Monday, March 30, 2009

Bad Air

You’re mad. I know it because that’s all I hear or read about in the news. They say that every time a person hears "AIG" and "bonuses" used together he or she gets so angry they could spit. It turns out that the politicians on Capitol Hill are mad too. They make comments such as the executives should either "resign or go commit suicide" (Sen. Charles Grassley later said that he really didn’t mean they should kill themselves). The problem with all of this outrage is that it redirects us from the real source of the problem much in the same way that a magician redirects our eyes as he does his magic trick.

My readers over the years know that I often use analogies in my postings. A while ago I wrote about the attempt to control malaria during the construction of the Panama Canal. ("Draining the Swamp" 10/14/2007) This horrible disease can also serve as an analogy for AIG and the "retention bonuses."

According to Wikipedia malaria gets its name from Medieval Italian mala aria, which means "bad air." At one time malaria was thought to be caused by miasma, or "pollution", which was defined as a poisonous vapor of particles consisting of decomposed matter. It was thought that one could identify this miasma by the presences of foul odors. Of course the real cause of malaria is not some particulate cloud but is actually a virus carried by the mosquitoes that flourish in unclean conditions and that live in stagnate water and swamps.

Limiting ourselves to being angry about the bonuses is like limiting ourselves to bad odors while being blind to the underlying cause of disease. We can scream in anger, jump up and down, and tax the bonuses but it won’t get to the source of the problem because it isn’t the greed of just a few executives. The source is an economic system based on capital.

As an example of historical irony the answer can be found in the works of Adam Smith, who most consider to be the father of capitalism. Of corporations ("joint stock companies") in his classic An Inquiry into the Nature And Causes of the Wealth of Nations he wrote, "The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master's honour, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company."

Smith showed us years ago that it was inevitable that the executives of corporations should develop this culture of greed because it goes to heart of capitalism. Centering on the bonuses and not removing the source, capital and the investor-owned firms, is like spraying perfume to try to prevent malaria. It might smell nice but it ignores the source.

Sunday, March 15, 2009

Reverend Frederick Denison Maurice

Back in May of 2008 I posted a brief biography about the founder of The Catholic Worker: Dorothy Day. This time I’ve decided to post a short biography of one of the lesser known advocates of cooperativism: Reverend Frederick Denison Maurice.

Reverend Maurice (b. 8/29/1805 – d. 4/1/1872) was the son of a Unitarian minister and one of the most brilliant of the 19th century Christian Socialists. He’s been described as “mild, unobtrusive, averse to undue opposition, convincing by his example and his earnest logic rather than by appeals to the feelings.”

Maurice honed his skills on a debate club as a young man in an Owenite society. As a young adult he was denied the right to graduate from Cambridge for refusing to sign the Anglican Church’s "Thirty-nine Articles." He later reversed himself and signed the Articles, which allowed him to attend Oxford. Between Cambridge and Oxford, Maurice worked as a writer and wrote a novel. In addition, after being ordained he served as a chaplain at Guy’s Hospital.

While a member of the faculty at Cambridge's King's College Maurice was known for being scholar, theologian, and historian. After his book, Kingdom of Christ, was published his reputation was enhanced. The Kingdom of Christ is often viewed as an omen of the future ecumenical movement for holding that while there are many divisions, such as denominations and sects, the church is essentially united. In 1848 Maurice joined with Kingsley and others to form the Christian Socialist Movement. Then in 1853 he published Theological Essays in which he expressed a belief that hell was not eternal. This was the last straw and as a result he was dismissed from his position at King’s College. He then became the first principle of the Working Men’s College.

According to Capaldi, the Christian Socialists "tried to combine cooperative economics with political conservatism." Of Christian Socialism, Maurice wrote that it was, "true socialism, true liberty, brotherhood, and equality- not the carnal dead level equality of the communist, but the spiritual equality of the Church idea, which gives every man an equal chance of developing and rewards every man according to his work." Once Maurice learned of the Parisian co-ops he was convinced that there was a need of cooperatives in England. He then wrote several pamphlets on cooperatives and declared that anyone that accepted the principles of cooperation could be called a socialist. In addition, Maurice and the Christian Socialists rented a building in London to start a cooperative with 12 tailors called the Working Tailor’s Association. Later the Society for Promoting Workingmen Associations was formed, which made loans to start-up other cooperatives.

Early on Maurice and the Christian Socialists were very successful. Soon in London there were approximately 17 cooperatives. After a point these cooperatives formed a central body, which was a forerunner of the Co-operative Wholesale Society. But they weren't limited to London. Cooperatives also began springing up in other large cities.

By 1853 though, things began to fall apart. The productive cooperatives started to close as problems appeared in their organizations. Some workers were robbed of their funds. Others closed due to internal disputes or apathy. Yet, he did help push through some legislation that helped cooperatives. While the Christian Socialists of the time failed to substantially change England, the work of Reverend Maurice did have a major impact on Christianity that is still felt today.

Sunday, March 1, 2009

The Other

"If men could only know each other, they would neither idolize nor hate." ~ Elbert Hubbard, US author (1856 - 1915)

Recently our new President made history (again) by speaking before a joint session in Congress in his first year. The majority of his speech consisted of Obama making his case for his economic package. Near the end the President introduced several guests. One of them was a banker name Leonard Abess. I’ll let the President explain:

"I think about Leonard Abess, the bank president from Miami who reportedly cashed out of his company, took a $60 million bonus, and gave it out to all 399 people who worked for him, plus another 72 who used to work for him. He didn't tell anyone, but when the local newspaper found out, he simply said, "I knew some of these people since I was seven years old. I didn't feel right getting the money myself.""

Leonard Abess provides an interesting lesson for us on the Left. The lesson isn’t a claim in the nobility of capitalists nor is it to praise bankers. The lesson Mr. Abess teaches is that we cannot, we must not, stereotype capitalists or anyone else as being "The Other." It’s the socio-economic system of capitalism that’s evil. Capitalists are people who are caught up in an oppressive system. We need to recognize that the capitalists are victims as well as workers.

Labeling any group of people as evil runs the risks of starting down a path that eventually ends at a guillotine.