Soul of Capitalism

Book: William Greider'. The Soul of Capitalism: Opening Paths to a Moral Economy. Simon & Schuster, 2003

Description

"The perception that social responsibility can become a market force is key to William Greider's optimistic new book, The Soul of Capitalism: Opening Paths to a Moral Economy (Simon & Schuster, 2003). A peerless political reporter (formerly for Rolling Stone, now for the Nation), Greider showers readers with examples about how Americans are changing "the arrangements within capitalism . . . little by little, to make more space for life, through innovations that eventually become common practice."

Unlike conservative apologists for the system, Greider does not believe that the marketplace represents a genuine expression of social values, or that social irresponsibility is a necessary evil for the generation of wealth. "The logic of capitalism" as presently constituted, he argues, ". . . cannot take society's interests into account. . . . The incentives, in fact, run hard in the opposite direction." Unlike many on the left, however, Greider does not consider the system irredeemable because of this "logic." (http://www.socialaction.com/11-2003/changing_capitalism.phtml)

Reform Strategies

From the review at http://www.socialaction.com/11-2003/changing_capitalism.phtml

The Soul of Capitalism moves its discussion from the workplace to Wall Street to manufacturing firms to the corporate boardroom to the federal government. Within each arena, he identifies rules and habits that function against democracy and feed America's "paradox of secure abundance accompanied by . . . stressed social reality." He also reports on the alternatives:

• Worker-owned businesses: Most American workers endure a "master-servant" relationship that guts their sense of creativity, passion and productivity. In contrast, Greider points to "ten million Americans [who] are worker-owners in some 11,000 employee-owned companies, with total assets of more than $400 billion." In addition, there are thousands of cooperative enterprises in the country, one of which he profiles: Baltimore's Solidarity, a cooperative temp agency that grew out of Narcotics Anonymous meetings, hooked up with a skilled manager, received a line of credit from an established community organization and made a $50,000 profit by its second year. Solidarity members "earn wages a dollar or two higher than rates paid by competing temp agencies plus they have health insurance coverage," Greider writes. "When a new client seeks to hire their labor, Solidarity workers go out to check the employer first and inspect the terms and conditions of work." By gaining some power over their working conditions and enjoying the dignity of ownership, Solidarity's members are inspired to exceed other temps in productivity – and so their list of clients expands.

• Labor union capitalism: Greider is particularly excited by Canada's Heartland Labor Capital Network, founded by Leo Gerard, now president of the United Steelworkers of America. Heartland engages in labor-friendly corporate takeovers that combine labor's expertise, pension capital and a motivated workforce with finance capital to create what Gerard calls "social capitalism instead of Darwinian capitalism." In the U.S., similar "direct equity investing" is being undertaken by the KPS Special Situations Fund, which has pioneered employee-ownership buyouts of Weirton Steel, United Airlines, Blue Ridge Paper Products and other companies that have fallen into disfavor with Wall Street but remain viable, particularly when their workforces become newly empowered. Greider foresees this strategy being implemented beyond the labor movement: Conceivably, for instance, environmentalists could organize targeted capital investments in major corporations to provide financing for the techno-logical changes in production systems needed to protect nature. . . . The returns on targeted eco-capital would be based upon the improved efficiencies these technologies bring to the company. Society's return would be a less destructive industrial system.

• Pension fund activism: America's greatest store of savings consists of $6 trillion held by pension funds – a "national savings program of awesome dimensions," Greider observes, that "has the potential capacity to reshape the nature of American capitalism." The key is for pension funds to become "active investors who pressure and punish companies for their deleterious practices, not as a gesture of social conscience, but because the corporate antisocial behavior damages a pension fund's own wealth." He explains: While environmental despoilation or other short-term practices of greed may boost a corporation's profits, the costs "will be paid by someone and thus injure the growth and efficiency of the broader economy in which the pension funds are invested." In effect, pension funds are what is known as "universal owners," whose view of economic well-being cannot be narrowly defined. Redefining profit to account for the true social costs of doing business would be a transformative shift in corporate culture that pension funds could catalyze.

• Remanufacturing: More than 70,000 firms and half a million workers are involved in the remanufacturing industry, which reclaims materials from consumer products – or, better yet, designs products to be highly recyclable. Greider highlights the work of furniture manufacturer Herman Miller Inc., a company with a $2.2 billion sales peak that has "systematically reduc[ed] the ecological consequences of its production." All 7,500 of the company's workers are shareholders, and the workplace is structured with performance gauges that point to "a deeper measure of long-term wealth creation than profits or stock prices. . . . In that spirit . . . employees organized their own companywide Environmental Quality Action Team . . ." One of the chairs they manufacture is now 100 percent recyclable. At the same time, the company's profitability over the past 30 years has exceeded the S&P index by 600 percent!"

(http://www.socialaction.com/11-2003/changing_capitalism.phtml)