(or the Right to a Return on one's Labor)
This week Senator Sanders crossed examined Norfolk R.R. CEO, Alan Shaw about future company policies in the wake of the East Palestine disaster. Sanders asked: (1) if the company would commit to ending so-called "precision scheduling" which involved laying off 40,000 railroad workers as a result of which safety standards had plumetted; (2) if the company would commit to giving all of its workers paid sick leave in line with the rest of the country; and (3) if the company would commit to paying "all" of East Palestine's health care needs resulting from the accident.
To each of the questions, Shaw begged off with some evasive burble which, said Sanders, made him "sound like a politician."
"With all due respect" Bernie sounded like a dog barking up the wrong tree.
This issue was settled a century ago, when Henry Ford wanted to "plow back" company profits into building more factories and employing more people instead of paying dividends to shareholders. The shareholders filed suit, demanding their dividends. In Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668 (Mich. 1919), the Michigan Supreme Court ruled that Ford's desire to use profits for some social and economic benefit took a back seat to the stockholders' right to those profits. In other words; the business of America is profit. No Shakespeare here.
The court's ruling became America's law which is founded on the principle that officers of a corporation owes a "fiduciary duty" to the stockholders. After all when someone lends you something you have a duty to do your best to return it in as good or better condition than when you got it. Company officers have a duty to use the money with which they have been entrusted wisely and for the benefit of the investors. As a result the profit that money generates also belongs to the investors.
Bernie certainly knew or should have known, that the Prime Directive binding Shaw was his fiduciary duty to the company's shareholders. As such he could not possibly commit to doing anything that would prima facie detract from this shareholders' profits.
It may be that in the course of business a CEO or manager must, as a result of some necessity, undertake measures which diminish profits; but that does not equate to making a commitment to do so out of the blue and in the abstract. If Shaw had answered "yes" to any of Bernie's question he would be committing himself to malfeasance of office. Surely Bernie understood this.
It almost made one feel sorry for Shaw. It certainly made me feel sympathy towards Lenin.
This issue was settled a century ago, when Henry Ford wanted to "plow back" company profits into building more factories and employing more people instead of paying dividends to shareholders. The shareholders filed suit, demanding their dividends. In Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668 (Mich. 1919), the Michigan Supreme Court ruled that Ford's desire to use profits for some social and economic benefit took a back seat to the stockholders' right to those profits. In other words; the business of America is profit. No Shakespeare here.
The court's ruling became America's law which is founded on the principle that officers of a corporation owes a "fiduciary duty" to the stockholders. After all when someone lends you something you have a duty to do your best to return it in as good or better condition than when you got it. Company officers have a duty to use the money with which they have been entrusted wisely and for the benefit of the investors. As a result the profit that money generates also belongs to the investors.
Bernie certainly knew or should have known, that the Prime Directive binding Shaw was his fiduciary duty to the company's shareholders. As such he could not possibly commit to doing anything that would prima facie detract from this shareholders' profits.
It may be that in the course of business a CEO or manager must, as a result of some necessity, undertake measures which diminish profits; but that does not equate to making a commitment to do so out of the blue and in the abstract. If Shaw had answered "yes" to any of Bernie's question he would be committing himself to malfeasance of office. Surely Bernie understood this.
It almost made one feel sorry for Shaw. It certainly made me feel sympathy towards Lenin.
Lenin hated social democrats. Why? Because underlying social democracy is a Fatal Compromise -- one which accepts the capitalist engine while hoping to make it run, not just more efficiently, but more fairly. However, the business of America is not "fairness" but business. We don't ask tigers to become vegetarians. Why should we expect a thing (in this case "capitalism") to be other than what it is. Bernie's questions to Shaw were like God asking the Devil if he promises to be good.
When Social Democrats promised to be good Germans, Lenin was furious. In a curiously prophetic phrase, he denounced them as "social chauvinists" who -- he said -- would in the end march off gloriously to war for the sake of German Big Business. In Lenin's view, there could be no compromises. Either one supported the system economically, poltically and geo-politically or one did not.
To be fair, intellectual purity is the enemy of practical good. Even Marx understood that it was hard and sort of unfeeling to chastise social democrats for negotiating an eight hour day, safer working conditions, sick leave and pensions -- in short for negotiating for capitalist-conferred benefits. These do help people and that is nothing trivial, especially if you are one of the people needing help.
But one should not forget that they are capitalist conferred. They are not just "benefits" but benefits provided by a system in antagonism with itself.
This was the meaning of Reagan's joke about "Hello, I'm from the Government, and I'm here to help." Reagan and Thatcher were keenly aware of the inherent antagonism. They promised to do away with it. They did do away with 90% of it and le voila. Half the country lives in working poverty, without "benefits," owning 3% of the total wealth, while the upper ten percent own 70% of all wealth.
When Social Democrats promised to be good Germans, Lenin was furious. In a curiously prophetic phrase, he denounced them as "social chauvinists" who -- he said -- would in the end march off gloriously to war for the sake of German Big Business. In Lenin's view, there could be no compromises. Either one supported the system economically, poltically and geo-politically or one did not.
To be fair, intellectual purity is the enemy of practical good. Even Marx understood that it was hard and sort of unfeeling to chastise social democrats for negotiating an eight hour day, safer working conditions, sick leave and pensions -- in short for negotiating for capitalist-conferred benefits. These do help people and that is nothing trivial, especially if you are one of the people needing help.
But one should not forget that they are capitalist conferred. They are not just "benefits" but benefits provided by a system in antagonism with itself.
This was the meaning of Reagan's joke about "Hello, I'm from the Government, and I'm here to help." Reagan and Thatcher were keenly aware of the inherent antagonism. They promised to do away with it. They did do away with 90% of it and le voila. Half the country lives in working poverty, without "benefits," owning 3% of the total wealth, while the upper ten percent own 70% of all wealth.
Yes for a while the tiger will behave, but he never ceases to be a wild animal and at any point the wildness can erupt, as it did in Norfolk's "precision scheduling" program and as it did, just the other day, in a Republocum's proposal to do away with laws against child labor.
Personally, I do not trust in absolutist solutions. Things always work better when they are a little bit fudged... like the "well tempered" musical scale. Perfection is grating on all things natural.
But one cannot walk down the road obliviously, the way liberals do, expecting tulips to fall from the sky, which is precisely the performance Bernie put on at the hearing.
What was needed was not a "commitment" from the tiger to do other than what tigers do. What was and is needed are binding laws that will force the tiger to behave with restraint. In theory, fascists actually understood this.
The principle of Dodge v. Ford Motor Company, needs to be uprooted and repudiated. For good measure, the opinion should be burned in public squares around the nation.
The Book of Genesis makes no mention of corporations. Corporations are not individuals with god-given rights to property. They are creatures of the State and it is the state which can create them to work as the State wants them to work with such immunities, rights and duties as the state shall grant and impose. This has apparently been forgotten in the United States and certainly in the murky well of the Senate
It is simply a no brainer, that if the State wants to it can impose limits on returns and dividends. It can require corporations to limit their financial growth in order to promote the public good. It can restrict what they do and how they do it. It can require them, for the sake of the workers and, by extension, for the sake of a happy society in which all have a purpose and place, to fork over money for safe working conditions, health care, pensions and so on. It is this principle that made France, Germany and the Nordic countries so successful both as societies and as "economic engines."
The United States also understood this from about 1945 to 1970, at which point capitalism's savage wildness began to reassert itself.
The principle of "imposing" socio-economic duties on corporations is hardly untoward or unnatural. The canard underlying so-called "fiduciary" duty is a dodge that assumes, without questioning, that the profits a corporation earns is "its" own money.
Say an investor invests $10.00 in a company, as a result of which he owns 10 shares at a dollar a share. Let us suppose that all of that money is used to produce better mousetraps as a result of which, all costs deducted, the company earns takes in $100.00. Suppose that the company has a total of five investors and (to make it simple) each of whom bought 10 shares. A total of $50.00 went in and a total of $100.00 returned. Each investor as doubled his investment.
But by what slight of hand is it said that the $50.00 in extra inflows "is" the investor's money? If we were to mark the bills with initials, $50.00 of the $100.00 woulds be initialed "A," "B," "C," "D," and "E". THAT money which was invested, which went out in costs, and which came back as a part of returns, could properly and rightly be called "the investor's money."
But the other $50.00 was not the "investor's" money. That's the whole point. If it were the investor's money then the investor would have gained nothing. He would simply have gotten back all that he put in. But the whole point of the exercise is to get back more than you put it.
So whose money is the additional $50.00. The Capitalist says: "It is obviously mine." Why? Because without the "trigger" of $50.00 invested there would no "return" at all. This is absolutely true. There is no pregnancy without an egg.
But the worker says: The additional $50.00 is obviously mine because without my work there would also be no "return." If the reader has jumped ahead; yes, there is also no pregnancy without a fuck.
Operating within the capitalist system both are right. But since both are right, both have a just claim to the company's profits. Our law, disgracefully only recognizes one party's rights. This is a grotesque violation of Equality Under Law.
Instead begging for commitments, Sanders should introduce and Congress should pass, legislation which recognizes the workers right to a "return on his labour" and the company's fiduciary duty to its workers as well as its stockholders. Anything less is throwing tulips at tigers.
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