The heart of the Accountable Capitalism Act is a requirement that companies with more than $1 billion in revenue obtain a corporate charter at the federal level, rather than basing themselves in the most loosely regulated state they can find. (Sorry, Delaware.)
This new charter is meant to address an epidemic of bad corporate behavior, especially the tendency of top executives to value profits over wider well-being. It would obligate executives to consider the interests of all corporate stakeholders — including employees, customers and communities — not just shareholders. It would require that at least 40 percent of company board members be elected by employees, an idea known as co-determination. The bill also contains provisions curbing stock buybacks, which tend to benefit only shareholders, and unilateral political expenditures.
.. it’s a distinct break from the neoliberal capitalism of the recent Democratic Party.
In the 1980s, Milton Friedman enshrined the idea of shareholder value maximization, which told businesses that their sole purpose was to maximize profit for their owners. Rather than pushing back against this obviously selfish, wealth-favoring theory, Democrats got on board. Sure, this framing might need a tweak here, a bit of regulation there, or the carrot of a tax break or two. But super-efficient big businesses would keep the broader economy chugging along for everyone — self-interest would mean we’d all win.
.. some 80 percent of stock market value is owned by 10 percent of the population, little of that benefit trickles down to the rest.
.. All that said, the Accountable Capitalism Act still relies on a fundamental belief that capitalism is good, even as a new generation of Democrats wants to upend that system altogether. On the left, winner-take-all competition — which Warren professes to “love,” by the way — is more and more seen as the root of our country’s ills, not something to preserve. A new wave of socialist candidates are loudly making that case.
.. But Warren isn’t out to get capitalism. She’s out to save it. The senator clearly believes that markets can create wealth.
What Are Capitalists Thinking?
If they’re worried about what’s driving the growing appeal of socialism, they need to look in the mirror.
.. You want fewer socialists? Easy. Stop creating them... The conditions under which the czars forced Russians to live gave rise to Bolshevism. The terms imposed at Versailles fueled Hitler’s ascent. The failures of Keynesianism in the 1970s smoothed the path for supply-side economics... the kind of capitalism that has been practiced in this country over the last few decades has made socialism look far more appealing, especially to young people... If you’re 28 like Alexandria Ocasio-Cortez, the New York congressional candidate who describes herself as a democratic socialist, what have you seen during your sentient life?.. As that happened, you’ve seen the rich get richer, and you’ve perhaps noticed that the government’s main response to this has been to keep cutting their taxes.. You witnessed the financial meltdown of 2008, caused by big banks betting against themselves. Capitalists might want to consider how all that looked to a young person who came from a working-class family and who probably knows someone who lost a job or even his house, while some of the bankers who helped create the mess walked away with golden parachutes, like that of Countrywide Financial’s Angelo Mozilo, which The Times valued at $88 million... You’ve watched corporations hoard profits, buy back their stock and not reinvest in their workers the way they once did as they move jobs to Central America and Bangladesh. If you read a lot, you know that stock buybacks were permitted under the Securities and Exchange Commission’s Rule 10b-18, which dates to the Reagan era, and that since it’s just an S.E.C. rule, it can be changed without having to pass legislation, but no one in either of the Democratic administrations since then bothered... Back in the days when our economy just grew and grew, we had a government and a capitalist class that invested in our people and their future — in the
- Interstate highways, the
- community colleges, the
- scientific research, the
- generous federal grants for transportation and regional development.
.. during all this time, socialism didn’t have much appeal. Back in the 1910s and ’20s, during an era of intense labor strife and before the existence of the welfare state, there were a couple of Socialist Party members in the House of Representative
.. But during the “Trente Glorieuses,” to use the French term — the glorious 30 years from 1945 to 1975 when everything largely worked in Western economies — socialism’s appeal in America waned.
.. So, back now to our 28-year-old. She was born in 1990. She will probably remember, in the late ’90s, her parents feeling pretty good about things — median household income did go up under Bill Clinton more than they had under any president in a long time, even more than under Ronald Reagan. But ever since, the median income picture has been much spottier, hardly increasing at all in inflation-adjusted dollars over 18 long years. And those incomes at the top have shot to the heavens.
.. if you were a person of modest or even middle-class means, how would you feel about capitalism? The kind of capitalism this country has been practicing for all these years has failed most people.
.. Yes, it’s given us lots of shiny objects to gush about. A smartphone that can display slow-motion video is a wonder. But an affordable college education, though perhaps not a wonder, is a necessity for a well-ordered society.
.. And if you’re a capitalist, you’d better try to understand it, too — and do something to address the very legitimate grievances that propelled it.