Business & Democracy
On America's Relevance to the Future
One of the most enduring stories of COVID-19 has been the ongoing supply chain disruptions. Price inflation caused by a diminished supply of goods and workers has been a bugaboo in 2021. The White House recently warned Americans that the usual cornucopia of Chinese-made products may not be available at our local Best Buys on Black Friday. We’re all waking up to the disturbing fact that here in the States, we don’t make crucial items like personal protective equipment, semiconductors, or even screws anymore. We’re completely dependent on foreign countries like China for most of our products. That’s because we’ve been allowing folks like Apple’s Tim Cook to move manufacturing jobs to places where workers can be exploited for 65 cents an hour in order to realize fat profit margins. Not only have we voluntarily de-industrialized our own country, we’ve compounded the error by re-building that manufacturing capacity within the borders of China, our chief economic rival. It’s a strategic blunder of historic proportions. We are on the cusp of going down in history as clowns. Imagine your neighbor paying for an in-ground pool in your backyard instead of theirs. And we’re going down this road just to goose the profits of our most wealthy citizens.
The problem is the way we organize production. Our system divides people into employers and employees to make things. Employers are a small minority who “own” our production infrastructure. The owners make all the top-level production decisions while their employees—the vast majority—are mostly locked out of that decision-making process. Ownership rights are bought and sold on the stock market, which means our decision-making apparatus is literally for sale in the good old USA. We have a one-dollar-one-vote system in business, instead of a one-person-one-vote system. It’s fundamentally undemocratic, which is morbidly ironic when one considers all the countries we’ve bombed in the name of bringing them democracy.
The basic notion of democracy is that anyone affected by a particular decision has a say (read: vote) in that decision. America fought a revolution to win that right in the political sphere, but we’ve failed to deploy the same logic in business, where people spend most of their waking hours. And now that lack of democracy is rendering us non-competitive. If everyone affected by the decision to relocate a factory to China was allowed to vote on it democratically, it would never happen because no worker in their right mind would vote to lose their own job.
In business terms, profit is the leftover revenue after labor, raw materials, and overhead costs are paid for. And of course, getting their mitts on this profit is the main reason people buy stock. Stockholders decide how to dispose of profits, and not-so-shockingly they usually award it to themselves. This is a major driver in the ever-increasing wealth inequality that’s destabilizing our society today. The more wealth shareholders keep for themselves, the more control they can buy. It’s a positive feedback loop and it’s growing into an existential threat. Society can withstand only so much wealth inequality before it collapses a la the Roman Empire. Economic polarization has gotten so bad that 10% of Americans are now sitting on 90% of our stock. We’re drawing ever closer to a terrifying tipping point.
Waking up to this reality en masse is our only hope to avoid historical humiliation. We’re about to go down in history as the country that squandered a massive economic advantage by gifting it to the Chinese with a bow on it. We’ve scored some embarrassing goals in our own net, but the game isn’t over yet. A heaping helping of self-awareness is the only cure for our disease; we cannot hope to reverse course without it. And self-awareness, of course, is the very point of these essays.