If Only We Could Fire CEOs for Firing Workers to Protest the Election

Democratic wins in the 2012 elections have led conservatives to moan, ridiculously, that America is becoming a land of lazy welfare recipients dependent on government: Bill O’Reilly complained that people voted for Obama because he’s supposedly giving them “stuff,” and interpreted this as a rejection of the “traditional” American ethos of the White Protestant Work Ethic.  He said, “People feel that they are entitled to things and which candidate, between the two, is going to give them things?”  Sore loser Mitt Romney said that Obama won because he had given “gifts” to his supporters.

Hence, yet again for conservatives we are on a road to creeping socialism.  Yet Obama’s has governed not as an enthusiastic New Deal populist but as a moderate conservative who has been quite stingy on economic stimulus.  These sour grapes also neglect the fact that corporations are the beneficiaries of the largest government “gifts” of handouts, bailouts, tax breaks, bloated contracts, and subsidies.

Nonetheless, many businesspeople have concluded that America is ungrateful for their services, and some seem intent on showing us how valuable they are by childishly picking up their bats and balls and going home.  There are several examples of business owners who have said that they will raise prices or cut worker’s pay or hours in response to the election results.  This Florida owner of several Denny’s franchises has declared that he will offset the costs of Obamacare by cutting worker hours, and the CEO of Papa John’s pizza is going to do the same, even though the company's free pizza giveaways cost several times more.  It’s important to note that these clowns are threatening people’s incomes and livelihoods — by which they meet the needs of themselves and their families — and that they are not doing so a business matter, but as a political protest of election results that they don’t like.

This is important as a matter of structural justice in economic institutions: this withdrawal of worker pay, benefits, and hours is just another form of capital strike.  I previously wrote:

Capital flight, sometimes also called capital strike, is the refusal by a company to productively invest unless its demands for special privileges are met, either by relocating capital or by hoarding it… Capital flight/capital strike is significant because it is a form of extortion: society's capital funds are used against it to the advantage of the investor class. It is the relocation or withholding of society's investment assets, not for rational reasons, but as a threat.

Owners of capital have the power to make society’s decisions about when and where to allocate capital investment, and it is important to understand that this is a great social power; ideally it should be done by trained, responsible, vetted people who are accountable to the workers, consumers, and communities affected by their decisions, and to society at large.  But because we allow private ownership of the means of production and also have set up the system so that the accumulation of private profit is the driving motive behind investment decisions, investment is only done when it promises to make some capitalist a pile of money.  America is particularly dysfunctional in its capital allocation decisions, because its business culture and corporate and legal structures encourage an extremely short-term outlook for business decisions: rather than investing for the years to come, or even for posterity’s sake, businesspeople focus on the latest quarterly profit, or even on wringing as much profit as possible from each nanosecond through automated computer trades.

The psychology of this has been commented on elsewhere — Digby has pointed out repeatedly how these businessmen take their own press seriously, believing themselves to be the “masters of the universe” and the creative force of the economy.  Some of them insisting on having their boots licked or else they won’t cooperate with the rest of society and perform their proper social function, to make capital allocation decisions in a responsible, productive way.  These are the same people who crashed the financial system and brought you the Great Recession.

I’m not so much interested in this as a psychological phenomenon, but as an economic structural matter.  It is of course the case that people in positions of power, who spend their lives as members of our society’s privileged capitalist elite, believe that they are special and whine like children when reality, and their fellow members of society, inevitably demonstrate otherwise.  In the political sphere, it was that psychological tendency towards arrogance and hubris (and other human psychological weaknesses) that led to limitations on political power and authority through democratization and structures of checks and balances.  Governance is better when power is spread and decision-making made accountable.

Now, imagine if we extended that to the economic sphere: imagine if businesses and corporations were run democratically by their workers, so that business leaders were elected to limited terms by their employees and could even be recalled for mismanagement.  There would be no way that a manager or CEO could cut pay or hours, ruining people’s very livelihoods, in protest of a political election.  The workers would fire them.  And even if business costs or other economic contingencies, such as providing for health care or dealing with a recession, actually did put a company in a threatened financial position, under economic democracy cutting jobs would be the last resort that workers would turn to.  Instead, they would find creative, innovative ways to succeed, and/or they would engage in job-sharing, cut profits and CEO pay and bonuses at the top first, etc.

If I had to choose only one politico-economic reform for modern society, I would pick democratizing business enterprise, because nearly all our political, economic, and social ills stem from private control of capital.  That is the most critical reform to make.

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