America's grand experiment is failing under our current version of capitalism and subsequent economic system. Major reforms must be initiated and our industrial/commerce leaders cannot and will not undertake these reforms. They must come from our citizenry through government action.
Several major elements of the current failed marriage must be dramatically reformed. l. Capital's influence on government. 2. Capital's regulation. 3. Capital's focus on their long term social sustainability. Let's begin to examine possible reforms. But first, what needs fixing?
Capitalism needs a social conscience. Current business school training neglects giving its graduates an understanding that capitalism can enjoy long term life with products and services that not only do no harm to our environment and citizens, but actually uplift both without or with minimum damage and the responsibility to provide solutions to damage they create. Additionally, students need a better understanding of the benefit to a commercial enterprise if consumers they serve are economically enhanced. A consumer given increasing buying power through better wages and benefits and products that improve their lives are proven to provide a longer product and shelf life to the goods they consume.
Currently the focus of the business schools seems to be empowering and rewarding investors, especially with short term gains and company performance quarter by quarter. That focus needs to shift toward long term growth and long term customer relationships. Certainly investors need to be rewarded in order to be attracted. But that has proven to be best achieved through happy and loyal repeat customers and happy and loyal employees serving them. These two sectors are currently ignored or at least neglected in the interest of short term rewards for investors and owners.
A major part of the long or at least longer term success of a company is its relationship to the geographic area it resides in and usually serves. That proven enhancement is largely lost in today's marketplace. The idea of good corporate citizenship is diminishing, except perhaps in the area of corporate philanthropy in support of the arts and charities where they are rewarded with federal and sometimes state tax breaks for their generosity. Altruism needs to be restored conjoining tax incentives.
First, we must address corporate influence on government and legislation, particularly regarding campaign finance. The dogma of money being speech must be reversed. It has overpowered citizen power and influence on government and legislation. The right to lobby must be constitutionally maintained, but the money part must be completely removed. This includes corporate advertising of their position on government and legislative issues; this must be removed. If not removed, then there must be some mechanism built into campaign/advertising regulation to equally empower consumers and citizens to message their positions on an equal basis. Thus, Federal Communications as well as Federal Election Commission statutory law must be totally reworked to bring equitable balance to the power of consumers and citizens with that of corporations regarding their influence on regulators and legislators and access to media to tell their story.
Second, capital regulation must be restored. This included SEC regulation which must protect investors and consumers from fraud and abuse. Insider trading and management manipulation of stock and bond pricing, buying and selling must be tightly regulated with harsh punishment for infractions proven. Further, offshoring of manufacturing and assembly must be rebalanced to reward businesses which create domestic American employment and restrict offshoring to supply of products and services in the foreign countries they are marketed in. Tax law must be completely reworked in order to redistribute wealth on a more equitable basis, eliminating wealth hoarding and providing for upgrading of our physical infrastructure to a level appropriate and necessary for quality of life and commerce in the 21st century. Question- is being a billionaire necessary? Millionaires seem quite comfortable.
Regulation of businesses which create monopolies documented to harm competition through unfair practices and drive prices up must be totally overhauled. Trust busting must be restored in industries proven to abuse consumers and impose on them unfair pricing. Justice Department prosecution of corporate crime must be restored and expanded. Economies of scale with increased corporate size and market share increase sometimes advantage the consumer, but there are many industries where the consumer pays excessive prices to create excessive profits; example, the cable/satellite TV industry.
Thirdly, long term social sustainability can be enhanced through empowering employees with greater ability to collectively bargain for improved wages, working conditions and benefits. Corporate anti-organizing initiatives are poorly regulated and must be closely scrutinized by regulators with criminal punishment where infractions are documented.
Corporate boards must be reworked via regulation to include workers, local community representation and gender/ethnic representation reflective of American demography. Likewise, via regulation, managements of corporations of size must reflect that demography.
Entrepreneural innovation has been a hallmark of our economy and must be encouraged with fair regulation and incentives to produce capital to finance new endeavors. Let's be sure that it remains the centerpiece of our American economic system.