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Davidson Loehr
October 8, 2000
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I want to talk with you about capitalism and economics – not as an economist, but as a theologian.
I know very little about economics. I’m not a CPA either, and couldn’t begin to analyze complicated financial pictures. But I am a theologian, and I do know about gods. I know how they work, how powerful they are, how invisible they usually are, and know that beneath nearly every human endeavor with any passion or commitment about it, there will be a god operating, doing the things gods do.
Gods aren’t “Critters in the sky,” like big cartoon characters, even though it’s common to speak of them that way. Gods are those central concerns that our behaviors show we take very seriously. We commit our lives to them, we are driven by them, and in return they promise us something we want, or think we want. Whether what they promise us is good or bad is a measure of whether the god involved is an adequate or an inadequate one. Good gods really have the power to bestow a greater and nobler quality of life. Bad gods pretend to, but in the end it turns out that we serve them. They get their power, we learn too late, by sucking the life out of us. In return, we get very little that was worth the sacrifice of our lives. The Greeks have a wonderful picture of the seduction, and the consequence of following, idols. It’s in Homer’s Odyssey, on Odysseus’s return home. Just before he comes to the Straits of Messina (where he is given another choice with profound psychological and existential echoes today), he has his famous encounter with the Sirens. Sirens were powerfully seductive goddesses whose sweet talk lured any sailors who heard them to their deaths. The sweet voices promised a life of love, ecstasy, ease, and all-round wonderfulness that was just too good to be true. When you looked on the beaches of their island, you saw nothing but the bleached bones of the fools who had followed them: they were too good to be true. Odysseus, you may remember, wanted to have the experience and feel the temptation, but was wise enough to know that no mortal can long resist the sweet voices of Sirens. So he had his men tie him to the mast, making them swear they would not untie him no matter what he may say. Then they put beeswax in their own ears, and sailed past the Sirens. The Sirens were so persuasive that Odysseus screamed at his men to untie him, that he might sail toward them. But they couldn’t hear him. So-in spite of his momentary wishes, you might say-Odysseus lived to serve nobler causes.
As a theologian, I’d say that the most important fact we can know about ourselves is to know the gods we’re serving in our lives and in our societies, and whether they are really worth our lives.
And in this age of skepticism and disbelief, one of the biggest misunderstandings about us is the thought that we have no gods, that we’re not a religious people. In general, we serve our gods well, even when they’re not worth serving at all.
Gods and Idols: Serving People or Profits
I’m interested in this battle between gods and idols, and how that is being played out in our economy today. It isn’t a simple thing, the contrast between people and profits. Its roots go all the way back to comments made by the Founding Fathers, over 200 years ago. Our founding fathers had very mixed opinions of “we the people”–many of them pretty insulting.
Alexander Hamilton declared that the people are “a great beast” that must be tamed. Rebellious and independent farmers had to be taught, sometimes by force, that the ideals of the revolutionary pamphlets were not to be taken too seriously. (Noam Chomsky, Profits Over People, p. 46).
Or as John Jay, the first Chief Justice of the Supreme court, put it, “The people who own the country ought to govern it.” (Chomsky, 46) Others among the founding fathers agreed wholeheartedly. The primary responsibility of government is “to protect the minority of the opulent against the majority,” said James Madison. (Chomsky, 47) Those “without property, or the hope of acquiring it, cannot be expected to sympathize sufficiently with its rights,” Madison explained. His solution was to keep political power in the hands of those who “come from and represent the wealth of the nation,” the “more capable set of men.” (Chomsky, 48)
This sounds like today’s cynical capitalism, but it was not. Like Adam Smith and the other founders of classical liberalism, Madison was precapitalist, and anticapitalist in spirit. But education, philosophical understanding and gentility were associated with money (I don’t think they would see that connection between money and character to be as strong today).
Still, Madison hoped that the rulers in this “opulent minority” would be “enlightened Statesmen” and “benevolent philosophers,” “whose wisdom may best discern the true interests of their country.” Such men would, he believed, “refine” and “enlarge” the “public views,” guarding the true interests of the country against the “mischiefs” of democratic majorities, but with enlightenment and benevolence. (Chomsky, 51-52).
For a man of James Madison’s depth and brilliance, that’s quite a naive hope!
He soon learned differently, as the “opulent minority” proceeded to use their power much as Adam Smith had predicted they would a few years earlier. They were living by the motto “All for ourselves, and nothing for other people.” By 1792, Madison warned that the rising developing capitalist state was “substituting the motive of private interest in place of public duty,” leading to “a real domination by the few under [a merely] apparent liberty of the many.” (Chomsky, 52)
Thomas Jefferson also distrusted the emerging class of capitalists: “The selfish spirit of commerce knows no country, and feels no passion or principle but that of gain.” (Jim Hightower, If the Gods Had Meant for Us To Vote, They Would Have Given Us Candidates, p. 283). Sounds surprisingly modern.
The battle between democracy and private profit-making has been a continuous thread in our history since the country began. A century ago, the American philosopher John Dewey was still writing, in the same key as Jefferson and Madison had, that democracy has little content when big business rules the life of the country through its control of “the means of production, exchange, publicity, transportation and communication, reinforced by command of the press, press agents and other means of publicity and propaganda.” John Dewey wrote this in the days before radio, television, or mass media. He also wrote that in a free and democratic society, workers must be “the masters of their own industrial fate,” not tools rented by employers. (Chomsky, 52)
It is a little eerie how much John Dewey sounds like James Madison, when Madison wrote more than 200 years ago that “a popular Government, without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy; or perhaps both.” (Chomsky, 53)
So there are these two powerful and opposite ideas in our society, both with roots going all the way back to our founding. Both centers of thinking are still battling to be the gods (or idols) that define us, our hopes and possibilities, our society. Will the people rule the country, or will big businesses rule the country and the people, while bamboozling the masses to keep them from understanding how badly they are being manipulated?
We live in the time when the scales have tipped heavily toward capitalism and away from democracy.
How did they get tipped so badly this time? One obvious culprit–or hero, depending on your perspective here–is the great economist Milton Friedman, who said, in his influential book Capitalism and Freedom, that profit-making is the essence of democracy, so any government that pursues antimarket policies is being antidemocratic, no matter how much informed popular support they might enjoy. (Chomsky, 9) That’s a powerful, terrifying, revolutionary redefinition of democracy. It’s amazing to me any anyone would ever have let it pass, let alone enshrined it.
But once you decide that the goal is profits over the wishes of people (“no matter how much informed popular support they might enjoy”), the manipulation of us masses is a constant part of the scheme. Because of course people don’t want to do more work for less money, to lose their power, their possibilities, even their chance of realistic hope. So the art of deceiving us has been with us a long time, too.
The art of bamboozling us is not a secret art. Until recently, it was talked about quite openly, going all the way back to at least the 1920s. The name from that time, one of the most important names in the art of bamboozling the masses, was Edward Bernays. Bernays had worked in Woodrow Wilson’s Committee on Public Information, the first U.S. state propaganda agency. Bernays wrote that “It was the astounding success of propaganda during the [First World] war that opened the eyes of the intelligent few in all departments of life to the possibilities of regimenting the public mind.” (Chomsky, 54)
Here are more words from this most influential American: “The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society.” To carry out this essential task, “the intelligent minorities must make use of propaganda continuously and systematically,” because of course they alone “understand the mental processes and social patterns of the masses” and can “pull the wires which control the public mind.” This process of “engineering consent”–a phrase Bernays coined–is the very “essence of the democratic process,” he wrote shortly before he was honored for his contributions by the American Psychological Association in 1949. (Chomsky, 53)
Another member of Woodrow Wilson’s propaganda committee was Walter Lippman, one of the most influential and respected journalists in America for about fifty years, and a brilliant, articulate, man. The intelligent minority, Lippman explained in essays on democracy, are a “specialized class” who are responsible for setting policy and for “the formation of a sound public opinion.” They must be free from interference by the general public, who are “ignorant and meddlesome outsiders.” The public must “be put in its place”; their function is to be “spectators of action,” not participants–apart from periodic electoral exercises when they choose among the specialized class. (Chomsky, 54)
About a trillion dollars a year are now spent on marketing. Much of that money is tax-deductible, producing the irony that we are paying many of the costs of the manipulation of our attitudes and behavior. (Chomsky, 58)
But that’s just local news. And capitalism, like all gods, is a jealous god, and knows no boundaries. Eventually, most gods and idols seem to want to rule the world.
Enter NAFTA
When the North Atlantic Free Trade Agreement (NAFTA) legislation for Canada, The United States and Mexico was rushed through–over about a 60% public opinion against it–contradictory studies were suppressed or ignored. The Office of Technology Assessment, for instance, which is the research bureau of our Congress, published a report saying that NAFTA would harm most of the population of North America. That report was suppressed. (Chomsky, 102)
The defenders of NAFTA sometimes slip up in their public acknowledgements of how it is producing such record profits for corporations at the expense of workers. Testifying before the Senate Banking Committee in February 1997, for example, Federal Reserve Board Chair Alan Greenspan saw “sustainable economic expansion” thanks to “atypical restraint on compensation increases [which] appears to be mainly the consequence of greater worker insecurity.”
What NAFTA made possible on an international scale was the ability of corporations to serve profit for the owners and shareholders by disempowering and dismissing the masses who worked for them. Workers were and are terrified that the owners will take the business to Mexico, Saipan, Burma, Vietnam and other cheap labor and forced-labor markets, which is what they are doing. We have become a little numb to the fact that whenever the stock market rises it almost always means that tens of thousands of our neighbors have been fired, their benefits or insurance cut or eliminated, and work is being done by dollar-a-day workers in other countries, often in conditions of inhumane forced labor. This is capitalism working perfectly, and it is an unmitigated disaster for almost every economy it touches.
After all the hype to push the passage of NAFTA through in spite of public objection, we don’t hear much about the post-NAFTA collapse of the Mexican economy, exempting only the very rich and US investors (protected by US government bailouts). Mexico was successfully transformed into a cheap labor market with wages only 1/10th of US wages, as the people, the masses, have been driven down farther into poverty, and their American counterparts lost their jobs. In the past decade, the number of Mexicans living in extreme pov-erty in rural areas increased by almost a third. Half the total population lacks resources to meet basic needs, a dramatic increase since 1980. The list goes on, it is quite a long and sad one. You don’t have to ask who won. This is capitalism. The people who control the capital won. Nobody else.
We seldom read about many of the effects of NAFTA in this country, either. Shortly after the NAFTA vote in Congress, workers were fired from Honeywell and GE plants for attempting to organize independent unions. The Ford Motor Company had fired its entire work force, eliminating the union contract and rehiring workers at far lower salaries. (Chomsky, 125)
Wages here have fallen to the level of the 1960s for production and non-supervisory workers. The Congressional Office of Technology Assessment predicted that NAFTA “could further lock the United States into a low-wage, low-productivity future.” (Chomsky, 126-127) But that report, like the others, was suppressed.
The Almighty Stock Market?
The quality of our economy, according to the pundits on television, is determined by the stock market. Yet again, we must ask what small part of the economy we’re talking about. Half the stocks in 1997 were owned by the wealthiest one percent of households, and almost ninety percent were owned by the wealthiest ten percent. Concentration is still higher for bonds and trusts. (Chomsky, 147) Today’s upper-class prosperity is built almost entirely on the bloated prices of corporate stocks. (Hightower, 149)
While the number of Americans getting college degrees is increasing, there are some who feel that this is a cynical ploy to make the degrees more worthless, because the real growing job market looks to be low-tech and low-paid. Between now and 2006, according to the Bureau of Labor Statistics, the thirty fastest-growing job categories include only seven that require even a bachelor’s degree. More than half of them pay under $18,000 a year. (Hightower, 152-153) And these are the thirty fastest-growing jobs coming up, the immediate hope for desperate people.
Times like this make me think of the great American philosopher Yogi Berra, when he said, “Half the lies they tell me aren’t true.”
Let’s bring it closer to home. Here in Austin, there are some 350 developers putting up some ten thousand homes a year. Less than five percent of these houses are priced below $100,000. Apartment construction here is also up. But of the 4,312 units built in 1998, only five percent were moderately priced. A bitter irony for the construction crews building these apartments is that they’re averaging about ten bucks an hour, and can’t find any place they can afford to live here. (Hightower, 157) Across the US, seventy percent of renters now pay more than a third of their monthly income on rent. (Hightower, 163) Indeed, some in this church are paying more than half their monthly income on rent. It isn’t because they can’t handle money well, it’s because prices are going up while wages and benefits are going down.
Twenty-five percent of the jobs in today’s celebrated economy pay a poverty wage. That’s 32 million people. (Hightower, 165)
Farmers today get only 20′ of the food dollar you and I spend, a nickel less than just a decade ago. That’s a 20% drop in income, in just one decade. (Hightower, 240)
If you back off to think of this battle of the rights of profits versus people, you could imagine, at least theoretically, an extreme kind of world in which the rights of corporations–which, incidentally, have no rights at all, only the privilege of existing as long as the public believes the corporations are serving the public’s general good–could actually trump the rights of people, states, even nations. Imagine a world in which corporations could sue nations if those nations took actions that cost the corporations revenues. In other words, imagine that a nation decided a gasoline additive was toxic to the environment, and banned gasolines containing it, and that nation was then sued by the corporation for loss of revenues. Or imagine a case where a corporation went into another country, used its power to create an illegal monopoly driving local firms out of business. Let’s say the locals caught on, took the corporation to court, ruled against it and even fined it for illegal business practices. It could happen. But in this most bizarre of imaginary worlds, imagine the corporation could then sue the entire nation for loss of profits. And imagine, since we’ve already crossed over into the insane, that the corporation could bypass all the courts in the nation it was suing, and win a multi-million dollar judgment against a country decided by a three-person team of financial advisors, of which the corporation got to pick one
Welcome to Chapter Eleven of the NAFTA agreement, for that world is already here, and so are the lawsuits.
First is a case reported on Jim Hightower’s radio show by a staunch, even rabid, Republican from Mississippi, a man named Mike Allred. Allred got involved when a funeral parlor owner from Biloxi, Mississippi came to him for help. A massive funeral home conglomerate from Canada named the Loewen Group had come into Biloxi, as it had come into many other cities in the United States, and used a variety of unlawful practices to force other funeral parlor operators out of business, then jack up the prices. One man sued them. In 1995, a Mississippi jury agreed that the Loewen Group was unscrupulous. The local man was awarded $100 million in damages by the jurors, and they added another $160 million in punitive damages. Loewen’s lawyers got the judge to force the jury to reconsider the punitive award, and the jury increased punitive damages to $400 million. The Loewen Group tried a couple other legal end-runs to avoid payments, but were unsuccessful.
Then one of their lawyers discovered Chapter Eleven in the new NAFTA agreeement. In 1998, Loewen suddenly sued the U.S. government, claiming the Mississippi court system expropriated the assets of its investors and harmed their future profits. The fact that Loewen was guilty of illegal and un-scrupulous practices was irrelevant. The Mississippi court took money from the corporation, in violation of the investor rights granted them in the NAFTA agreement. In other words, NAFTA had bestowed a legal right on foreign corpo-rations that allows them to avoid the punishment our state courts impose on them when they break our laws, allowing them to demand that our national government pay for any fines and financial losses the corporation incurred as a result of the guilty verdict. Loewen is now demanding $725 million from the US taxpayers.
There’s more. The case bypasses all US courts. It goes before a special “corporate court” of three trade arbiters, one of which is chosen by Loewen. The results are imposed on our nation, our taxpayers, and are not subject to review by any of our courts. The people from Mississippi were not allowed to appear, since their testimony that the Loewen Group’s behavior was illegal, monopolistic, unethical was irrelevant.
There is also no requirement that either the corporation or the government has to make the case public. Some feel that a victory for Loewen would completely undermine the American civil justice system, putting the profits of foreign corporations above any and all interests of all of our citizens and all of our laws. But even if Loewen loses this case, the rights are still there, guaranteed to investors but not to nations, for other corporations to try.
At least two other such cases have been filed, I’ll talk about only the shorter one. The Ethyl Corporation, based in Virginia, has already sued the Canadian government for banning their leaded gasoline and labeling its additive toxic (our own EPA is working to ban the same toxic additive). Canada was sued for $251 million, the little panel of trade arbiters met with government officials, and settled for having the government pay them $13 million and apologize for implying that their gasoline additive is dangerous, even though they, and our own EPA, know it is dangerous. By doing this, they have set a precedent for corporations being able to sue governments for loss of profit, and by denying people and whole nations the right to protect their people and their environment from poisonous chemicals added to their fuel or food, as long as some corporation is making a profit from it.
Remember Thomas Jefferson’s prescient statement from two centuries ago: “The selfish spirit of commerce knows no country, and feels no passion or principle but that of gain.” The spirit of capitalism is a lot like the spirits of the Sirens, promising what they can not deliver, but doing with so very seductively. What is happening is what Thomas Jefferson and many of the other founders of this country feared would happen. The power has shifted from the people to the corporations, and laws are being enacted and enforced that let profits trump people and international corporations trump nations. This is the logic under which the media and politicians of both major parties can define ours as a “strong” economy while wages for the majority of Americans are lower in constant dollars than they were thirty years ago, personal bankruptcy rates set new records every year, we have the highest child poverty rate in the developed world, the highest mortality rate for children under five in all the industrial nations, our nation’s companies are eliminating about 64,000 of the better-paying jobs each month, and Americans in their 20s are the first generation who can not expect to do better financially than their parents. If this is a “strong” economy, we need to ask “for whom, and at whose expense?”
To me, this story is about the only story worth writing about, it is a betrayal of democracy barely short of treason. I think it will become a “cause” for me, something I’ll devote some time and energy to in the wider community. I’ve called Jim Hightower’s office and the Austin Metropolitan Ministries, suggesting that clergy should become involved in sponsoring public lectures and panel discussions on the subject of the systematic selling out of people for profits, and I’ve offered to serve as either lecturer or moderator for public panels.
If you think I’m wrong, I challenge you to produce some data and arguments that can account for these facts in another way, and suggest that this church could provide an important service to itself and the greater community by sponsoring public discussions of what, exactly, is happening in our country in this age old battle between profits and people.
Perhaps I’ve made some mistakes here. I’m not an economist. I’m not a CPA, I don’t even balance my checkbook. But I am a good theologian. I know the difference between gods and idols, and I know how deadly the worship of idols is and has always been.
Capitalism is doing very well. It is serving the needs of those who control the capital above all other needs, as it is supposed to do. Our economy, despite the raving stories, is not doing well. It is doing poorly. It’s bad housekeeping, it’s making a bad home for us as a nation.
But our problems are not primarily economic. They’re religious. We’re worshiping false gods. For the past generation in this society, our social and political policies have been increasingly dictated by the overriding concerns of capitalism, of bottom-line profits for the few who control capital, at the price of dismantling and disempowering the middle class.
You see, it’s all happened before. We’ve always been so seduced by the glitter of gold that we’re on the verge of making it into a god. There’s nothing new here. And there’s nothing new about the results, either.
Once money is turned into a god, it is–like all deities–a jealous god, and will not permit any other consideration to come before it. So we sell the righteous for silver, and Vietnamese girls for a pair of Nike tennis shoes. We transfer wealth, power, and possibilities from the common people to the very few who have gotten enough money to be players in the game of capitalism.
When we exalt capitalism as we have, when we change tax structures and income distribution to create, as we have, the greatest disparity between rich and poor since the Middle Ages–I can see, and feel, that our problems aren’t about money. They’re theological. We’re worshiping false gods again.
And unless we stop it, everything else will follow inexorably from that–as it always has.
Afterthoughts:
In many ways, this was a very frustrating sermon to write. It touches so many areas, it should have been a five- or six-sermon series. In final drafts, I cut more than half the material from the sermon–which was still too long.
I notice that I’ve also referred to only two books here–Noam Chomsky’s Profits Over People and Jim Hightower’s If The Gods Had Meant for Us To Vote, They Would Have Given Us Candidates. Some of the other books I read to pre-pare for this ‘ obviously a list far too short to “prepare for” any topic this vast ‘ included the following:
Arianna Huffington, How to Overthrow the Government
Robert McChesney, Rich Media, Poor Democracy
Michael Janeway, Republic of Denial
Neil Postman, Amusing Ourselves to Death, How to Watch TV News
While this is a partial list, it’s obviously not long enough to give me an “expert” understanding of the disciplines touched on. One of the thrills and frustrations of the liberal ministry resides in the fact that every subject has religious implications if taken deeply enough. This makes us, by definition, generalists rather than specialists.
However, I’ve always been blessed with very bright and informed congregants, who seem forever eager to help me learn more about whatever discipline they think I’ve slighted–especially when it’s their discipline! Perhaps you’ll be among them?
Addendum:
Since this sermon has appeared here, been sent to several other servers and gained a small life of its own, I have received several letters insisting that it contains some important factual errors, especially concerning the case involving the Ethyl Corp. and Canada. I don’t have time or resources to check, but want to include some of these points (and invite other critiques of fact or argument). Here are some of the points I have received. Again, I don’t know if they hold up, but want to share them:
That the MMT additive is NOT toxic to the environment. It harms the exhaust system of cars, but not (directly, anyway) the environment.
One respondent said the ‘horrible toxin’ (MMT) is methyl tertiary-butyl ether, which is used undiluted in the human body to dissolve gallstones. Check this out in Merck Manual. Far from getting rich in the manufacture of this lead replacement the stock has dropped to less than $2.00, and all dividends have been discontinued.
Others have insisted that the real culprit is not merely capitalism, but our whole social structure of priorities that endorse and strengthen the more greedy and individualistic varieties of capitalism. Among these larger social trends, they include the ‘winner-take-all’ mentality (which sanctions big winners and ignores the vast majority of other players), and the superhero (and super wealthy) status of top sports stars and celebrities.
I appreciate and agree with this larger framing.
Davidson Loehr, 11-27-00
