Yet, as professor of political economics Gar Alperovitz points out, “In the Eisenhower era, corporations paid an average 25 percent of the federal tax bill; they paid only 10 percent in 2000 and [following the first Bush tax cuts only] 7 percent in 2001.”15
One of the foundational principles of democracy is that all people are treated equally in regard to issues of the law, citizenship, and their access to the commons. As Lawrence E. Mitchell, a John Theodore Fey research professor of law at the George Washington Law School and author of Corporate Irresponsibility: America’s Newest Export, said, “The function of corporations in light of their constitutional person-hood is effectively to foreclose access to the commons for most citizens. The entire proposition that a corporation is a person is ridiculous.”16
From Unequal Protection: How Corporations Became “People”—and How You Can Fight Back by Thom Hartmann, © 2010, published by Berrett-Koehler.
Sociopathic Paychecks
From Threshold: The Crisis of Western Culture
I know a planet where there is a certain red-faced gentleman. He has never smelled a flower. He has never looked at a star…. And all day he says over and over, just like you: “I am busy with matters of consequence!” And that makes him swell up with pride. But he is not a man—he is a mushroom.
—ANTOINE DE SAINT-EXUPÉRY,
THE LITTLE PRINCE (1943)
AMERICANS HAVE LONG UNDERSTOOD HOW SOCIALLY, POLITIcally, and economically destabilizing are huge disparities in wealth. For this reason, the US military and the US civil service have built into them systems that ensure that the highest-paid federal official (including the president) will never earn more than 20 times the salary of the lowest-paid janitor or army private. Most colleges have similar programs in place, with ratios ranging from 10-to-1 to 20-to-1 between the president of the university and the guy who mows the grass. From the 1940s through the 1980s, this was also a general rule of thumb in most of corporate America; when CEOs took more than their “fair share,” they were restrained by their boards so that the money could instead be used by the company for growth and to open new areas of opportunity. The robber baron J. P. Morgan himself suggested that nobody in a company should earn more than 20 times the lowest-paid employee (although he exempted stock ownership from that equation).
But during the “greed is good” era of the 1980s, something changed. CEO salaries began to explode at the same time that the behavior of multinational corporations began to change. When Reagan stopped enforcing the Sherman Antitrust Act of 1890, a mergers-and-acquisitions mania filled the air, and as big companies merged to become bigger, they shed off “redundant” parts. The result was a series of waves of layoffs, as entire communities were decimated, divorce and suicide rates exploded, and America was introduced to the specter of the armed “disgruntled employee.”
Accompanying the consolidation of wealth and power of these corporations was the very clear redefinition of employment from “providing a living wage to people in the community” to “a variable expense on the profit and loss sheet.” Companies that manufactured everything from clothing to television sets discovered that there was a world full of people willing to work for 50 cents an hour or less: throughout America factories closed and a building boom commenced among the “Asian Tigers” of Taiwan, South Korea, and Thailand. The process has become so complete that of the millions of American flags bought and waved after the World Trade Center disaster, most were manufactured in China. Very, very, very few things are still manufactured in America.
And it wasn’t unthinking, unfeeling “corporations” that took advantage of the changes in the ways the Sherman Antitrust Act and other laws were enforced by the Reagan, Bush Sr., Clinton, and Bush Jr. administrations. It took a special type of human person.
In his manuscript “Toys, War, and Faith: Democracy in Jeopardy,” Maj. William C. Gladish suggests that this special breed of person is actually a rare commodity and thus highly valued. He notes that corporate executives make so much money because of simple supply and demand. There are, of course, many people out there with the best education from the best schools, raised in upper-class families, who know how to play the games of status, corporate intrigue, and power. The labor pool would seem to be quite large. But, Gladish points out, “There’s another and more demanding requirement to meet. They must be willing to operate in a runaway economic and financial system that demands the exploitation of humanity and the environment for short-term gain. This is a disturbing contradiction to their children’s interests and their own intelligence, education, cultural appreciation, and religious beliefs.
“It’s this second requirement,” Gladish notes, “that drastically reduces the number of quality candidates [for corporations] to pick from. Most people in this group are not willing to forsake God, family, and humanity to further corporate interest in a predatory financial system. For the small percentage of people left, the system continues to increase salaries and benefit packages to entice the most qualified and ruthless to detach themselves from humanity and become corporate executives and their hired guns.”
One of the questions often asked when the subject of CEO pay comes up is, “What could a person like William W. McGuire or Rex W. Tillerson [the CEOs of UnitedHealth and Exxon Mobil, respectively] possibly do to justify a $1.7 billion paycheck or a $400 million retirement bonus?”
It’s an interesting question. If there is a “free market” of labor for CEOs, you’d think there would be a lot of competition for the jobs. And a lot of people competing for the positions would drive down the pay. All that UnitedHealth’s stockholders would have to do to avoid paying more than $1 billion to McGuire is find somebody to do the same CEO job for $0.5 billion. And all they’d have to do to save even more is find somebody to do the job for a mere $100 million. Or maybe even somebody who’d work the necessary 60-hour weeks for only $1 million.
So why is executive pay so high?
I’ve examined this question with both my psychotherapist hat on and my amateur economist hat on, and only one rational answer presents itself: CEOs in America make as much money as they do because there really is a shortage of people with their skill set—such a serious shortage that some companies have to pay as much as $1 million per week or per day to have somebody successfully do the job.
But what part of being a CEO could be so difficult—so impossible for mere mortals—that it would mean that there are only a few hundred individuals in the United States capable of performing it?
In my humble opinion, it’s the sociopath part.
CEOs of community-based businesses are typically responsive to their communities and are decent people. But the CEOs of the world’s largest corporations daily make decisions that destroy the lives of many other human beings. Only about 1 to 3 percent of us are sociopaths—people who don’t have normal human feelings and can easily go to sleep at night after having done horrific things. And of that 1 to 3 percent of sociopaths, there’s probably only a fraction of a percent with a college education. And of that tiny fraction, there’s an even tinier fraction that understands how business works, particularly within any specific industry.
Thus there is such a shortage of people who can run modern monopolistic, destructive corporations that stockholders have to pay millions to get them to work. And, being sociopaths, they gladly take the money without any thought to its social consequences.
Today’s modern transnational corporate CEOs—who live in a private-jet-and-limousine world entirely apart from the rest of us—are remnants from the times of kings, queens, and lords. They reflect the dysfunctional cultural (and Calvinist/Darwinian) belief that wealth is proof of goodness and that goodness then justifies taking more of the wealth.
In the nineteenth century in the United States, entire books were written speculating about the “crime gene” associated with Irish, and later Italian, immigrants because they lived in such poor slums in the East Coast’s biggest cities. It had to be something in their ge
nes, right? It couldn’t be just a matter of simple segregation and discrimination!
The obverse of this is the CEO culture and, in the larger world, the idea that the ultimate CEO—the president of the world’s superpower—should shove democracy or anything else down the throats of people around the world at the barrel of a gun.
Democracy in the workplace is known as a union. The most democratic (i.e., “unionized”) workplaces are the least exploitative because labor has a power to balance capital and management. And looking around the world, we can clearly see that those cultures that most embrace the largest number of their people in an egalitarian and democratic way (in and out of the workplace) are the ones that have the highest quality of life. Those that are the most despotic, from the workplace to the government, are those with the poorest quality of life.
Thus a repudiation of the sociopathic corporate norms that led to a business culture that is cancerous to our planet is a vital first step toward reinventing our culture in a way that is healthy and sustainable.
From Threshold: The Crisis of Western Culture by Thom Hartmann, © 2009,
published by Viking Penguin, a division of Penguin Group (USA) Inc.
Acknowledgments
TAI MOSES IS ONE OF THE MOST BRILLIANT, INSIGHTFUL, THOUGHTful, and talented writers and editors I’ve ever had the pleasure to work with. Thank you, Tai, for turning about a million words of my jumble into a coherent and readable whole!
Johanna Vondeling, who had the idea for this book, is equally incredible—I’ve never before so mourned the loss of an editor/publisher as when she moved to Australia.
And Neal Maillet of Berrett-Koehler has done an absolutely wonderful job of shepherding this book along from concept to completion. It’s been our first time working together, and I’m so impressed by his ability to “get things done,” as they say in the Dale Carnegie course.
Many thanks and much gratitude to a couple of real pros—Gary Palmatier and Elizabeth von Radics of Ideas to Images—for the book’s design and copyediting.
And thanks so much to Louise Hartmann, who has been first-draft editor, idea-bouncer, inspiration, and nudge for all of these books and who has been my best friend, wisest adviser, and beloved wife for well over three decades.
Notes
PART I: WE THE PEOPLE
The Story of Carl
1. Business Week, April 21, 2003. Business Week, April 18, 2005. US Bureau of the Census, H-6 Table, 2004.
2. “Controversy Continues over Outsourcing Report: Commerce Department ‘Disses’ Congressional Democrats,” Manufacturing and Technology News, January 19, 2006; and “Jobs Picture: Payrolls Up Moderately, but Slack Persists Despite Low Unemployment,” Economic Policy Institute, September 2, 2005, http://www.epi.org/publications/entry/webfeatures_econindicators_jobspict_20050902/.
3. Kathy Chu, “For More Companies, 401(k) Becomes Automatic: Employers Freeze Pensions, Push Saving onto Workers,” USA Today, January 10, 2006.
4. Editorial, “The Pension Deep Freeze,” New York Times, January 14, 2006.
5. Allstate, October 4, 2005.
6. L. Conradt and T. J. Roper, “Group Decision-Making in Animals,” Nature 421 (January 9, 2003): 155–58.
7. James Randerson, “Democracy Beats Despotism in the Animal World,” New Scientist, January 8, 2003.
8. Paul Craig Roberts, “The True State of the Union: More Deception from the Bush White House,” Counterpunch, February 1, 2006, http://lists.fahamu.org/pipermail/debate-list/2006-February/000048.html.
9. Gary Wolfram, “Econ 101: How Do Tax Cuts Work?” January 11, 2006, http://www.mrc.org/bmi/commentary/2006/Econ__How_do_Tax_Cuts_Work_.html.
10. Ravi Batra lays this out brilliantly in his book The Greenspan Fraud (New York: Palgrave Macmillan, 2005).
11. US Census as reported in The Century Foundation report, “New American Economy: A Rising Tide That Lifts Only Yachts,” http://tcf.org/publications/2008/7/pb467.
Democracy Is Inevitable
1. Per Ahlmark, “How Democracy Prevents Civic Catastrophes,” address to European Parliament, April 8, 1999.
2. http://www.hawaii.edu/powerkills/DP.CLOCK.HTM.
3. R. J. Rummel, Death by Government (Somerset, NJ: Transaction, 1997).
4. Mark Palmer, Breaking the Real Axis of Evil: How to Oust the World’s Last Dictators by 2025 (New York: Rowman & Littlefield, 2005).
5. http://www.freedomhouse.org.
An Informed and Educated Electorate
1. “Ted Koppel Assesses the Media Landscape,” BBC World News, April 12, 2010, http://news.bbc.co.uk/2/hi/programmes/world_news_america/8616838.stm.
2. “Studio,” Museum of Broadcast Communications, http://www.museum.tv/eotvsection.php?entrycode=studio.
3. Yochai Benkler, “Ending the Internet’s Trench Warfare,” New York Times, March 20, 2010, http://www.nytimes.com/2010/03/21/opinion/21Benkler.html.
4. Wallace Turner, “Gov. Reagan Proposes Cutback in U. of California Appropriation; Would Impose Tuition Charge on Students from State; Kerr Weighs New Post,” New York Times, January 7, 1967, cited in Gary K. Clabaugh, “The Educational Legacy of Ronald Reagan,” NewFoundations.com, January 24, 2009, http://www.newfoundations.com/Clabaugh/CuttingEdge/Reagan.html.
5. Steven V. Roberts, “Ronald Reagan Is Giving ’Em Heck, New York Times, October 25, 1970, cited in Clabaugh, “Educational Legacy” (see note 4).
6. Richard C. Paddock, “Less to Bank On at State Universities,” Los Angeles Times, October 7, 2007, http://articles.latimes.com/2007/oct/07/local/me-newcompact7.
7. Gary K. Clabaugh, “The Educational Legacy of Ronald Reagan,” NewFoun dations.com, January 24, 2009, http://www.newfoundations.com/Clabaugh/CuttingEdge/Reagan.html.
8. James C. Carter, The University of Virginia: Jefferson Its Father, and His Political Philosophy: An Address Delivered upon the Occasion of the Dedication of the New Buildings of the University, June 14, 1898 (Ann Arbor: University of Michigan Library, 1898).
9. Thomas Jefferson, The Writings of Thomas Jefferson: Containing His Autobiography, Notes on Virginia, Parliamentary Manual, Official Papers, Messages and Addresses, and Other Writings, Official and Private, eds. Andrew A. Lipscomb and Albert Ellery Bergh (Washington, DC: Thomas Jefferson Memorial Association, 1905), http://www.constitution.org/tj/jeff 02.txt.
PART II: BRAINSTORMS
The Edison Gene
1. “Hail to the Hyperactive Hunter,” Time, July 18, 1994, http://www.time.com/time/magazine/article/0,9171,981099,00.html.
2. Razib Khan, “People, Not Pots, in Africa,” Discover, August 29, 2010, http://blogs.discovermagazine.com/gnxp/2010/08/people-not-pots-in-africa.
3. John F. Shelley-Tremblay and Lee A. Rosen, “Attention Deficit Disorder: An Evolutionary Perspective,” Journal of Genetic Psychology 157, no. 4 (1996): 443–53.
4. Peter S. Jensen, David Mrazek, Penelope K. Knapp, et al., “Evolution and Revolution in Child Psychiatry: ADHD as a Disorder of Adaptation,” Journal of the American Academy of Child and Adolescent Psychiatry 36, no. 12 (1997): 1672–81.
5. Ibid.
6. J. M. Swanson, P. Flodman, J. Kennedy, et al., “Dopamine Genes and ADHD,” Neuroscience and Biobehavioral Reviews 24, no. 1 (2000): 21–25.
7. Yuan-Chun Ding, Han-Chang Chi, Deborah L. Grady, et al., “Evidence of Positive Selection Acting at the Human Dopamine Receptor D4 Gene Locus,” Proceedings of the National Academy of Science 99, no. 1 (2002): 309–14.
Framing
1. To give conservatives their due, they try to make a case that gun ownership lowers crime. Yet all the statistics they can marshal are indirect and may have other causes. For a good example, see this paper defending gun ownership by the very highly regarded conservative think tank the Cato Institute: David Kopel, “Trust the People: The Case Against Gun Control,” July 11, 1988, http://www.cato.org/pubs/pas/pa109.html.
2. “Youth Violence and Firearm Statistics,” http://www.athealth.com/Consumer/issues/gunviolencestats.ht
ml.
3. Coalition for Gun Control, “More Guns = More Death,” http://www.guncontrol.ca/English/Home/Facts/moregunsmoredeathsJan2011.pdf.
4. United for a Fair Economy, “New Poll Finds Americans Support Estate Tax 2 to 1: National Petition Shows Growing Support for Tax among Farmers, Businesspeople,” August 31, 2005, http://faireconomy.org/press_room/2005/new_poll_finds_americans_support_estate_tax_2_to_1.
5. United for a Fair Economy, Estate Tax Campaign, http://faireconomy.org/news/estate_tax_campaign.
6. “Most Americans Support Some Form of an Estate Tax, Poll Finds,” April 18, 2006; http://foundationcenter.org/pnd/news/story_print.jhtml;jsessionid=MHSCTVOIMV0AHLAQBQ4CGXD5AAAACI2F?id=140100009.
7. Luntz, Maslansky Strategic Research, “Iowa/New Hampshire Democrats Talk Inheritance Taxes,” February 16, 2006, http://www.policyandtaxationgroup.com/pdf/LuntzSchoenNH-IAFeb06%20.pdf.
The Thom Hartmann Reader Page 33