The Politics of Mass Ownership

The Shifting Demographics of American Capitalism

BY DAVID WISHNICK

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Illustration by Hilary Falb
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MENTION OF THE AMERICAN DREAM conjures a hazy image of a family, maybe drinking cold beer or iced tea, and some backyard sunshine. Ever since Thomas Jefferson altered the Lockean mantra of "life, liberty, and property" to end with "pursuit of happiness," the American ideal has also flirted with ownership. To own a home is integral to fulfillment of the American Dream--just ask Arthur Miller's archetypal worker from Death of a Salesman, Willy Loman. Though Willy works toward owning a home, he can only pay off his mortgage with his uncertain sales commissions. He owns no part of the company where he works, nor does he own stock in the great American corporations that spur our national economic growth.

The lure of the Dream, though, tends to gloss over Willy's anxieties. This family, this beer, this backyard, this rapturous American Dream, means not worrying about finances, not fearing any threats to a simple, enjoyable way of life. Rather than being inundated with the din of worry and struggle, the life of someone living the American Dream should be accompanied by the low hum of satisfaction. We've got a juggernaut of an economy, but how many people actually receive a legitimate share of the profit from our American bull market?

Almost 70 percent of American households own their home. That's good, and that number is improving through the types of programs that have been growing since Herbert Hoover made home ownership a priority at the Federal Department of Commerce in the 1920s. The triumph of the 30-year securitized home mortgage is the gold standard of government policy leading to growth in ownership of dreamy American material goodness.

But there are a couple of troubling facts about the chasm between the haves and the have-nots. Though about half of all American households own stock through some arrangement, this is a hollow statistic. The vast majority of households-71 percent-own less than $2000 of stock or none at all. With less than 30 percent of the nation receiving anything close to tangible benefits from stock ownership, there is a lot of room for change.

The Willy Lomans of the nation may get a hell of a salary compared to the rest of the world, but they sure don't benefit like the Wal-Mart Waltons from this economic boon of ours. If they did share a stake in corporate ownership, they might begin to adopt different ideas about our society; they might also vote for the political party that makes it possible for an average citizen to benefit from stock ownership.

Here's one more stat for the road: the top one percent of households has a higher net worth than the bottom 95 percent. Land of opportunity? One of the best. Land of equality? Not when you take a look in the bank.

For better or worse, ownership is one of the implicit promises of the American Dream. Both conservatives and progressives have taken to couching political agendas in the language of an 'Ownership Society.' Such rhetoric purports to balance the economic inequality in this country while upholding a fundamental faith in capitalism: a perfectly American solution to an American problem.

But not all Ownership Societies are created equal. There appears to be a storm brewing between the Neo-Cons in the White House and old-liberal technocrats about what it means to own a stake in the American Dream.

Ownership Society Debut

The Bush White House and most conservative think tanks, notably the Cato Institute, recently began to court the voters who desire a share of ownership in the economy. They introduced an idea of a mythical future in which every American would benefit from the growth of our corporations, and they called it the Ownership Society. As President Bush puts it, an Ownership Society gives everyone a "vital stake in the future," and this future, though personally owned, is inherently shared.

This concept of community ownership as a panacea didn't just materialize in George W. Bush's mind after he read the latest issue of The Socialist Organizer; the revolution has been a long time coming. American political philosophy has always extolled the Lockean rights of life, liberty, and property. The right-wing Ownership Society doctrine taps into this in order to promote the goals of "responsibility, liberty, and prosperity," to quote the Cato Institute's summary of the program. The logic behind this philosophy is that if you maintain a personal financial interest in society, then you will more diligently attend to the maintenance of community structures and practice more active citizenship in order to protect your livelihood.

More importantly, if you work all day for a salary alone, somebody is profiting from your labor and it isn't you. Bush's Ownership Society program involves changing Social Security in order to put 12.4 percent of every laborer's paycheck into investment ownership, but privatization has been a come-on that falls flat. The privatization plan leaves unanswered the problem of how to fund current benefits-the ones current retirees receive unsolved.

While the Bush administration takes criticism for its Social Security privatization schemes, the plan would leave something resembling a true Ownership Society in its wake. The complete realignment of the system would be painful (trillions of dollars in owed Social Security type of painful), but if the average American worker were to begin contributing approximately $4,500 per year to an investment portfolio, the nation would be a fundamentally different place.

Capitalism, The Failure Of

Despite this potential, not everyone buys into the Bush version of an Ownership Society. As counsel to the US Senate Committee on Finance from 1980 to 1987, a former lawyer and investment banker named Jeff Gates co-authored legislation known as the employee stock-ownership program (ESOP) with Democratic Senator Russell Long. (Russell Long is the son of depression-era wealth redistribution advocate-and Louisiana's pride and joy-Huey "Kingfish" Long.) In 1998, Gates wrote a populist-ownership opus, entitled The Ownership Solution, which garnered praise from both sides of the aisle-although the praise was tentative when coming from the right. The book stresses the importance of stock ownership amongst the wage-earning middle-class.

Gates and his crew at the Shared Capitalism Institute invoke ownership rhetoric similar to that of the Bush administration. Just like the plan to privatize Social Security (which Gates supports), Gates' ideas are radical. Start with the inspiration for Gates's born-again love for mass ownership-a book by philosopher Mortimer J. Adler called The Capitalist Manifesto-and you are bound to turn some people off, even in this post-Soviet world of ours. Some members of that 29 percent in the stockholding class also tend to get miffed when anyone who worked with the son of the Kingfish brings up ideas of mass ownership. The Kingfish wanted a world where "every man [is] a king," and current kings and heirs might dislike sharing the throne. But the ideas are not just radical because of where they came from; they are radical because they would drastically alter the nature of America's economy.

Despite the populist political lineage, the Shared Capitalism people attempt to promote a "more equitable and sustainable form of free enterprise" from a purportedly non-ideological basis. In the minds of the people at the SCI, economic, social, and environmental sustainability can only be attained if the current plutocracy is eliminated and a wider ownership society is allowed to emerge. This sounds just like the Bush administration's rhetoric, but this Ownership Society goes even further.

Gates attempts to contend with the myriad systematic failures of American capitalism. Gates's major criticism of capitalism is that it "is not designed to create capitalists, but to finance capital." In other words, capitalism promotes money-making for current owners while denying non-owning members of society (mostly wage-earners living paycheck to paycheck) ownership of the tastiest fruits of their labors-profits.

The pact of stock ownership requires that business decision-makers bow down at the feet of the almighty shareholder; to do otherwise would be to violate the popular ethics-and the laws-of running a corporation. The business world's version of the Hippocratic Oath would be "First, enhance shareholder value," and the fine print would read "disregard the implications that your actions have on anyone but your shareholders." That is to say, 71 percent of the nation is disregarded when public companies make decisions. If growing a business is moral duty, then diluting ownership unnecessarily is a deadly sin.

Gates's policy prescriptions are guaranteed to get a rise from the AARP folks, but it might just be a good one. In addition to fostering growth of

ESOPs, Gates calls for reductions in capital gains taxes and estate taxes that might even have small government advocates quoting The Ownership Solution. The hitch is that these tax cuts would only be applicable to stock in companies that promote profit sharing by way of employee stock ownership. Gates also advocates the very anti-free market use of government contract policy to support employee-owned companies. And he hasn't ruled out the Kingfish's own solution of high taxes on the wealthy to bring about wholesale wealth redistribution.

Gates's programs appeal to the redistributive instinct of any good liberal, but his take on Social Security means that he's professing the same love of the private sector that keeps small-government conservatives up at night. So while the Bush administration is slowly losing the immediate goodwill that came from announcing a program with the idealistic goals of the Ownership Society, Gates and the Shared Capitalism Institute has put forth a set of programs that could really catch on-even if Social Security privatization is a half-baked plan.

Stealing The Message

If the Ownership Society concept is a tenuous middle ground between worker's rights activists and would-be Social Security privatizers, then President Bush has been more aggressive in taking the Ownership Society home. The words "Ownership Society" are now strongly linked to the GOP's new populism, but the Democrats aren't going down without a fight.

The hot new freshman, Eliot Spitzer, has been making advances at the Ownership Society from his post as New York's Attorney General. He utilizes tactics that the Bush people couldn't touch for fear of offending the GOP's core. Spitzer defends the rights of stockholders and protects the average American from abuse by big owners, and he does so with the outspoken goal of making ownership of American corporations safe for all. So, while the rest of the Democrats come across as Chicken Littles for attempting to expose Bush's game for bull-market bullshit, Spitzer is crusading as Protector of Small Investments. The Ownership Society might be more willing to go to bed with the Party of Clinton if they got a little flashy and adopted a few Ownership Solutions of their own. Either way, Willy Loman and the rest of that 71 percent of the nation isn't seeing any progress right now.

David Wishnick B'07 is not ashamed to have invented a special dance just for Belle and Sebastian songs.

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