Monday, October 14, 2019

We Need a New Version of Capitalism

Republicans - especially Donald Trump - are eager to depict whoever the Democrat presidential nominee turns out to be as a socialist and a threat to capitalism and somehow an enemy of average Americans even though the Democrat agenda is to improve the lot of a majority of Americans, not just the wealthy and big corporations as the GOP made clear was its goal in the form of the Trump/GOP tax cuts and the Trump/Pence regime efforts to roll back safety regulations and clean air and clean water regulations while destroying labor unions.  The irony is that many in Trump's base long for the 1950's when life was better for many because of labor unions that upheld wages and the far higher taxes paid by the wealthy funded infrastructure projects such as the Interstate highway system. In short, today's version of capitalism has turned toxic for the majority - much as was the case in the Gild Age, a time the GOP seeks to seemingly restore.  Not all of the wealthy are content to see income disparities continue to rise as the wallow in greed.  David Walentas, a visionary New York real estate developer definitely not cut from the same cloth as Trump, just made a $100 million gift to the University of Virginia to benefit students from families where no one has ever attended college.  Then there is Marc Benioff who argues that a new capitalism is needed in a column in the New York Times.  Here are column highlights:
Capitalism, I acknowledge, has been good to me.  Over the past 20 years, the company that I co-founded, Salesforce, has generated billions in profits and made me a very wealthy person. I have been fortunate to live a life beyond the wildest imaginations of my great-grandfather, who immigrated to San Francisco from Kiev in the late 1800s.
Yet, as a capitalist, I believe it’s time to say out loud what we all know to be true: Capitalism, as we know it, is dead.
Yes, free markets — and societies that cherish scientific research and innovation — have pioneered new industries, discovered cures that have saved millions from disease and unleashed prosperity that has lifted billions of people out of poverty.
But capitalism as it has been practiced in recent decades — with its obsession on maximizing profits for shareholders — has also led to horrifying inequality. Globally, the 26 richest people in the world now have as much wealth as the poorest 3.8 billion people, and the relentless spewing of carbon emissions is pushing the planet toward catastrophic climate change. In the United States, income inequality has reached its highest level in at least 50 years, with the top 0.1 percent — people like me — owning roughly 20 percent of the wealth while many Americans cannot afford to pay for a $400 emergency. It’s no wonder that support for capitalism has dropped, especially among young people. To my fellow business leaders and billionaires, I say that we can no longer wash our hands of our responsibility or what people do with our products. Yes, profits are important, but so is society. And if our quest for greater profits leaves our world worse off than before, all we will have taught our children is the power of greed.
It’s time for a new capitalism — a more fair, equal and sustainable capitalism that actually works for everyone and where businesses, including tech companies, don’t just take from society but truly give back and have a positive impact.
What might a new capitalism look like?
First, business leaders need to embrace a broader vision of their responsibilities by looking beyond shareholder return and also measuring their stakeholder return. This requires that they focus not only on their shareholders, but also on all of their stakeholders — their employees, customers, communities and the planet. Fortunately, nearly 200 executives with the Business Roundtable recently committed their companies, including Salesforce, to this approach, saying that the “purpose of a corporation” includes “a fundamental commitment to all of our stakeholders.” Unfortunately, not everyone agrees. . . . . When asked whether companies should serve all stakeholders and whether capitalism should be updated, Vice President Mike Pence warned against “leftist policies.”
But suggesting that companies must choose between doing well and doing good is a false choice. Successful businesses can and must do both. In fact, with political dysfunction in Washington, D.C., Americans overwhelmingly say C.E.O.s should take the lead on economic and social challenges, and employees, investors and customers increasingly seek out companies that share their values.
Legislation to close loopholes in the Equal Pay Act have stalled in Congress for years, and today women still only make about 80 cents, on average, for every dollar earned by men. But congressional inaction does not absolve companies from their responsibility. Since learning that we were paying women less than men for equal work at Salesforce, we have spent $10.3 million to ensure equal pay; today we conduct annual audits to ensure that pay remains equal. Just about every company, I suspect, has a pay gap — and every company can close it now.
For many businesses, giving back to their communities is an afterthought — something they only do after they’ve turned a profit. But by integrating philanthropy into our company culture from the beginning — giving 1 percent of our equity, time and technology — Salesforce has donated nearly $300 million to worthy causes, including local public schools and addressing homelessness.
Globally, few nations are meeting their targets to fight climate change, the current United States presidential administration remains determined to withdraw from the Paris Agreement and global emissions continue to rise. As governments fiddle, there are steps that business can take now, while there’s still time . . . .
Skeptical business leaders who say that having a purpose beyond profit hurts the bottom line should look at the facts. Research shows that companies that embrace a broader mission — and, importantly, integrate that purpose into their corporate culture — outperform their peers, grow faster, and deliver higher profits.
Of course, C.E.O. activism and corporate philanthropy alone will never be enough to meet the immense scale of today’s challenges. It could take $23 billion a year to address racial inequalities in our public schools. College graduates are drowning in $1.6 trillion of student debt. It will cost billions to retrain American workers for the digital jobs of the future. Trillions of dollars of investments will be needed to avert the worst effects of climate change. All this, when our budget deficit has already surpassed $1 trillion.
That is why a new capitalism must also include a tax system that generates the resources we need and includes higher taxes on the wealthiest among us. . . . . Nationally, increasing taxes on high-income individuals like myself would help generate the trillions of dollars that we desperately need to improve education and health care and fight climate change.
The culture of corporate America needs to change, and it shouldn’t take an act of Congress to do it. Every C.E.O. and every company must recognize that their responsibilities do not stop at the edge of the corporate campus. When we finally start focusing on stakeholder value as well as shareholder value, our companies will be more successful, our communities will be more equal, our societies will be more just and our planet will be healthier.
Trump and his vulture capitalist cronies embody the direct opposite of this responsible proposal.

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