Our opinion: Welcome to Plantation America
We are awash in capital and yet, around the world, the economic revival is floundering.
Clayton M. Christensen and Derek van Bever, writing for the Harvard Business Review, note the modern era is characterized by "capital superabundance" in which financial assets are today almost 10 times the value of the global output of all goods and services, and that the development of financial sectors in emerging economies will cause global capital to grow another 50 percent by 2020.
"Like an old machine emitting a new and troubling sound that even the best mechanics can't diagnose, the world economy continues its halting recovery from the 2008 recession," write Christensen and van Bever. "Look at what's happening in the United States: Even today, 60 months after the scorekeepers declared the recession to be over, its economy is still grinding along, producing low growth and disappointing job numbers."
Despite historically low interest rates, they write, corporations are sitting on massive amounts of cash and failing to invest in innovations that might foster growth.
The two acedemicians want to know what is causing this behavior.
"Are great opportunities in short supply, or are executives failing to recognize them? And how is this behavior pattern linked to overall economic sluggishness? What is holding growth back?"
The pair, with assistance from alumni, explored a wide range of reasons for the sputtering recovery, including political and economic uncertainty, the low rate of bank lending, a decline in publicly supported research in the United States, and the demise of innovation platforms like Bell Labs.
They believe that the crux of the problem is that investments in different types of innovation affect economies and companies in very different ways, but are evaluated using flawed metrics.
"Specifically, financial markets -- and companies themselves -- use assessment metrics that make innovations that eliminate jobs more attractive than those that create jobs. Efficiency innovations typically pay off within a year or two." Companies invest in efficiency, which eliminate jobs, because on an unexamined assumption, they write, "Which has risen almost to the level of a religion -- that corporate performance should be focused on, and measured by, how efficiently capital is used."
Would you like that in regular English? Short-term profits trump long-term profits in an era when the rule is get as much as you can, as fast as you can and get out.
The result, write Christensen and van Bever, is that the institutions, especially banks, that are meant to "lubricate" capitalism no longer do so.
Christensen and van Bever believe the system can be turned around by appealing to logic, fairplay and appropriate government policy that would liberate capital from short-term profits.
Fat chance, argue some political and economic observers.
"With all due respect ... these guys are thugs and looters," notes Arendt, writing for Daily Kos. "Your polite attempt to point out they are killing the goose that lays the golden eggs will get no traction with conquistadors. They will continue to suck America dry while looking for the next target overseas."
Let's not forget that for more than 30 years, following reduced taxes on the wealthiest Americans and the rolling back of regulations to rein in financial malfeasance, we have been promised the wealth would "trickle down" or that "a rising tide raises all boats." But since Ronald Reagan's days as president, the rich and corporations have stashed more than $30 trillion in offshore tax havens.
"Our surplus has been channeled into the Wall Street gambling casino, the rise of a predatory class of financial capitalists, and a bloated military/intelligence/police budget," notes Arendt.
Michael Lind calls this a "plantation" mentality, "a cruel caste system in which the white, brown and black majority labor for inadequate rewards while a cultivated but callous oligarchy of rich white families and their hirelings in the professions dominate the economy, politics, and the rarefied air of academic and museum culture."
Lind notes that throughout much of our history, New England-based Yankee aristocracy with values rooted in Puritan communitarian values were in charge of the economy.
For the most part, notes AlterNet's Sara Robinson, the Yankee aristocracy "tempered its predatory instincts with a code that valued mass education and human rights; held up public service as both a duty and an honor; and imbued them with the belief that ... you had the moral duty to do something positive ... for the benefit of mankind."
For the Yankee Puritans, liberty resided in the community, which had the right and responsibility of governing itself while caring for the sick, educating the young and providing for the needy. "The kind of support that maximizes each person's liberty to live in dignity and achieve his or her potential," writes Robinson.
But the plantation aristocracy that has come to control the economy since the 1980s is characterized by "its utter lack of civic interest, its hostility to the very ideas of democracy and human rights, its love of hierarchy, its fear of technology and progress, its reliance on brutality and violence to maintain 'order,' and its outright celebration of inequality as an order divinely ordained by God," she writes. Its liberty is defined by "The higher your status, the more authority you have, and the more 'liberty' you can exercise."
"The mentality of (today's) businessman is that of the pre-modern 'seignurial' elite ..." writes Lind. "It is not an industrial capitalist mind-set at all, but the mentality of the Spanish conquistador, who dreamed of quickly acquiring fabulous wealth by plundering precious metals ..."
If it is not evident by now, the plantation mentality currently runs the economy. You want proof?
As Robinson notes, "The wealthy and powerful are free to abuse employees, break laws, destroy the commons, and crash the economy -- without ever being held to account. The rich flaunt their ostentatious wealth without even the presence of humility, modesty, generosity or gratitude." In addition, the military/industrial complex consumes 60 percent of our annual treasury and the police are given the training necessary, not to serve and protect, but to subdue and suppress, she writes. Segregation is increasing, militias and racist organizations are undergoing a revival, we are reducing our investments in education, infrastructure, libraries, the poor, our children, our elderly ...
"As long as America runs according to (these) rules of ... politics, economics and culture, we're no longer free citizens exercising our rights to life, liberty and the pursuit of happiness ... Instead, we're being treated like serfs ... Welcome to Plantation American."
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