The California drivers’ handbook states: “At an intersection,
yield to the car which arrives first or to the car on your right if it reaches
the intersection at the same time you do.” (I discovered this when
my teenage son took his driving test.)
Why does the car on the right get priority over the car on the left? It’s
unclear. Quite possibly the rule is entirely arbitrary. But someone has to
have the right of way or cars will collide. The same is true for boats at
sea, and for moving objects in any complex system.
So too in a market economy. When two property rights come to the same intersection,
one has to trump the other. Either capital can fire labor, or labor can fire
capital. Either my right to pollute trumps your right not to be polluted,
or vice versa. As they say in Hollywood, someone must get top billing.
But who? Marjorie Kelly has written a brilliant book called The
Divine Right of Capital. By divine she doesn’t mean God-given. She means that, under
our current operating system, the rights of capital trump everything else.
The rights of workers, communities, nature, and future generations — all
play second fiddle to capital’s prerogative to maximize short-term
gain. This hierarchy isn’t the doing of God or some inexorable law
of nature. Rather, it’s a result of political choice.
The question of who gets the top right in any society is always an interesting
one. Invariably, the top dogs in any era assert that there’s no alternative.
Kings said it three hundred years ago; capital owners say it today. They
hire priests and economists to add moral or pseudoscientific credence to
their claims. The truth, though, is that societies choose their top right
holders, and we can change our minds if we wish.
Kelly locates many places where capital’s supremacy is written into
our codes. Corporate directors, for example, are bound by law to put shareholders’ financial
gain first. If a raider offers a higher price for a publicly traded company
than its current market value, directors have little choice but to sell,
regardless of the consequences for workers, communities, or nature. Similarly,
it’s the fiduciary duty of mutual funds, pension funds, and other institutional
investors to seek the highest returns for their shareholders or beneficiaries.
This duty is embodied, among other places, in the Employee Retirement Income
Security Act of 1974. Although the language of the act sounds innocent enough — a
pension fund manager, like any trustee, “shall discharge his duties
. . . solely in the interest of the participants and beneficiaries” — it
results, ironically, in the financing of many workers’ retirements
by investing in companies that shift other workers’ jobs overseas.
Throw in the WTO and NAFTA, and the rights of capital stand comfortably astride
everyone else’s.
What’s wrong here? It’s not that businesses pursue profit; that’s
what they’re designed to do and what we want them to do. The problem
is that private capital rides in the front of the bus while everyone else
rides in the back.
At the moment, there’s one law that does give preference to creation’s
gifts: the Endangered Species Act, which says a species’ right to survive
trumps capital’s right to short-term gain. The trouble is, the law
comes into play only when a species has been so devastated it’s on
the brink of extinction. Even then, the courts don’t always enforce
it. Recently, in a very dry year, the government reduced its delivery of
subsidized water to California farmers because endangered fish needed it
to survive. Some farmers sued, arguing that the government had unconstitutionally “taken” their
property. A federal court agreed, the Bush administration refused to appeal,
and the farmers collected $13 million in damages.
It seems to me that, if anything is divine, it should be gifts of
creation. Morally, they’re gifts we inherit together and
must pass on, undiminished, to future generations. Economically,
they’re irreplaceable
and invaluable capital. Protection of these shared assets
should trump transient
private
gain. Broad benefit should trump narrow benefit. The commons
should trump capital. This should be written into our economic
operating
system and
enforced by the courts. ... read
the whole chapter