Americans want something new. Whether they call themselves tea party, progressive, conservative or liberal, there is an underlying consensus that something fundamentally wrong has taken hold of our country and perhaps our world. This wrongness is causing uprisings and conflict within nations on an unprecedented level and shows no sign of fixing itself. Political parties seem unable to identify the issues involved and as the Occupy movement spreads, they struggle to grasp what they even can do.
Make no mistake, regardless of the ideological framework from which the protesters come, there is a common theme present in both the baby boomers chasing Sarah Palin with tea bags hanging from their hats and the young people packing US cities today. That constant is the underlying feeling that something very deep in the tissue of our country's body is sick. Our knee jerk reaction is to blame it on Obama or wealth or liberals or government but the truth, as is usually the case, is more nuanced.
Lightning – Corporations as a Natural Force
In a capitalist economy, the pursuit of wealth is the country's energy. Corporations are simply legal groups that collectively seek to do so in an organized fashion. To understand the underlying sickness, you have to let go of your assumptions about capitalism and corporations and accept the basic facts of what corporate business structure is and is not.
Corporations, like a natural force, are amoral. This is not to say they cannot do good or evil, but rather that they have no interest in doing either as a default condition. Corporations seek the path of least resistance towards profit within the industry and framework they design for themselves as it relates to the overall economy. Think of company activity as lightning. A lightning bolt travels across the sky or to the ground based on the easiest path depending on the conditions of the air and the physical landscape. Contrary to popular belief, a lightning bolt will strike the same location over and over if conditions make that path the easiest one.
This path of least resistance is not laziness or accident. Corporations are legally designed this way. In fact a board of directors carries what is called a 'fiduciary duty' requiring them by law to maximize shareholder gain. This means they can be criminally charged if they don't seek the greatest possible profits for their shareholders.
Now add in the stock market. The stock market gives the public the ability to become shareholders of companies they believe will do well, but more importantly the stock market lets owners move their money from company to company based on their own analysis of market trends and the likely futures of various goods and services. This means that a portion of the largest corporations are held by people who have no long term interest in that company's future or behavior. They own stock only so long as the stock is climbing and then jump to another company if they see a better opportunity. Pair this reality with the fiduciary duty of the board to these stockholders and you have a natural, compelling default behavior that evolves inside corporate America to do whatever legally leads to the maximum difference between costs and revenues – short term profit.
This isn't to say corporations are slaves to this default, it is to say that when all other things are equal, a US company will seek the path of greatest profit over any other consideration. Their underlying objective in the business is not building society, creating jobs, pursuing public policy goals, or even providing the goods or services in their current business plan. Their underlying objective is profit and they will chase that above all else and with little deviation. Like a lightning bolt racing across the sky, they may zigzag and arch, but they will always head towards the path of least ionic resistance regardless of where it lies.
If you think of corporations as lightning, it becomes easier to understand their behavior. They are, to a certain degree, predictable in a general sense. They can be expected to streak towards the opportunities that arise for profit and will not concern themselves so much with what might catch fire by their touch or passing not because they're evil but simply because they must serve a very narrow, specific set of interests.
Controlling the Fire - The Rule of Law
Understanding corporations as an economic 'natural force' is a good way to understand how they can be responsible, in part, for a societal evil without being evil themselves. The very nature of capitalism and corporations – their amorality and specific profit focus – means that a strong rule of law is necessary to keep capitalism from treading into destructive territory. Completely unregulated, capitalist business would engage in all kinds of horrors including slavery, paramilitary conflicts, and even prey upon it's people as another direct resource of assets to be exploited for profit. While plenty of business leaders are, themselves, moral and would refuse to enter such ventures, it is an undisputed fact is that if profit is available, someone in the market will go there without laws and consequences to deter them.
So no matter what your political position on the left/right spectrum, there is a core understanding at the root of our economics that the rule of law must be maintained and must be enforced. The fires generated by lightning strikes must never consume the population or destroy the fabric of what holds us together as a country. In an ideal setting, that rule of law is enforced equally regardless of wealth, status, or influence. When the rule of law is strong, government need not be terribly large. The free market does have the capacity to regulate itself if the territory of it's strongest potential excesses is cordoned off and insulated by government from the lightning strokes of corporate activity. So anyone who supports the advantages of a capitalist free market must also support a strong government when it comes to defining the legal boundary of the field in which that market may operate. The stronger that government's ability to enforce the rules, the less rules need exist because the possibility of that government's creation of a rule is incentive to the market to regulate itself.
The Copper Rod of Government
While the founders were genius in many ways, they missed a very important protection to their democratic experiment: They never insulated the government against money. Quite the contrary, in fact. George Washington was chided in one of his early elections for not providing enough of a spread of food and liqueur to reward the people who voted for him. It was assumed from the very beginning that wealth would play a role in getting people to participate in government, and as our country grew the general policy was that wealth could be used to garner participation and build support, but in the end the idea was that elections would mean each man's vote was still their own.
But none of this anticipated the rise of the administrative state. As the population expanded, so did the federal government. Talking about whether government's expansion caused or responded to the excesses of a free market run amok is beyond the scope of this document. But the result was that in order for people to attain and retain office, more and more money was necessary to reach voters. Spending on campaigns and media to reach an ever increasing population made heavily funded campaigns less of an advantage and more of a political necessity. This slowly made the government more and more dependent to those interests who could produce reliable election funding.
What's important here is understanding an evolutionary process. In the earliest days, a man's individual income was enough to provide the financial incentive to participate in a vote. In effect, the candidate held a 'kegger' to get people to turn out. As the country grew, the financial requirements to hold that kegger rose from being within one person's financial ability to many and then to a level that required a fund raising operations or corporations to work over time. Eventually it got so high that only the largest organizations or corporations could actually produce the necessary cash. At this point, the copper rod of government started to reach high into the lightning filled sky of the economy it was supposed to be overseeing. Thomas Jefferson saw this risk:
“I hope we shall crush… in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country."
-Thomas Jefferson
But I'll go out there and say that while Jefferson saw the danger, he was wrong to blame the corporations. What he should have been doing is looking hard at the government itself and asking how they could have, should have, and as I'll argue later still need to insulate government from finance.
A Co-Dependent Relationship from Hell
So what we have right now is a government that has grown into what amounts to a tall, copper spire in an economy built around lightning strikes of business inspiration seeking the path of least resistance towards profit. The result is not only predictable but inevitable. Once a group of corporations reached a level of resources that made them almost their own state, investment in government itself became the path of least resistance to profit. It becomes easier to change the rules of the game and tweak the rule of law to increase bottom line profits than it does to open a factory, improve a product, or provide a superior service. Starting in the 80's, corporations reached this critical mass that made this process of manipulating governments the best possible path towards growth. While symptoms of it were evident for our whole national history, it was in the 80's and beyond that the process picked up real steam.
Government, having enslaved itself to the need for massive funding to perpetuate either party's control over policy fell into line. And so began the most destructive codependent relationship on the planet. Government officials needed money to stay in power (90% of all federal elections are won by the bigger spender) and business did what it is supposed to do: Take advantage of an opportunity to maximize shareholder gain. The needs of both threw our system into a downward spiral the edges of which started to consume our society and shred the opportunities of those not directly engaged in this financially deadly dance.
By the time our economy crashed in 2006, the constant onslaught of lightning strikes from the free market had fused government into a tool for profit, changing the 'free' market into a controlled market where the laws no longer sought to balance opportunity and promote the good of society but instead to specifically facilitate profits for those who had reached that financial critical mass – the largest and most influential financial and global enterprises.
Death of the American Dream
The rule of law – the very foundation of the free market - was now administered by a government whose tax code, regulatory law, and economic policy had been radically reshaped into a giant copper straw by which wealth was extracted from the economy into the coffers of a few companies. Again, these companies were doing exactly what they were supposed to do and seeking the path of least resistance, a path made possible by government failure to insulate itself from being the target of that acquisition process.
When we talk about the American dream, we talk about a free market where anyone with ambition, ideas, initiative and perseverance can realize progress and attain wealth. But this opportunity depends on the rule of law, made manifest in the government, maintaining an even hand in the administration of it's authority. In order to do that, the government must never be at the mercy of financial influence.
An Unthinkable Result
In the grandest and most ironic twist of our history, the codependency of the capitalist market and a failed government has made us a regressive socialist country masquerading as a Democracy. The means of production for the greatest wealth inside the United States are no longer its ideas, products and services. Instead the means of production >IS< the government. By adjusting tax rates, business laws, regulatory laws, and local ordinance, the businesses focusing their electrical current through government could destroy competition, secure greater profits, and increase their bottom lines by avoiding taxation. All of the tools available to them in the normal market process existed as they always had, but now government worked for them and in so doing became a government business with undue authority over other businesses and society itself much like any extreme socialist enterprise. The exact things conservatives were wringing their hands about in 2008 if government got to big were happening under their noses because a few companies, specifically financial firms, had gotten big enough to subjugate the political system to their will and had become 'too big to fail', extracting wealth from the American people to cover their bad bets and keeping all the gains from their good ones.
The protesters in the Tea Party were right to be enraged. So are the Occupy protesters now swarming our nation and across the world. But liberals blaming the corporations for the atrocity that is our broken and now regressive society are wrong. Conservatives blaming and trying to dismantle the government for the same are equally misguided. The enemy of our country is the twisted and rapidly spiraling relationship between these two that must be broken apart. The copper lightning rod of our government's electoral and lobbying system needs to be torn down and reshaped, insulated this time from the market it seeks to empower. Corporations too big to fail need to be broken up and a real free market with real competition established. The goal of these protests must be ambitious and arguably revolutionary: Publicly funded elections, removal of lobbyists, possibly even a constitutional amendment to prohibit financial contributions to politics outside of taxation.
It seems impossible, but so did protests of this magnitude just a few months back.
We now live in a world of instant communications, facebook, smart phones, email and twitter. Perhaps the biggest thing dividing us right now is an artificially created bipolarity of opinion designed to politically divide us into 'bases' and through control of funding, eliminate anyone that isn't secure in the camp of two opposed ideologies. If you've watched the Republican debates or listen to Democrats argue, you know that our population is not as black and white as Rush Limbaugh or Michael Moore would have you believe.
Imagine a world where collectively funding politics was completely illegal, thus ending both political parties in addition to lobbies and pacs. Where publicly funded debates started at the local level entertaining anyone as a candidate who could gather enough signatures and produced a subset of winners that moved up by regions, then states, then to a national stage. Where candidates won based on the merits of their ideas and proposals, not their funding and party. Where a pro choice fiscal conservative and an evangelical in favor of universal health care could exist as options and win the hearts and minds of Americans instead of having to reshape themselves to an ever polarizing base. With today's communications and media, would it be so impossible to walk away from some elements of our representative democracy and embrace the more pure democratic option now made practical by technology?
If you're like me, you're tired of fighting your friends because the politics of fear have kept us focused on each other instead of on the twisted codependency of our economy and our government. It is because of this fatigue and the realization of how deep the problem runs that I am all for the Occupy movement growing without end. The kind of changes we need are truly revolutionary, and unless our government faces the prospect of a real revolution, they will not step forward out of the embrace of their hated lover to take a stand on the painful break-up that must happen before the opportunities and principles upon which our country was founded can once against take root and begin to really flourish.
Make no mistake, regardless of the ideological framework from which the protesters come, there is a common theme present in both the baby boomers chasing Sarah Palin with tea bags hanging from their hats and the young people packing US cities today. That constant is the underlying feeling that something very deep in the tissue of our country's body is sick. Our knee jerk reaction is to blame it on Obama or wealth or liberals or government but the truth, as is usually the case, is more nuanced.
Lightning – Corporations as a Natural Force
In a capitalist economy, the pursuit of wealth is the country's energy. Corporations are simply legal groups that collectively seek to do so in an organized fashion. To understand the underlying sickness, you have to let go of your assumptions about capitalism and corporations and accept the basic facts of what corporate business structure is and is not.
Corporations, like a natural force, are amoral. This is not to say they cannot do good or evil, but rather that they have no interest in doing either as a default condition. Corporations seek the path of least resistance towards profit within the industry and framework they design for themselves as it relates to the overall economy. Think of company activity as lightning. A lightning bolt travels across the sky or to the ground based on the easiest path depending on the conditions of the air and the physical landscape. Contrary to popular belief, a lightning bolt will strike the same location over and over if conditions make that path the easiest one.
This path of least resistance is not laziness or accident. Corporations are legally designed this way. In fact a board of directors carries what is called a 'fiduciary duty' requiring them by law to maximize shareholder gain. This means they can be criminally charged if they don't seek the greatest possible profits for their shareholders.
Now add in the stock market. The stock market gives the public the ability to become shareholders of companies they believe will do well, but more importantly the stock market lets owners move their money from company to company based on their own analysis of market trends and the likely futures of various goods and services. This means that a portion of the largest corporations are held by people who have no long term interest in that company's future or behavior. They own stock only so long as the stock is climbing and then jump to another company if they see a better opportunity. Pair this reality with the fiduciary duty of the board to these stockholders and you have a natural, compelling default behavior that evolves inside corporate America to do whatever legally leads to the maximum difference between costs and revenues – short term profit.
This isn't to say corporations are slaves to this default, it is to say that when all other things are equal, a US company will seek the path of greatest profit over any other consideration. Their underlying objective in the business is not building society, creating jobs, pursuing public policy goals, or even providing the goods or services in their current business plan. Their underlying objective is profit and they will chase that above all else and with little deviation. Like a lightning bolt racing across the sky, they may zigzag and arch, but they will always head towards the path of least ionic resistance regardless of where it lies.
If you think of corporations as lightning, it becomes easier to understand their behavior. They are, to a certain degree, predictable in a general sense. They can be expected to streak towards the opportunities that arise for profit and will not concern themselves so much with what might catch fire by their touch or passing not because they're evil but simply because they must serve a very narrow, specific set of interests.
Controlling the Fire - The Rule of Law
Understanding corporations as an economic 'natural force' is a good way to understand how they can be responsible, in part, for a societal evil without being evil themselves. The very nature of capitalism and corporations – their amorality and specific profit focus – means that a strong rule of law is necessary to keep capitalism from treading into destructive territory. Completely unregulated, capitalist business would engage in all kinds of horrors including slavery, paramilitary conflicts, and even prey upon it's people as another direct resource of assets to be exploited for profit. While plenty of business leaders are, themselves, moral and would refuse to enter such ventures, it is an undisputed fact is that if profit is available, someone in the market will go there without laws and consequences to deter them.
So no matter what your political position on the left/right spectrum, there is a core understanding at the root of our economics that the rule of law must be maintained and must be enforced. The fires generated by lightning strikes must never consume the population or destroy the fabric of what holds us together as a country. In an ideal setting, that rule of law is enforced equally regardless of wealth, status, or influence. When the rule of law is strong, government need not be terribly large. The free market does have the capacity to regulate itself if the territory of it's strongest potential excesses is cordoned off and insulated by government from the lightning strokes of corporate activity. So anyone who supports the advantages of a capitalist free market must also support a strong government when it comes to defining the legal boundary of the field in which that market may operate. The stronger that government's ability to enforce the rules, the less rules need exist because the possibility of that government's creation of a rule is incentive to the market to regulate itself.
The Copper Rod of Government
While the founders were genius in many ways, they missed a very important protection to their democratic experiment: They never insulated the government against money. Quite the contrary, in fact. George Washington was chided in one of his early elections for not providing enough of a spread of food and liqueur to reward the people who voted for him. It was assumed from the very beginning that wealth would play a role in getting people to participate in government, and as our country grew the general policy was that wealth could be used to garner participation and build support, but in the end the idea was that elections would mean each man's vote was still their own.
But none of this anticipated the rise of the administrative state. As the population expanded, so did the federal government. Talking about whether government's expansion caused or responded to the excesses of a free market run amok is beyond the scope of this document. But the result was that in order for people to attain and retain office, more and more money was necessary to reach voters. Spending on campaigns and media to reach an ever increasing population made heavily funded campaigns less of an advantage and more of a political necessity. This slowly made the government more and more dependent to those interests who could produce reliable election funding.
What's important here is understanding an evolutionary process. In the earliest days, a man's individual income was enough to provide the financial incentive to participate in a vote. In effect, the candidate held a 'kegger' to get people to turn out. As the country grew, the financial requirements to hold that kegger rose from being within one person's financial ability to many and then to a level that required a fund raising operations or corporations to work over time. Eventually it got so high that only the largest organizations or corporations could actually produce the necessary cash. At this point, the copper rod of government started to reach high into the lightning filled sky of the economy it was supposed to be overseeing. Thomas Jefferson saw this risk:
“I hope we shall crush… in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country."
-Thomas Jefferson
But I'll go out there and say that while Jefferson saw the danger, he was wrong to blame the corporations. What he should have been doing is looking hard at the government itself and asking how they could have, should have, and as I'll argue later still need to insulate government from finance.
A Co-Dependent Relationship from Hell
So what we have right now is a government that has grown into what amounts to a tall, copper spire in an economy built around lightning strikes of business inspiration seeking the path of least resistance towards profit. The result is not only predictable but inevitable. Once a group of corporations reached a level of resources that made them almost their own state, investment in government itself became the path of least resistance to profit. It becomes easier to change the rules of the game and tweak the rule of law to increase bottom line profits than it does to open a factory, improve a product, or provide a superior service. Starting in the 80's, corporations reached this critical mass that made this process of manipulating governments the best possible path towards growth. While symptoms of it were evident for our whole national history, it was in the 80's and beyond that the process picked up real steam.
Government, having enslaved itself to the need for massive funding to perpetuate either party's control over policy fell into line. And so began the most destructive codependent relationship on the planet. Government officials needed money to stay in power (90% of all federal elections are won by the bigger spender) and business did what it is supposed to do: Take advantage of an opportunity to maximize shareholder gain. The needs of both threw our system into a downward spiral the edges of which started to consume our society and shred the opportunities of those not directly engaged in this financially deadly dance.
By the time our economy crashed in 2006, the constant onslaught of lightning strikes from the free market had fused government into a tool for profit, changing the 'free' market into a controlled market where the laws no longer sought to balance opportunity and promote the good of society but instead to specifically facilitate profits for those who had reached that financial critical mass – the largest and most influential financial and global enterprises.
Death of the American Dream
The rule of law – the very foundation of the free market - was now administered by a government whose tax code, regulatory law, and economic policy had been radically reshaped into a giant copper straw by which wealth was extracted from the economy into the coffers of a few companies. Again, these companies were doing exactly what they were supposed to do and seeking the path of least resistance, a path made possible by government failure to insulate itself from being the target of that acquisition process.
When we talk about the American dream, we talk about a free market where anyone with ambition, ideas, initiative and perseverance can realize progress and attain wealth. But this opportunity depends on the rule of law, made manifest in the government, maintaining an even hand in the administration of it's authority. In order to do that, the government must never be at the mercy of financial influence.
An Unthinkable Result
In the grandest and most ironic twist of our history, the codependency of the capitalist market and a failed government has made us a regressive socialist country masquerading as a Democracy. The means of production for the greatest wealth inside the United States are no longer its ideas, products and services. Instead the means of production >IS< the government. By adjusting tax rates, business laws, regulatory laws, and local ordinance, the businesses focusing their electrical current through government could destroy competition, secure greater profits, and increase their bottom lines by avoiding taxation. All of the tools available to them in the normal market process existed as they always had, but now government worked for them and in so doing became a government business with undue authority over other businesses and society itself much like any extreme socialist enterprise. The exact things conservatives were wringing their hands about in 2008 if government got to big were happening under their noses because a few companies, specifically financial firms, had gotten big enough to subjugate the political system to their will and had become 'too big to fail', extracting wealth from the American people to cover their bad bets and keeping all the gains from their good ones.
The protesters in the Tea Party were right to be enraged. So are the Occupy protesters now swarming our nation and across the world. But liberals blaming the corporations for the atrocity that is our broken and now regressive society are wrong. Conservatives blaming and trying to dismantle the government for the same are equally misguided. The enemy of our country is the twisted and rapidly spiraling relationship between these two that must be broken apart. The copper lightning rod of our government's electoral and lobbying system needs to be torn down and reshaped, insulated this time from the market it seeks to empower. Corporations too big to fail need to be broken up and a real free market with real competition established. The goal of these protests must be ambitious and arguably revolutionary: Publicly funded elections, removal of lobbyists, possibly even a constitutional amendment to prohibit financial contributions to politics outside of taxation.
It seems impossible, but so did protests of this magnitude just a few months back.
We now live in a world of instant communications, facebook, smart phones, email and twitter. Perhaps the biggest thing dividing us right now is an artificially created bipolarity of opinion designed to politically divide us into 'bases' and through control of funding, eliminate anyone that isn't secure in the camp of two opposed ideologies. If you've watched the Republican debates or listen to Democrats argue, you know that our population is not as black and white as Rush Limbaugh or Michael Moore would have you believe.
Imagine a world where collectively funding politics was completely illegal, thus ending both political parties in addition to lobbies and pacs. Where publicly funded debates started at the local level entertaining anyone as a candidate who could gather enough signatures and produced a subset of winners that moved up by regions, then states, then to a national stage. Where candidates won based on the merits of their ideas and proposals, not their funding and party. Where a pro choice fiscal conservative and an evangelical in favor of universal health care could exist as options and win the hearts and minds of Americans instead of having to reshape themselves to an ever polarizing base. With today's communications and media, would it be so impossible to walk away from some elements of our representative democracy and embrace the more pure democratic option now made practical by technology?
If you're like me, you're tired of fighting your friends because the politics of fear have kept us focused on each other instead of on the twisted codependency of our economy and our government. It is because of this fatigue and the realization of how deep the problem runs that I am all for the Occupy movement growing without end. The kind of changes we need are truly revolutionary, and unless our government faces the prospect of a real revolution, they will not step forward out of the embrace of their hated lover to take a stand on the painful break-up that must happen before the opportunities and principles upon which our country was founded can once against take root and begin to really flourish.
Comments
Post a Comment