Closing Plenary Address

Can Democracy Live with Capitalism?

Paper presented at the Fourth Annual Kent State University Symposium on Democracy

William Greider

I am honored to be part of this commemoration. In the spring of 1971 I was a young reporter for the Washington Post covering the concluding weeks of the My Lai trial at Fort Benning, Georgia, which had gone on for quite a long time, where Lieutenant Calley was on trial for the massacre. It was a terrible, terrible time for this country, regardless of what your perspectives were, and I think it’s really impressive and valuable that your university has found a way to keep that moment alive, partly as a memory, but also as a way to step aside and reflect, beyond your regular drill, on what democracy is about, what the country is about, and to talk about those great big fuzzy questions that we usually avoid. So I’m here to do that today, with great pleasure, I hope. I’m not a scholar, not an economist, not a professor; I’m a reporter. Therefore, I can speak with a looseness that perhaps will sound unacademic to some of you, and that is not unintended. If you have been to any of this conference, you know that we are sort of roaming the globe with a lot of interesting angles. I want to bring you home to America this afternoon. I want to challenge the triumphalism that is now in the air for obvious reasons, and speaking especially to students, younger people, I want to disturb your thoughts and invite you to think about some unconventional propositions.

We Americans tell ourselves; rather, we tell the world that we are the richest, freest, most powerful, and most tolerant nation on earth. In addition, beyond that, we are the best of all possible democracies. That is pretty much what we tell ourselves. Is it true? I’m going to get into not a cross-border comparison but questions about our values, how our country operates, and how distant we may be from what we tell ourselves.

Are we truly free? If we are, why do we feel so confined by the terms and limits set on our lives by commerce and finance? Especially when we go to work. Alan Greenspan, the Federal Reserve chairman, puzzled aloud a few years back at the very height of the economic prosperity. What he discovered was that in 1982, at the depth of a really severe recession, polls showed that something like 12–15 percent of workers were highly insecure about their jobs. In 1998–99, when employment was down to 4 percent, something like 35 percent were insecure about their jobs. I think that’s a suggestion that all is not quite as well as it seemed in the statistics. If we are so rich, why do Americans work three to four hundred hours longer each year than comparable workers in other advanced industrial countries? Why do so many people—not very publicly, but we all know this is so—walk around with a kind of internal sense of loss or failure, or even shame, that they’ve done all the right things by their job, or they’ve worked hard, they’ve studied, they’ve done all the rest, and yet they’re still not quite making it, or they have to work an extra job to get the mortgage paid, and so forth and so on. Cheryl Crow put it pretty well—do you remember the song, “If we’re so happy, why does it feel so bad?”

If this is a democracy, then why are most Americans voiceless on big decisions made by corporations and financial institutions that truly shape our lives, our communities, our country, and in some large ways, shape the private decisions that will perhaps determine the fate of the earth? I suggest we will not find the answers to my rhetorical questions by going once again at the failures of the federal, state, or local governments. Rather, we will find them in the nature of American capitalism, its operating values, and the institutional structures within it that define who has power and who doesn’t. This is an economic system that literally overwhelms society without public consent, and usually without much public discussion of what is occurring.

I offer you this proposition. Americans will not realize an authentic democracy beyond the familiar formalities unless and until they find a way to alter the economic system in fundamental ways. I didn’t say destroy it. I didn’t say crush it. I didn’t say overtake it, or any of those words. I’m talking about changing capitalism in organic ways within; changing the way it does valuations and the very narrow value system that it pursues; rearranging the power structure so that it is more inclusive, less a very steep pyramid and somewhat flatter; and restoring the primacy of society’s own aspirations and our obligations as citizens and human beings. And I add, difficult as I may make this sound, it cannot be done by government or government regulation, because it has to be done intrinsically, one step at a time, at first within the institutions of enterprise and finance themselves and then with the consent of the people who participate in those organizations and with the communities and regions behind them who have a big stake in the way these institutions function. In a way, what I’m suggesting is that we have to do a little manipulation, maybe a lot of manipulation, and change the DNA of how American capitalism functions.

Now to be really preposterous, I assert that this is possible to do if you’re willing to take the long view and if you’re willing to understand that the really profound changes in human societies, including this one, are long stories of struggle and incremental gain and setback, trial and error, and people, like yourselves, having the courage, the nerve, and the smarts, to try things differently. When they work, other people will copy them and together you build, literally, a new social reality that can change laws, the Constitution, and big institutions. I say this so confidently because I saw it happen in my lifetime. I mean that literally. I’m speaking, of course, of the civil rights movement, which was composed of the most humble and somewhat despised people in our country. Yet, they determined to liberate themselves from the racial caste system, which this country lived by when I was a child and young adult. And they did it. They liberated themselves, not by winning elections, but by years of struggle, and as Martin Luther King Jr. prophesied, they liberated a lot of us white people too in the process.

To young people, I know you’ve been taught by culture, by events, whatever, to be skeptical and a little on guard about people coming around with big talk. I just ask you to keep your mind open, because I really do believe I’m describing crudely here what I think is the next threshold for a reform era. I think it could be the next great advance in the search for the democratic idea—a search that, of course, has gone on for hundreds of years. What is the democratic idea? My favorite definition comes from the historian, Lawrence Goodwin at Duke University, who wrote a wonderful book—I urge you to read it when you have time to read books for yourself again—it’s called the Populist Moment, and it’s a story of people in the late nineteenth century who were basically barefoot farmers in the South and Midwest and who organized the Populist agrarian revolt against what was happening to them. Larry Goodwin, who has become a friend and teacher to me, describes the democratic idea as “the people will participate in the process that organizes their lives.” When I wrote Who Will Tell the People, I came up with a somewhat simpler definition, “Democracy is a society that functions on mutual respect,” and that’s not a rule; it’s just a feeling. People know whether it is present or not, and I don’t have to tell you that this society does not much function on mutual respect.

One reason that I am optimistic is that I know there are people—Americans—out there now working on this. They are environmentalists, farmers, labor union members and leaders, church-group members, managers and owners of businesses, and financiers. I call them all pioneers in my book, and I’m happy to single them out, wherever they are. You have a pioneer right here, at Kent State. His name is John Logue, and he heads the Ohio Employee Ownership Center. He has become a teacher of mine too, whether he knows it or not, and whenever we talk, I learn. He is dedicated to the process, slow and frustrating and tortuous that it may be at times, of making workers and employees the owners of the firms where they work. He is probably—I don’t want to blow too much smoke at him—but I think the Ohio Network is probably the best in the country. There aren’t that many that actually do this across the state—help people, workers, union members, managers, and owners make the conversion and then make it work after they’ve done so. He doesn’t say this, because he’s too modest and restrained in manner, but this is what building democracy is really about.

I’m also optimistic because what I know from my reporting is that people are not as powerless as they imagine. A dedicated minority can change the society and show the way to others. They can find the leverage points, and then, once they get them moving, they can spread the word. When I say leverage, I’m talking about the power implicit in potential that anyone has as a worker, as a consumer, as a manager or owner, as an investor in finance, as a citizen, and as a voter. You really have to figure out—and people are trying to do so and making some headway—how those different points of being can work as one along with others doing similar collective action.

One may fairly ask, “What does all this have to do with globalization?” I would say everything and nothing. My reading of global capitalism is that nations and regions of the world develop advanced capitalist economies quite different from ours, and you can argue through the night about the virtues and liabilities of the different types, but I don’t have any intention of doing that. Rather, I just want to make the point that Germany and Japan, for instance, have gone through the experience of fascism and World War II, with their respective horrors, and both have come out in very different ways, developing very effective economies and capitalist systems that have deep social obligations grounded in them—some by law, some by unspoken custom, some by explicit contracts—and both of these systems are quite different from what they call here in America the “cutthroat version.” Again, I’m not going to argue the comparative virtues, but I do say countries will get to their own system out of their own culture, history, experience, and politics, and if America is to resolve the problems I’m throwing up in the air, it, too, will do it in its own terms or it will not do it at all. If it succeeds, if we begin to change not just the tone but the operating values of American capitalism, then the rest of the world will certainly benefit rather directly from that because in the globalizing economy, which America led, promoted, and supported really since the end of World War II, we have been the boss, to the extent that anyone is, in describing and promoting the values. Moreover, the values we are promoting, I think, are in fact quite narrow and utterly indifferent to social and cultural implications. If we can find some remedies, others will borrow from us and we will certainly make the global system more humane in the process, and maybe we will borrow some ideas from them, because this is really something that everybody is working on around the world, each in his or her own way. Am I un-American to talk like this? I think this is the moment to talk like this. The cold war is over. It has been over for ten years. Capitalism won, state-centered communism and socialism lost, and issues that were really fairly taboo a generation ago are now available for discussion again, and I’m going to do that. Actually, I think this is the patriotic thing to do at this moment in history. At a minimum, I want to encourage that thought in all of you.

My new book, The Soul of Capitalism: Opening Paths to a Moral Economy, explores this frontier, the points of collision between capitalism and American society and the pioneers who are already out there. I describe the destructive collisions between these two competing overlapping value systems. We answer in many ways. We cannot help answering to both of those systems. I’m not going to dwell on this; I go into it at some length in the book because I think it is important for people to understand the motivating imperatives and virtues of capitalism versus the obligations we all feel and ought to uphold as human beings, and I’m not talking here about narrow personal business ethics questions. I’m talking about obligations to self-potential, fulfillment, self-realization to nurturance, raising our kids, continuing the human cycle in the best terms we can, protecting the inheritance from the past, building something for the future that we will pass on to generations beyond on us, defending nature against destruction because we need it to survive along with other living things, and so forth—again I am not going to elaborate any further, but you get the idea. That is a different set of imperatives than enterprise has, and it is not that one set is wrong and the other is right so much as who is pulling whom. I will just give you some very quick examples of how people get tugged in their lives and communities more or less continuously by these two realms. In a family, the choice may be as simple as work versus family. Time. We need the money, or we would like to have it, so we take the extra jobs and lose time with the kids. In a community, we want to keep the jobs, so we look the other way while they dump the stuff in the river. I am making these crude and simple, but you get the idea. In a company, there is the manager who has to do the right thing for the company, and as the company is cutting back and laying off or dismissing valuable long-term employees, who are perfectly capable and productive, he knows perfectly well that they are losing their livelihoods and not for any personal reasons of fault. He says to himself, “Well, if I don’t do this, the company will be injured. Besides, it’s my job,” and so he does it, in a sense doing “the right thing” and then he feels bad about it. This is a very old conflict, I should tell you. It goes back really almost to the beginnings of modern industrial capitalism 150 to 200 years ago, and it was particularly intense early in the twentieth century in America when most of the present forms in institutional relationships that we live with were created and solidified into the status quo.

In those days, believe it or not, there were a whole lot of Christian theologians and ministers running around the country denouncing capitalism, because they saw the brutalities and the injustices. Some of them called themselves Socialists, although they were a little vague about what that meant, but they were known as a movement called the Social Gospel movement. It is an interesting period in history if you went back and read their indictment then and compared it to what you see today; it is not the same country that existed in 1900 or 1920, but there is a certain amount of overlap in the present complaints.

I quote a Rev. Emil Brunner, who was a Swiss reform minister, and a conservative actually, not a Socialist. This is what he said about the system: “This system is contrary to the spirit of service.” He meant Christian service. “It is base and irresponsible. Indeed, we may go further and say that its irresponsibility developed into a system.”¹ Irresponsibility developed into a system—I don’t know if any of you have read any of Milton Friedman, but that’s a pretty good fit with Milton Friedman’s assertion that a corporation cannot take responsibility for collateral consequences; in fact, it would be wrong to do so. So the CEOs and the managers are necessarily irresponsible in that sense of the word; and in the last eighty to one hundred years, mainly due to our affluence perhaps, a lot of others have joined that group, including most of us. The workers are rendered irresponsible because they have been put in a position where they are told not to take responsibility for decisions for how the line works or how the office works; indeed, that’s the manager’s job, not theirs. Consumers are irresponsible because industrialization literally separated the buyers from the production processes or the end of content of the product. We don’t buy what we make anymore. We mostly consume things that were made somewhere else, sometimes around the world. Likewise, investors in the modern financial system are pretty irresponsible, I think. They watch the stock market price every day, but they don’t have a clue what really happens in most of the companies they allegedly own.

Our political activities are now organized for us largely by business organizations, and this is particularly true of the past twenty to thirty years. In one of my earlier books, I call these corporations the new political machines, and they literally finance both political parties. They help chose the candidates, usually with their money; they rigorously develop issues for legislation and the agendas; and they are quite adept at blocking issues and agendas that they don’t approve of.

Reorganizing capitalism means rearranging power in America. It means, literally, people taking responsibility. I think Americans are ready to do that. Maybe they weren’t able in 1930 or 1900, or even in 1950, but I think they are now. At least they are equipped to do it. I don’t say that all of them want to do it, but I think some do, and it means rejecting the role of mindless cogs and asserting voice, using that leverage on behalf of what we happen to think is most valuable. However, unless you happen to be wealthy or supertalented, you can’t do this by yourself. You have to do it collectively, joining with others. It requires a sense of invention and indeed a playful sense of invention, “cause nobody’s ever done this before, anywhere in the world.” You say to yourselves, “Well, let’s figure out who we can be connected with. Who has a similar, though not quite the same, grievance, desire, or aspiration?” Then, even though they are very different, let’s stitch together, if not a formal organization, at least a working alliance of mutual trust and shared commitment and then pursue it. Democracy is hard to do. Real democracy is very hard to do. Nevertheless, like our social human obligations, it promises great rewards. It literally promises larger life experiences for people—not for the very well-educated maybe, not for those who already have an abundance of influence and wealth, or whatever, but for the broad ordinary ranks of Americans it does hold out that promise. More freedom, not just to be actors in the larger world, but for personal self-realization.

Now let’s turn to that real world and I’ll talk about some examples of what these words mean.

The first realm is work in which most all of us probably have our deepest and most enduring interaction with American capitalism. I want to read from Elaine Bernard who is a professor at the Harvard Trade Union Program. This is what she said about the status of work in America. “As power is presently distributed, workplaces are factories of authoritarianism polluting our democracy. Citizens cannot spend 8 hours a day obeying orders and being shut out of important decisions affecting them and then be expected to engage in a robust critical dialogue about the structure of our society. Indeed, in the latter part of this past century, instead of the workplace becoming more democratic, the hierarchical corporate workplace model is coming to dominate the rest of society.”²

Where did Americans learn to be passive and resigned? Maybe they learned it at work on the shop floor, in the offices. Maybe the search for democracy actually begins at work, not at election time.

The U.S. employment system functions as a distinctly feudal manner. I’m drawing now on David Ellerman who was on the panel before you as discussant. He has done a lot of really important work on this. He describes the employment system, in most instances but not entirely, as a master-servant relationship. If you were the serfs on his property, he was your feudal lord and master, and if he didn’t like the way you behaved, he would expel you. There were nice lords; there were also abusive lords, but the power relationship was clear to all.

Now ask yourself. Is that the way the American employment system works? Just ask yourself if it sounds right, and ask your friends. Ask your mom or dad about their workplaces. Most employees are excluded from the decisions. They get a wage, but they are also excluded from the returns that their labor helped create. That is why I observe in passing in my book The Soul of Capitalism: Opening Paths to a Moral Economy, “The corporation, as presently organized, is an engine of inequality, and a principal one.” Moreover, it is not just the difference of wages between the bottom and the top, which we know are extreme. It is because the profit, the surplus return from the enterprise, flows into relatively few hands: the insiders of the top, key financial creditors, and statistically, perhaps, the broad ranks of shareholders. Whereas the people who really live in the company don’t get to share in that. They belong to the company but the company does not belong to them.

Here is the counterreality that people like John Logue are creating: employee-owned companies. John will correct my numbers because they keep changing, but there is something like ten to eleven thousand employee-owned companies in America now with probably eight to eleven million people working in that setting. They are not all democratic, some of them are partially so and some of them are underdeveloped, but they are there in that relationship. If you think of law partnerships, they function definitely as owned by the partners of the firm. They raise the capital and buy the building, hire the others, and so forth. There is also the example of tenured faculty. The tenured faculty of Kent State will not be able to share the university’s profits since there don’t seem to be any, but they are protected by an employment system that not only gives them insulation from abusive forces in the society that don’t like their ideas but also gives them some interest in decision making. Through the faculty senate, or whatever the mechanism is here, they get a voice in the direction of their department and in the direction of the university. I don’t want to idealize any of these examples, least of all tenured faculty or law firms, but I’m just trying to get in your heads that this is not as radical an idea as it may sound. People do it and there are many variations on these examples: cooperatives, farm cooperatives, production cooperatives, consumer cooperatives, and so forth.

The essence, to use David Ellerman’s phrase, is “workers own their own work.” They own it, are responsible for it, take the risks, and there is present some mechanism whereby they have voice. It doesn’t mean they get to run everything. It doesn’t mean executive decisions are made by majority vote. Nevertheless, there is an apparatus for sincere participation by all of those involved in the firm who are the insiders and the owners, and they share in the rewards. That is, they will gather some share of the returns, and as John Logue can tell you, over time, they accumulate real capital that way. Whether or not that capital winds up as their family nest egg, it’s a device to rebalance the maldistribution of wealth in this country without confiscating anybody’s. I mean that literally. The wealth is created in the future and will be distributed from the profits of the firm. It’s not utopian.

Take John Logue out for a beer sometime and get him to tell you how hard it is. I’m kidding him because he knows this world as intimately as anybody in this country. He also knows the future with a visionary sense of what is possible if people take this seriously. His dream, as he might share with you after a second or third beer, is to create a Mondragon cooperative here in Ohio—Mondragon is the famous cooperative system in Spain among the Basque people—but what he means is an industrial park filled with companies, all of whom are employee owned. I was with him at one of his association meetings, and he was running a little discussion group. He had the room filled with labor people, managers, lawyers, support people—just the best kind of mix of Americans you could hope for—and he said, “If we had such a place, what would it do?” They immediately starting spitting out these wonderful ideas about the cooperative things these small employee-owned firms could do among themselves: everything from sharing accountants to getting an environmental specialist in; to making a common job pool so that if one company has to lay people off, they’ll find work in somebody else’s shop; child care; education; community meeting halls. Believe me, this is all very routine conversation, you understand, but what it said to me is that people have these great imaginations of inventiveness if you can find a setting in which they can let them go and make some of it happen. He hasn’t done that yet, and I keep asking him, but he’s still working on it. That is the essence of owning your own work. You are invested in yourself.

Now let me move on to capital finance. Wall Street, as we know and I mean that as emblem because finance is now spread all over the country, is the core of power in capitalism. Its investment decisions literally shape the social contract far more directly than politics or religion. We witnessed some of this in a contagion of scandalous irresponsibility—there’s no other word for it—accompanying both the bubble building up in the stock market and in the collapse in the aftermath. The decisions I am talking about are not just about fraud and obvious thievery. Their decisions of where the capital will be deployed, for what purpose, and the terms of how the firms will use the capital are ones we live with in our communities, our workplaces, or wherever. And these decisions are very closely held. There is no public forum during which we can even look at them in advance. Society experiences the results after the fact, for better and for worse. Whether it is environmental destruction or closed factories or harsh new work terms for the employees, or an entire industrial sector transformed, you sort of look around and say, “Boy, where did they decide that?” Nobody got to vote on airlines adopting the hub system. Cities, in fact, spent billions of dollars to build these new take-a-walk airports that are necessary for the hub system—and Wall Street really was at the center of promoting this idea of efficiency. Now, fifteen years later, if you read the papers, you know that all of the leading airlines are in deep trouble, or bankruptcy, and they want to back out of the hub system because it turns out it was a bad idea in terms of the capital it required and the discomfort it delivered to customers. And, guess what? The small upstart companies, like Southwest, with a high culture of employee participation, are beating their socks off. So it was not only a bad social decision but also, definitely, a bad business decision.

Nobody votes on the introduction of genetically modified seeds, and, basically, I’m agnostic on the question. However, we know from the history of industrial capitalism that companies are anxious to go forward with a new technology before they really know the full consequences, and then we learn afterward about whether it was actually a good idea to dump PCBs in the river, or you know, name your poison, DDT, ALAR, and so forth and so on. I hope that’s not going to be true for genetically modified seeds, but we will find out. This stuff is now grown all across America now.

Nobody was allowed to approve the horrendous, I use that word advisedly, hog factories that have now spread across the country in corporatized agribusiness. If I had more time, I would curl your sensibilities by describing them, but basically, they brutalize the animals, spread pollution all around them in air and water, and, meanwhile, roll over small independent farmers who were growing maybe a couple hundred hogs in the normal, humane way, but didn’t have a prayer of competing on price with somebody who’s got a pen of five thousand hogs, all of whom are severely confined and are there to produce and reproduce and get fat enough to kill. That’s what I mean by the collisions.

Here is an interesting wrinkle, however. Wall Street operates mainly on other peoples’ money and you know what? It’s our money. I mean at least some of ours, not mine. I have a pitiful little savings. I don’t actually have a pension, but that’s another story. Wall Street finance does broadly operate on the savings of working Americans. Yes, it remains true that wealth is grossly unequal among American families. And, yes, the rich got much richer in the last couple of decades, but here’s the paradox. While that was happening, if measured among families and individual persons, the wealth was collecting in pension funds, mutual funds, and other savings places, which are now the dominant accumulation in American finance. It is these storehouses, these fiduciary institutions, that own the stock market, 60 percent of the shares of the thousand largest corporations. The pension funds and others, unfortunately, passively follow Wall Street’s narrow values, and in doing so, they injure the very people who are the beneficial owners of that wealth, the future retirees. It helps, of course, that most people don’t understand this. Most Americans are quite ignorant of the connection. They would be furious if they did understand it. So a long and vital campaign is underway, led by organized labor, church groups, environmentalists, and lots of others, not only to try to get leverage over that money, which in the end belongs to them and other ordinary Americans, but also to educate, agitate, and force these fiduciary institutions to change their investing values. It begins by saying that we are not going to buy stock in a company that makes nuclear bombs, tobacco, handguns, or whatever. “Socially responsible investing” is, I think, the bow wave for a deep shift in American consciousness—people starting, clumsily at first, but with real purpose, to take responsibility for their money. As that happens with pension funds, particularly the ones managed by public employees and labor that are outside the hands of corporate control, they can move money around actively in ways that will impose new values on companies. Count on it.

Inovest is a small rating firm, only five or six years old, but it has developed an elaborate performance rating system on environmental, social, and labor conditions of all the major corporations. It rates them much like Standard and Poor’s hands out a credit rating of a company: good, bad, terrible, terrific, like that. Then it matches that against the stock performance of those companies. Guess what? The companies with the highest social ratings, by their very careful measures, also produce higher returns in the stock market. They look at sectors even like oil and chemicals, which are going to be problems in pollution terms, and even those companies, the best of them, are 15 to 20 percent better than the worst of them. So the message is pretty clear, and some pension funds, just a few—I don’t want to exaggerate the progress—are beginning to look at this, test it on their own, and then say, “yeah, we need to begin applying investing measures like that.” That is, encourage the good guys and punish the bad guys, and, over time, companies, mutual funds, and brokerages will have to respond to that, because this great wealth, eight to ten trillion dollars that is housed in these fiduciary funds, is the heart and soul of the stock market and a lot of other kinds of investing.

I want to go just quickly to corporations, production, and consumption. I said the fate of the earth might be in the hands of business. This is what I meant.

I won’t go through the back-and-forth details about global warming, but if the science is right, the fate of the earth does lie in the hands of corporations, not our decision making, not public agencies. In America, it will be decided largely by two industrial sectors: autos and electric utilities. Both of those are politically potent, as we know, and both have persistently, year after year, decade after decade, resisted the imperative to confront the dangers of carbon dioxide emissions, which is the heart of the global warming problem. I could belabor that at length, but for the purpose of this discussion, I just want to say that both of those sectors, and they’re not alone in America, actually lack the capacity to innovate. They lack either the will or the self-confidence to really get out ahead of others with a new product that is better designed, more efficient, and reduces drastically the collateral consequences, whether it is environmental safety or anything else. This quality of innovation is actually the core of what we should want in corporations. Because of ecological crises, the big message is that this country, and the rest of the world, has to undergo an industrial transformation, redesigning both the content of products (that is, get the toxins out whenever you can), the wastefulness, and the processes of production that produce both. The good news is this is doable. I have described a number of versions of the good news in the book, and the technologies, on the whole, are not to be discovered in the future—they are already known. The problem is corporate decision making is working on a different scale, asking if they can make an investment that will give a certain return or that won’t cost too much against the return, and other such questions. I must tell you, we don’t have three hundred years to work this out. I don’t know how long we have, but I think it is pretty clear that capitalism, at this level, has to change.

There is a kind of low grade civil war underway across the country in issues you will be more familiar with: environmental activists from the hog factories, foresting, timbering, and others who are the people on the case. They are using consumer leverage, going to the big buyers of paper or the big buyers of meat and poultry, and expressing their values and forcing business revaluations. That’s a long road. My own view is, it will be a long road to reinvent the corporation, to break it up so that its insiders include a much more varied and socially interested group: all the people who work there, maybe their suppliers, and their communities where the factories are located. However, I will say, capitalism has redeeming virtues that its critics generally don’t mention. There are good reasons why capitalism prevailed across centuries against other forms of organization of business enterprise. One of those virtues is that it is forward looking by its nature. It invests into the future, hopes that its investments are sound, and then collects the returns or it takes it in the face if the investments were not sound. That is a spirit of exploration that I admire when it is done well and honestly and is not just an empty paper transaction. I think that is the energy that can help us get out of this conflict because wherever you are in history, there is always somebody on the sidelines, on the margins of the main enterprise, tinkering and inventing and trying to develop a new method, or new relationship, or new production system, or new technology, trying to do things differently and hoping to gain some advantage out of that for sure. It is that spirit that we need to encourage, to get the explorers, the pioneers, in a position where they can flourish, with our support, and the rogues will find the walls moving in on them, to put it crudely. Yes, eventually, not next year, not the year after, but eventually, we will want to get to politics and change the nature of what politics talk about and then enact some laws that codify some of these expectations and so forth. Again, I think that is doable, but I have to acknowledge that recent experiences are not too comforting.

Those of you who have been reading the business pages over the last three years saw this recurring story: scores, maybe hundreds, of CEOs, boards of directors, and financiers who were insiders in major companies, literally bilking the investors, the hapless, run-of-the-mill shareholders, and looting the company by selling early, collecting huge collateral rewards, and then often leaving what was a perfectly sound firm in ruin, bankrupt, or dissembled. You have to ask yourself, how did it happen that this became almost normal? I don’t say that everybody did it, they didn’t, but this rapacious personality that we knew was a CEO.

I was talking once to Paul Hawkin, if you know that name; he is the author of another important book, Natural Capitalism, and he is, and was, an eco businessman and another visionary who feels very strongly about the need for America to come to grips with these issues. He said, “Well, you know in Buddhist iconography, that figure is called the hungry ghost.”³ The hungry ghost is depicted as a person with a huge stomach and pencil thin neck who cannot get enough, whether it is drugs, fame, food, money. He can never get enough, and many persons running American corporations are like this. It is bizarre, don’t you think, given our democratic values, that these people were empowered in such a way. I’m not suggesting we have elections, but I think we need to do profound reform of the corporate institution and a lot of others to get back to something that society can live with. Surely we can do better in America than the hungry ghost.

I just want to close, again, talking primarily to the students. I hope this hasn’t overloaded you or overwhelmed you with provocative claims, and I do know that I sound rather eccentric compared to the usual discussions of economics, business, politics, democracy, and so forth. Most of you, I suspect, are probably not ready to take me seriously, or even take my word for it. That’s good. Some of you, maybe four, five, six, eight in this room, may be privately saying, “Yeah, I think that smells right. You know I’m going to get my head into this.” That’s the group I was speaking to all this time. I do ask all of you to keep your minds open. You are at a pivotal moment, a great moment. You have your own new understanding of this country. Young people always are able by nature, not by virtue, to see things that us old folks aren’t able to see. Of course, it is because you had different experiences growing up than I did or than your parents did. That doesn’t make you more learned; it’s just different and it’s an opportunity to take that and think about it and roll these things around. That’s why I want you to keep your mind open to the prospect that some of this may be true. So, let’s check out the book, talk with kindred spirits, ask questions. I think what I’m really trying to do, above all, is to inspire a little doubt and curiosity. More doubts about the system as it is, less doubt about yourselves, and more curiosity to inquire further into how our system does work, why it often fails to deliver life, liberty, and the pursuit of happiness for all, and how and whether you might participate in some way in changing things. In short, I am putting it on you. If any of this stuff is going to happen, it is going to be your generation, not mine, and I wish you good luck.

Notes

1. Emil Brunner, qtd. in Gary Dorrien, Soul in Society: The Making of Social Christianity (Minneapolis: Fortress, 1995).

2. Elaine Bernard, Dollars and Sense (Sept.–Oct. 1999).

3. Paul Hawken, interview qtd. in William Greider, The Soul of Capitalism: Opening Paths to a Moral Economy (New York: Simon and Schuster, 2003).

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