Oregon Humanities

Beyond Individualism

How capitalism is destroying America

John Frohnmayer

Several years ago, I went to my first and only shareholders meeting. Organizers laid out cookies and orange juice for the handful of us who showed up, but they were careful to conduct all business, receive the proxies, and conclude the voting before we got a chance to talk. When the microphone came to me, I asked if the fund was concerned that executives in companies it helped finance were making 435 times what the average worker makes. They weren’t. Their reasoning was that they had to get the best leaders, and to get the best they had to pay the most. Social justice was not in their portfolio; their only charge, as they saw it, was to make money for their shareholders.

“The best” have shown us what they can do. Their ships burn in the harbor, and we wonder if there is any economist in the world who knows what the hell is going on. Maybe George Soros, who predicted such a meltdown in his 1998 book The Crisis of Global Capitalism, knows: “Market forces, if they are given complete authority, even in purely economic and financial areas, produce chaos and could ultimately lead to the downfall of the capitalist system.”

I would put it in slightly different terms: “growth for growth’s sake” is the ideology of the cancer cell. And the illness is built into the bones and sinews of capitalism. The corporation has unlimited life and, legally, has all of the privileges of a citizen but few of the responsibilities. Corporations don’t have to serve in the military. They don’t get called to jury duty, and they don’t have to be good neighbors. The corporate model is designed to maximize profit and minimize responsibility. In short, corporations don’t go to church.

I have come to believe that capitalism, if it continues in its present form, will destroy us. It will destroy us physically because the earth cannot withstand present levels of consumption, let alone expansion. Just think of the carbon load when India and China have as many cars as we do. Capitalism will destroy us economically because it makes a virtue of the vice of greed. The resulting wealth inequality causes social unrest, famine, health crises, terrorism, and insecurities throughout the world. Adam Smith’s invisible hand is giving us a single-digit gesture. The philosophy of unfettered self-interest is incompatible with justice, compassion, and, indeed, with freedom. And capitalism will destroy us spiritually because the accumulation of stuff does not make us happy. All we get from accumulating stuff is the insatiable craving for more stuff, most of which ends up in the landfill.

So here is the pickle we find ourselves in: the market is in the toilet, people have lost their jobs, and companies have stopped buying inventory, so more suppliers have gone down the tube and the government is heaving sacks of money out of airplanes to try to help because 70 percent of our economy is based on buying stuff. The first rule of economics is that everything is connected to everything else, so if we are to bumble our way out of this mess, we have to consider a few more values like equality, spiritual happiness, community, and pluralism. The preamble of the Constitution purports to establish justice, ensure domestic tranquility, and promote the general welfare, so shouldn’t our economic policy have some relationship to these goals?

We should ask ourselves some hard questions. Can we quantify wealth or value in terms other than the accumulation of dollars and the consumption of stuff? Can we strive for a smaller house, a more-efficient car, a longer-lasting couch, a secondhand shirt? It’s a tough sell. My life in the arts has been dedicated to promoting the value of artistic excellence that will be appreciated for its profundity by this and future generations. The wealth of culture has received precious little support from elected officials: as a recent example, look at how the state legislature has raided the Oregon Cultural Trust. But Albert Einstein—smart guy—tells us that not everything that can be counted counts, and not everything that counts can be counted.

The next hard question is whether idealism can become the new realism. Can the life of the mind trump the rush we get from fresh acquisition? Can education, service, quality, and permanence supersede disposability, shoddiness, and crap? Can modesty and prudence beat excess and gaudiness? In his essay “The Idea of a Local Economy,” writer and farmer Wendell Berry writes that the environmental crisis is a crisis of character about how we choose to live. He is right: we are passive consumers who have ceded our proxy about what happens to the planet to corporations.

And here is the toughest question: can we moderate rampant individualism? A simplistic way to look at the difference between American and Canadian culture is that the first duty of a U.S. citizen is to protect individual rights and the first duty of a Canadian is to be a good neighbor. Frederick Jackson Turner, in his essay “The Significance of the Frontier in American History,” argues that the abundance of land to the west made it possible to move on when your neighbor started to bug you. With each new westward move, there was a renewed struggle between savagery and civilization—or so we thought. The struggle has always been about the individual at the expense of the community.

When I was in law school, my tax teacher said again and again, “It’s a game.” Meaning, if the individual can figure out a way to beat the government out of a buck, more power to him or her. It’s a hell of a message for the community, but it is absolutely consistent with our philosophy of accumulating stuff: I want and will get mine. I will use it, throw it away, move away, and leave you with the trash, sucker.

I have five suggestions for how we can begin to break our fixation on stuff. First, the for-profit world should learn something from the nonprofit model. Nonprofits attract voluntary contributions because their products are worthy; these “products,” such as poets in the schools, museums, and experimental theater—things that are not supported by the marketplace—have social value. Nonprofits know how to survive on the crumbs from the table because that is how they always have had to operate. They consciously follow a counter-market strategy. Remember, after war, the most expensive activity known to mankind is opera.

Second, we must revise the tax code, stripping out the provisions that have made it so compelling for the manufacturers of stuff to move their plants overseas. For example, 80 percent of Wal-mart’s inventory comes from China. Recently, I was in a dress store with my wife and offered to buy her any garment that was made in the United States. My wallet remained closed. Currently, a manufacturer that moves its plant to, say, Guatemala will get a dollar-for-dollar U.S. tax credit for every dollar it pays to the Guatemalan government, and any profits made there will not be taxed until profits are brought back into the States. Stupid? Stupid, indeed.

Third, as part of the federal stimulus package, we should encourage help for manufacturers to find new markets. For example, many of the world’s diseases could be prevented by adequate water-purification units; the technology is simple, the cost modest, and the demand enormous. Chrysler made tanks during World War II, so why couldn’t it make high-speed railcars now? Thomas Friedman, in his book The World Is Flat, writes that the way to regain our economic chops is to develop clean, abundant, cheap, and reliable new energy sources, along with a carbon tax to make these new sources competitive. The carbon tax is just one example of taxing the societal costs of stuff on the front end. Tax bottled water for the cost of the plastic—both in its manufacture and its throwaway cost. Plus, a tax on bottled water, or other items with non-reusable parts (like electronics) would be a dunderhead tax for those who buy them. The point is to get us to recognize that we are drowning in stuff, and we had better be proactive.

Fourth, change corporate law. No longer would corporations be citizens, nor would they have unlimited life. I propose five-year charters, renewable upon showing that the corporation has social utility and is paying its taxes, fair wages, and the real cost of its activities on the planet. And shareholders should have a real voice in management that reflects more accurately their ownership positions.

Finally, we can all help make work more meaningful by investing in companies that make something that is valuable. I have a Harris tweed coat that I have worn for twenty-five years and that will never wear out. I am as proud to wear it as the weaver was to make it.

Nobody is going to change human nature. Communism failed because it discounted personal ambition, acquisitiveness, and individuality. Capitalism could likewise fail because it is heartless, wasteful, and frivolous. What we seek is a balance between the free market and government control, with the recognition that the balance is always a shifting target. A step in the right direction is a step toward a more inclusive society, and fortunately we already have the goals articulated in the Fourteenth Amendment and the Golden Rule to guide us.