Part II: How Billionaire Greed Ruined a Perfectly Good Strategy Called Corporate Sustainability. 3 Possible Pathways Forward
In Part 1 of this essay I explored how billionaire greed disrupted the progress of corporate sustainability and ultimately our democracy. I explored how the “religion” of capitalism should never have been positioned by a corporate backed media, at the behest of the “elite”, to solve some our planet’s biggest environmental and social challenges. I explored how billionaires not only refused to share their great wealth but rather, how they systematically chose to guide their political puppets to create policies that would further concentrate it. And if that wasn’t enough, they began to overstep their societal roles by looking at philanthropy as a way to solve the social and environmental problems that their undue influence helped to create in the first place.
Some argue that this philanthropic angle served three purposes; one was to ease their conscience from a life of business that may have caused some “unavoidable” harm. Another was to feed their egos by being a part of the solution to improve the world and lastly, by sharing a relatively small portion of their wealth, as described by Anand Giridharadas, they would soften the oversight of journalists and regulators. This was a clever strategy as it would act like a vaccination, giving them immunity when it came time to assess their business practices as to whether they were in any way hindering competition or worse, democracy.
“I would be willing to make what may sound like a very counterintuitive argument that the world would be better off without Mark Zuckerberg doing his philanthropy and doing all this change the world stuff….I actually think journalists and regulators would have had way more aggressive scrutiny on Zuckerberg over the last 10 years. So I’d be willing to lose whatever schools and disease programs Facebook has funded in exchange for having a healthier democracy where Facebook is in check.”
The corporate elite and billionaires have fought callously to protect their wealth hoarding system and because of that we find ourselves at the intersection of two very serious problems; potentially devastating environmental degradation and massive inequality.
Change is coming — what follows are 3 possibilities of how wealth sharing and ending billionaires’ interference into our system may occur. For those of you who look to be critical, remember that this is not a deep dive into policy and it’s not intended to be a political platform. The most productive way to approach any ideas that you think are incomplete or problematic is to share your insights on how to make it better — this is not intended to open a values based discussion on what type of government ideology is best. These are simply 3 possibilities on how a desire for more sharing may unfold.
Option 1 — Voluntarily Release Some of their Power (Share)
I must admit that I’m not particularly confident that this will be how the future unfolds but nevertheless, this option could very well be the simplest and would likely cause the least amount of disruption. Yes, it would reduce the wealth of the 1% or more precisely, the .01%, but that’s the point — billionaire wealth hoarders need to feel some pain as the system rebalances.
A) Pay your taxes
In order for the elites to start sharing more, they need to immediately start paying their fair share of taxes, which raises another question, why do billionaires even exist. Author Umair Haque suggests that there’s nothing intrinsic about them, they’re simply a policy choice, or failure. He states in his article, “Why Billionaires Need Society More Than Society Needs Billionaires”, that, “Nobody is inherently a billionaire. We decide as a society to reward some activities and punish others and treat others with indifference — hence, billionaires.” And when it comes to assessing whether billionaires benefit society, Hague argues:
“…the rise of billionaires didn’t result in prosperity, wealth, riches or fortune. The average American is broke. He lives paycheck to paycheck. He’s crushed by debt he can never repay. He lives a life of psychoeconomic trauma. It’s a terrible plight. Billionaires didn’t make any of that go away — in fact, they seemed to make it happen.”
At the same time we need to unravel the cultural narrative which states that those who have succeeded in the marketplace (or as if often the case — their spouse or parents) are worthy of adoration, as they are somehow very wise and have special powers to help solve the problems that they created in the first place. A well financed democracy where failure is met with a voter nudging exit from politics, would do a much better job than relying on unaccountable billionaires who on a whim decide that they have the prowess to solve big social and environmental problems.
Furthermore, I propose that all media spare the public with anymore billionaire good ideas on how to solve our biggest issues until they pay their taxes.
B) Pay Living Wages and Support Unions
Stop interfering with social and economic legislation that could instantly make millions of people’s lives better and simultaneously fund initiatives that will have lasting structural benefits for the poor.
Corporations and billionaires like to think that they’re solving problems when they help to deliver food to the hungry but these programs are no substitute for paying a living wage. Families that have full time employment should be able to buy their own food without having to rely on handouts. A great example of misguided problem solving is how Walmart, the low wage and anti-union crusader, decides to give $50 million a year to help relieve hunger in the US and thus becomes a force for good to help the needy. On the surface this is a great initiative but when you pull back the curtain, you see an organization that uses its immense resources to lobby for a low minimum wage and fights unions.
Walmart could do far more good by paying its employees a living wage and donating to organizations that support unions, rather than setting up another CSR initiative to help feed the hungry. In fact, a good argument could be made that this idea alone would do far more good than the collective effort of their entire CSR department.
C) Climate Change and Environmental Harm
Stop polluting and doing harm! Stop lobbying against environmental policies that would force companies to protect public goods such as air, water and soil and require companies to pay for their environmental impacts. Climate change is a great example because the harm is so widespread. Not charging companies some kind of impact and adaptation fee for their contribution to climate change ensures that taxpayers will have to foot the bill which is nothing more than corporate socialism which further adds to expanding inequality.
D) Wall Street
Wall Street must stop interfering with regulations and policies that would curtail its greedy and risky behaviour. Both the Glass Steagall and Dodd-Frank Acts need to be reinstated to their full potential and even strengthened. Wall Street must never be able to hold the economy of the US and the world hostage again with concepts like too big to fail, and citizens must be protected from future government bailouts and other predatory financial service practices. Additionally, a small tax needs to be placed on all investment transactions and an even larger tax on pure trading activity and tied to the hiring of more employees to oversee an industry that has syphoned money from the middle class for far too long.
E) Offshore Tax Havens
Stop interfering with government. All tax loopholes must be closed and strictly enforced. Hundreds of new IRA employees must be hired to collect these unpaid taxes. Tax evasion via the elite must hold stricter penalties that would place perpetrators behind bars. These activities degrade government programs and should be considered a threat to national security or at least national wellbeing. You can read more about Elizabeth Warren’s proposal (which deals with many issues including Offshore Tax Havens) in this Washington Post article, Elizabeth Warren to propose new ‘wealth tax’ on very rich Americans, economist says.
F) Wealth Tax
Stop interfering with government. New wealth taxes must be targeted at those who have amassed fortunes. Elizabeth Warren has proposed a tax that would levy a 2 percent tax on estates worth more than $50 million, and a 3 percent tax on fortunes worth more than $1 billion.
According to economists Emmanuel Saez and Gabriel Zucman, from the University of California, Berkeley, “the wealth tax would hit less than 0.1% of households and raise 2.75 trillion over a over a 10-year period.”
Another proposal that is being floated is to raise the capital gains tax and treat investment earnings like ordinary income — this makes more sense as the ultra wealthy usually pay for their lifestyles by taking money out of their stock portfolios and not via a salary.
G) Citizens United
Stop interfering with government. Mixing money and politics is dangerous for democracy. Citizens United must be overturned and strict limits must be placed on political contributions.
Option 2 — Regulations Forced Upon Them
If Billionaires can’t figure out how to share, then some of their wealth and power will need to be taken from them. This option is much like Option 1 but it will be legislated upon billionaires and elites by a democratically elected government brought to power by a frustrated and angry population. Odds are that these efforts will go much further than the voluntary approach of Option 1 and that it will be far more painful for them — that is if anyone’s net worth dropping from 10 billion to 5 billion could in any way be considered painful.
Option 3 — This is Where it Where it Gets Messy
There is currently a vacuum in leadership due to the neoliberal approach to global politics that has largely failed. Society is more unequal than it has been in 100 years — and it’s more angry and democratically unstable.
The majority of global citizens (especially in the US, UK, much of Europe, Bazil and increasingly in Canada) do not feel heard by politicians and they are furious. This is not an emotion that leads to rational decisions in the voting booth.
The Promise of Prosperity
Many countries have shown a willingness to punish the establishment with a so called “strong leader” who promises to clean up a dysfunctional government. They promise to get the economy back on track and to remove or correct what is causing pain for so many.
On the right they promise to free the country from economic mismanagement and a web of tangled regulations that makes doing business difficult and expensive. While on the left they also promise to clean house and get rid of the same “elites” who have ruined a good thing. A fundamental difference is that the left promises to invest in the very systems that the right promises to cut as a pathway to prosperity.
In this environment of voter anger all that matters is that the “elites” are thrown out. Voters can be irrational and can be easily swayed by a charismatic leader to either the far left or the far right. To many, the combination of identifying the villain along with the exciting promise of prosperity is simply irresistible.
Where the current batch of leaders take us is anyone’s guess. We can hope that they deliver on our big issues but hope will only take us so far.
There’s still time to make things better, but the first step is to acknowledge the truth about what is at the core of our “climate plundering and wealth concentrating system”, and who profits and maintains it.
This is a necessary conversation if we hope to prevent a climate crisis. A more fair system where the needs of the 99.9% are on the forefront of decision makers’ minds, rather than billionaires, would go a long way to relieving voter anger. We don’t need complex ideologies to find the path forward just one simple concept — societies thrive when we all do better, not just the billionaires. More sharing and less greed would be a giant leap in the right direction.
In Part 3 of this essay I will dive into the issue of transparency and explore how corporations can come clean about where their true motivations lie — without any interference or spinning from the marketing, PR or CSR departments. Now that would be a welcome change!
Click here for part 1 of this essay.
Brad Zarnett is a sustainability strategist, thought leader and speaker. He is also the Founder of the Toronto Sustainability Speaker Series (TSSS). You can follow Brad on twitter at @bradzarnett, LinkedIn or join his email list to stay connected.