Rethinking Corporate America

I know, I know, Americans believe in individuality, but thoughtful Americans know they’ve been sold a bill of goods.

(CALGARY, Alberta) - This is a heuristic exercise—which my dictionary defines as “encouraging a person to learn, discover, understand, or solve problems on his or her own”. My job is to give you the information with which to do that.

In 1600, Queen Elizabeth I and a few of her court intimates founded the East India Company. As part of the founding charter she granted the company limited liability for losses on the part of the enterprise’s backers. They could lose money if the ships were lost, but they had no liability for the lives of the sailors whose lives were lost along with the ship.

Democracy should change things but, so far it hasn’t. People still vote against their own best interests and erroneously believe that the owners and overseers in society have rights that take precedence over everyone else’s. Or, as H. L. Mencken observed: “Democracy is the theory that the common people know what they want and deserve to get it good and hard.”

Look at a glass of water. Water is a molecule made up of oxygen and hydrogen atoms. Test of your knowledge: In a glass of water which is more important, the oxygen or the hydrogen atoms? Answer: They are co-equal. Take either atom away and it is no longer water.

Another test: Ordinary table salt—sodium chloride. Which is more important—the sodium or the chlorine atoms? That’s right, now you’re getting the hang of it.

And so it is with every chemical compound, no matter how many atoms in the molecule. Take a molecule of acetylsalicylic acid—aspirin. It has the chemical formula C9H8O4 which means nine carbon atoms, eight hydrogen atoms and four oxygen atoms. If you take out any one atom what would the molecule be? I don’t know what it would be, but I know what it wouldn’t be—aspirin.

Everyone has heard of the concept Yin and Yang. It is customarily applied to genders with women being Yin and men being Yang. But it goes far beyond that. It’s the dualism of our reality. You cannot have an “up” without a “down” or “in” without an “out” or “black” without a “white”. There was a popular song in the 1950s called “Love and marriage” saying that “they go together like a horse and carriage. You can’t have one without the other.”

Final test: Look at one of America’s public corporations. It’s made up of owners and employees. Test: Which is more important to the continuing survival and prosperity of the enterprise, the owners or the employees? If you said they were co-equal, you’re showing an understanding of symbiosis and cooperation. A simple demonstration: Without thousands of employees, Bill Gates is nobody, limited to what he can earn as a single individual. Conversely, most employees, without Bill Gates (or an equivalent genius) are just wanderers through the economic wilderness, lucky if they can feed and clothe themselves and their families at or above a subsistence level.

If we assume the co-equality of owners and workers, it’s not a stretch to conclude that the financial output of the company, the profits, should be co-equally shared.

The table above gives ten example companies, number of employees and net income for 2008. Wal-Mart had a net income of $10.3 billion. If that amount were divided equally—half to go employees and the other half for management to reinvest in the company or distribute to shareholders, the two million employees would have received, on average, an extra $2,575 last year, or $215/mo added to their paycheques. Not a trivial amount considering that the average Wal-Mart employee makes about $10/hour. This would boost them to about $11.25/hour. (Poor Wal-Mart. Everybody picks on them. Wahhh!)

There are a couple of anomalies on the list. The number for Target is obviously too high. There are no Target stores here in Canada so I am not familiar with their corporate structure. Someone correct me if I am wrong but I suspect that the number of employees is deflated because most of the people working in the stores are not “employees” but are classified in some other way.

Pierre-Joseph Proudhon was a nineteenth century anarchist whose most famous saying is: “Property is theft.” In a book titled What is property? he elaborated:

“If I were asked to answer the following question: What is slavery? and I should answer in one word, It is murder!, my meaning would be understood at once. No extended argument would be required . . . Why, then, to this other question: What is property? may I not likewise answer, It is robbery!, without the certainty of being misunderstood; the second proposition being no other than a transformation of the first?”.

Proudhon was an extremist but he cannot be dismissed out of hand because there is a portion of substance in his argument.

Proudhon wrote in the century after Adam Smith’s Wealth of Nations. Smith had written: “All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with any other persons.”

ExxonMobil is a company that finds oil, processes it and sells it for a profit. But who owns the oil the company finds? It is beneath the ground as part of the mineral rights the government owns. Let’s be clear on this point. It is owned by everyone, which includes you! Here we have one of the many failings of democracy. The legislators of years past have seen fit to give these rights away for a pittance and the real owners, the citizens of the country have rolled over and had it given to them good and hard!.

Finding oil is hard work, potentially dangerous work, and work that requires special expertise. It is reasonable that people engaged in such work should be generously rewarded. But to the tune of billions of dollars on an annual basis? I think not.

This one area shows conclusively that most Americans have not grown up, because they still believe the childhood ditty finders, keepers!. As an aside, considering that almost all Americans have been educated in government-run schools, this could be considered pretty conclusive proof that governments are incompetent.

So, what to do with the ExxonMobils? I think it would be eminently fair for the companies and people behind the discoveries to be lavishly rewarded. There would be nothing amiss in giving the key people ten or twenty or fifty million dollars as a reward for what they accomplished. They would be recognized as national benefactors and encouraged to do it again, if they could. But the remaining billions would go into the public purse for the benefit of all. Finders is not keepers. Although he did not coin the phrase, conservative economist Milton Friedman made popular the saying, “There is no free lunch.” Oil industry executives have obviously not read Friedman.

In closing there is another consideration that I am sure some have been thinking about as they were reading: What if a company loses money? Should the employees cough up half the loss? It’s a reasonable sounding theory, but it has two holes in the logic.

First, people are not machines. If a company has to shut a factory down, the machines and equipment can be mothballed and called back into service anytime in the future. Not so with people. They and their families have daily needs which must be met. In such situations, it’s reasonable for them to reduce their income, but it must remain sufficient for them to live at levels of decency and dignity so that when they are called back to work, they are psychologically fit and ready to go—probably really ready to go because when people are idle, they tend to get bored.

The second point is the more important one. Management and owners are in charge of the company. If things go badly, it is usually the result of their decisions. Because the workers are merely following management orders, it would be unfair to penalize them.

My suggestion for wealth redistribution has no chance of being implemented unless a majority of people want the change. But they can certainly do some good in this direction through worker unionization.

I know, I know, Americans believe in individuality, but thoughtful Americans know they’ve been sold a bill of goods. The belief in individuality and “every man for himself” is a pernicious belief system imposed from above. it’s the oldest trick in the masters’ book—divide and rule. I’ve explored the falsity of individualism in my article “The unbearable emptiness of being a conservative” (The Unbearable Emptiness of Being a ConservativePolitical Perspective by Daniel Johnson Salem-News.com).

I have to laugh sardonically when I read about people who don’t believe in unions and argue for a “right to work”. They say things like, they want to deal with the company themselves. Give me a break. If Wal-Mart were unionized, workers could bargain for higher wages, benefits and so forth. Our free-individual, however, would be powerless going into a bargaining session. If he wants a raise and the company declines to give him one, what are his options? Withdraw his services? Unless he is a uniquely qualified and needed worker, his only choice is to walk away with his tail between his legs. A single reed is weak and can be easily broken; a bundle, not so easily. You read it here first.

Daniel Johnson was born near the midpoint of the twentieth century in Calgary, Alberta. In his teens he knew he was going to be a writer, which explains why he was one of only a handful of boys in his high school typing class—a skill he knew was going to be necessary. He defines himself as a social reformer, not a left winger, the latter being an ideological label which, he says, is why he is not an ideologue, although a lot of his views could be described as left-wing. He understands that who he is, is largely defined by where he came from. The focus for Daniel’s writing came in 1972. After a trip to Europe he moved to Vancouver, British Columbia. Alberta, and Calgary in particular, was extremely conservative Bible Belt country, more like Houston than any other Canadian city (a direct influence of the oil industry). Two successive Premiers of the province, from 1935 to 1971, had been Baptist evangelicals with their own weekly Sunday radio program—Back to the Bible Hour, while in office. In Alberta everything was distorted by religion.

Although he had published a few pieces (unpaid) in the local daily, the Calgary Herald, it was not until 1975 that he could actually make a living from journalism when, from 1975 to 1981 he was reporter, photographer, then editor of the weekly Airdrie Echo. For more than ten years after that he worked with Peter C. Newman (1979-1993), Canada’s top business writer (notably a series of books, The Canadian Establishment). Through this period Daniel also did some national radio and TV broadcasting with the CBC. You can write to Daniel at: Salem-News@gravityshadow.com