There is a specter haunting the planet. It is the specter of the failure of Western Capitalism.
All that is solid -- jobs, homes, retirement savings -- melts into air. Our cock-a-hoop capitalism is staring into a pesky abyss which is either Lacan's mirror or the funky Weltschmerz of its own behind.
Yet far away in communist China, capitalism is alive and well -- maybe because China is not a democracy.
In Western democracies, capitalism is in crisis -- maybe because capitalism is not democratic.
The fact is that capitalism is a feudal system, which therefore works well in a feudal society like China.
But in modern, highly evolved democracies, capitalism is a handicap.
Why? Democracy has evolved, but capitalism hasn't. It's essentially unchanged from its 18th century origins. Capitalism is so feudal, it's almost medieval. It requires a subservience from its minions that hints at slavery, serfdom, or peonage. It grants its captains of industry the freedom to lord it over everyone else like banana-republic dictators or command-economy Kremlin bosses. It booms and busts with the fervor of a yo-yo being yanked by a tuning fork on steroids. Every so often it poops itself like a toddler sans toilet training, and sits there bawling in its own excreta until the state steps in to clean its unruly bottom.
Democracy, on the other hand, has advanced like a nimble marsupial -- maybe because democracy had an earlier start than capitalism.
Today, feudal capitalism is just a painful drag on modern democracy. A bad fit, mixing awkwardly with democracy, like sand on the beach gumming up the lubrication of mating; like original sin damning an innocent newborn.
What follows is a radical prescription to drag capitalism out of its fuddy-duddy necrosis: we're going to give it the tools to act in the sentimental spirit of humane socialism, yet retain the animal vigor of brute capitalism.
It is a simple three-point program to democratize capitalism, which will find agreement from the entire spectrum of economists -- Marxists and Keynesians alike, not to mention Schumpeterians, Hayekians, Minskyites and even out-of-favor Friedmanists. The whole bloody lot, from Adam Smith to Paul Krugman.
Now that's a mighty big tent, and you may think I'm out of my way-too-inclusive mind, but bear with me, my fellow-capitalist: your own mind is about to be turned upside down and then spun around like a tween girl at her first dance party, and you're going to love it.
Let's start with a statement that may upset you Friedmanists (as if your world hasn't been rocked enough already).
Capitalism is too irrational to be left to capitalists.
The capitalist market believes it can operate independently of the state until, in the manner of a drugged-out rock star, it chokes on its own vomit. Then, ever so patient, Papa Democracy has to spank Brat Capitalism and bail it out of yet another reckless adventure that threatens to ruin the whole family.
Attached to democracy, capitalism is as dysfunctional as wagon wheels on a Maserati.
The challenge for any democracy is to make its capitalism as democratic as it is -- to evolve capitalism into modernity, the way democracy itself has evolved out of the ancien regime into the robust mode of today's most successful states.
How? Start with the first and most fundamental question: leadership.
Who leads in democratic states? Elected representatives.
Who leads in capitalist corporations? Non-elected CEOs, appointed by boards who are sort of elected by shareholders.
If CEOs were democratically voted into office, like any other leader in a democracy, capitalism could become democratic, instead of being millstoned in autocracy -- a discordancy more incongruous than implanting a penis on a tennis ball.
Unelected CEOs don't belong in modern society: they're throwbacks to a time when father knew best, pashas were carried around on pillowed litters, and a nation saluted the Fuhrer. It's as if we've let loose a mob of little Napoleons in our midst. The most illuminating analogy for today's corporate leadership is this: our CEOs are like feudal warlords in Afghanistan.
They're all-powerful dictators. Exerting one-man rule by decree. Driven by a looter's mentality: they constantly reward themselves with untold riches, no matter how well or how badly the business is doing. They have the morality of con men. If exiled, they abscond unscathed with massive treasure jokingly called golden parachutes. While in power, they can banish thousands from the tribe in mass lay-offs, to cover for the huge mistakes they make as unaccountable dictators. Life in a modern American corporation is about as democratic as Germany under Hitler or Russia under Stalin. Our CEOs are today’s version of Genghis Khan.
1. HOW TO EVOLVE CAPITALISM OUT OF ITS PRIMEVAL SWAMP
To modernize capitalism, and bring it out of its outdated feudal stage, we have to start by making its warlord leaders accountable to someone else besides themselves.
CEOs have to be subjected to the democratic indignity of the vote every four years, just like the elected representatives in a democracy.
If being voted into office is good enough for the President of the United States, it's good enough for the CEO of General Motors or Citigroup or AIG.
If these CEOs were subject to the vote, General Motors and Citigroup and AIG would be thriving today instead of half-dead.
Moreover, in a fast-changing world, CEOs should also be subject to term limits -- just like we need a new US President every four or eight years, we need new CEOs every four or eight years, too.
Their hegemony needs to proscribed, because they've been on a power binge as ambitious as the esurient rapacity of Hitler, Mao, Stalin or Dick Cheney. Which has landed us in our present parlous state of living in the command economy of a Kremlin-like system run by financial banker-predators who, instead of contributing to society in any productive way, hatch vast debt pyramid schemes on the backs of the millions of credit-card holders and mortgage-holders they've created as little money spigots in order to clean them out (every US citizen is now a Wall Street ATM) -- with the final intent of going after our actual taxes, and diverting this bounty away from essential social services into their rackets.
With one big difference.
Instead of suffering under the massive Soviet incompetence (examples: Russia's old auto industry and agriculture) of some self-serving Communist apparatchik who hands out top-down orders to thousands because after years of clawing his way to the top by sucking up to a hierarchy of bosses, he's sucked up enough arrogance from them to think he knows better than anyone how to run an economy ... we're suffering under the massive American incompetence (examples: Detroit and Wall Street) of some self-serving capitalist CEO who hands out top-down orders to thousands because after years of clawing his way to the top by sucking up to a hierarchy of bosses, he's sucked up enough arrogance from them to think he knows better than anyone how to run an economy. Authoritarianism is authoritarianism, whether it lives in the USA or the USSR. So is the rank incompetence bred from flagrant arrogance.
Understand this: I've got nothing against leaders. I appreciate how invaluable a good CEO can be, and the qualities required:
1. A good CEO looks beyond dollars (profits) to people (customers), i.e. he knows he's running a customer-serving machine rather than a money-generating operation (take care of your customers and the money takes care of itself).
2. A good CEO realizes that the best use of yields in the present is to help him decide which bets to make for yields in the future, i.e. he knows he's managing an investment vehicle as well as a profit-extracting operation.
3. A good CEO grows future leaders (giving them the big opportunities as well as the big problems), i.e. he knows there's a future beyond himself.
I'm just against unaccountable leaders whose power is so entrenched, nobody would think of replacing them unless they stole into the bedrooms of every board member twice a night to pee on their bed-pillows.
The only way to curb power is to have people vote for their leaders -- whether they're your president, your governor, your mayor or your CEO.
2. WHO GETS TO VOTE FOR OUR CEOs?
Who should vote for a CEO?
It can't be the board. They are the cronies of the CEO. In fact, given their mediocre record of oversight (no better than the SEC, skunks overseeing turds), there's no reason for them to exist at all in an updated, modernized capitalism.
Some would say that shareholders should vote for the CEO. This is a notion as misguided as asking frogs to start fishing for crocodiles. The shareholders are totally removed from the day-to-day operations of the corporation. Their only interest in the corporation is that its shares should move up and that it should pay dividends. Shareholders are like the absentee landlords of yore who lived it up in town while their lands were farmed by peasants; they're like those uninvolved faraway owners who expected rent or a percentage of the harvest for doing nothing.
Who are the people with the greatest stake in the success of the corporation -- the most affected by its success or failure?
Obviously, the people employed by the corporation.
The workers. Those lowly grunts who actually do the real work of the corporation. Who get their actual nails dirty, their actual blue and white collars besmirched, their actual lower backs bent out of shape, their actual fingers carpal-tunneled by keyboards. They earn their daily bread from the corporation; its success is way more fundamental to them than to its shareholders.
The shareholders invest money in the corporation, but the workers invest something more important. They invest their lives. They invest the hours of their days. That's a bigger investment than any shareholder makes.
The shareholders merely own shares in the corporation. The workers ARE the corporation.
They are the people who should get to vote for their CEO, because he is THEIR leader, nobody else's: not the leader of the shareholders, nor the bondholders, nor the customers, nor the board. Take the President of the US: he leads the citizens of America, not the people who've bought US Treasury bonds.
3. IN DEMOCRATIC CAPITALISM, CEOs HAVE TO CAMPAIGN FOR THEIR JOBS
How would voting for a CEO work?
Every four years the workers vote. They choose between various people from within and outside the corporation, who put themselves forward as candidates for the job of CEO.
These candidates tell the workers how they'd do the best job for the corporation. In other words, they campaign.
The candidate with the most compelling story of future success for the corporation, and the best record of past achievement, will get the most votes from the workers. If the current CEO did a good job for the past four years, he will probably win and become a two-term CEO.
A revolutionary idea for sure, but something that will happen for sure, because it's more commonsensical than the wreck we have now. It's too commonsensical to die, now that it exists. Maybe there'll be a hundred wrecks before this revolution happens, but it will happen. Mark my words, fellow-capitalists; mark them like the fingernails of God marked two tablets on a mythical mountaintop.
For too long, capitalism has suffered under the widely accepted notion of the dictatorship of the CEO. Like the old divine right of kings, we've had the divine right of the CEO.
This ludicrous bit of whimsy has been unquestioned for more than a century. How come? Well, the blindness of the human race to the most obvious of facts is an indelible constant of the human condition. One of the greatest minds of all time, Aristotle, saw nothing wrong with slavery. The most obvious fact, by virtue of its obviousness, has the biggest chance of escaping human awareness. That's how the divine right of the CEO has managed to blunder its wacky way across two centuries without being questioned. Well, I am questioning it now.
Forsooth and gadzooks: monarchies lost all credibility back in the 19th century, yet here we have this idiotic corollary of the divine right of the CEO still operating in the 21st century. This is more absurd than foot-binding a marathon runner. Or powering a moon rocket with a horse-drawn buggy. Or constraining a modern woman in a whalebone corset. The divine right of the CEO is a shackle on the real potential of capitalism. It is holding capitalism back, and caging it in the inefficiencies of its feudal origins. You have tinpot dictators paying themselves exorbitant wages, even when their companies lose money. This is totally inefficient. Utterly not market-friendly. Completely feudal, old-fashioned, and in need of change.
4. THE CACAPOOFINESS OF CORPORATE COLONIALISM
Also, incredibly destructive. These capitalist warlords often get nation states to start wars for their benefit -- like getting the US to overthrow democracies in South America or Africa or the Middle East, or invading Iraq (where the sole beneficiaries are Halliburton and Blackwater, with Big Oil angling for its cut after giving their Texas oil buddies Bush-Cheney a nudge and a wink to go get those oil fields at no cost to them but at a cost of a million plus lives to the Iraqis). These predator-capitalists high-handedly cross borders (like terrorists) and globalize their warlord reach into world-straddling multinational corporations, dwarfing nation states in size and power -- and with the supra-national flexibility to outsource their labor to third-world sweat shops, retail their products to first-world consumer markets, and offshore their profits to handy tax havens.
Who sanctions this globally corrupt and absolute power? Nobody but the warlord CEOs themselves, aided by the governments they buy off. They've replaced the old European state colonialism with a new corporate colonialism. They can now pollute the entire planet with toxic emissions, toxic derivatives, and toxic advertising. They colonize our minds and constrain our hearts in a gulag of the free market. Commodification has conquered the globe; its fetishism constitutes a planetary neurosis. It's almost like the spontaneity of all humanity is caged on a vast Prison Planet of the Holy Business Empire. Ironically, neither the inmates nor their warlord wardens possess the keys to launch either outside into free, fresh air. Both bourgeois capitalists and proletarian labor -- the overlords and the underdogs -- live in captivity. (Of course, the cages of the overlords have nicer furniture and greater commodes and shower curtains.)
This warlordism-gone-global is no way to run any business in an otherwise democratic state.
But when CEOs have to earn a regular vote like everybody else wishing to exert power in a democracy, all is changed forevermore -- as dramatic a change as nasty, scaly dinosaurs evolving into free-flying beautifully plumaged birds.
The corporation is changed in its very structure, because now power becomes a give-and-take two-way street -- flowing from the bottom-up as well as the top-down.
This is the first way to start modernizing capitalism: to make the CEO accountable within the corporation. When all CEOs work for their workers, they will serve their corporations best.
5. THE ETERNAL PERTINENCE OF THE ENTREPRENEUR
But what if someone starts a company and builds it up -- should someone who actually owns the company be subject to a vote?
Here's where we get to the nub of capitalism.
Also, we get to my second revolutionary suggestion to drag warlord capitalism out of the feudal age into the modernity of the 21st century. Again, we will be going deep into the fundamentals -- into the obviousness that has escaped the human brain until now.
Fundamental question two: what is capitalism good for?
Fundamental answer: only one thing -- it encourages innovation by entrepreneurs.
The entrepreneur is the only thing about capitalism that remains enduringly functional for all time. The only thing worth preserving.
An entrepreneur is one of the greatest kind of human beings there can be: someone who has a new idea and goes to bat for it full blast, promoting their enterprise with all their heart, soul, marrow, bone, blood, balls and ovaries.
Business has its millions of functionaries and worker bees, but it also has its Steve Jobs, its Richard Bransons, its Bill Gates, its Paul Newman's Owns, its Ben and Jerrys, and its Shai Agassis (google Agassi: within the next ten years, he'll be the most famous entrepreneur on the planet).
Like the Beethovens and Picassos, the Darwins and the Einsteins, the Edisons and the Berners-Lees, these brilliant flames of individuality bring the greatest joy and support to the rest of us. Entrepreneurs are the creative artists of capitalism. We could not be truly human, and grow even more human, without them.
One reason entrepreneurs do what they do, is because if their idea works out, and enough people buy it, they might be richly rewarded.
It's not the biggest reason -- far bigger reasons are their creative passion and their pride in having their idea out there working. (It is an index of the vacuity of apologists for feudal capitalism that they prioritize monetary reward over the deeper passions that drive the human heart. Beethoven didn't compose for money; Steve Jobs doesn't do what he does for money; Warren Buffet hasn't bought himself a castle in the South of France. If you think money is what drives people, you're an idiot. And if money is what actually drives you, you're worse than an idiot: you're a psychopath. Just like the bonus-psychotic, 80-hour-workweek slaves of Wall Street. This may be what's wrong with America: too many of its TV-addled citizens think they should be driven by money; they've been misled about their own nature.)
But the lure of a rich reward does help to get the entrepreneur out of bed every morning, for sure.
So nothing should be done to stifle the creative passion of the entrepreneur. This is after all the one and only good thing about capitalism -- its main driver, its beating heart, the reason why we've been slamdanced out of our subsistence lives of yore into the riches of modernity.
Entrepreneurship is a supreme value of civilization because it reflects a fundamental human value, the creative freedom of the individual.
So here's how to keep entrepreneurship alive, and yet keep capitalism accountable.
6. HOW TO MAKE ENTREPRENEURS EVEN RICHER
Say you have a new idea that could make money. If you're juiced by the entrepreneurial spirit, you start a company. It’s yours, you own it. You're the entrepreneur.
Because your idea is good, your company starts to grow. You add more employees as you make more money so that your expanding company can make you even more money.
Here's my second revolutionary proposal to modernize capitalism.
You are the owner of the company as long as your business employs under a 100 workers. You’re the dictator. You’re free to support your employees, or exploit them.
The day you decide to expand to the point where you need more than a 100 workers -- the minute you hire your 101st worker -- the second you find you need to employ more than a 100 workers to expand even bigger and faster to make megabucks -- at that point, a new change kicks in.
A kind of legal French revolution.
A brandnew law of non-feudal 21st century capitalism.
This law says you now have to share ownership of the company with your workers, which I will call citizen workers from now on, because it sounds more dignified.
The minute you have more than 100 citizen workers, you have to give them 51% of your company.
Bear with me before you lose your mind or get your knickers in a painful wedgie or split your entire brain on one little hair ... because it's getting worse, my fellow-capitalist.
After you've handed 51% of your business to your citizen workers, you and your citizen workers may decide to take the company public, but then you can offer only up to 49% of the company to outside shareholders.
Out of your share.
The shares of the citizen workers can never be alienated. They’re not even allowed to sell their shares themselves. If they leave the company, their shares go back to the company, i.e. to the other citizen workers.
In other words, the workers will always own at least 51% of their company.
So when you as the owner get to a 100 workers employed, you face an existential decision. You can decide to stay at 100 employees and be an Afghanistan warlord-type dictator. But if you want to expand to make more money on a bigger playing field, you have to change your company from a dictatorship to a democracy.
In one leap, you have to flip your company out of its feudal stage into a new, democratic future. All by yourself, as one individual, you have to do what civilization has struggled for centuries to accomplish.
Poor you. Such a weight of antiquated history on your puny little latterday shoulders. Imagine. You have to abdicate your throne and allow the peasants into your palace to share your escargots, complete with those funny escargot holders. You have to birth your own French Revolution, replete with guillotine-fierce pangs disturbing your bonny bourgeois belly. You have to storm your Bastille and overthrow yourself.
7. SHARING POWER AS WELL AS OWNERSHIP
Besides sharing ownership you also share power, because now the citizen workers get the right to vote for their leader every four years.
They will keep voting for you, the original owner, if the company does well and makes money for them. But they will vote for someone else if you start to blow it. (As the original owner, you can rule longer than the two-term limit to which a hired CEO is subject.)
If the citizen workers vote for someone else, he or she starts running the company instead of you. You still own your 49% of the shares, but you have no power anymore.
If the citizen workers decide to sell shares to the public, they can do it without your say-so. They can raise capital for the company by selling up to 80% of your 49% share of the company. The capital they raise goes to the company, not to you. You can decide to sell your 20% of your 49% share of the company in the IPO if you want to cash in.
Hold on to your horses (even if by now they've bolted to Mars). It gets worse.
Every year, if there hasn’t been an IPO, you have to give away 5% of your 49% to the citizen workers until the last 20% of it, which you can keep forever and pass on to your kids. Or sell to the citizen workers in what used to be your company, or sell to shareholders.
How's that for an ouch and a yippee in one, fellow-capitalist? An ouch for you, a yippee for your workers.
It works even better than spreading the wealth around via progressive taxation, which works pretty well; it's about spreading ownership around so wealth will be spread around accordingly to help democracy devolve power down from the elite to the plebs. (In America this has been an uphill battle -- ever since our founders rigged our government to allow the elite to stave off the power of the plebs, yet give the appearance of allowing the plebs a fair shake. America has always been a rather unequal society. The closest we ever came to equality was after WW2. FDR's 1935 Social Security made old age less humiliating; strong unions ensured a decent wage; FDR's 1944 GI Bill opened up an upper-class-only college education to regular folks; Civil Rights gave black folks a political voice; LBJ's 1965 Medicare helped the retired delay death, and US capitalism entered its Golden Age that lifted all boats. Then that amiable shit Ronald Reagan came along to make sure it lifted only yachts.)
Distribute ownership, and you distribute wealth more equally, and combat the scourge of inequality guaranteed by feudal capitalism.
Crazy, isn’t it?
But is it any crazier than what we have now? Who says it's better that shareholders own a company rather than the people who work there, the actual human beings who ARE the company? Who says it’s better to have a board-appointed CEO than one democratically elected by the workers? Who says it’s better to have outside shareholders exert some sort of control when they have never stepped foot on the factory floor and only bought the shares on the recommendation of some broker – what you might call a class of absentee landlords? What’s so logical about that?
One idea behind our 21st century capitalism is that it’s OK to be the dictator of a 100 people, but not of more than a 100. You can screw a 100 people in any orifice available, kick their butts on a regular basis like a regular despot, knock 'em downstairs or kick 'em upstairs, bust their balls or stroke their egos, but no more than a 100.
Every small business can be a dictatorship, but all big businesses have to be democracies. In fact, the workers who sign up with your dictatorship are there because they’re hoping your company will grow beyond a 100 workers into a democracy.
8. BUT ISN'T IT UNFAIR TO TAKE A COMPANY AWAY FROM ITS OWNER?
Now you may say this is all totally unfair -- taking a man or a woman’s company away from him or her and handing it to the employees simply because his or her original idea was so good it needed more than a 100 workers to exploit its full potential. Doesn’t he deserve all the money to be made from his idea? Why should these workers be able to muscle in on her profits? He’s the guy who came up with the idea. She’s the gal who took the original risk of starting a business to bring her idea to a waiting world. If we keep doing business this way, we will take all motivation away from those innovators who bring new ideas to our society and keep it growing and changing and vital.
Goddammit: who the heck are these pawns in your scheme for worldwide domination to suddenly become your kings and queens?
It’s easy to mount a counter-argument against this. Who says the guy with the great idea wouldn’t make more money for himself by giving over 51% of his company to his workers, who would now work harder and smarter because they’re working for themselves and not just for him? Isn’t this a better way to make sure that good ideas will better succeed and keep our society growing and changing and vital? And wouldn’t this system encourage natural entrepreneurs to start more than one company: to come up with one idea after the other, and start many companies, one after the other, to get their ideas out in the world -- instead of doing the first good idea they get and sticking with that for the rest of their lives?
9. TURN WORKERS INTO BOURGEOIS CAPITALISTS
Under a more democratic system of capitalism, not only are power and assets shared, but also motivation and incentive.
When everyone is an owner, behavior changes. Everyone in the company, from the CEO to the janitor, owns shares and will be thinking about how they can make more money for the company -- how they can do their job better, how they can save money for the company, how they can maximize profit. The company’s money is their money.
Isn’t that more true to capitalist ideals than it is for the workers to rely solely on a fixed wage?
My contention goes further: I say a democratic corporation will beat an undemocratic corporation run by a board-appointed CEO and owned by absentee shareholders, hands down, no problem -- as easy as milking guilt from a Catholic. It stands to reason: a company owned and run by many capitalists who actually work in the company will work more cost-consciously and more profit-mindedly and more competitively than any other.
Here's the point: turn workers into capitalists. So they act like owners instead of serfs. Take privatizing the economy to the logical extreme of putting it in the private hands of every private individual working in it.
Now the workers will work smarter and harder. The bosses will work smarter and harder. The CEO will work smarter and harder. They’re all working for each other as well as for themselves. They're all accountable to each other. They all want each other to do better, because that way they themselves will do better. They win by sharing.
Like eager beavers, like a colony of ants or bees, like a retreat of monks, like a holistic commune, like a tribe of Bushmen, like a social network, like Mother Theresa's nuns, like an Obama campaign, like Wikipedia, like a Superbowl team, like a black church, like a geek startup, like Costco, like the Civil Rights movement, like that rarest of things, a functional family, they'll not only develop a shared culture, but create something else we seldom see: a shared soul, a whole that's an exponential multiple of its parts, a business that's infused with unbusinesslike emotion, a home-away-from-home haven where humans are delighted to work and work to delight their customers, a community of semi-spiritual empowerment -- which, instead of a mission statement that looks good on paper, births a cause that repletes the soul.
This is the perfect model of a perfect company in a perfectly competitive system. Not the 19th century old-fashioned feudal slow-moving slugs we have now. The fact is that our current feudal capitalism is a miserable system that should be committed to the dustbin of history as soon as enough humans wake up to its profoundly anti-democratic ethos. Feudal capitalism is like an old dog with rotting limbs who miraculously still has a few sturdy molars left to snap at whoever questions the fact that its legs are so gangrenous it can hardly stand. Capitalism is a past-her-time non-erotic sclerotic old sex peddler with a glass eye and more lipstick on her face than a hyena has rotten meat in its intestines. Capitalism is a doddering traumatized soldier of lost fortune who still hits the deck when a baby coughs behind him. Capitalism is the pig shit from an agribusiness farm dumped in a vast lake that renders several counties unfit for human habitation.
But modernized democratic capitalism will be, like democracy itself, an exuberant marvel of human organization -- the reddest rose in the garden of civilization.
Cue the violins.
And now drop the cold water: how the heck do we make this happen? It's all very well to conjure some splendid utopia, but how do you get to a real McCoy, standing tall in the real world, hitching up his gabardine trousers?
Aha. This is where you come in, my fellow-capitalist. Arise from the fainting spell induced by my preceding warblings. Gorge yourself on some tart smelling salts. And get this: it's all going to be up to the you-and-me of the voting public to lean on our elected representatives to nudge capitalism towards modernity by enacting a law that says:
1. Every business that democratizes itself gets a two-year tax holiday.
2. Every CEO who makes democracy happen in his or her corporation within the first 10 years of the program, gets a lifetime tax holiday.
This will probably be the first time in history that a tax break for the rich makes any sense.
So now there is something noble for you to do, my fellow-capitalist. An actual social mission above and beyond your dedication to the making of moolah: start pressing your government for a payback when you democratize yourself -- and enjoy a bigger tax cut than ever imagined by those zombie puppets of predator capitalism, the GOP (aka the Greatly Outnumbered Party).
10. WHO IS BETTER FOR BUSINESS -- CEOs OR UNIONS?
If workers could vote for their CEOs today, which CEOs would survive? Steve Jobs of Apple would, for sure. But how many others?
If you’re a CEO, engage in this thought experiment: do you feel the cold breeze of democratic accountability raise the hairs on the back of your neck?
If only more of our American CEOs labored with that breeze down their necks.
If only CEOs were self-aware enough to know they're not only caging their workers, but themselves: the potential of everyone -- management and labor alike -- is locked down-and-out on the stultifying top-down feudal plantation command economy of 19th century capitalism.
If only our capitalism worked in a more democratic way.
But under our widely accepted and highly admired system, we just have to cope with the results of dictatorship-predator capitalism: cars and burgers that wreck our environment and endanger life on earth; HMOs that deny us operations that could save our lives; and CEOs who make more money in a day than their workers make in a year.
In fact, when it comes to making wise business decisions, it's a good rule to trust workers and their unions more than CEOs and their bail-out backstops in government. Way back in 1949, a pamphlet came out called “A Small Car Named Desire,” which said Detroit should not bet everything on bigness, but that many consumers would welcome smaller cars that cost less and ran on less gas. The pamphlet was written by the research department of the United Auto Workers Union. After Pearl Harbor, the UAW came up with a plan to convert Detroit's auto plants into arms factories before the CEOs did. When the war ended, the union had a strike at GM with demands that included putting union and public representatives on GM's board, something GM was too dumb to go for. Hey, these dirty-nailed workers are not our class, darling.
But the Union fought on, and most of the things that let workers into the middleclass -- like annual cost-of-living adjustments -- were invented by them against the wishes of the CEOs.
This UAW, whom the GOP today demonizes for Detroit's troubles, helped incubate every new, modern movement of our time. The UAW funded the March on Washington in 1963, when Martin Luther King made his “I have a dream” speech. They funded Cesar Chavez's farm workers union. They provided their conference center in Port Huron, Michigan to the Students for a Democratic Society to write their manifesto. They helped the National Organization for Women get started. They helped fund the first Earth Day.
Tell me one CEO who's been that forward-looking, visionary and modern.
And the UAW has been agitating for national healthcare all along. If the country had listened to the UAW instead of the CEOs of our HMOs, the Big Three would've been able to save themselves the $1,500 extra in employer healthcare payments that an American car costs over what it costs Japan or Europe to make a car.
The UAW has been more business-minded and far-sighted than all the CEOs in America put together. Our workers are the lifeblood and backbone of capitalism. Unaccountable CEOs are the terrorists of capitalism. If the UAW were able to vote for their CEOs, we'd have a thriving Detroit. When all workers everywhere have the basic right to vote for their CEOs, we'll have democratic capitalism, and the US will indeed become a shining city on a hill.
We’re stuck with the capitalism we have instead of the capitalism most of us may prefer, if only we knew about it.
We're stuck with labor and management being enemies, when they should be friends working with the same purpose and motivation. We're stuck with mutual fear and hatred and rage instead of comity and community in the workplace. Workers live in fear of management, because they can be fired for any or no reason. Management lives in hatred of labor, because they think of them as costs that mess up their profits. Management wants machines for workers, and they're stuck with people. The workplace is like a dysfunctional family -- rigid, disciplinarian, abusive Dad vs. rebellious, lazy, unfocused, whiny kids -- instead of a happy family.
We have workers who try to get away with working as little as possible for as much money as possible, and managers who work as long and hard as possible for as much money as possible: not a good life for either. Workers don't have the satisfaction of being committed to their work, and managers don't have the time left over from work to be committed to the satisfaction of family life.
Call me a dreamer. But if democratic capitalism actually happened, you yourself might find that, ohmigod, there’s a dream out there worth following.
11. SOCIALIZING THE COST OF DOING BUSINESS IS GOOD FOR BUSINESS BUT BAD FOR SOCIETY
There's one last point to cover: my third revolutionary proposal.
How do you make companies accountable to the greater society and our planet and our environment when they're driven by the profit motive?
In other words, how do you make capitalism moral?
Well, you can do it without being moral at all. Just make business accountable. The capitalist solution to this conundrum is simple: every business has to eat its own costs.
Let me explain. Take America's dying auto industry, once the most powerful in the world, that made the weapons with which we won WW2.
It makes cars and trucks. But we pay for the roads and bridges, and the traffic lights, and the polluted environment from gas emissions, and the health costs from car accidents that kill more than a million people a year.
Detroit doesn't eat its costs. It makes its profits and leaves the costs to us.
As the mantra goes, under capitalism businesses privatize profits and socialize costs. (Martin Luther King nailed it when he said capitalism is socialism for the rich and free enterprise for the poor.)
Under a democratic, accountable capitalism, businesses will have to step up and pay for their costs themselves.
This simple, business-like and non-moral proposal will make capitalism moral.
The immorality of business only happens because it has been able to outsource its costs to the rest of society.
If corporations had to pay top-dollar for polluting the environment, they would stop polluting the environment.
If tobacco growers had to pay the medical bills of those people they give lung cancer to, they might decide to switch to growing fava beans or Golden Delicious apples.
If fast-food hamburger chains had to pay for the environmental costs of the beef they use that come from cattle that fart methane into the atmosphere and cause 18% of global warming, they might invent some really tasty and healthy vegetarian meat-substitutes.
If global finance companies have to account for the social costs of imploding derivatives by paying unemployment insurance to the millions of Americans who've lost their jobs because of this reckless gambling, they might cut down on their trade in risky derivatives.
Here's what's almost Hiroshima-nuking-the-road-to-Damascus brutal and depressing: how America's financial titans managed in a few months in 2008 to socialize their complete failure at the most rudimentary capitalist risk-taking into a Fed-and-Government-Sachs bail-out that they've stink-bombed upon us unwitting taxpayers to the stench-to-heaven tune of $13 trillion -- with nary an apology or sense of shame or, even worse, without the slightest risk of being locked up forever for blatant fraud in an institution devoted to anal-rape rituals.
What can one say? Fuck me with a blowdryer. Paint me yellow and call me a banana. The mind boggles into a fog of boggledom. Extravagant analogies fail me, and I've got the market in extravagant analogies cornered. Let me try. It's as mind-begoggling as Newton espying the grandeur of gravity in a fucking apple, or Blake seeing a world in a grain of sand and holding infinity in the palm of a hand. It's as brain-befarting as a unicorn nodding so fiercely in assent to his lady love's swollen-vagina request for immediate coitus (“yes! yes! yes!”) that -- to the undying frustration of the horn in his crotch -- the horn on his forehead accidentally stabs her through the heart. It's as stomach-bechurning as a mom seeing the freedom of single womanhood waltzing out the front door as she plaintively scoops poop from her squealing baby's bottom at three o'clock in the morning while her husband snores blissfully in bed and her nipples hurt like two little fires burning her dreams of being the first violinist in the Berlin Philharmonic to ashes smoking fitfully at the bottom of a George Foreman Lean Mean Fat-Reducing Grilling Machine.
Something like that. Anyway, you get the idea. Businesses have to eat their own costs, and bingo! capitalism becomes moral.
12. SOME OTHER STUFF THAT WOULD BE NICE TO GET DONE
Of course there are some other moral things to be done:
1. The way the factory farms of agribusiness treat animals is absurdly cruel and monstrously evil -- caging living creatures together as tightly as skeletons in a mass grave, so confined that beaks have to be snipped and tails clipped to stop them from tearing each other to pieces in claustrophobic rage and sorrow. This has to be addressed by special legislation. One day we will surely stop eating our genetic cousins, and then this legislation won't be necessary. Meanwhile, in America alone, livestock production causes 55% of soil erosion, needs 37% of all pesticides and 50% of all antibiotics, releases 33% of the bad nitrogen and phosphorus going into our surface water, and dumps cancer and heart disease on millions of people. Eighteen percent of all greenhouse emissions in the world come from methane-farting livestock. The sooner we stop eating red meat, the better for our health and our planet. Agriculture should anyway be returned to small farmers all over the world, since subsidized agribusiness doesn't do much to solve world hunger, which is the big moral problem of our time (facts to chew on: a billion humans are hungry to the point of famine; two billion people depend on the food grown by 500 million small farmers in developing countries; these farmers' debt burdens have driven 150,000 Indian farmers to suicide). It can only be solved if each country grows its own food, and maybe if most regions and areas and cities and towns and hamlets and garrets and even most families grow their own local food in their own back garden lots, and apartment dwellers grow food on their window sills and rooftops. Flying food around the world pollutes the planet. (Gardening is the best hobby in the world: if our kids grew up nurturing nature, waiting for fluffy clouds to water seedlings into pretty flowers and colorful veggies, we'd be a nicer, kinder, better world.)
2. What about taxation, so hated by the Reaganauts and the Thatcherites? It has to become heavily progressive again, like it was before Reagan was put in charge by a cabal of Californian CEOs and ruined the Golden Age of American Capitalism 1945-1970 when the middleclass expanded dramatically and a family could live on one paycheck and CEOs didn't pay themselves 300 to 500 times what their workers made. And there should be a tax on all financial transactions.
3. Human rights need a bit of looking at, too, especially equal rights for women. You wouldn't want your sister to grow up in an Arab or African or Asian country. Oppressing women is an economic cost on society, perhaps the biggest cost currently preventing the world from becoming a capitalist paradise. It halves the potential of an economy. The rights of all humans should be expanded in our democracies, plutocracies and dictatorships -- to include the inalienable right of everyone to food, health, shelter, legal and military protection, education and free expression. It may be that all those goods and services should be provided by the state, for free, out of our collective taxes. These rights may be too vital to be left to the machinations of the private sector, too precious to be ruled by the profit motive. It looks like agriculture and finance -- the food that fuels humans, the credit that fuels business -- may be in need of either government takeover or intrusive regulation to steer them away from too-big-to-fail-or-function monopolistic practices in the West.
Feudal capitalism breeds monopolies -- Microsoft and Google are the latest examples of big business crowding out small businesses -- and government's job is to break them up when they happen, and to prevent mergers when bankers and CEOs drool at the hefty fees involved and forget that mergers only work for their short-term pocketbooks but never for any actual long-term business prospects. Not even the omnipotences of the Christian, Islamic and Hindu gods spliced into one Supergod know what the government was thinking when they forced Bank of America to swallow Merrill Lynch and give themselves years of merger heartburn.
4. The financialization of the American economy is a travesty of common sense. Casino capitalism (as opposed to value-producing capitalism) is a waste of human effort. It's a toss-up whether the creation of money (debt) should be left to banks, the government, or to an independent supra-agency (akin to the Supreme Court in the legal system) with the power to sentence to anal rape all those economic war criminals -- banks, brokers, private-equity firms and hedge funds -- who leverage themselves beyond a legal allowance of say 12:1, or give themselves bonuses based on a year's deals instead of five or 10 years' efforts, or spend more than 30% of their capital on gambling with paper assets instead of backing actual businesses that produce real goods and services.
As for the goddam Fed, it should be made accountable to somebody -- perhaps the President. It's the most undemocratic invention ever, created and staffed by banks to oversee banks, giving one man the authority to throw around trillions.
As for the rich, they should be forced -- yes, fucking FORCED -- to use their wealth productively instead of hoarding it in hedge funds. All that money is just sloshing around instead of being productively invested to start new businesses.
Personally I see no place for the gambling of securitization and credit-default swaps in a healthy capitalism. Heard about use value and exchange value and surplus value? Let me introduce you to the value of credit-default swaps: Vegas value. Credit-fault swaps are about spreading risk so far and wide, the whole system is at risk. Look at the numbers: there are $63 trillion of CDS's out there. The Chinese would have to make toy fart balloons for a million years before they'd get up to that Vegas value. These toxic viruses were invented in 1997; before that the world got along fine. What the hell is the raison d'etre of these financial weapons of mass destruction? A CDS is betting that a party will default on their obligation. Hey, let's bet on the fact that we're fuckups. What kind of a system bets on its own failure? This is not the creative destruction of capitalism; it's the destructive destruction of capitalism. It's betting that capitalism will default, which it obligingly does, seeing as its practitioners are willing to bet it will.
While we're at it, I don't see much use for private banks either. Obviously they can't do their jobs; they'd rather speculate than finance businesses. The state runs schools, the police, the army, and should run health. Why shouldn't it run banks as a public utility, and stick to the boring but healthy financing of homes, cars, education and business (instead of reckless gambling with “financial instruments,” a euphemism for Vegas chips)? Just the job for a boring government bureaucrasy, I should think. The government is the solution, not the problem. The greatest advance of the last 30 years, the Internet, was invented by the government. Against the excesses of capitalism, there is only one defense: the nation state.
5. The militarization of the American economy is ridiculous. It must mean one of two things: either we're the biggest bullies in the world, or the biggest sissies. Our government spends more than half our tax dollars -- the so-called discretionary spending part -- on the Pentagon, which is more than the rest of the world spends on its armies combined. We have over 800 overseas military bases. For what? What is the Department of Defense defending us against? Sensible spending of our money? Why aren't they called the Department of Attack? Talk about rampant socialism: the military-industrial-Congressional complex is simply a government handout to corporations who make things we don't need, to do things we shouldn't do. What a circus: weapon systems sophisticated enough to fight alien invaders from the Planet of the Borgs or Klingons but useless against insurgents armed with nothing more than AK-47s, IUDs and the joy of killing Americans; cost overruns running over the moon and back; workers making guns instead of butter, beds, blenders and bulldozers. This boondoggle has no connection with capitalism: it's command-economy Soviet-style communism in action.
6. It may also be a fair legal point to make everyone in a corporation -- workers and management alike -- personally responsible for any harm the corporation causes, instead of moving legal obligations over to the corporate entity, which is a way of escaping personal responsibility.
7. And we may have to get used to the fact that there is a limit to growth -- that developing economies need it, but developed economies don't -- and that the solution to overproduction is to stop stimulating demand, and for all of us to seek happiness in our personal lives instead of in junky stuff. GNH over GNP (gross national happiness rather than gross national product). Research shows that beyond a minimum point of material security, more money makes nobody happier. Moreover, growth by polluting corporations has pitched our only planet into becoming unfit for human life by the time our grandchildren bear children, which should make us all desperately unhappy unless clean, green energy becomes our universal #1 agenda of all time -- a challenge bigger than capitalism itself, that only a modernized capitalism can face. Current capitalism -- caged in its extractive and non-sustainable stage -- caused this problem, and is bound to lose this fight.
8. What to do about our elite? You can't trust them from one generation to the next. Bush Sr was a fairly responsible president with a sense of noblesse oblige. Yet he raised a son who blackened the family name forevermore, plunged the US into two unnecessary wars, stood by helpless while the sea washed an American city away, dug the economy into a grave of debt, buried the GOP under the ideological rubble of absurd unreason, and sanctioned torture. What can one say? That Bush Sr was a terrible parent? That Bush Jr was one exceptionally dumb puppet? That Bush Sr made the monstrous mistake of entrusting his fratboychick to That Really Bad Uncle Cheney? It's a drama out of Sophocles by way of Ionesco.
Like the poor, the elite will always be with us. Privilege breeds entitlement. Entitlement breeds indifference. Indifference breeds scorn. Scorn breeds condescension. Condescension breeds pride. Which comes before a fall.
There's just no getting round the vicious circle. Privilege corrupts. Total privilege corrupts totally. The poor are said to leech on society, but the privileged are full-bore vampires. The bloodlust of our vampire elite is as rampant as a trillion ticks on heat, and can barely be bottled up by democracy. Our income inequality, now back to Gilded Age proportions, is the direct result of the usurious greed of our elite. I don't know what happens at elite universities, but obviously they don't know how to teach their students -- the future leaders of our democratic yet capitalist nation states -- the first thing about social responsibility. Maybe we should make this an entrance requirement to any Ivy League college: go work as a community organizer in some urban ghetto for a year first. America has plenty to choose from. Rub the noses of the elite for a good year of daily exposure in the downer of extreme poverty, and they might emerge with half a heart and a moral compass that points more or less north. (Either that or a No-Child Policy for all millionaires.)
13. EVERT'S THREE-POINT PRACTICAL PLAN FOR MODERNIZING AND HUMANIZING CAPITALISM
These eight points, although important, are all supplemental considerations when it comes to the urgent business of discouraging capitalism from choking on its obvious contradictions like a teenager risking accidental death for a bigger orgasm by masturbating himself with one hand while strangling himself with the other. The fundamentals are really simple, and summed up in Evert's three-point plan for modernizing capitalism and giving it a human face:
1. Any CEO has to earn his job by winning the democratic votes of his corporation's workers for a four-year term, with an eight-year term limit.
2. Any business will be owned by the founder in perpetuity or until it employs more than a hundred employees, after which ownership passes over to the employees.
3. Any company has to eat its own costs.
This is how capitalism can be saved from itself. Three simple, practical suggestions. The sort of thing the granola-sincere but mutton-headed Left and New Left and Marxist Left and the Port Huron statement and social democrats and democratic socialists and assorted Pinkos and Trotskyites and The Fabian Society and George Orwell and Raymond Williams and Old and New Labour and The New Statesman and liberals and progressives and the Seattle Battlers and The Nation and Noam Chomsky and Naomi Klein and Pete Seeger and Billy Bragg have been looking for, ever since Proudhon's “property is theft” and Marx's “class struggle” and “the philosophers have only interpreted the world, in various ways; the point, however, is to change it” -- but cannot find because they're more epiphanied by theory than praxis: in other words, more interested in pamphleteering utopias than rolling up their sleeves and organizing change on the ground in the world of real people with mouths to take in food and rear ends to crap it out. Armchair activists can be like the philosophers: they often interpret the world in order to leave it unchanged.
That's why my Capitalist Manifesto really takes off from where the Communist Manifesto took off (five of its famous 10 points are still valid) -- a manifesto that certainly changed a good part of the world in surprisingly horrible ways, including many sharp minds in the unchanged parts. Listen, I know. Capitalism is the opium of the bourgeoisie. But we're stuck with it like we're stuck with the irritating biology of two genders: it's the system that came out on top. Marx didn't understand that capitalism could be democratized instead of withered away along with the state, because although he understood capitalism better than anyone ever, he didn't quite grock democracy like we do (even though most of our democracies are really sort-of-benign plutocracies, except for the one model of the most humanely progressive social organization in history so far, the Nordic exception -- also exceptional for being the highest-taxed AND most competitive economy on earth).
My Capitalist Manifesto posits the sort of stuff that the World Social Forum in South America is groping towards (though soiling a “Manifesto” with the moniker “Capitalist” would offend them). In fact, we have to look to Latin America of all places if we want to find the first green seeds of a modernized capitalism sprouting their delicate, cutesy, adorable, teensy flowery heads.
Today's feudal capitalism cannot stand. It is just too old, too 19th century, too stultifying, too deadening, too unfair, too unequal, too costly, too amoral, too demonstrably the dumbfuckest of all dumbfuckery in the history of the dumbest dumbfuckeduppedness of all dumbfuckable dumbfuckosity.
Capitalism is the dinosaur in our midst.
It's not as if it can't change. It's only been around since the Industrial Revolution of the 18th century. If you think of the entire history of humankind as one day, capitalism has been around for two minutes.
14. NOW IS THE HOUR
There's nothing particularly natural in human nature about capitalism. It's just another economic system that began in England in the 18th century and spread everywhere, and it's been under constant change and challenge since then, with labor laws and the workweek and all sorts of innovations being forced upon it, mostly by workers in opposition to management, and by great new technologies, like the media and the internet. Yet it has not shed its most dysfunctional characteristic -- the labor-management, worker-boss struggle (that Marx figured could be solved by a revolutionary antithesis when all it needs is a synthesis with a little democracy).
Still, things have moved along somewhat. Today's capitalism isn't quite the Seventh Circle of Hell it was when it started out, with children toiling in unhygienic factories for seven days a week, 14 hours a day.
Yet it's still a gazillion miles away from halfway perfection.
Capitalism shares Islam's problem of being mired in a dogma-blighted Dark Age. Read the Wall Street Journal's editorial pages if you want to see how dark. Like Islam, capitalism has not had an Enlightenment, nor a Reformation, nor a Revolution, nor an Age of Reason to help it enter modernity. Capitalism is a selfish greedy hungry whining baby of evolution that needs to grow up. It's an aging lion full of cancerous sores that smells so bad, the young lions can't stand to go near him to oust his stinking ass. We need a new way of thinking about work and workers and markets and production and demand and GDP and arbitrage and leveraged buyouts: freeconomics, not economics. You've got to excuse me here, but you may have noticed: Freedom is my thing. (Responsibility is my other thing.)
It's not markets that should be free, but people.
It's not the freedom of markets that count, but the freedom of people.
It's more important that people be free than markets.
For that to happen, capitalism has to change and become democratized. This will cause an enchanting ripple-effect beyond itself: a democratized capitalism will make democracies themselves more democratic -- as democratic as they should be. Democracy works -- via the vote, freedom of speech, the rule of law, the right to private property, progressive taxes, a social safety-net, and time-tested institutions -- to guarantee the well-being of its citizens, and to give all of them an equal opportunity at achieving their full potential. America doesn't do that: our income inequality grows by the hour; our social mobility is worse than the UK and France, two aristocracy-top-heavy countries. The US is a failure as a democracy because its capitalism is not democratic.
Let's raise the cry: Democracy in all things -- even in capitalism!
We can't have this undemocratic beast of feudal warlord capitalism operating in our democracies, and often making us all miserable, when -- with the three changes I've outlined here -- capitalism can make us all happy.
The time has come for real change. Now is the hour to start working and agitating and demonstrating and protesting and flash-mobbing and publishing and blogging and networking and linking and emailing for a fundamental mutation in our working lives.
Capitalists of the world, catch up! You have nothing to lose but your cages.
The Capitalist Manifesto: How to Modernize Capitalism from Feudalism to Democracy
There is a specter haunting the planet. It is the specter of the failure of Western Capitalism.