wrote that “there is one and only one
social responsibility of business to use its resources and engage in activities
designed to increase its profits.”
for this and other contributions to economic nonsense that went on to bring
various South American economies to their knees and infect Ronald Reagan’s
easily infected mind. If you think that’s a liberal’s cheap shot at Reagan, I voted for the man—twice.
man. He was simply wrong and wrong as
hell on a very large international stage.
to be wrong and from time to time many of them are. What they are not allowed is to have their
wrong-headedness extend across forty years of political and economic history,
driven by greed and greed’s
choke-hold on reality.
still matter and the fact is that capitalism—a truly fine
system, has turned on us and bared
The capitalism I thrived under
during my business boom-years of the 50s through 70s was based both on profit and social responsibility. You could also become rich at tax levels that reached 90%–millionaire rich, instead of the billionaire style that divides us so viciously. In the late 60s, J. Paul Getty and Howard Hughes topped the richest list at between $1 and $1.5 billion. Today, it’s Jeff Bezos at $112 billion
responsible to create great products and sell them at competitive prices,
invest in the quality and care of your workforce and (by doing so) contribute
to the national wealth.
Burroughs, Coca Cola, IBM and Sears Roebuck were all such companies. They were the ‘blue chip’ investments little
old ladies depended upon in their retirement and they were dependable in that
social contract. Investors in those days looked for long-term reliability,
steady profits and growth.
sideways. Milton Friedman’s wild and since disproved theories (the same that
had destroyed South America by that time) took hold in the private mind and began to be marketed in the public mind.
Asian slave-labor to sell a $3 shoe for $100, it may be outrageously profitable.
But it’s hardly socially responsible. Uncle Milton made it okay and,
what-the-hell he’d won a Nobel. Americans no longer made shoes, but who cared?
A little job loss, sure, but you don’t pay union wages, health and retirement
benefits to Asians. Who the hell are
they, anyway? Didn’t they bomb Pearl Harbor?
buy stocks anyway. It’s just a small thing (except for those on the small end) and
Nike suddenly had the marketing money to shove its swoosh down our throats. It was (and still is) very cool to wear
the swoosh on your sports clothing. The swoosh brand became the thing and you and I actually paid
Nike to wear their brand. A marketing
success beyond all expectations.
but hang onto your hat and wallet, you’re not going to like it much.
the new flavor in town, how did we get capitalism on the menu?
investment advisors remarketed
themselves as Goldman Sachs whiz-kids and (with a little lobbyist
sleight-of-hand) banks were allowed to own investment
divisions (as laws to prevent exactly that were lobbied out of existence) and
the horses were out of the starting-gate. Stodgy old bankers became stock-market
experts and not only promised riches,
but would loan you the money, so shoemakers could become rich.
addicted to gambling on the short-term instead of investing in value. 1929 was way
too far in the past to remember and, besides that, these were the new rules in a new economy. Quarterly earnings were watched like a roulette-wheel
and ‘blue-chip’ sounded like a new flavor of ice cream.
drop in engineering degrees and a surge in MBAs. Who the hell wanted to get
their hands dirty, when big dough was there for the taking?
some were taken. There were the sheep
and those who sheared the sheep.
In the meantime, as actually making stuff fell out of fashion, wages dropped, jobs dried up (why
here, when Asia was the place to go?) and the economic gulf began to widen. The
social fabric upon which capitalism was built began to fray. Look no further
than who got bailed out in tough times and who lost their homes. There will
always be tough times, but we used to
that balance out the good times. We simply changed
the metrics of who will eat and who will serve.
poor investment we lost our money. No more. In this new economics when you made
a bad investment you got bailed out and someone else lost their home and brought their kids home from college.
decide that shareholders were gods?
kicked off to start the game, Milton Friedman refereed, investment banks were
cheer-leaders and we were the beer and hot-dog audience, hollering for our team
hoping to win.
that as you sift through today’s news. There have never been so many winners
managers in the world are: UBS, $2.4 trillion;
Bank of America Merrill Lynch, $1.1 trillion;
Morgan Stanley, $1 trillion. For the
understanding of un-understandable numbers, a trillion is a thousand billion dollars.
debt, $1 trillion; student loans,
$566 billion; auto loans, $314 billion.
who will eat and who will serve.
side are you on?