Featured Quote

In 1913, Henry Ford wrote the following as the directors had been reaping the rewards of profits - "The wages we pay are too small in comparison with our profits. I think we should raise our minimum pay rate".

Friday, March 18, 2011

More on Ethical Capitalism


While I thought I came to this idea pretty much on my own, it seems that I am following in the footsteps of a U.K. heroine! Noreena Hertz is a visionary and talks about exactly what I've been talking about for a while now. She has been at it from as far back as 2004!
With inequality surging, resources diminishing rapidly, and the earth's very future in question, capitalism-at-all-costs is no longer an option, she insists: "I have problems with this very extreme form of capitalism where the pendulum has swung so far in one direction, where the focus is completely on the short term, and no one is thinking about the consequences."
The largest financial crisis since the Great Depression confirmed Hertz's long-standing conviction that there would be dire consequences if unregulated markets were rewarded for success but not penalized for failure.
Hertz's last piece of advice was to the CEO himself. She told him if the company maintained its CEO-centric culture, in which voices from below couldn't make themselves heard, it would continue to operate with blinders on. "Companies have a choice at this moment as to which side of the fence they're on," says Hertz.
Co-op capitalism: co-ops work within a market-economy framework and are profit oriented, but because workers all own shares in the companies they work for, a long-term focus and a desire for collective success are built into the system.
Hertz points out that a country's "health" most often correlates with its levels of inequality, now at an all-time high in the United States.
Books to Read : The Silent Takeover and The Debt Threat
Google More about Noreena Hertz.

This Article goes a lot further than my idea of Ethical Capitalism.  The article seems to suggest taking the leap off the cliff, but I am suggesting we take the steps one at a time to get there.


This author also cites Henry Ford as inspiration.
The most serious, the most large-scale, and undoubtedly the most immoral of these scandals does not, however, fall into these categories, because it is legal. Salaries, plus stock options, plus various benefits - the compensation of presidents and the two or three highest officers of today's big multinational companies - have gone from roughly forty to fifty times their employees' average salary (Henry Ford's ratio of decency) thirty years ago to some three hundred fifty or four hundred times that average salary today.
Movie : Inside Job (but donate and get it from TruthOut!)

Policy Innovations calls for us to be ethical in business and fully consider the consequences of one's actions.
I asked United Nations Special Representative John Ruggie whether ethical capitalism is possible. "Well, sure," he said with a grimace. "But it won't occur unless policies and regulations provide the right incentives," he continued. "The role of ethics is in shaping those regulatory regimes."
This is what I would like to avoid.  Government Regulations are a Last Resort.  Companies have the ability to self regulate - and its only when they refuse that government has to step in.

Book : The Promise of American Life (published in 1909) (Kindle edition is free!)

My blog at Politico.com introducing "ECSUS" - a concept I hope takes off.