I attended the People’s Climate Rally at Oakland on Sep
21st. I wasn’t sure what to expect, after all, it was the first
rally I’ve ever attended and the topic itself draws lukewarm response from
people, even from those who appear socially responsible. One could claim the march itself was a
tremendous success in NYC where it drew some 400,000 onto the road. Worldwide,
it looks like nearly 700,000 people took to the road and participated in
regional events. That, however, is a very small percentage of the 7 billion
world population.
At Oakland, the rally held in conjunction with the
broader event drew a much smaller set; I’d hazard to guess some 1000 people
were there. What was interesting to me is that more than half of them were
there with a subtly modified agenda. These folks believe the mess we have with
the climate change to be a symptom of capitalist excesses and that the fix lays
in moving to a socialist alternative. There were multiple organizations pushing for
a “system change, not climate change”. And system change invariably implied
embracing socialism instead of capitalism.
Studies have determined that to provide water and
sanitation for all in the world, it would take $9B per year. Basic health and
nutrition would set one back by $13B per year. And basic education comes with a
$6B per year price tag. Without debating about these numbers, let’s for a
moment take these studies at face value. In contrast, two of the most
profitable oil companies in the USA, Exxon Mobil and Chevron raked in profits
of $32B and $21B respectively in 2013. When you look at the basic needs of the
large population and contrast it with the profits of a few, you can’t help but
wonder if the “system change, not climate change” has something to it. When you
consider that profits from just one of oil rich companies could solve all of
world’s water, sanitation, health, nutrition & education with $4b to spare,
you are forced to step back and reconsider what’s happening around you. $4b is not chump change in profits, mind you! Some
of the most profitable companies in the US, Exxon, Chevron, Apple, Pfizer, Microsoft and
others like them can wipe out lots of world’s woes and yet sport a handsome
profit for their shareholders.
If solving big problems were that straight forward, why
hasn’t it happened? I’ve often reflected that it is so because we do not have
system that promotes responsible capitalism. And what exactly is “responsible
capitalism”? Since that is not a well-accepted phrase, I will attempt to
outline what I believe it means.
Responsible capitalism is one where we don’t have
corporations and individuals fight tooth and nail to avoid paying their fair
share of taxes. Worse, they don’t resort to exploiting loop holes in tax
structures and off shoring profits to avoid paying taxes.
I know I am opening myself to sharp criticism when I use
phrases like “fair share of taxes”. What
is fair share, you ask? Well, ours is a country where laws are laid out based
on behavior of “reasonable person”. That’s precisely how a judge explains to a
jury how to review a situation at hand. Not how a democrat would behave… or a
republican… or a libertarian; not how a rich person would behave… or a poor
person; Not how a Christian would behave… or a Hindu… or a Muslim… When
defining a reasonable person, we do not worry about their political
affiliation, or their economic status, or their religious belief or any of the
hundred ways we can categorize, box and stereotype human beings. We simply are
expected to understand a “reasonable person”. I implore you to be reasonable as
we continue to explore this difficult topic of responsible capitalism.
It is not responsible capitalism when a successful
electric car making company negotiates $1.3 billion in tax credits in order to
build a battery manufacturing plant in Nevada when the CEO of the company is
worth $12 billion himself.
In 1914, when HenryFord doubled the salary of his workers to $5 a day and reduced their work
hours to 8 from 9 a day, he practiced responsible capitalism. To put this in
perspective, a worker could make $100 a month and the price of a Model T then was
about $300.
When we have a system where we do not argue to bitter end
about raising the minimum wages to $15 an hour while CEOs make multi-million
dollars, we have responsible capitalism. Interestingly a worker would make
about $2500 per month if the minimum wage were $15/hour while the price of a
small car will set them back by 10 grand, a ratio that is close enough to what
existed in 1914.
Responsible capitalism is when an average employee gets
an opportunity to partake in the profits and stock appreciation of a company.
It certainly is not responsible capitalism if the CEO is awarded 7 million
stock options while it is impossible to award 500 stock options to a new
employee in the same company.
Responsible capitalism is demonstrating a willingness to
be inclusive of others less fortunate than you and providing them an
opportunity to get ahead by sharing your good fortune, whether it is knowledge,
money or unique skills.
Responsible capitalism is not a cry for socialism. When
we are able to put people above politics and profits, we have responsible
capitalism.
