Monday, February 16, 2009

Lack of Trust

"The chief lesson I have learned in a long life is that the only way to make a man trustworthy is to trust him; and the surest way to make him untrustworthy is to distrust him and show your distrust." ~ Henry L. Stimson

The capitalists are rattled. They’ve suddenly realized that there’s a serious absence of trust in our economy. In a December 24th, 2008 editorial the staff of the Dallas Morning News whined, “For want of trust, the global economy nearly melted down.” On his web site the capitalist apologetic Scott Burns cried, “Right now all we know is that nothing is trustworthy. Not our political leaders. Not our business leaders. Not the government or private institutions that are supposed to provide oversight and evaluation.”

Like Captain Renault exclaiming that he’s shocked, shocked to find gambling at Rick’s their surprise isn’t very convincing. That’s because the seeds of the current growth of distrust were planted by the capitalism itself.

Distrust originates in capitalism from its own hyper-competitive nature. It’s well documented by authors such as Barbara Ehrenreich and Robert Sennett that within capitalism, especially the current globalized version, relationships are viewed as simply means to an end. The other person is either a threat or an opportunity. So we don’t want to show our hands, to borrow a gambling phrase, to just anyone lest we allow the other person to learn something that they can use to either get ahead or against us.

It took hundreds of years but this distrust has spread from the economic infrastructure and now infects all aspects of the superstructure of society. Parents distrust their children so they place nanny technology on their computers. Couples distrust each other and jealousy abounds. Neighbors distrust each other so people set up housing associations full of rules and regulations to make sure that each person maintains his or her property just as the neighborhood expects.

How can we climb out of this pit? While the return of Keynesian-style regulation by the Obama administration will provide limited increase in trust in the short-term it won’t truly solve the problem. The only real solution is to replace our greed-based competitive system with a system based on cooperation and mutual support. The solution demands an economic democracy.

Tuesday, February 3, 2009

Death by Greed

Most of us have heard or read how hundreds of people were sickened, and eight died, from a recent outbreak of salmonella. Recently the FDA reported that they had finally traced the source of the outbreak to a factory in Blakely, Georgia owned by Peanut Corporation of America. But while the peanut butter shipped by the factory was indeed contaminated with salmonella it wasn’t the ultimate source of what sickened and killed people. The ultimate source of their suffering and death was greed.

According to the Wall Street Journal the government has charged that the company’s own internal tests had found salmonella but that the company didn’t disclose their results and continued to ship the contaminated peanuts. Why didn’t the company report their internal findings? According to the article they didn’t because they weren’t required to.

Was this the result of corporate abuse of power? Not in this case. Headquartered in Lynchburg, Virginia, PCA is actually a privately owned company with approximately one-hundred to two-hundred and fifty employees. Their annual sales have ranged from $10 million to $25 million.

When one considers the seriousness of the charges along with the nature of the company we see a simple truth. An economic enterprise doesn’t have to be an investor-owned firm to be corrupted by greed.

What lesson might we learn for a future economic democracy out of this mess? As I see it the most important lesson is that in an economic democracy there would still be a need for government regulation. While cooperatively run enterprises tend to operate with a higher level of ethics people won’t become angels with the end of capitalism just as they weren’t angels in the modes of production that preceded it. So we can expect that there will still be a need for oversight by federal, state, and local authorities to insure safety for both consumers as well as workers.