Government And Markets

But how will we organize to accomplish that Great Work? We presently have no system of governance adequate to the stresses and challenges of the century ahead. This fact has led many to believe that we must put our faith in the corporations as the primary agent of change. Indeed, for the past 30 years we have been exposed to a long and increasingly tedious celebration of markets and an equally vigorous denigration of gov-ernment.26 Much of this was self-serving hype by people with much to gain from less regulation, lower taxes, and little public scrutiny. Much of it, too, was driven by the ideology of market fundamentalism that thrived in some university economic departments "through a remarkable level of conformism" and throughout the extreme right of American politics through the mystical power of true belief (Saul, 2005, p. 33). Some of it emanated from right-wing think tanks created for the purpose of spreading the worldview once held by the robber barons with all of the compassion of the Social Darwinists and Calvin Coolidge's sense of public urgency. The defense of free markets, in particular, was exaggerated and misleading, and some of it destructive and dangerous.27

Abstractions such as the corporations and the market have no interest in the long-term collective future beyond pecuniary gain. Corporations are bundles of capital dedicated to near-term profitability of stockholders, not to the long-term sustainability of the human enterprise.28 Allegedly given the rights of persons in 1886 in an otherwise insignificant case about payment of back taxes, corporations have steadily acquired sufficient political clout to prevent changes in law and regulation that would infringe on profits.29 The power of K Street lobbyists in Washington did not change when Tom Delay departed Congress. Money, access, and power are as seductive to Democrats as to Republicans. The implosion of Enron and more recently the collapse of the housing and financial markets are instructive not as aberrations but as a persistent tendency in a system that has been constructed around rules that protect the rights of capital without the countervailing power of an alert government willing and able to protect the public interest. Jonathon Porritt, the chairman of the U.K. Sustainable Development Commission, puts it this way:

it is clearly politicians who have to make the most decisive interventions . . . it's governments that frame the legal and constitutional boundaries within which individual citizens and corporate entities must operate; it's governments that set the macro-economic framework through the use of fiscal and economic instruments; and it's governments (by and large) that set the tone for public debate and that can take the lead on controversial and potentially divisive issues."30

In other words, "the current approach to corporate responsibility simply isn't up to the task in hand____the primary responsibility for making it all happen still lies with government" (p. 220).

To work effectively, in other words, markets have always required energetic, flexible, and imaginative governments to set the rules, level the playing field, enforce the law, and protect the larger public good over the long term. That is only to say, as Yale political scientist Charles Lindblom argues, that "the market system can be understood only as a great and all-pervasive part of the structure and life of society," not the other way around (Lindblom, 2001, p. 277). Or, as Amory Lovins puts it, "markets are only tools. They make a good servant but a bad master and a worse religion . . . That theology [economic fundamentalism] treats living things as dead, nature as a nuisance, several billion years' design experience as casually discardable, and the future as worthless" (Hawken, Lovins, Lovins, 1999, p. 261).

Corporations can do a great many things better than they have, and markets can be harnessed to better purposes than they have served in the past. Some major corporations such as Wal-Mart are greening their operations and supply chains. Others have joined together in the U.S. Climate Action Partnership to support climate legislation. Some survivors in the financial management community are developing instruments and investment tools to shift assets to long-term value aligned with ecological health. But many, in Peter Senge's words, "fail to summon the imagination and courage to face the fact that they are selling the wrong products . . . to the wrong customers" (Senge, 2008, p. 310). Few will, without strong, imaginative, and farsighted government leadership of the kind we associate with the founding of the United States, Lincoln's response to the secession of the Southern states, and Franklin Roosevelt's leadership in the 1930s and during World War II. Corporations acting in disorganized or unregulated markets will not act consistently for the public good when it no longer serves their short-term shareholder interests. To do otherwise would be fatal to the management of underperforming companies. The cardinal rule of capitalism is to make money, and no amount of greenwashing can hide that fact.

A great deal, accordingly, depends on how and how well we repair and enhance the capacity of government to do what only governments can do. The market is the arena in which we say "I" and "mine" and in which we act mostly for near-term advantage. Government is one in which we come together to say "we" and "ours," in order to protect and enhance our common interests immediately and over the long term. Markets seldom act for the enduring public good; governments can and must. But a great deal of our commonwealth, common property, and capacity to act collectively has been squandered in the past four decades, diminishing our democratic heritage and reducing our capacity to respond collectively to the kinds of emergencies that will become more common in the future. The miserable performance of the Federal Emergency Management Agency in the wake of Katrina and more recently the total failure of regulation that culminated in the bankruptcies of major financial institutions, for example, were the predictable results of decisions by people who wanted to get government off their backs.31 Both cases (as well as others) starkly revealed a void where we need the capacity for foresight, competent actions in emergency situations, transparency, and accountability. Once again, we painfully learn that assigning foxes to guard the henhouse is good neither for the hens nor eventually for starving foxes.

This is neither an argument against markets in their proper place nor one against corporations properly chartered and regulated for the public good. It is decidedly not an argument against private enterprise, although we have every reason to dislike unaccountable corporate power, as well as the power of business to manipulate appearances so as to appear considerably better than they are. My position is not "socialist," whatever that word is presumed to mean, but it is decidedly in favor of placing limits on corporate power and even individualism where its excesses cast long shadows on the prospects of our grandchildren and theirs. It is not a hymn to a mythical American past but a call to draw strength and perspective from our history, which at its best has been always pragmatic and experimental. We must repair and enhance our civic culture and our collective capacity to solve problems associated with climate change in the brief time before they become unmanageable. To that end we will need courageous leadership and a media sufficiently committed to the larger public good to promote a national conversation on the rules and procedures by which we make crucial choices in the long emergency ahead, starting with those set down in our founding as a nation. In this conversation, business and commerce clearly have an important role. But they can no longer be given the power, whether by domination of the media or by backroom lobbying, to conflate corporate profit with the public interest.

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