“With Labor Day approaching Angelo Mozilo, (…) chief executive of Countrywide Financial – the company that has helped drive world markets into turmoil (..) – raked in $42.9 million last year. The Nobel laureate Harold Varmus, chief executive of the Memorial Sloan-Kettering Cancer Center, was paid $2.5 million”. This writes Marie Cocco for www.truthdig.com. Title of her story is: ‘Free Market Madness’.
She concludes that the quoted example means that “We value the contributions of someone who has left homeowners frantic about whether they will be able to keep a roof over their heads about 18 times as much as we do those of a brilliant scientist whose ground-breaking research on the genetic basis for cancer could save millions of lives”.
Lamenting capitalism
Implicit in her rhetoric is the eternal lament of capitalism. It is brutal. It is based on greed and the constant re-awakening of everybody’s greed. And it is. The problem with her and other intrinsically socialist thinkers – obviously in the US she is not called a ‘socialist’, but a ‘left-wing liberal’ – is, that the criticism stems from a system based on envy and hate. Capitalism is greed; socialism is envy.
Both systems stink. If we want to move forward, we must quit the left/right rhetoric and devise a new global ethic, as well as a new global economic model. As a matter of fact, these have already been devised. We have Hans Kung’s new global ethic and Louis Kelso’s economic model. But because their ideas are part of a totally new paradigm, only few people see it at this time. New paradigms are not easy to see. So, although we agree with the following paragraph taken from Marie Cocco’s article, we point out that she does no more than stating the obvious problem. The problem is, as she says, ‘obscene’. It is. However, we want to persuade her and others to start writing about the solution.
She writes: “We’ve known for years that executive pay is obscenely out of whack with the earnings of today’s workers. The current ratio, according to public data analyzed by the Institute for Policy Studies, is that CEO pay among the chieftains of Fortune 500 companies is about 364 times the pay of an average worker”. It is also obscene that earnings of men and women who work full-time dropped by about 1 percent last year. They dropped during the last three years and will continue to drop. That is capitalism. In one word: Obscene!
The solution is not socialism
Full of socialist envy Marie Cocco goes on stating the problem over and over again, as though we don’t know it yet. She does not understand why people don’t respond to these capitalist iniquities anymore. It seems to be ‘boredom with the truth’, she says. Well, it’s not boredom with the truth, it’s boredom with only the problem-side of the truth. If we start talking about the solution-side of the truth, the boredom soon vanishes.
Now, apparently she does see a light at the end of the tunnel, for she closes her lamentation with the remark: ‘Rebalancing our culture is the only long-term hope’, whatever that may mean. A few lines earlier she quotes Chuck Collins who spells out exactly where the shoe hurts. “We tilted the rules so that asset owners became winners over wage earners. We lifted up capital and betrayed work”. Quite right! So what are we going to do about it?
Binary economics is the solution
There is only one solution. Every individual citizen should be turned into an owner of productive capital. You cannot defend your country, unless you own a part of it. You cannot be loyal to your company, unless you own a part of it. Public policy can and should be used to remedy the economic injustice so eloquently described by Marie Cocco by turning every individual worker and every individual citizen into an owner of productive asset-backed capital.
By tying such ownership to future profits, we can start rebalancing economic power. It behooves Marie Cocco and Chuck Collins to read Louis Kelso. Their eyes will open. Cocco will also understand why we changed the title of her article.
Today’s video is an interview with two binary economists, both Harvard educated men. Scholars, we could say. Of course, they also can be wrong. But it’s worth listening to them for solutions instead of repeating the problem over and over again.