Un­der­stand how our econ­omy has changed

Maryland Independent - - Community Forum -

Here’s a rec­om­men­da­tion for La­bor Day, the hol­i­day that rec­og­nizes the Amer­i­can work­place: put Robert Re­ich’s book “Sav­ing Cap­i­tal­ism: For the Many, Not the Few” on your read­ing list for the fall.

This best­seller takes an in­formed look at our na­tional econ­omy and how it can once again do far bet­ter at meet­ing the needs of all Amer­i­cans. It’s a stim­u­lat­ing book about eco­nomics for peo­ple (such as me) who do not read books about eco­nomics. As Pub­lish­ers Weekly notes, “Re­ich’s pow­er­ful fi­nal ar­gu­ment is that Amer­i­cans need to rid them­selves of the idea that it’s too late to change their econ­omy.”

Re­ich, a pro­lific author, teaches pub­lic pol­icy at the Univer­sity of Cal­i­for­nia. He served in three na­tional ad­min­is­tra­tions, in­clud­ing as Sec­re­tary of La­bor. Re­ich is par­tic­u­larly ef­fec­tive at draw­ing con­nec­tions across the wide ex­panse of re­cent his­tory and eco­nomics and lead­ing his readers to “ah-ha” mo­ments of discovery. Con­sider this one ex­am­ple out of many. Af­ter World War II, CEOs gen­er­ally un­der­stood that they were re­spon­si­ble to all the stake­hold­ers of their cor­po­ra­tions. Frank Abrams, chair­man of Stan­dard Oil of New Jersey, said in 1951 that the job of man­age­ment “is to main­tain an eq­ui­table and work­ing bal­ance among the claims of the var­i­ous di­rectly af­fected in­ter­est groups . . . stock­hold­ers, em­ploy­ees, cus­tomers, and the pub­lic at large.”

To­day, CEOs are con­cerned for their share­hold­ers to the ex­clu­sion of work­ers, cus­tomers and so­ci­ety. Former Coca-Cola CEO Roberto Goizueta de­clared, “We have one job: to gen­er­ate a fair re­turn for our own­ers.” By “fair” he meant the max­i­mum re­turn pos­si­ble, re­gard­less of its ef­fect on other peo­ple.

This ex­clu­sive fo­cus on share­hold­ers, which dates back only to the 1980s, is not re­quired by law. Cor­po­rate ex­ec­u­tives and di­rec­tors do not have a fidu­ciary re­spon­si­bil­ity to max­i­mize stock val­ues or put share­hold­ers’ in­ter­ests above all oth­ers.

Re­ich ex­plains that the struc­ture of the Amer­i­can econ­omy is fluid. It has changed many times over the years. He doc­u­ments in de­tail the forces that have dis­torted our econ­omy dur­ing the last sev­eral decades. In the best Amer­i­can tra­di­tion, he calls for the ex­er­cise of coun­ter­vail­ing power to bring about re­forms that will serve ev­ery­body. To find out about his bold and hope­ful pro­pos­als, read “Sav­ing Cap­i­tal­ism.”

The Rev. Charles Hof­facker, Brandy­wine The writer is the rec­tor of St. Paul’s Par­ish, Baden.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.