Thursday, May 31, 2018

Economic Insanity: Chapter 7 (part 2)

A Nation of Owners (Part 2)

The Federal Model
Each responsible citizen in the United States has a vote, but each citizen doesn’t vote on every issue, every bill, every executive decision, every Supreme Court ruling. Such a voting system would create political and social gridlock. Instead, we elect representatives, then they vote for us, make executive decisions, and appoint judges and other government officials. If we don’t like their voting record, we don’t reelect them. It’s not true democracy, but it is a workable compromise between potential anarchy and the imposed order of arbitrary authority.
We are, at least in theory, a democratic republic. And economic democratic republics would follow the same principles. Equal ownership, equal voice, equal representation. To prevent the abuses of power and position that we see in Congress, we would have to designate a limited term for those elected as managers within corporations and other organizations. Four or five years would be sufficient. And after a manager’s administrative term was completed, he or she would then return to the regular workforce. This would eliminate the professional managerial class and would prevent the politicizing of organizational leadership, which is exactly what has happened to American government on the national level.
The advantages of this form of economic organization would be similar to those created in government by the U.S. Constitution. These advantages were laid out by Alexander Hamilton, James Madison, and John Jay in The Federalist Papers, which were arguments made in support of our particular form of constitutional government. Among these advantages were the following.

The U.S. government represents a federation of states. The states retain some power and autonomy, but are bound into a greater whole. The creation of this federation was a move toward centralization, the intent being to overcome the major weak point of the Articles of Confederation—dissension among the states. The states needed to be strong, to be unified in a larger cause, and only a strong central government could achieve those ends. This move, of course, was also based on military, security, and commercial concerns.
In most businesses today, however, the movement would have to be in the opposite direction, toward decentralization, since most organizations are authoritarian in nature and dominated by strong central control. Departments or divisions, acting much as states do in the federal government, would retain certain powers and perform certain roles. Limited, universal ownership, however, would create strong incentives toward smaller, community-oriented businesses, and away from national or international conglomerates. There would be little purpose in or justification for large, nonregional businesses under such an ownership arrangement, and great impetus to break down today’s conglomerates into regional- or community-sized pieces that focused on one particular product or a set of related products. Some companies might divide up into several small, independent, department-sized groups.

Checks and Balances
Our federal government, as established in the Constitution, is a brilliant plan for preserving political freedom and democracy by preventing one individual or a segment of government from gaining too much power. Power is balanced in at least four ways: between the states and the federal government, between the two houses of Congress, among the three branches of the federal government, and between the people and their elected leaders. It is not my purpose here to explore all the ramifications of these governmental checks and balances, only to say that a similar system would need to be established in large economic institutions.
In the vast majority of today’s businesses, large and small, the owner or CEO or perhaps a small group of leaders hold total power. They function more or less as dictators, exercising the legislative (policy-making), the executive (administrative), and the judicial (decision-rendering) powers in the organization. They can do just about what they want to, with no internal checks and balances, for only certain (usually inadequate) external restraints prevent them from abusing the awesome power that is theirs. Separating the executive, legislative, and judicial powers in businesses makes perfect sense. It is the best way to prevent the abuse of authority, even if that authority is granted by the employees themselves through elected management.

Popular Sovereignty
Because in the United States the people are sovereign, their will influences all branches of government. Supposedly, the only tyranny possible under such a government would be the tyranny of the majority, which worried Tocqueville.
Time, however, has proved this supposition wrong. The tyranny of the majority is not, in fact, the only tyranny possible in America. Our political system has been reshaped over time so that the wealthy and influential can exert a form of tyranny. This oppression will be with us until we accept certain types of political and economic reform. But tyranny of the majority is a very real thing in America. And, ultimately, it has but one check: the virtue of the people.
If the majority is wise and moral and virtuous in its selection of leaders, the potential tyranny of the majority will be of no consequence. The danger comes only when the majority forsakes its virtue. The Founders were well aware of this, but they had enough confidence in mankind to try this experiment anyway. Said Madison:
I go on this great republican principle, that the people will have virtue and intelligence to select men of virtue and wisdom. Is there no virtue among us? If there be not, we are in a wretched situation. No theoretical checks, no form of government can render us secure. To suppose that any form of government will secure liberty or happiness without any virtue in the people is a chimerical idea. If there be sufficient virtue and intelligence in the community, it will be exercised in the selection of these men; so that we do not depend on their virtue, or put confidence in our rules, but in the people who are to choose them.1
The Founders quite clearly trusted the overall virtue of the people regarding the selection of political leaders. And I believe their confidence was well placed, for even though times have changed and our choice of political leaders is regrettably limited by money and influence, we still scrutinize these candidates through the lens of a morality that no longer governs our own lives. We expect (even demand) of our elected leaders standards of morality and virtue that we do not apply even to ourselves. The day may come when the majority totally loses its sense of virtue and surrenders to outright depravity, but sufficient moral feeling has survived to prevent the tyranny Tocqueville feared. [Okay, I have to insert a comment here. This may have been true in 1995, when this book was published, but I would argue that we have reached the point where the majority has lost its sense of virtue (at least the majority as represented in the Electoral College). The fact that America has elected the most corrupt president in its history, a completely amoral man who embodies everything the Founders tried to prevent, says something about where at least one of our political parties has gone. In 1995, I was pretty sure something like our current mess would never happen. Where we go from here will tell us who we are as a nation. I certainly hope for a strong reaction against the corruption of the Trump administration that has also infected the Republican Congress. Time will tell.]
If we organize our economic institutions according to the principles set forth in the Constitution, they would be subject to the same threat of tyranny from the majority. But this threat is insignificant next to the actual tyranny we see in our present authoritarian organizations. What this system would remove from our economic institutions is the ignorant body of employees that is willfully blind to injustice, pollution, dishonesty, and unfair business practices. No longer would there be powerless employees who say, “Hey, I didn’t know. I just do my job and don’t ask questions. I have no influence over what management does.”

The leaders we elect after examining them under the media microscope are our representatives in government. They speak and act for us. The president of the United States executes the public will; the legislature enacts laws through the authority given it by the people; the Supreme Court acts for the people in determining whether laws (and decisions of lower courts) are in harmony with the guiding principles set forth in the Constitution. None of these branches of government, however, pleases everybody. Sometimes they don’t please the majority. How is this possible?
Regardless of whether they were elected by popular vote or appointed by an elected official, these individuals have their own interpretations of right and wrong, good and bad, just and unjust. Representing a diverse populace is no easy matter. Sometimes special interests, because they have purchased influence (or gained it some other way), sway public representatives away from the majority position. Sometimes representatives, because of individual conscience, vote or act contrary to the will of their constituents. Sometimes there are several options, and pursuing even the most popular one still leaves 75 percent of the people dissatisfied. Representation, in short, is a compromise between the tyranny of the majority and the tyranny of individual rulers. It is the most necessary element of a republic.
In businesses this element would also be necessary in order to control the chaos into which a purely democratic workplace would inevitably fall. Every worker can’t have a voice in every decision, nor would he or she want to. That would be highly inefficient. But every worker would need a voice in the overall management of the enterprise and a knowledge of what is being done and why—because the workers would be the owners. And they would exert the powers of that ownership not only in choosing those who represent them, but also in establishing limits on the power of their representatives.
These four features of our democratic republic, established by the Constitution, should apply to any organization comprising more than, say, fifty or so individuals. We must put ownership back where it belongs—in the hands of the people—but we must also avoid the chaos that a purely democratic system would spawn. The federal model is a viable solution, a perhaps imperfect although workable compromise.
Business leaders have recognized the benefits of giving employees at least the illusion of democracy, although they generally give employees only a fraction of the voice they deserve. The recent movement to permit employees to participate in ownership—from PepsiCo’s “Share Power Plan” to Wendy’s stock options for employees—is commendable and is gaining momentum in the United States. Much of this growth in employee ownership has come through employee stock ownership plans (ESOPs), now in place at some eleven thousand companies, involving 11.5 million employees (13 percent of the civilian workforce). Employees now own more than $120 billion in their own companies’ stock, which though impressive represents only 3 percent of all shares in U.S. firms.2
These plans are popular because they (predictably) increase employee commitment and generate cash flow, but they do not go far enough. Employee shareholding at limited or token levels should not be mistaken for actual employee ownership. A business can never become an economic “democratic republic” if most of the stock is held by either a few powerful individuals or a multitude of distant, uninterested shareholders. Authoritarianism with a democratic facade should not be confused with republican democracy.

The Conversion
If we are serious about overcoming our nation’s deep problems, we must make sweeping fundamental changes in our economic system, in both theory and practice, by bringing it more in line with our political philosophy and our social ideals. Says Shann Turnbull:
To minimize corruption of all sorts, we need to decentralize power to the greatest extent possible so as to maximize checks and balances. The most fundamental sources of power in society arise from the ownership and control of land, enterprise and money. The current ownership system was developed to serve the needs of past rulers who sought absolute powers. As a result, there is no limit as to the extent and value of property which any person can possess. New rules are needed to decentralize the power of owning things—rules which follow the self-limiting and self-regulating principles found in all living things.”3
Given the fact that capitalism as we know it is both corrupt and rapidly deteriorating, we are faced with the dilemma of how to get from our present system to one that is both more equitable and more workable. This will not be an easy transition, for it will involve the conversion of our present authoritarian organizations into democratic institutions. Unfortunately, recognizing that we need to make this transition is much easier than actually making it. How do you convert from a system of either narrow, unlimited ownership or widely dispersed absentee ownership to a system of limited, universal ownership?
A good argument can be built for making this transition gradually, over a long period of time. If we were to try to make this shift overnight, the consequences would likely be as horrible as they are predictable. Suddenly abolishing our present system of ownership would create a crisis far more perilous even than the Civil War, which arose from abolishing a different, although related, form of ownership. It would be naive to think that those who have accumulated vast amounts of money, property, and power would simply yield to reason (or even newly enacted laws) and give up these possessions without a fight. And I mean a literal fight, one in which the odds would be stacked against change and democracy. It is not difficult to imagine an actual civil war far more devastating than the one fought over slavery.
How then can we make this transition? Turnbull takes a shot at this dilemma. He proposes a system in which ownership of corporations transfers gradually, at a rate of 5 percent per year, from investors to stakeholders (employees, customers, suppliers). The investor would reap profits for ten years, after which this gradual transfer would begin. What this means is that thirty years after the initial capital infusion, the investor would have no ownership in the enterprise. This, says Turnbull, “would make corporate investment consistent with the time-limited rights provided to all investors in intellectual property like patents and copyright.”4 Mature corporations, according to Turnbull’s plan, would then finance new technology and market growth by transferring parts of their operations to spinoffs or “corporate offspring,” which would attract new investors.
This system, although a far cry better than our present heap of perpetual, monopolistic shareholding, is still a system in which technology and economic growth would be supreme, and in which capital would still be concentrated enough that individuals and groups could invest heavily in new spinoffs or corporate offspring. Seen in the context of these issues, Turnbull’s vision of economic change might be an intermediate step that would pave the way for a system of complete equality and limited, universal ownership.
The first question we should ask, though, is this: Do we have thirty years to convert our present system into Turnbull’s vision, which is still only a halfway house from our current economic prison to the free society we would become? The answer, I fear, is that we may not have even ten years. Time is not on our side in this matter.
1. Alexander Hamilton, James Madison, and John Jay [“Publius”], The Federalist Papers (New York: Bantam Books [1787–88] 1982), xxi.
2. Corey Rosen, “The Options Option: A New Approach to Employee Ownership.” Management Review, December 3, 1991, 30.
3. Shann Turnbull, “Transforming Society,” World Business Academy Perspectives, winter 1992, 6.
4. Turnbull, “Transforming Society,” 6.

Saturday, May 19, 2018

Economic Insanity: Chapter 7 (part 1)

A Nation of Owners (Part 1)

Employees are being paid to produce, not to make themselves into better people.
Corporations are purchasing employee time to make a return on it,
not investing in employees to enrich their lives.
Employees are human capital, and when capital is hired or leased
the objective is not to embellish it for its own sake but to use it for financial advantage.
But somewhere in this philosophy there is an inconsistency
with the notion of a society of self-governing individuals.
The large corporation has become an organizer of people,
a user of people, a molder of identities, according to criteria that it has evolved,
without regard to the effect on those people except as this is registered on the balance sheet.

—Neil W. Chamberlain,
The Limits of Corporate Responsibility

The first step we must take, if we wish to design an economic system independent of growth and progress and more tuned to serving the real needs of society, is to reconsider the most fundamental principle of capitalism—namely, the license to accumulate unlimited capital. Limitless ownership. This is the grand key that turns the lock on Pandora’s box and unleashes the demons of relentless, interminable growth in our economy. Consequently, a change in our ability to own things is the most fundamental change we must make, a change that will affect us not only economically, but socially and politically also, for it will serve as a first and pivotal step in bringing the ideals that compose the American Dream back into harmony.
      As mentioned earlier, a fundamental philosophical incongruity separates the founding principles of our nation from the economic tenets that govern modern capitalism. This disparity would be of little consequence if its impact were limited to the esoteric arguments of scholars. Unfortunately, this is not the case. The incompatibility between our political ideals and our economic realities affects each individual in society at a very personal level. Indeed, the authoritarian nature of our economic institutions effectively prevents most American citizens from achieving their innate potential as they seek a fulfilling life, an equal share of liberty within the bounds of democracy, and a true and independent sense of happiness.
      Some may choose to discount this argument, insisting that most workers prefer to be employed from eight to five each day by someone else and are fully satisfied with their work. This argument, however, runs counter to both common sense about human nature and the cold, hard facts. A recent Roper poll, for instance, found that only 18 percent of American workers consider their careers personally and financially rewarding.1 Eighteen percent. Apparently, spending forty hours or more each week performing tasks that someone else tells them to perform is not so enjoyable to most Americans—especially when they are paid the bare minimum while those who own their time live in comparative opulence. If the rebellion in the former Soviet Bloc should have taught us anything, it is that people do not enjoy being subject to unaccountable power.

Building a House of Happiness
One idea we often overlook in both politics and economics is the notion that our nation’s founding was the beginning of a process, not the end. It was the planting of a seed, not the harvesting of ripened fruit. The Founders changed many things, but they did not change everything. Indeed, what they changed more than anything was direction. There was not total agreement among the Founders on all issues and, in some ways, more than moving toward a specific goal, they were moving away from certain evils, establishing a system that would prevent them from cropping up again. Unfortunately, they had no way of predicting some evils, such as the concentration of power in large economic institutions (that in many ways resemble the vessels of arbitrary power they so vehemently opposed). Had they foreseen our day, they likely would have included in the Constitution specific limitations to the accumulation of economic and not just political power.
Perhaps the Founders didn’t totally understand the forces of societal change their Revolution had set in motion, but they did understand one thing. They knew that the new nation would reach its ultimate destination not in one giant leap, but in countless stages over time. The Founders were bound by the reality that some things must change gradually, that some ideals are beyond our present reach. This does not mean, however, that those ideals are not worthy, or that we shouldn’t strive toward them.
The Founders, if you will, drew up the blueprint and laid the foundation. Later generations would then follow that blueprint and build on that foundation, perhaps changing a few features as circumstances warranted (this is why they provided a means for amending the Constitution). Whether they actually got so specific as to designate what sort of roof or veneer the structure would eventually have is both debatable and irrelevant. They knew what kind of edifice they wanted: a free one to which each citizen would have equal access and in which every American could reach his or her human potential. Some of the details, they knew, an informed and moral citizenry would have to put in place.
Unfortunately, in some ways we are not changing in the right direction. We have tossed the Founders’ blueprint aside and are building a sprawling prison on the foundation that was to have supported a beautiful mansion. In our economic institutions, we have not followed the blueprint, which included such values and principles as democracy, equality, the sanctity of each human life, individual liberty, and the pursuit of happiness. Instead, we have built up authoritarian economic institutions that operate in direct conflict with the values and principles of our founding. The industrialists and the professional executive class would have us believe that those values and principles do not apply to economic matters, or that we should apply them only in a token or metaphorical sense, but that is nonsense.
“As free agents,” David K. Hart maintains, “individuals can magnify or squander the possibilities of their lives, but those lives are sacred. Therefore, no organization, public or private, has any right to deny, or even trivialize, the possibilities of individual lives with organizational requirements.”2 We must remember that the American Revolution was fought to protect individuals from the exercise of unaccountable power in their lives. If authoritarian institutions—be they political, social, or economic—oppress us, we can never achieve true democracy, equality, freedom, or happiness.
As suggested in an earlier chapter, our current belief in the idea of progress, in unbridled technological advance and economic growth, has no overriding purpose, no end objective, no destination. But our society, as defined by the founding values, does have an overarching purpose: to empower each individual to achieve true happiness. We are to arrive somewhere as American citizens, and that destination is a happy and healthy society.
“Happiness [is] the aim of life,” wrote Jefferson. “The happiness of society is the end of government,” John Adams concurred. And the pursuit of happiness, which Jefferson categorized as an unalienable right, just happens to be inseparably connected to the right to hold property. As noted in chapter 5, the historian Paul Johnson asserts that happiness is only achievable if people, by honest effort, can acquire property. “Without widely dispersed property,” he adds, “true individual independence, and so a sound Republic, [is] impossible.”3
Widely dispersed property, not the concentration of property (and therefore power) that we see in modern capitalism, is the precondition to happiness and a sound Republic. If our society is to reach its true destination, if our government is to achieve its proper end, we must address this question of ownership.

Limited Ownership
A pivotal question, if we are concerned with achieving personal happiness, preserving the sanctity of each individual life, and creating a sound Republic, is the question of ownership—and not just ownership of property and capital, but the ownership of human time and energy, which has been labeled “human capital,” a callous and demeaning term.
The fallacy we too often fall into is assuming that we can correct basic inequities by either transforming the American workplace or taking money from the wealthy and giving it to the poor. Corporate restructuring, flattening, or reengineering; team building; employee empowerment; and all the other buzzwords we have dreamed up to give workers the illusion of ownership (and thus motivate them) quietly bypass the real issue, as do all the liberal social redistribution programs. Not one of the currently popular approaches to achieving greater equality and democracy in the workplace addresses the fundamental obstacle to universal human happiness: lack of true ownership. We must transform our thinking on that issue.
To put it bluntly, we must prevent the three basic sources of authoritarian organizational control in our lives: unlimited capital concentration, absentee ownership, and state ownership (or state control, which is the aim of many liberal programs).
This is not a difficult problem to solve. Using a simple process of elimination, if we refuse to allow individuals to control large quantities of capital (and thus control the lives of hundreds or thousands of employees), if we disallow absentee ownership (which has created America’s new ruling class, the professional executives), and if we don’t permit state ownership or control of industry (a fraud perpetrated by the power hungry who insist that state ownership is really ownership by the people), then only one alternative remains: widespread, limited, direct ownership by the people, individually, not collectively.
Limited ownership is not a new idea. Thomas Paine, for instance, declared in The Rights of Man (1792) that “commerce is capable of taking care of itself,” but he also condemned “all accumulation . . . of property, beyond what a man’s own hands produce.” This idea of limited, universal ownership persisted well into the nineteenth century. A mid-century labor leader named Robert MacFarlane declared that “small but universal ownership” was the “true foundation of a stable and firm republic.”4

Three Levels of Ownership
Limited, universal ownership of property and the means of production is the only form of ownership that is consistent with the founding values of the American nation. Specifically, under a system of limited ownership, an individual would be allowed to own only as much property as he or she could make productive use of. This is the basic principle. It prevents an individual or group of individuals from accumulating more property than they themselves can effectively use, which in turn prevents them from buying time and talent and energy from the unpropertied or disfranchised (who have nothing else to sell) to work their fields or staff their offices or man their factories. It permits individuals, however, to prosper to the full extent of their intelligence, talent, diligence, and ingenuity. Above all, this principle allows every individual to own his or her personal labor and not be required to sell it. Only the fruit of that labor, which each individual owns, is for sale.
Although ownership based on ability to make productive use of the thing owned is the fundamental principle at work here, we must distinguish between different levels of use, different levels of ownership. The Indian philosopher P. R. Sarkar suggested a three-tiered economic system, an idea that makes good sense. The following description is my own extrapolation from Sarkar’s basic formula.
The first level of this three-tiered economy would consist of small enterprises that produce mainly nonessential goods and services and perhaps a few essentials. These enterprises would generally have a single founder or perhaps two or three, and maybe a few “partners” who come on board somewhere downstream. To be consistent with the guiding principle of ownership limited by contribution, each new addition to the business would receive a share of ownership.
If a doctor needs to hire a receptionist or a bookkeeper to make his or her practice more efficient, if a restauranteur needs to enlist the help of waiters and waitresses, if a CPA requires the services of a secretary or a clerk, then the new member of the team would be given a share of ownership. Why? Because without that new member’s contribution, the business would be less effective and a portion of the work wouldn’t get done. But how much ownership should each new member of the business have? An equal share? Probably not. That would not be just, particularly in the case of a doctor or dentist or CPA who must invest much more time to be trained than, say, a receptionist or a bookkeeper. Ownership must also reflect seniority and other factors such as personal sacrifice, start-up funding, and risk. Perhaps my own business can serve as an illustration.
When a partner and I formed a small enterprise to design and market a humorous calendar system, we determined that we would not hire any employees, although we could very well have done that. We agreed, simply, that if we needed help, we would bring in new partners. But these new partners, although they would add value to our business, wouldn’t have been there at the start. We, the two original partners, worked and scraped and worried and sacrificed and risked bankruptcy to get the company to the point where we would need more hands to do all the work. For that we felt we deserved a proportionally larger share. So we developed an ownership formula based on seniority. If you’ve put in ten years to make the tree grow, you should own more of the fruits than someone who has put in just two years. This formula doesn’t guarantee us twice as much ownership as new partners, or even one and a half times as much, just a fraction more, based on years of association. And as more partners are added, equality increases, until, if the company ever becomes large, there will really not be much distance between the founders and new owners.
An economic system based on this philosophy does four things: First, it gives you incentive to find the right outlet for your talents and energy and to stay there, because if you keep jumping from company to company you never build equity in an enterprise, never own a significant portion of your work. Second, it prevents you from using people, from hiring them to do unpleasant tasks for you and paying them as little as possible. When you’re giving a share of your company away, you don’t do it with the intention of using someone to further your ends, because, third, it causes you carefully to select individuals of excellent character and ability who are willing, as it were, to jump in and get their hands dirty and take over responsibilities you can’t handle. Consequently, fourth, it provides a natural disincentive for companies to grow larger than they need to. We don’t want deadwood in our company. We can’t afford it. We also don’t want to jump into fifteen new markets with three hundred new and diverse products. We know what we do well, and learning our own well-defined market is sufficient challenge. If all companies had this philosophy, imagine the incentive it would create for children in our society, who would know that if they didn’t prepare themselves well—educationally, socially, and morally—to contribute something of value, they wouldn’t ever find a place to make a living.
As a precaution in our business, so that we won’t bring in a new partner who is merely putting on a good show in the short term but would be a bad fit in the long run, we have adopted a mandatory one-year probation period, during which any prospective partner is guaranteed near full compensation but must prove his or her worth. If, in that time, there arise personality conflicts or indications of moral defects or a mismatch of skills, we can terminate the association. Or the prospective partner can do the same if he or she doesn’t feel comfortable or happy in our company.
Under such an arrangement, your work colleagues become just like family. There’s more holding you together than self-interest. You depend on one another, and you’re very careful about whom you adopt. You also discover that you yourself can accomplish more actual productive work than you would if you were merely somebody else’s employee (or a manager who gets paid primarily to see that others get their work done), because you own your work and the fruits of your labors. This type of organization virtually eliminates dependence and replaces it with interdependence. And it totally abolishes the tyranny that often prevails in the world of small business.
The second level of economic activity would consist of larger enterprises owned collectively by the “employees.” But of course they would no longer be employees. They would now be owners. No shares of ownership would be held by “absentee owners”—outside individuals who do not give their time and talents and energy to the creation, marketing, or distribution of the company’s products. This level would encompass basically the bulk of what we now call corporate America, organizations producing products whose efficient creation and distribution require the efforts of many people.
Because these are large organizations, a form of management different from that found in level-one businesses would be necessary. Whereas level-one enterprises could operate quite easily as true democracies, level-two organizations are often too large for this. Pure democracy in organizations of more than, say, fifty people would turn quickly into chaos. Rather, these organizations would have a republican form of management, patterned after our political system. Later in this chapter I’ll discuss this “federal model” of management in detail; for now suffice it to say that managers would be elected by the owners.
The third level of this economic system would consist of basic industries that benefit everyone in the community: transportation, communication, education, defense, utilities, and so on. These industries, more or less, belong to everyone. They are too large to be managed effectively by cooperatives and are too important to be driven by the profit motive. Many of them must, of necessity, be monopolies. Therefore, they must fall in the public realm. Public boards or local governments would be the logical bodies to manage these entities. The people who would work in these organizations would be owners, of course, along with all other members of the community, but they would also be public servants in the truest sense of the word.
Let’s now take a look at an alternative to the form of authoritarian management that at present prevails in our economic institutions, large and small. This management model, as suggested above, would apply primarily to the second tier of organizations in a new, more equal system of ownership.
1. Andrew Leckey, “Only 18% Regard Jobs as Rewarding,” Deseret News, December 5, 1993, M, 6.
2. David K. Hart, “Life, Liberty, and the Pursuit of Happiness: Organizational Ethics and the Founding Values,” Exchange (BYU School of Management, Spring 1988): 5.
3. Paul Johnson, “An Awakened Conscience.” Forbes, September 14, 1992, 183.
4. Christopher Lasch, The True and Only Heaven (New York: Norton, 1991), 205.

Thursday, May 17, 2018

Some Tips on Writing Fake Mormon Newsroom Stories

This morning my son emailed me a link to the now infamous fake news story about President Nelson apologizing for the LDS Church’s racist past. For someone intimately acquainted with the LDS Style Guide, it was immediately obvious that this was not produced by the Church. And whoever was responsible spent a lot more time getting the website knock-off to look right than actually writing a credible news story.
So, here are a handful of tips for whoever concocted this story (and for anyone else who would like to attempt a similar stunt).
1. Get the name of the Church right. In the very first line, “Latter Day” appears. The RLDS Church used to have it this way, but the LDS Church always hyphenates, with “day” lowercased. In your second use of the name, the initial “the” is lowercased, a hyphen appears, but “Day” is capitalized. If this had been released by the Church, the initial “the” would have been capitalized and the “day” lowercased. Of the seven instances when you give the entire name of the Church, the only one you get right is at the very bottom where, ironically, you copied the style guide note from the real website.
2. The LDS Church prefers unique spellings of certain words. “Counselor” always has one L, not two. You got it right twice and wrong twice. Consistency also matters, by the way. Likewise, the Church prefers to spell “fulness” with one L.
3. Learn how and when to use an em-dash. You used hyphens. This isn’t just LDS style, but almost every style I’m acquainted with. Hyphens are not em-dashes. Either you don’t know how to make an em-dash on your computer or you don’t know what one is. An official Church publication wouldn’t get this wrong.
4. LDS style generally advises spelling out numbers ten and lower. So, using “5” in the text sticks out to a trained eye. BYU Studies, I should add, follows Chicago on this, so we spell out all numbers one through one hundred.
5. LDS style capitalizes pronouns referring to Deity. You’ve got it both ways. Sloppy. BYU Studies again follows Chicago (and scripture) here and lowercases these pronouns.
6. Capitalization. Well, good luck on this one. You’re all over the board. There are rules governing this in the LDS Style Guide, but they sometimes don’t make a lot of sense. You just have to be well acquainted with the system, so you’re at a distinct disadvantage here.
7. Punctuation. Again, you really don’t have a clue. And it would take far more time than I have to even begin a tutorial.
Well, that’s just the tip of the iceberg. From what I read, I came to two conclusions: First, whoever wrote this was totally unacquainted with LDS Church style (indeed, probably any style). Second, it is a whole lot easier to create a website that looks like real McCoy than to compose a stylistically correct document (that's why they pay us editors the big bucks!). Obviously, the creator of this spoof was no Mark Hofmann.

Saturday, May 5, 2018

A Pie-in-the-Sky Blueprint for a New Political Party

If I had the time and money (hence, pie in the sky), I would love to start a new political party, since the current major parties have too much loyalty to big donors and powerful corporations and are therefore unwilling to tell the American people the truth—about pretty much everything. The Republican Party, in particular, is unwilling to propose policies that we really need, and I believe the majority of Americans would respond positively to the truth, even if it is painful, simply because they know we have significant problems and our current elected officials are unwilling to deal honestly or productively with them.
So, I would like to outline a basic philosophy for what I would call the THIRD Party, short for the Totally Honest, Intelligent, Responsible, Decent Party. As one might expect from the acronym, this party would espouse the following principles:
1. Honesty is important. We the voters have been lied to about too many things for far too long. The Republicans are especially guilty of this. They have been lying for almost 40 years about economics. They know it, and most Americans know it. That’s why less than 30 percent of Americans polled by Gallup before the Republican tax “reform” was passed viewed it favorably. It’s why Republican politicians have stopped touting it as something to be proud of. Most Americans know that the rich don’t need more money. They know that giving them more money doesn’t create stupendous growth or millions of new jobs. It simply gives the wealthy more money, which they often use to invest in technologies that replace human labor with machine labor. Corporate executives admitted beforehand (and are now following through on that admission) that they will use the extra money from the tax cuts not to add jobs or to pay their current workers better but to give out more dividends and buy back stock, which benefits primarily the wealthy investors and the executives who own stock. Most American see through this scam.
They also know that the debt needs to be dealt with. We can’t go on living beyond our means. But we can’t balance the budget and pay down our debt by cutting taxes or by slashing spending. We have significant infrastructure needs. We have a generation of Baby Boomers retiring who have not been able to save enough for retirement. They will rely on Social Security and Medicare. There are also many poor, sick, elderly, unemployed, and disabled who depend on Medicaid, CHIP, and other government “safety net” programs to avoid disaster. We are not so cold-hearted as to leave these people to their own devices (even though Republicans like to talk as if they were). So, massive cuts to these programs are simply not in the cards. These are simply facts. Another fact is that teachers in many states are woefully underpaid. They are starting to demand fair treatment, and legislators have no choice but to cave in to their demands, because fairness is on the teachers’ side. So let’s be honest about our predicament. We need to start talking about increasing taxes, a lot, in order to pay for all the things we expect and demand of government and to pay off a lot of debt that politicians have simply refused to deal with. People like me need to pay more. But those who need to pay the most are those who have benefitted most from the lax regulations and irresponsible taxation schemes of the past 40 years. So, the THIRD Party will campaign on raising taxes and balancing the budget. We’ve tried supply-side, trickle-down economics for almost 40 years. It doesn’t work. It never will work.
And the dire predictions about the effects of a tax increase are pure political rhetoric. We tried a little experiment with raising taxes on the wealthy when we allowed the Bush tax cut on the highest earners to expire. What happened? Well, the rich kept getting richer. There were no negative effects on the economy. None at all. The wealthy probably never noticed the increase. If they did notice, it did not affect them at all. It did not cost us jobs. But it helped decrease the deficit.
Honesty is extremely important in campaigning. The American people are cynical about politics because they have been lied to by politicians of both major parties for so long. Much of this involves making promises on the campaign trail that the candidate has no intention of keeping. Donald Trump was, of course, a master at this. Buyer remorse has already set in among many Trump voters. This past week, even Fox News started taking him to task for his constant lies. THIRD Party candidates, by contrast, will not campaign on lies or half-truths. That is why the first word in the acronym is so important. Being somewhat honest is not enough. THIRD Party candidates will be totally honest. They will tell the whole truth about what our country needs: higher taxes, responsible government, a smaller and more agile military, less welfare for corporations, means testing for social programs, facts about the changing economy (no promise to restore jobs, for instance, that have been made irrelevant by technology or market forces), significant efforts to combat climate change, reasonable gun laws, and a clear plan to meet our actual infrastructure needs. I believe voters are tired of hearing empty promises. They are cynical. They would find total honesty appealing, even if it hurts. I also believe that many politicians would also be relieved to just be able to tell the truth and would gravitate to a party that demands honesty. I believe Donald Trump will create a huge backlash against dishonesty. Having elected leaders who tell the truth would be an extremely popular notion. Digging ourselves out of the mess we’ve created with decades of lies and half-truths is not going to be painless, but we need to address this and not leave it for our children and grandchildren to clean up.
2. Expertise is important. The Republican Party has been waging a war on intelligence. The GOP used to be serious about policy. No longer. It has become a party that governs by sloganeering and a bankrupt ideology. If someone actually knows something (is an expert), the Republicans label that person as “elite,” which has become a right-wing pejorative. But we need to listen to intelligent people. These include climate scientists, tax experts, macroeconomists, policy analysts, health-care specialists, intelligence operatives, diplomats, and education specialists. We need to embrace intelligence and the people who are experts in important fields. Trump may claim to love the uneducated and go to great lengths to avoid facts and knowledge, but we’ve got to stop assuming that uninformed people know how to run a country in the highly complex twenty-first century. Intelligence is not elitism, and it certainly isn’t something to demean and degrade. We are seeing the results of stupidity in the GOP’s “repeal and replace” efforts, in their horrific tax “reform” adventure, in their efforts to increase pollution and greenhouse gases, and in their ideological responses to crises that could be solved by intelligent, reasonable policies. Ignorance ain’t pretty. And we’re currently getting a double helping.
3. Fixing our health-care system is important. The ACA was never perfect. But it was a step in the right direction. The opposition to it was purely political, if not personal (the GOP had sworn to oppose anything Obama did). The ACA was actually based on Republican ideas and a conservative blueprint, which was part of the reason it was imperfect. It didn’t go far enough, but it would have worked after a fashion if it hadn’t been repeatedly sabotaged by the very people who should have embraced it. But it was incomplete. It still left people uninsured. It didn’t deal well enough with exorbitant medical costs and the profit motive that has taken over the health-care industry. Other countries are doing far better than we ever did. We can learn from them. The THIRD Party will select carefully from the best features of those other systems and propose a health-care system that covers everyone, reins in prices, and provides quality care. It is possible. Other countries are doing it. We just need to have the political will to get the profit motive out of medicine. Health care should be seen as a public good, similar to education, not as a product to be sold to whoever can afford it. We need to stop being the stupidest country on earth when it comes to health care.
4. Greater economic equality is important. While there will always be rich and poor, studies show that countries with a smaller gap between the wealthiest and the average citizen have the healthiest economies. Rampant inequality, such as we have in America, is not just economically unhealthy; it is unsustainable. If wealth keeps migrating to the top, demand shrivels for the products businesses need to sell in order to keep the economy going and debt explodes. The wealthy don’t spend the same percentage of their income on consumer products as would be spent if that same money were spread around a large middle class. The wealthy invest, and if there is insufficient demand to justify investing in new production capacity, the wealthy will seek other options—often speculative financial instruments that are not tied to the creation of actual products or services people need. When the consumer classes receive a greater share of income, they generally spend most of it, driving demand and keeping the economy healthy. They also save more, which reduces demands on the government in the long run.
The statistics all show rapidly increasing inequality. By 2014, the wealthiest 1 percent possessed 40 percent of the nation’s wealth; the bottom 80 percent owned 7 percent. And the gap keeps increasing. All you have to do is plot this on a graph to see where this trend will take us, and it is not a future we want to experience. When income is drastically unequal, over time wealth becomes even more unequal, especially since the wealthy invest while the middle and lower classes have to spend pretty much everything they earn (or more, by going into debt). Eventually, this creates a society in which too many families and individuals cannot afford the necessities of life and will either require help from government or will slip through the cracks. The former will cause further strain on the federal budget; the latter turns us into the wealthiest Third World country on earth.
So, the big question is, how do we reverse this unsustainable trend? The most reasonable answer is to increase employee ownership in America’s businesses. This will spread profits to those who create them but all too often don’t receive a fair share of them. We can easily increase employee ownership by simply offering tax incentives to companies that share ownership and penalizing those that restrict it.
5. Freedom and government are important. The Republican Party has co-opted the word freedom and has misapplied it in numerous ways. Primarily they have insisted that Americans need freedom from government. The problem with this philosophy is that this creates unprecedented freedom for authoritarian institutions that only government has the power to control. I am talking about businesses here. Anyone who has worked in a typical American business—anything from a small sole proprietorship to a mammoth multinational corporation—has seen authoritarianism up close and personal. If you liken most businesses to nations, the employees are not the equivalent of citizens. They do not have a vote. They are merely used for their labor and compensated as little as the business owner can get away with. A reasonable analogy is that they are slaves. They almost never earn enough that they can become independent of the authoritarian wage-labor system.
Depending on the organizational structure, capitalist businesses may resemble monarchies, oligarchies, plutocracies, dictatorships, aristocracies, fiefdoms, or theocracies, but almost never can they be described as democratic republics, in which power resides in the employees. In essence, we have embraced an economic system that is almost totally at odds with our political ideals. Put another way, free enterprise may exist between businesses, but it rarely exists within them. This is a result of the system of capital ownership we have adopted.
The problem with this form of capitalism, as William Greider put it in his classic One World, Ready or Not, “is not that capital is privately owned, as Marx supposed. The problem is that most people don’t own any.” Eighty percent of corporate stock is owned by the richest 10 percent of the people. And that number is increasing over time.
Why is this significant? Because the economic authoritarians—the owners and controllers of capital (including human capital)—have an inordinate degree of power in our country, which has the ultimate effect of turning our government into a black market in which both policy and politicians can be purchased. We now have a government of the corporation, by the corporation, and for the corporation.
One of the basic functions of government is to regulate business so that it is neither dangerous nor burdensome to the average citizen. But the tail is wagging the dog in America. The THIRD Party would reverse this. Instead of freedom from government, the THIRD Party would promote freedom through government. Let me use a simple example. I have good health insurance. Expensive, but good. And yet I do not have the freedom to seek medical care from some of the best providers. Why? Because they are out of network. My friends in Germany feel a good deal more freedom in this regard because government has intervened in the health-care industry. Some Americans are in far worse shape than I am. They cannot afford health insurance and must rely on emergency care, the least effective and most expensive option. Their freedom is restricted because government is not doing what it should be doing. Instead, it is allowing authoritarian corporate entities to extract a profit from the health woes of American citizens. Who has freedom here? Corporation do, not American citizens.
In much of America, government is seen as the enemy, the source of our problems. But government is us. It is our tool for creating a more equitable, prosperous, and just society. We must embrace government, make it more efficient, but allow it to serve us as it was intended to do. It is not the enemy. We will only enjoy full freedom through government, not from government.
6. Transparency is important. Any politician, party, or organization that keep secrets from the people, unless for national security reasons, is neither honest nor well-intentioned. Therefore, the THIRD Party will require all candidates for office to make public their tax returns for the previous 10 years. It will also require all candidates to reveal the sources of their funding. It will restrict giving by corporations and other large impersonal entities, preferring smaller donations from individuals. It will refuse interference from Super PACs, and if any insist on interfering, the THIRD Party will disavow them. They are not welcome in America, and THIRD Party candidates will campaign on the promise to overturn Citizens United. Big money has no place in politics. This will require the creative use of less expensive methods of campaigning, primarily through the Internet and social media. Donald Trump has abused this method of campaigning, but he has shown how effective it can be. The THIRD Party will take this lesson and apply it in an honest and decent manner.
7. Global warming is real and is human-caused. This should not even be a political issue. It is a partisan point of division only because of the Koch brothers and the instrumentality of Mike Pence in getting his fellows in Congress to deny a massive consensus among climate scientists (see this New Yorker article). The science is overwhelming, and we need to join the rest of the world in doing something about it. The THIRD Party will therefore propose and support strong measures to rein in carbon emissions.
8. Guns do kill people. The Second Amendment is fairly easy to interpret. Its context is a well-regulated militia. It says nothing about self-defense, hunting, shooting ranges, or anything other than providing for the protection of our nation against foreign powers. It certainly was never written with the assumption that Americans would need guns to arm themselves against their own government. What this suggests is that legislators should have broad discretion in restricting the ownership of a variety of weapons. We regulate hand grenades. We regulate tanks. We regulate missile launchers. We should be able to regulate such weapons as military-style rifles that serve no other practical purpose than to kill as many people as possible. The THIRD Party will therefore propose reasonable legislation to limit the ownership of the types of weapons used in the growing number of mass killings that occur on this scale only in America. Gun registration will also be a high priority.
Other advanced countries have mentally ill citizens. Other countries have extremists. Only America has the number of mass slaughters we see with increasing frequency. The difference? Other countries have sensible gun laws. Most Americans, even Republicans, want stricter gun laws. Only the politicians who bow to the NRA refuse to do anything about our situation.
Our current mess is partly due to the conservative Supreme Court decision in 2008 in District of Columbia v. Heller, which overturned two hundred years of court precedent in interpreting the Second Amendment. For a history of the court’s views and an argument against this radical change, see the dissenting view by Justice Stevens.
9. Immigration reform is important. Immigration is important to the economy. Creating a path to citizenship for those who were brought here as children is important. Welcoming refugees is important for our national soul. To turn our backs on those desperate individuals and families who are fleeing oppression or danger is unconscionable. The THIRD Party will insist on comprehensive immigration reform to create a safer, more systematic, but more humane immigration system.
10. Decency is not just important; it is essential. With the GOP’s embrace of Donald Trump, our political discourse has become crude, offensive, and reprehensible. Before Trump, the two parties were mudwrestling in the swamp. With Trump, it has gotten exponentially worse. The THIRD Party will therefore insist that its candidates and elected officials refrain from personal attacks, name calling, and even innuendo. It will insist on a discussion of crucial ideas. If the other parties choose to campaign in the gutter, that is their choice. The difference will be distinct and will be noticeable to the American people. I believe they will welcome a return to common decency. That does not mean, however, that the THIRD Party will turn a blind eye to corruption or foul behavior by politicians and elected officials. Speaking out against morally reprehensible behavior is crucial. This is also the responsibility of the press.
11. A free press is crucial. Contrary to what Donald Trump is trying to convince his followers of, most of the mainstream news outlets are not publishing or broadcasting “fake” news. They are doing their best to make sense of the constant stream of lies and contradictions that flow from the White House. Unfortunately, polls show that a majority of Republicans believe Trump more than they believe the press. In case you’ve ever wondered how Hitler could have possibly gained power in 1930s Germany, just look at what is going on in America today. When people are willing to believe lies and propaganda instead of using their brains to question what’s being said, democracy is in danger. The free press is sometimes our best defense against dictatorial tendencies in leaders. The press is certainly not perfect, but if it is not free, it is useless. The THIRD Party will therefore strive to support the constitutionally established freedom of the press and not undermine its efforts to hold power accountable.
Well, I could go on, but since eleven is a nice, clean prime number, I’ll stop here. You get the idea. This is the sort of political party I believe America needs, and I suspect this is the sort of political party Americans would flock to. Maybe someone with more time and money than I have can give it a try.