Steagall would have prevented this most recent catastrophe. His point is that regulations provide a focus and a target for industries which, to achieve their ends, require businesses to “purchase” politicians and justices. So, industries are operating in a fundamentally flawed system that points exactly to where we are now, in a “democracy” of the businesses, by the businesses, and for the businesses.

I highly recommend watching the whole program but I do want to comment on one of Dr. Wolff’s suggestions as to avenues to explore as we move beyond capitalism. (Everything he suggested is being done or tried somewhere on Earth currently so his are not the recommendations of an ivory tower academic.) His principal recommendation is reflected in the title to this piece: let’s try democracy to run business enterprises. He started with the fact that current corporations are run by very small groups of individuals at the top and that corporations are constituted with no social responsibilities at all. What if corporations were more democratic? What if everyone involved had a say in what the corporation did, in what it produced, and how it produced it? One outcome he thought plausible is that it would be very highly unlikely that such a corporate structure would pay its CEO 350 times what the average worker got paid (the current average for large corporations). This, by itself, would decrease the wealth gap in the entire country as corporate executives constitute much of the 1% earning such a disproportionate share of this country’s income. Another effect is that it would make it highly unlikely that the member’s of such a board of governors would pack their plant up and send it to China!

I can hear now the howl’s of conservatives defending the sacred right of capital to call the shots. “It’s the shareholder’s money invested, they should get to say what is done with it!” Yes, that is the “normal argument.” But it takes capital and labor to make a business, so why is capital totally in charge? If you look at any successful corporation, you will find that the owners, be they individuals or shareholders, had very small roles to play in the overall success of the enterprise. Managers make the vast majority of the decisions, workers implemented them. The owners may have had the idea of the company itself, but the rest of the ideas came from designers, engineers, acountants and economists, and the like. And many shareholders may have bought their stock after the company found success and had almost no role in that success. Dr. Wolff’s comment is that we have rejected most “all and none” authoritative social structures: master and slave, lord and serf, etc. and maybe it is time to do the same for employer and employee.

Dr. Wolff’s main point is that if we try to “reform” our current system, what we create is more politicians, regulators, and regulations for businesses to target and transform to their benefit, which makes the businesses richer and more able to do more of the same. Such is the genesis of our current state of affairs in which, for example, not one politician has suggested that we re-institute the Glass-Steagall Act. It is time to see what our commitment to democracy really is.

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8 Comments »

  1. Democracy over profit? Unfortunately I don’t think that will happen. Oh we’d (being we the people) would chose it but our system is so broken that money is the great decider.

    More and more are starting to ask and debate, rather then ‘fix’ our political system, what do we do after it collaspes?

    How do we prevent repeating the same mistake of money influencing politics?

    Like

    Comment by fatherkane — March 16, 2012 @ 9:13 am | Reply

    • Why would we make the assumption that a new system would be less profitable? The historical trend is that new systems are more profitable. I think the current definition of profit, though, is too narrow. profit is not just dollars and sense. Recall Amazon.com’s struggle as a startup in explaining that they were after market share and not profit, that profit would come eventually but during the first 5-7 years of its existance, its goal was greater market share. (Amazon seems to be doing okay right now.)

      One of Toyota’s stated goals is to “provide high quality jobs for its employees.” No one would accuse Toyota of being unprofitable.

      In Germany, if you want to move a business of a certain size, you must get approval from the local magistrate (the community) and from the trade unions affected. Germany is the second largest exporter of manufactured goods (to China) and seems to be doing rather well.

      Dr. Wolff’s point is we need to open up our thinking and stop looking at large complex systems with “either-or” mentalities. I recommend watch the show highly and thanks for the comment!

      Steve

      Like

      Comment by stephenpruis — March 16, 2012 @ 9:22 am | Reply

  2. Wow that was strange. I just wrote an incredibly long comment but after I clicked submit my comment didn’t show up. Grrrr… well I’m not writing all that over again. Anyway, just wanted to say superb blog!

    Like

    Comment by Servicios SEO — April 1, 2012 @ 1:20 am | Reply

  3. I am so tierd of hearing the howl of the defeated class of the most spoiled people on the planet. We can do this and here is why. No matter how broken the system is and no matter how much of the Constitution has been chipped away and no matter what the GOP, the Democratic Party, The President or even that scared, defeated little voice in your head is telling you. There are over 300 million of us. If only 10% of us believe this can happen and all show up at the White house at the same time, This will happen.
    Look, the Government has been preparing for this day for a while now. They started to Militarize the nations Police Departments when they realized the U S Armed Forces would NEVER fire on American Citizens, especially under the circumstances. So they are trying to sway the cops who shouldn’t be cops to begin with. The rest of the Police will realize, which most of them already have, that they are just like us. The Police have been enlisted to do the dirty work for the 1% but guess what ? only 20% of them will show up when the day comes. So now what do we have, 30 million Americans against maybe 100,000 cops ? The 1 % won’t give this up without a fight, I believe Freedom is a damn good reason to take the fight to them….

    Like

    Comment by Glenn Smith — April 8, 2012 @ 3:46 pm | Reply

  4. […] Civilization? It sounds like a good idea. – Ghandi April 10th, 2012 var addthis_config = {"data_track_addressbar":true}; Why Not Try . . . Democracy?  […]

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    Pingback by Civilization? It sounds like a good idea. – Ghandi « Investment Watch Blog — April 10, 2012 @ 11:04 pm | Reply

  5. Yes, Steven, but more importantly, Richard Wolff’s latest educational and critical review of capitalism, “Can We Afford Capitalism” (on Link TV) is fabulous and incredibly valuable to all Americans who now really need to understand the ‘political economy’ — or as he might say the ‘economic politics’ that is killing us.

    However, I would only add for those willing to look even a level deeper, that capitalism is merely the latest vehicle, the last technique, the most modern lever through which Empire, and ’empire-thinking’ elites, have always controlled societies, countries, and now in this post-nation-state world, the entire globe.

    Empire and ’empire-thinking’ elite need to be properly diagnosed as the hidden cancerous tumor, that is simply using the mechanism and system of ‘capitalism’ to parasitically control the world — whereas in the past Empires, and empire pretentious phonies and “quessers” (as Kurt Vonnegut called them) used earlier techniques like claiming to speak from gods, having the divine right of Kings, understanding nature, predicting the future, controlling bigger armies, and other elitist crap to control their earlier societies — now such dangerous fools have ‘capitalism’, and its money control over politics, to use as their sledge-hammer of Empire control.

    Best luck and love to the “Occupy Empire” educational and revolutionary movement.

    Liberty, democracy, equality, and justice
    Over
    Violent/Vichy
    Empire,

    Alan MacDonald
    Sanford, Maine

    Like

    Comment by Alan MacDonald — June 4, 2012 @ 7:18 am | Reply

    • I am with you. I watched a bit of the Queen of England’s Diamond Jubilee this last weekend and no one made the comment that kings, in general, came from a long line of rapacious war lords that exerted control over small populations by brute force and a “protection racket.” The vast majority of people at that time needed no help from those people, rather they could have used help in any number of ways but “titheing” (sp?) away a sizeable fraction of their income every year wasn’t it. And yet we have come to love our overlords . . . Stockholm syndrome, maybe?

      Steve

      Like

      Comment by stephenpruis — June 4, 2012 @ 7:30 am | Reply

      • Right on, Stephen. Yes, the English common people, who with the labor gov, did away with their long standing Empire somewhat peacefully, should be furious that the elite and the PR pawns are still using the image of Kings/Queens/Royality as propaganda.

        But when all is said, the English did a fair job of getting rid of overt Empire — which I only hoe that Americans can do to the DGE (Disguised Global Empire) that now controls our own country. First Americans have to understand that the current disguised Empire regime (D’s & R’s) is nothing but a dual-Vichy facade going one better than Hitler and Goebbels did in France c. 1940.

        Best,
        Alan

        Like

        Comment by Alan MacDonald — June 4, 2012 @ 8:34 am | Reply


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