A Progressive Opportunity Society

by Gary Boatwright, Tue Feb 15, 2005 at 06:50:39 AM EST

So many great diaries today. If only I could promote them all--Chris

That has kind of a nice ring to it doesn't it?

I started off yesterday with a diary Embrace Class Warfare that was based on Gar Alperovitz's article,
Taking the Offensive on Wealth in The Nation. Last night his new book, America: Beyond Capitalism arrived.

Dude is serious! Run, don't walk, to your nearest bookstore and get America, Beyond Capitalism.

First, let's turn to the conservative case for a Progressive Opportunity Society that has been percolating away underneath the supply side veneer of conservative economic thought:

Traditional conservatives, like the founder of the University of Chicago free-market school of economics, Henry C.Simmons, begged fellow conservatives to recognize that "[t]urned loose with inordinate powers, corporations have vastly overorganized most industries." Indeed, this highly respected conservative (and Milton Friedman's revered teacher) held that "America might now be better off if the corporate form had never been invented or never made available to private enterprise."

Another leading conservative, Friedrich A. Hayek, years ago urged that "if we continue on the path we have been treading [toward what he termed the `monopolistic organization of industry' closely allied with government], it will lead us to totalitarianism."

William Safire observes, "It is for conservatives to ask ourselves: Since when is bigness goodness?"

There is still a quiescent strain of libertarianism on the right. "That `big government' is anathema to individual liberty is the fundamental structural argument of traditional theory." Why can't conservatives reduce the size of government? "I will do many things for my country," columnist George Will lamented during the Reagan years, "but I will not pretend that the careers of, say, Ronald Reagan and Franklin Roosevelt involve serious philosophical differences."

It boils down to two factors. First, individuals want specific programs, paid for out of general revenue. Second, large corporate interests are well organized to maintain the current corporate redistributivist "free market" status quo, lobby Congress for corporate welfare, and when necessary or convenient, to go hat in hand begging for a massive corporate bailout for the "common good."

"Today roughly 90 percent of working Americans are employees--a very different kind of individual" than the individual entrepreneur underlying traditional conservative institutions of free-market capitalism. The essence of liberty and freedom is time. "Only if individuals have time that they can dispose of freely as they see fit can liberty be truly meaningful." Walter Lippman said that free time was "the substance of liberty, the material of free will." From Herbert Marcuse, "the reduction of the working day to a point where the mere quantum of labor time no longer arrests human development is the first prerequisite for freedom."

Well that's a brief overview of the first forty pages. Alperovitz offers a variety of possible solutions. One possibility: a 2% wealth tax directed towards a combination of enhancing the Earned Income Tax Credit and/or a version of Sen. Bob Kerry's "KidSave Accounts" to which the government would contribute $1,000 at birth for every child, and $500 per year for the next five years. "The Funds would be invested and allowed to grow until the individual reaches age twenty-one, at which time roughly $20,000 would be available for investment in education" or similar purposes. I've heard Sen. Santorum support this program or a similar one.

If anyone thinks these ideas will not resonate strongly on both the right and the left, please read today's story in the L.A. Times, Economy's Growing, but Where Are the New Jobs?: Firms are expanding without hiring. Some analysts wonder if this change is permanent. In addition, former Sec. of the Treasury O'Neil has a very interesting editorial, A New Idea for Social Security. hmmmm.

There's a strong dis-satisfaction with the direction our country is going both economically and politically. Progressives can and should make the case for a Progressive Opportunity Society. Instead of trying to rain on President Bush's Opportunity Society Parade, maybe we can just give the parade a nudge in a liiitle bit different direction.

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Another Great Diary JB!

Keep up the great work!

One possibility: a 2% wealth tax

It's unreal that we're the only modern Western Country without any sort of annual wealth tax. Poll after poll show that American's value hard work over sitting on wads of cash, so why couldn't we mount a populist campaign to even out the playing field? Hell, if the wealthy right-wing is going to wage class warfare, shouldn't we fight back?

"That `big government' is anathema to individual liberty is the fundamental structural argument of traditional theory."

My question is- why doesn't the fear of big organizations translate into a fear of mononploies and big multi-nationals (esp. those that have renounced their citizenship by moving their headquarters)?

by Alex Urevick 2005-02-15 05:13AM | 0 recs

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Re: Another Great Diary JB!

I think there is tremendous opposition to global corporations across the political spectrum. One of several arguments Alperovitz makes that I didn't really cover is that our political process has been captured by corporations. Bush has managed to delay the inevitable revolt against corporate corruption by gaming the political system and political rhetoric with his moral values distractions.

The inequality of wealth and the rise in compensation for CEO's has been matched by lower levels of managerial competence and increased public distrust of corporations. Can you imagine Elliot Spitzer as Atty. General instead of Roberto Gonzalez?

by Gary Boatwright 2005-02-15 06:21AM | 0 recs

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better idea..

lets reframe the whole 'tort reform' thing by pushing for real tort reform.. which could start by figuring out a way to attribute causation to the actual perpetrators and charge them for the effects of their deliberate or criminally neglectful actions in enough of a way to fully compensate the victims AND change corporate behavior so that corporations do the right thing BECAUSE THEY WON'T BE PROFITABLE IF THEY DON'T.

We also should eliminate the travesty of legal corporate 'personhood'.

The Santa Clara 'decision' was America's BIGGEST mistake..

by ultraworld 2005-02-15 05:58AM | 0 recs

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Re: better idea..

That's part of the same idea. Remember, I've just read and covered the first forty pages of Alperovitz's book. All I've provided so far is the introduction to Alperovitz's thesis, and not even all of that.

Alperovitz is working from a far larger canvass than what I have been able to provide so far. Stay tuned, or better yet, buy the book.

by Gary Boatwright 2005-02-15 06:24AM | 0 recs

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Re: better idea..

I support this, plus addidn even heavier criminal charges for Senior leadership...Such as Manslaughter charges if they willingly neglected the danger. Throw these CEOs in jail for 5 year...in a "pound me in the ass" prison (thanks Office Space) and see how quick they are to avoid fixing a dangerous problem.

by yitbos96bb 2005-02-15 07:21AM | 0 recs

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Re: better idea..

We could give Wall Steet a choice. A 2% Wealth Tax just might seem like a better idea than prison.

by Gary Boatwright 2005-02-15 07:28AM | 0 recs

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Useful and Informative links

United for a FairEconomy

Inequality.org

CBO Study

The Widening Income Gap from the Center for Budget and Policy Priorities.

by Gary Boatwright 2005-02-15 07:24AM | 0 recs

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Thanks tor the good read. But...

I think the ideas for change are wrong. The deck chairs really belong over there...

Roosevelt would have been proud of the "wealth tax" and the "KidSave" programs. After all he, as all of us in the choir know, was the one who saved capitalism last time.

They would do well as a massive corporate bailout for the "common good."

Sorry for the snark. It was just a little surreal reading all the big ideas at the start and then being brought down to earth by the "solutions". Don't get me wrong, I'd sign on to those ideas in a second.

As for Progressive Opportunity Society - it's too many sylables and too latin in orgin. IMHO.

by Jeff Wegerson 2005-02-15 09:25AM | 0 recs

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Re: Thanks tor the good read. But...

Roosevelt would have been proud of the "wealth tax" and the "KidSave" programs. After all he, as all of us in the choir know, was the one who saved capitalism last time.

Actually, I think that many people credit John Maynard Keynes and his theory of Aggregate Demand with saving Capitalism, though Roosevelt's implimentation of Keynesian policies certainly saved American Capitalism.

I know that the neoclassicist utopians would argue against this, but it was Keynes who vanquished their predicessors, the classicists, to the margins for close to 40 years.

Who would have thought that savings could cause so much trouble?

by Alex Urevick 2005-02-15 09:57AM | 0 recs

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Sorry. My U.S. centricism was showing.

Your view clearly trumps mine. Thanks for throwing me a line though.

by Jeff Wegerson 2005-02-15 07:16PM | 0 recs

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You are confusing apples and oranges

You seem to be indicating that a 2% wealth tax to provide income support and savings opportunities for low income workers is equivalent to corporate welfare. There is a profound difference in how the chairs are arranged.

Corporate and personal wealth for the top 10% are both at record highs in real and comparative terms. Tax levels for both groups are at record lows. Wage inequality is at record highs. Corporate malfesance is possibly higher than it ever has been.

If all Alperovitz was suggesting was rearranging the deck chairs I would still agree. As I mention earlier, Alperovitz is writing with a far broader canvass than I was able to cover in this diary from the first 40 pages of his book.

America, Beyond Capitalism is calling for a radical shift in the structure of our political and economic structure. I'll get into that more later this week.

For now, how about using a 2% Wealth Tax to give corporations incentives to provide ESOPs for their employees? Without any other changes, how would a job at Walmart look if the employees were given an additional 10% to 15% of their wages in Walmart stock shares? Now picture a progressively structured ESOP, so that the employees received a greater percentage than the CEOs.

For example, workers would be awarded a 15% ESOP contribution on their first $20k in income, and 10% on the next $30k in income. An employee who earned $20k would get $3,000 in stock options. An employee who earned $50k would receive a total of $6,000 in stock option. Employees who earned over $50k would only receive the ESOP contributions on their first $50k in income. ESOP contributions would be capped at $6,000 per employee.

There is no economic or market rule that says ESOP plans must disproportionately benefit the highest paid executives. Adam Smith's invisible hand does not have a seat at the Corporate Compensation Committee table.

Alperovitz is talking about more fundamental restructuring than that. He is talking about genuine employee ownership of the company.

by Gary Boatwright 2005-02-15 10:47AM | 0 recs

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Re: You are confusing apples and oranges

I wasn't confusing apples and oranges because I was only shown the apples.

ESOP's. Now the missing pieces are being shown. That's more than a deck chair move. That's a start at addressing the undemocratic nature of corporate capitalism. Hell the un-economic nature of corporate capitalism.

Simply taxing the rich in order to funnel more money through the economy (via the poor and middle-class) is fine, but it doesn't address the concentration of ownership issues.

So I'm jumping the gun here. Sorry. Write on, I await furthere installments.

by Jeff Wegerson 2005-02-15 07:13PM | 0 recs

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Re: Thanks tor the good read. But...

As for the Progressive Opportunity Society, I don't think it's a good idea to form a thinktank with the initials P.O.S.

by wayward 2005-02-15 01:41PM | 0 recs

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POS - LOL - eom

by Curt Matlock 2005-02-15 02:05PM | 0 recs

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POS - Point of Sale - n/t

by Jeff Wegerson 2005-02-15 07:14PM | 0 recs

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Worth discussing but off the rails a bit

The marriage of corporatism and big government is fascism and that is where the US today is firmly planted.

Decades ago, when the extant rules for our society were put into temporary balance by TR and FDR, big corporations and government control of society via its control over corporations, personal liberty and the egalitarian economy had a chance to flourish.

But today, big corporations and the top corporate class are firmly in control of both government and of the media.

Fascism reigns and personal liberty is definitely on the wane.

Nations like Argentina (for one) prove that the world's ruling economic class can live happily in a society were widespread poverty stands side by side with extreme wealth.

by leschwartz 2005-02-15 10:35AM | 0 recs

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Re: Worth discussing but off the rails a bit

Alperovitz addresses corporate fascism in the context of both political and economic domination. I've only read the first forty pages. Please be patient and/or buy the book.

by Gary Boatwright 2005-02-15 10:53AM | 0 recs

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whatever happened to...

...the MyDD book club? speaking of books we should all be reading...

by JoshInNYC 2005-02-15 11:41AM | 0 recs

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Two more books

I commend JB for another excellent diary. I believe this discussion is absolutely key for the future of our party, the future of our country and the future of our civilization.

I want to suggest two other books for his continued study and discussion. The first is the latest by a giant of economics – John Kenneth Galbraith”s The Economics of Innocent Fraud.

The review on Amazon states, “John Kenneth Galbraith has been immersed in economics for most of his long and remarkable life. The purpose of this extended essay is to illuminate examples of "innocent fraud" or the gulf between perception and reality in the modern American economic system…The dominant role of the corporation in modern society is one such form of innocent fraud, and he explains how managers hold the real power in our system, not consumers or shareholders as the image would suggest. Despite the "appearance of relevance for owners," capitalism has given way to corporate bureaucracy--"a bureaucracy in control of its task and its compensation. Rewards that verge on larceny."
He also explains how the public realm is effectively controlled by the private sector. The arms industry is but one example of this: "While the Pentagon is still billed as being of the public sector, few doubt the influence of corporate power in its decisions." He also looks at the financial world which "sustains a large, active, well-rewarded community based on compelled but seemingly sophisticated ignorance," and in particular the Federal Reserve System, "our most prestigious form of fraud, our most elegant escape from reality." In essence, Galbraith says that the Fed, for all of its power and prestige, effectively does nothing. And he has little problem with this: "Let their ineffective role be accepted and forgiven."
The other book I strongly recommend is The Case for the Living Wage by Jerold Waltman. Although I am just beginning to read this book, Waltman first attempts to make the case that our civic republican tradition, along with the philosophies of all of our mainstream religions (including evangelical Protestantism) compel us to support a wage structure whereby everyone who works receives compensation that will allow them to live at a truly decent level.

by The Goatherder 2005-02-15 12:01PM | 0 recs

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wealth distribution

great post! I can't wait to read the book. Here is a fun fact: The wealthiest 450 individuals in the world have more wealth than the bottom 3 billion.

That is 450 vs 3,000,000,000.

by Atrain 2005-02-15 04:42PM | 0 recs