Table of Contents

The New Enlightenment excerpt, pages 1 – 6

Excerpts from The New Enlightenment and Amazon as Metaphor are also in pages under the Economic System Advancements and Political System Advancements menu tabs

Non-Policy Excerpts from The New Enlightenment

Introduction to The New Enlightenment

Every observer of our society can see we are facing many serious problems. These problems are not isolated; they are connected through political and economic systems serving the majority of Americans increasingly poorly. The New Enlightenment describes some of the ways these systems are descending us into alarming levels of injustice and dysfunction, but its primary focus is on solutions. You will learn how we can create a more prosperous and far more just and democratic society, one in which prosperity will be more equitably shared. 

Sometimes paradigm shifts are necessary to solve fundamental prob­lems. Now is such a time, so innovative, transformative solutions are pro­moted here. They are evidence based to best serve the country as a whole. Few of us want what we have now, a political system mainly serving a small elite most able to influence it, and their dominance is growing. We can have a truly democratic republic through the political system reforms I detail in this book.

The beneficial transformations I design for—some are summa­rized below—may seem too large to be achievable. Many will believe that no policies can exist that will achieve these goals because if they did exist they would have already been implemented. However, if you consider the policies detailed in this book carefully, you will see that this prejudice is misguided. The de­tailed program described in this book will:

  • End unemployment or reduce it to historic lows.
  • Create a minimum tax-free annual income of $34,980 for full-time work. Expanding and reforming the Earned Income Tax Credit (EITC) and raising the mini­mum
  • Reduce full-time work-hours to 36 hours per week. Despite 10% fewer work-hours, and consequently as much as 10% lower com­pensation from the workplace, people’s take-home income whose income now is under $160,000 will rise, and rise proportionally more the lower the income, due to either lower taxes or the ex­panded EITC.
  • Transform the economic system to one where most economic ac­tivity will be performed by worker-owned and controlled busi­nesses at the end of the designed 20-year transition period. Loans, grants, tax benefits and subsidies within several detailed pro­grams will accomplish this. By extending democratic practices into the workplace, and substantial capital ownership to the work­force, income and wealth inequality reduction, productivity en­hancements, and other important benefits result.
  • Eliminate the dominating importance of money controlled by national public office candidates and their allies, and thereby allow a meaningful democracy to exist. This will be ac­complished mainly by instituting a TV and radio station license requirement to offer generous allotments of airtime free of charge to four qualified candidates per national public office contest within a thoroughly detailed system. No reasonable need for the purchase of airtime will exist. All airwaves are pub­licly owned, so they should best serve the public interest. Also, support qualified candidates with postal, newspaper, and internet advertising subsidies, and institute a new Fairness Doctrine.
  • Enhance democratic functioning with new, innovative democratic forms. Average citizens in deliberative groups involving 0.1% of the citizenry will develop some public policies.
  • Create a vigorous media of, for, and by the people necessary for a well-functioning government of, for, and by the people. This book details these ways to accomplish this: Insti­tute a license renewal requirement for worker-ownership and con­trol of air media companies, and support it with loans, grants, tax benefits and subsidies. Motivate ownership and control by work­ers of other kinds of media businesses, also through loans, grants, tax benefits and subsidies. Media ownership and control by workers will eliminate important media content selection biases resulting from the character of current media ownership and management, and result in other important benefits. The media’s role in the functioning of a democratic society is essential, and our media corporations’ current structure is inevitably serving this role This policy will create a new and vigorous media culture more responsive and accountable to the majority.
  • Eliminate tuition for two and four-year public colleges. This will help meet our stated ideal of equal opportunity for all and help create the well-informed citizenry needed for a well-functioning democracy and economy. It will also remove an enormous burden from millions of future college graduates whose education serves the national interest.
  • Increase Social Security payments by $500/month to all recipients, and provide it to some who are currently ineligible. The United States ranks 30th among 34 developed countries in the percentage of a median worker’s earnings that our public pension system replaces, and private pensions are becoming less common and generous.
  • Eliminate the deficit.

The economic and political system reform program detailed in this book will also have other transformative beneficial impacts if instituted. 

Impossibly grandiose goals? They are not—on one condition: Your support and the support of many others for the detailed program in this book and the organization devoted to seeing it be instituted. Please join us so we can reach a critical mass in numbers for this change to be inevitable. Let this time of crisis be a time of opportunity, a time for a New Enlightenment where, unlike during the 18th century Enlightenment,  all people independent of race and sex share in its benefits.  All of our lives can be improved, for tens of millions of us dramatically so, through policies that will create a far more just and beneficial political, social and economic order. Now is the time to make it happen.   

Our current political system needs radical reform because, inherently, policymakers unwilling or unable to serve the majority are its result. When good and capable persons overcome nearly insurmountable barriers to their entry into elected office, they are largely disabled by dysfunctional rules of Congress and colleagues serving narrow, moneyed interests. So further decline or paralysis is inevitable without system change.

The person who may be the most well-informed judge on the relative quality of our election system is the internationally renowned election observer, former President Carter, whose Carter Center has monitored 96 elections in 38 countries. He said, “We have one of the worst election processes in the world right in the United States, and it’s almost entirely because of the excessive influx of money.” For this and other important reasons, the U.S. Congress’s approval rating reached a historic low in 2014 of 9%.[1] Only 9% of Americans think Congress is mainly influenced by the voters they represent.[2]

The outcomes of our economic system are to a large degree determined by the regulation, tax, and government expenditure policies created by our political system, so major economic injustices and hardships are evident. A 2013 Gallup poll found that 20% of the U.S. population did not have enough money to buy the food they or their family needed at least once over the prior year.[3] In 2013, about 50 million, that’s over one in every seven, Americans lived in poverty, a higher fraction than at any time since 1966, a higher number than ever. Our per capita Gross Domestic Product (GDP) was $52,800 in 2013, but in 1966 it was $28,680 in 2013 dollars. So on average, each person in the United States had an income almost two times higher in 2013 than in 1966, yet about the same fraction of the population was in poverty because nearly all the country’s income gains have gone to a small economic elite.

The average wealth of the poorest 40%, 126 million Americans, was negative $10,800 in 2013, but as our GDP per capita indicates, we are a wealthy country, not a poor one.[4] The total wealth of just 400 people, less than .00013 % of our population, was over $2.3 trillion in 2013.[5] This is approximately the total wealth of the least wealthy 190 million Americans or 60% of the country and is about the GDP of Italy, the eighth largest national economy in the world. The top 400 people have wealth equivalent to 12.8% of U.S. GDP in 2013. In 1980, the wealthiest 400 Americans had wealth equal to “only” 2.8% of U.S. GDP.

The Gini coefficient measures inequality, with numbers between 0 and 100 that rise with greater disparities. The UN-Habitat Monitoring and Research Division defines an income Gini coefficient of 40 as an “international alert line” indicating that a society’s “Inequality [is] approaching dangerously high levels” that could “lead to sporadic protests and riots.” Our income Gini coefficient is now about 48 and has risen to about 80 for U.S. wealth.[6] Our economic inequality is the highest in the developed world and our economic mobility the lowest.

We cannot have a functioning economic system if income or wealth is divided equally, but disparities so large that the top 1% of Americans have 24% of the nation’s income is unjust and economically, politically and socially harmful.[7] The average income of the top 1% of U.S. households in 2011 was $1,530,773, while the average income of Americans in the bottom 20% was $9,187. The highest income for an individual was $4.9 billion. Part 4, Note 1 details why this degree of income disparity is unjustifiable and harmful.  

With the huge disparity in economic power inevitably comes a huge disparity in political power, resulting in greater economic disparity. This vicious cycle of growing power disparities will lead to disaster unless it is consciously and forcefully interrupted and reversed. Yet it seems we are continuing to run on this path of predictable outcome, like lemmings over a cliff.

Increasingly, people are aware of their powerlessness, so they no longer bother to vote. If people believe their interests will not be served whoever is elected, they have little motivation to vote. We have, by far, the lowest voter turnout in the developed world.

Concurrent with the decline in trust in our political system and leaders is a decline in trust in our business leaders and media. And this decline in trust is extending not just to our most important institutions, but also to one another as individuals. The percentage of Americans who believe that other people can generally be trusted fell from 46% in 1974 to 33% in 2012. Trust is essential to social cohesion and political stability, and it is negatively correlated with economic inequality. Trust in a democratic system of government requires trust in the few who represent the interests of the many.

These ominous signs for the future of our country and many other signs of societal dysfunction and decay we urgently need to address with robust policy solutions. Some of these other signs I describe in Part 1 of this book. For decades, both major political parties have allowed the development of, or created, a long list of shocking economic, political and other societal conditions. Why are we tolerating this?

We are a creative people, yet little creativity has been applied to the most important domains of ensuring that our economic and political systems best serve the majority of people. The debate on all the important related issues has been too narrow, due mainly to a dysfunctional media. But the problem runs deeper to those in our academic institutions’ political science and economics departments, where adherents to failed dogmas are common—dogmas that, not coincidentally, have served a narrow elite, to the detriment of the majority. Academic economists have commonly supported or actively promoted the policies of removing important and necessary regulations on corporations, and of lowering taxes on high-income households and corporations that have been instituted over the last few decades. These policies have served the country poorly. However, some members of these academic disciplines have had clearer vision or higher purpose, and some of the policy proposals in this book use ideas of some of these and other exceptional people.

Clearly, a mass movement is needed for fundamental change, and I hope this book attracts you to be part of the one in the direction it defines. Recent history gives the Occupy movement and the Tea “Party” as examples of important political forces that rose unexpectedly and quickly to great prominence. These movements are far from the limit of what can be accomplished, and what has been accomplished by political movements in the past.

I chose the name The New Enlightenment mainly because economic inequality was one of the most important motivations for the Enlightenment period’s societal transformations, including the one that created the United States. Data from medieval England and today indicate it is more extreme now than it was before the Enlightenment. For this reason and others, it is time for a New Enlightenment. These data and this analysis are in Part 1, Now Is the Time for The New Enlightenment.

If you are aware of the evidence that our economic and political systems require major reforms, you can skip most of Part 1 with little loss of continuity. The data from England before the Enlightenment are rarely seen, though, and their analysis and comparison with conditions today is original here, so I recommend that no one skip this Part 1 information and other historical and essential information in the first ten pages of Part 1. The facts in Part 1 may cause despair, but do not despair. The rest of the book is designed to create hope by providing the major part of a foundation for a New Enlightenment.

   Robert Bivona

The New Enlightenment was written over about a five-year period beginning in December 2011

[1] http://www.gallup.com/poll/1600/congress-public.aspx

[2] Congress Still Ranks Low in the Public’s Eyes, Rasmussen Reports, 1/3/15 http://www.rasmussenreports.com/public_content/archive/mood_of_america_archive/congressional_performance/congress_still_ranks_low_in_the_public_s_eyes

[3] More Americans Struggle to Afford Food, 9/12/13, Alyssa Brown http://www.gallup.com/poll/164363/americans-struggle-afford-food.aspx

[4] Household Wealth Trends In The United States, 1962-2013:What Happened Over The Great Recession? Edward N. Wolff, National Bureau Of Economic Research, pg.14

[5] Inside The 2013 Forbes 400: Facts And Figures On America’s  Richest http://www.forbes.com/sites/luisakroll/2013/09/16/inside-the-2013-forbes-400-facts-and-figures-on-americas-richest/

[6] Fortune magazine, America is the richest, and most unequal, country, Erik Sherman  9/30/15, http://fortune.com/2015/09/30/america-wealth-inequality/, U. S. Census data http://www.census.gov/newsroom/press-releases/2015/cb15-157.html

[7] Striking it Richer:The Evolution of Top Incomes in the United States (Updated with 2013 preliminary estimates) Emmanuel Saez, UC Berkeley,1/25/15. The data in Saez’s document is determined using income tax statistics. Based on the authors communication with Emmanuel Saez, about 2% additional income share would likely result from taking into account income directed to tax havens.

The New Enlightenment excerpt,
pages 8-11,16, 17

The Age of Enlightenment

During the Enlightenment, people imagined and acted on a vision of a radically more just world

The original Enlightenment period in the 18th century was a time when many people in Europe, and later in the American colonies, shared a vision of a transformed world. The more widespread use of printing presses, more extensive roadways, and newly created postal services needed to distribute periodicals and other print media allowed their means of mass communication, print media, to dramatically increase public awareness of societal issues. There was an explosion in the number of books and other publications. Literacy rates increased greatly, and debating societies and other public forums were used to discuss the important issues.

As a result, many people were able to imagine the possibility of a fundamentally more just world order than the one in which they were living—an order based on reason, the ideals of equality for all, democracy, and fundamental individual human rights. More importantly, they also acted on their new and radical vision. During this period of revolutionary transformations, the powers of monarchy, the privileges of the nobility, the political power and authority of the Catholic Church were overturned. There were also dramatic revolutions in science and philosophy. The American Revolution (1775–83) was an integral part of the Enlightenment period.

Enlightenment revolutionaries strove to create more egalitarian societies

The awareness of the importance of economics to politics was a fundamental part of the Enlightenment. The Enlightenment revolutionaries experienced the injustice of the majority of the wealth of their society being controlled by a tiny fraction of the population. This small minority used their vast wealth to control the political and social order. So Enlightenment revolutionaries formed more egalitarian societies where political leaders were accountable to the majority. Governments were designed to ensure that public policy served the ideals of democracy, equality for all, reason, and basic individual human rights. America was one of these societies.

America was the most egalitarian society in the world

In America’s early years it was the most egalitarian society on the planet, and our Founders were proud of these conditions. In a letter from Monticello dated September 10, 1814, Thomas Jefferson wrote:

We have no paupers …. The great mass of our population is of laborers; our rich, who can live without labor, either manual or professional, being few, and of moderate wealth. Most of the laboring class possess property, cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich … such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families …. Can any condition of society be more desirable than this?” Jefferson contrasted these conditions with an England of paupers and plutocrats: “Now, let us compute by numbers the sum of happiness of the two countries. In England, happiness is the lot of the aristocracy only; and the proportion they bear to the laborers and paupers you know better than I do. Were I to guess that they are four in every hundred.”[1]

George Washington, nine months before his inauguration as the first president, predicted that America “will be the most favorable country of any kind in the world for persons of industry and frugality, possessed of moderate capital, to inhabit … it will not be less advantageous to the happiness of the lowest class of people, because of the equal distribution of property.”[2]

After Alexis de Tocqueville’s famous journey to America in the 19th century, he returned to France and wrote that nothing “Nothing struck me more forcibly than the general equality of conditions… the influence of this fact…has no less empire over civil society than over the Government; it creates opinions, engenders sentiments, suggests the ordinary practices of life, and modifies whatever it does not produce…the equality of conditions is the fundamental fact from which all others seem to be derived, and the central point at which all my observations constantly terminated.”[3]

Early America was the world’s most egalitarian society.[4] Today, we are the outliers in the other direction—we are the most unequal of all the developed countries. On a per capita basis, we produce over 30 times the amount of goods and services per year than when the country was founded.[5] Yet, in 2012, almost 50 million Americans were in poverty and over 20 million were severely poor, with incomes less than one-half the official poverty income.[6]

During America’s early years England’s 1% were so rich that the country’s average national income was nearly as high as that of the colonies, despite the much greater prosperity of the majority of Americans. Today, America’s 1% are taking a greater share of national income and wealth than the old English aristocracy did, and a larger percentage of the country’s income and wealth than any other advanced country.

[1] Letter from Thomas Jefferson to Thomas Cooper, 10 September 1814

[2] Letter from George Washington to Richard Henderson, 19 June 1788

[3] Democracy In America, Introductory chapter, Alexis De Tocqueville

[4] NY Times, America, Land Of The Equals By Chrystia Freeland, 5/3/12

[5] American Enterprise Institute: Life Expectancy v. Real GDP Per Capita, 1800-2007 Mark J. Perry. In 1800, in the U.S. per-capita real GDP was $1,343 by 2007, it was $42,952. https://www.aei.org/publication/life-expectancy-v-real-gdp-per-capita-1800-2007/. Worker hours per capita are much lower now than in 1800, so the GDP/capita ratio is an underestimate of the productivity gains.               

[6] U.S. Department Of Health & Human Services, Information On Poverty And Income Statistics: A Summary Of 2013 Current Population Survey Data 09/18/2013 https://aspe.hhs.gov/basic-report/information-poverty-and-income-statistics-summary-2013-current-population-survey-data

The Enlightenment Era’s Ideals Were far from Fully Realized

The tolerance of the atrocity of slavery and the near extermination of Native Americans

The Enlightenment era ideals of freedom and equality for all, democracy, basic individual human rights and using reason to determine action, advanced societies greatly. But they had (and we still have) a long way to go. Many Enlightenment era Europeans’ and Americans’ understanding of who was fully human was tragically deficient. Racist atrocities during the Enlightenment era resulted from faulty information and evil people, not Enlightenment ideals.

Slavery pre-existed the Enlightenment era, but the large Transatlantic slave trade was facilitated during the era by advancements in weaponry and their production processes, the ability to travel, and to produce ships that could carry large numbers of people. Unfortunately, advancements in science and technology, a major characteristic of the Enlightenment era, have always resulted in advancements in the abuse of science and technology.

The Enlightenment transformations were imperfect and incomplete advancements, as have been all others. Basic individual human rights were not extended in the U.S. and Europe to races other than the white race, and to women, until well after the Enlightenment, and even in the 21st century this extension is far from complete.

Social orders dominated by elite powers of monarchy and nobility were inhumane, and eliminated based on Enlightenment philosophy. We now are in a period where a kind of aristocracy is again dominating our social order. This book will describe some of the resulting dysfunction and injustices.

So we need a New Enlightenment, one where all people independent of race and sex share in its benefits. But these benefits will be largest for those currently most disadvantaged by the unjust social order now.

If enslaved African Americans were justly compensated for their labor, what would the assets received then be worth today? Also, a hundred years of Jim Crow laws and economic oppression from other forms of discrimination followed enslaved African Americans’ theoretical emancipation. The result is that African Americans now have 1/20 the per capita wealth of whites.

Although not targeted to benefit any specific race, New Enlightenment reforms will reduce disparities between the races. But to what degree should we further correct disparities resulting from injustices of the past? This will best be answered after the true democracy and other social reforms of the New Enlightenment. 

Economic Disparities Now and Then

Greater economic disparities exist now than before the Enlightenment, as the table shows, for income inequality. The first three columns of the table include data from Gregory King’s classic early study of British income inequality that published the information on 26 classes of persons in England and Wales in 1688. The fourth column is calculated by multiplying the first and third columns. (A summary and analysis follows this detailed table.)

Income Distribution in 17th Century Britain

Number of Families in Class

Class

Yearly Income Per Family (£)

Total Income in Class

160

Temporal lords

3,200

512,000

26

Spiritual lords

1,300

33,800

800

Baronets

880

704,000

600

Knights

650

390,000

3000

Esquires

450

1,350,000

2000

Eminent merchants & traders by sea

400

800,000

12000

Gentlemen

280

3,360,000

5000

Persons in greater offices and places

240

1,200,000

8000

Lesser merchants and traders by sea

198

1,584,000

10000

Persons in the law

154

1,540,000

5000

Persons in lesser offices and places

120

600,000

40000

Freeholders of the better sort

91

3,640,000

5000

Naval officers

80

400,000

2000

Eminent clergymen

72

144,000

15000

Persons in liberal arts and sciences

60

900,000

4000

Military officers

60

240,000

120000

Freeholders of the lesser sort

55

6,600,000

8000

Lesser clergymen

50

400,000

50,000

Shopkeepers and tradesmen

45

2,250,000

150000

Farmers

42

6,300,000

60000

Artisans and handicrafts

38

2,280,000

50000

Common seamen

20

1,000,000

364000

Laboring people and out-servants

15

5,460,000

35000

Common soldiers

14

490,000

40000

Cottagers and paupers

6

240,000

30000

Vagrants, beggars, gypsies, thieves and prostitutes (per  head)

2

60,000

Medieval Britain Income Inequality Summary and Analysis with a Comparison to America's Income Inequality in 2011

 

Medieval Britain

2011 U.S.

Maximum household income

3,200(£)

$4.9 billion (hedge fund manager John Paulson)

Median household income

38(£)

$51,413

Ratio of maximum income to median

84.2 to 1

95,307

Top 400 highest income household’s average income

1835(£)

$202,400,000

Ratio of top 400 average
income to median

48 to 1

3,937

The highest 1%’s income  percent of  all income

11.3%

24%

Income Inequality Is Far More Extreme Now Than In Medieval Times

The Scottish Enlightenment’s Adam Smith

Adam Smith was one of the key figures of the Scottish Enlightenment, and he is widely considered the father of modern economics. His work was important to many other very influential thinkers, including David Ricardo and Karl Marx in the nineteenth century and John Maynard Keynes and Milton Friedman in the twentieth. Smith’s “An Inquiry into the Nature and Causes of the Wealth of Nations” (1776) is one of the most influential books ever written. In it he wrote:

 “Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many.”

“All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”[i]

“Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”

Societies require systems that moderate tendencies for distributions of wealth and income to be highly skewed toward a small economic elite.

The term “economist” did not exist in the time of Adam Smith. He considered himself to be a moral philosopher dedicated to understanding ways for society to be organized to best serve the majority of people and the ideal of justice.

People should be taxed “as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.” Taxation should “remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.” 

Adam Smith

Smith maintained that sharing the feelings of others as closely as possible is ideally one of our main drives in life. The meaning of his famous “invisible hand” reference has been misinterpreted to justify individual greed as the driving force within society.

[i] Adam Smith, The Wealth of Nations: An Inquiry into the Nature & Causes of the Wealth of Nations, Book 5, pg. 316 and Book 3, Chapter IV, pg. 448

Amazon as Metaphor manuscript excerpt,
6,183 words

Non-Policy Excerpts from Amazon as Metaphor

Introduction to Amazon as Metaphor

Our society’s growing injustices and dysfunctions have most of us desiring major social advancements. If instituted, the public policies I detail in this book would satisfy much of this desire. They would create a far more just, democratic, and better functioning society.

We are a heavily polled nation, so we know how most of its members perceive the state of it. Nearly eighty percent of Americans are dissatisfied with the country’s direction or believe it is in decline.[1] Sixty-two percent are “fearful” about the state of our nation.[2] Before the Covid-19 pandemic, seventy-three percent of Americans believed that historically extreme economic inequality would grow;[3] it did so more than most people could have imagined. From March 2020 to October 2021, U.S. billionaire wealth surged to $5 trillion, a seventy percent or $2.1 trillion increase. Most of the $2.1 trillion gain and the $5 Trillion in wealth is untaxed. Seven hundred forty-five billionaires own two-thirds more wealth than the bottom fifty percent of U.S. households combined.[4]  Seventy percent of Americans say the U.S. economic system unfairly favors the powerful.[5] The number would be significantly larger than seventy percent with better functioning mass media and educational institutions.

And of the related political inequality, eighty-five percent of Americans believe our political system needs major changes or needs to be completely reformed.[6] Voters rate political corruption as America’s biggest crisis. Eighty-seven percent say it is widespread in the federal government.[7] Fifty-one percent believe “U.S. democracy is at risk of extinction;” twenty-three percent are unsure.[8] 

Who is responsible for our ominous state of affairs?

Princeton University researchers determined the answer regarding the decline of functioning of our governmental institutions and, as a result, most of our social decline. Based on their analysis of 2,000 public policies instituted over three decades they found: “Policymaking is dominated by powerful business organizations and a small number of affluent Americans… The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact on public policy.”[9]  An economic elite is determining the course of our nation, so in a real sense, United States democracy is not at risk of being extinguished; it is already gone.

Since members of a small elite are abusing dysfunctional economic and political systems to advantage themselves at the expense of the rest of us, these systems require fundamental reforms. The reforms must end and reverse the vicious cycle of growing economic and political inequalities, each making the other more extreme, threatening our nation’s survival.

Despite the very wealthy’s corrupting influence on our political system, many people assume they are hugely beneficial members of our society or that financial rewards are proportional to the social value provided. Part 1 provides a detailed analysis of the case of Bezos, Amazon’s founder, largest shareholder, and executive chairman with nearly $200 billion in personal wealth, to determine the validity of this assumption. Part 3 examines its validity from a wider perspective.

None of the members of our super-wealthy class are among the people who made the greatest creative contributions to the foundation of our modern economy. The innovators who created foundational advancements, like the computer, the transistor, microelectronics, quantum mechanics (as much as 30% of GDP is based on inventions made possible by quantum mechanics[10]), the laser, and the  discoverers of the nature of DNA (on which the biotech industry is based), are mainly responsible for our economic system’s advancements over recent decades. These innovators are not among the super-wealthy, and their work was not motivated by the prospect of extreme personal wealth. Their creative genius was on a vastly higher level than any ingenuity involved in creating an online bookstore, Bezos’s original innovation. However, Amazon’s original “bookstore” website was primarily the creation of two software developers he hired. Extreme concentrations of wealth mainly come from exercising monopoly power or abusing corporate governance defects to get a large share of the corporate revenues.

We would not know Bezos’s name without massive governmental support of Amazon through tax advantages, direct public subsidies, and other routes. Just the removal of his company’s sales tax advantage from 1996 through 2015, which totaled $21.4 billion, would almost certainly have destroyed his company.[11] With this $21.4 billion government policy gift of up to a 10% discount to Amazon’s customers, Amazon destroyed tens of thousands of businesses.[12]

We all witnessed a dramatic example demonstrating financial rewards disconnect with social contribution. In 2008, the most richly rewarded financial industry executives were among those most responsible for nearly destroying the world economy.

The social harm of the richly rewarded Bezos and Amazon has been less dramatic and more insidious than that of some financial companies but substantial and motivated similarly—by goals more fundamental than serving customers competently. Like all conventional corporations, it is devoted to maximizing profits and, to serve this ultimate goal, maximizing market share. In the process, social harm is irrelevant, and Amazon has expressed it through its relationship with other businesses, its workers, and consumers—despite the polls showing the company at the top of all retailers in customer satisfaction. Most consumers are unaware of its detrimental effects on markets.

We did not need to empower a monopolist to support the development of e-commerce. In Part 2, I show how e-commerce could have developed far more constructively if Amazon did not exist and how we can radically beneficially transform the e-commerce landscape now. The resulting social benefits will be widespread and immense. Parts 2 and 4 detail several public policies that, if instituted, will reverse our ominous social decline trends, much of which are founded on corporations’ ownership and management structure. 

The extraordinarily powerful chief executive officer (CEO) of large corporations is nominally under boards of directors. But in practice, the CEO has the most power, including in the director selection process.[13] A consequence of this power is that most Fortune 500 corporations have the CEO also as the chairman of the board of directors.[14] Fortune 500 CEOs and other members of a corporate elite are setting the agenda for humanity’s future through their dominant roles in economic, political, and media systems worldwide. Their agenda serves their interests and has included a reduction of their taxes and regulations, the shredding of our social safety net, and government subsidies and lucrative contracts. Most of the rest of us want the opposite, but that’s irrelevant; they get what they want.

Our ruling class’s wealth is of historic proportions, and with it comes a corresponding amount of power. And as we have all heard, “Power tends to corrupt, and absolute power corrupts absolutely.”[15] For this reason, we should not allow even the most ethical among us the wealth or power of our ruling class. Making fundamental economic and political system reforms that reduce inequality more urgent is many of them were far from ethical before acquiring the massive amounts of money that further corrupted their character.

Among the consequences of our economic system’s flaws detailed in Part 3 are the little recognized personality characteristic tendencies at the top of the corporate hierarchy. The motives to be at the top and the requirements the get and be there result in a higher than average concentration of extraordinarily immoral people in our economy’s, and so our society’s, most influential positions.

In Part 3, I provide examples of top managers’ socially destructive behavior; much of it was required by their profit maximation role. However, some managers have pushed beyond legal and far beyond moral boundaries to maximize profits with actions that knowingly harmed the health and well-being and even destroyed the lives of large numbers of people.

In Part 1, I describe Amazon’s socially harmful practices over its 23-year history as a public company. Among them are labor abuses, which put it on the “cutting edge” of a possible regression to the late 19th and early 20th centuries. At that time, the abuses led to workplace protests, strikes, industry-wide boycotts, massive demonstrations in cities, and militias, police, or federal troops putting down labor strikes about 500 times.[16] From 1850 to 1940, at least 54 Americans were killed in labor disputes.[17]

Labor conflicts may not be as violent in the 21st century, but they are growing along with the power of technological methods for labor abuse. In 2018, the number of workers in strikes involving 1,000 or more workers was 485,200, a 264% increase from the average of the prior decade and the highest number in over 30 years.[18]

Unless we fundamentally reform the way corporations are organized and purposed, they will continue to generate social harm of various kinds and degrees. Powerful, elite-dominated enterprises dedicated to their profit regardless of social harm, on the whole, will ultimately be devastating.

Part 4 has a practical plan to reform U.S. corporations’ management and ownership structure, which is essential to improving corporate behavior. If instituted, it would transform our economy over a 20-year period to one where most businesses are worker-owned and democratically controlled. Among the benefits will be greatly reduced inequalities and economic hardships.

In his February 2019 State of the Union speech, Trump made clear he could not see the hardships our economic system generated (and continues to generate) for tens of millions of Americans. He claimed an “economic miracle” existed in the U.S. The major owners of large corporations and their managers saw a “miracle,” but for most of the rest of us, economic distress prevailed. In the United States, 78% lived paycheck to paycheck—if they missed one paycheck, they could not meet all their expenses.[19] 40% of adults could not come up with $400 for an emergency without selling something or borrowing money.

At about the time of Trump’s speech, Bezos also perceived an “economic miracle.” He had over $162 billion in wealth, making him the wealthiest person in the world by far. And growing numbers of people were seeing and pointing out a related obscenity: He accumulated his vast wealth largely as a result of pushing Amazon’s warehouse workers to their limits while paying them 9% below the industry average.[20]  For most of its existence, for tens of thousands of its warehouse workers, accumulating any wealth was impossible; they could not even meet their basic needs.

In the relentless pursuit of market share and profit, Bezos ignored moral considerations. But after he had $162 billion in company wealth, he may have acted on a moral imperative by raising Amazon’s minimum wage (except for contract workers) to $15 per hour. More likely, though, in the months before he announced the raise in November 2018, public awareness of his workers’ abuse grew to the extent where he viewed paying at least close to a living wage as a public relations necessity.

Bezos wanted to call his company relentless.com—that URL still takes you to Amazon’s site—before adopting the name of Amazon. Relentless.com expresses its essence well, as does regardless.com ruthless.com, and rapacious.com though a corporation with the later names would be less likely to be viable. All four alternatives have the disadvantage of not distinguishing the company.

In only one sense, Bezos’s relentless and regardless dedication to maximizing profits was unusual among corporate CEOs. He had a long view; most CEOs work to achieve maximum short-term profits. Bezos understood he was positioned to attain monopoly power by maximizing market share first, which would lead to maximum profits in the long term. Institutional and other investors saw the same and gave his company the freedom to lose massive amounts of money consistently for its first several years as a public company as they watched it destroy thousands of other businesses. (In just the year 2000, it lost $2.1 billion.[21]) Bezos and Amazon’s investors’ foresight was clear; the company reported $1.86 billion in net income in the fourth quarter of 2017, more than the total over the prior 14 years.[22] And it had a profit of over $10 billion in 2018, over three times its previous high.[23] 2021, Amazon’s profits boomed to $33.4 billion. The profits and resulting vast wealth in corporate stock mainly benefited a small elite, the major owners and top managers.

In 2021, Bezos ruled over 1,300,000 people, subjects to his whims. That number is more than the population of Wyoming and Vermont combined. The 1,300,000 only includes people formally Amazon employees, not the enormous number of sellers on Amazon’s “Marketplace” and other people whose livelihoods depend on Amazon.

Many people have struggled, fought, and died for the right to have democratic public governments, but most people now live much of their lives in a very different environment. Over 100 million Americans accept subordination within private dictatorships—corporate governments where the chief executive officer and a small surrounding clique have absolute rule. Managers set the agenda for and conditions of everyone else. They can impose sanctions, including job loss, demotion, pay cuts, worse hours, worse conditions, and harassment. Workers have no recourse except to quit unless these actions can be proven to be based on discrimination against a social group defined by race, religion, sex, or sexual orientation.

In some of our private dictatorships, including Amazon, the lowest-ranked have their bodily movements and speech minutely regulated most of the day.[24] Private dictators control millions of human lives to a degree Stalin never dreamed of. Besides their dominance over the people they employ, some significantly influence the lives of everyone through political systems they have captured.

In the idiom “a bull in a china shop,” bull is a metaphor for anything powerful whose character makes it regardlessly and relentlessly destructive to its environment. As one of the most prominent and significant examples, Amazon we can appropriately use as a more specific metaphor for powerful private dictatorships that express their relentless and regardless pursuit of market share and profit-maximization character in destructive ways in our economic and social environment. We must fundamentally reform their character because it threatens our society’s survival. I detail how we can accomplish this.

Amazon is a “public company,” which could mean the value taken from its workers for corporate profits is widely distributed. But it does not because Amazon, like all public companies, has a grotesque ownership distribution. The total public company value owned by the top 1% is more than 16 times the value held by the bottom 80% and more than the bottom 99%.[25] And in 2019, CEO’s average compensation of the top 350 firms in the U.S. rose to $21,300,000, while most Americans had an annual income of less than $36,000.[26] Over the last few decades, the “bosses” at the top of corporate hierarchies have been taking for themselves and corporations’ owners a growing share of the value workers produce, generating historic inequalities.

On the extreme inequality generated by our and the world’s economic systems, Nobel prize-winning economist Robert Shiller stated, “The most important problem we are facing … is rising inequality in the United States and elsewhere in the world.”[27] High and rising inequality is essential to all our social decline trends. Tens of millions of low-income Americans are harmed the most, but the harm is pervasive. Stressors associated with inequality even have detrimental health effects on the wealthy, as I show in Part 3. And as inequality continues to grow, the instability of the society in which the rich and the rest of us live will increase with it. So by reducing inequality, the rich will benefit also.

If our nation’s Founders miraculously appeared and were told how large our nation’s gap is between the rich and the poor in income and wealth, they would assume mass starvation and homelessness exists because only a very impoverished lower class can result in disparities so vast. But this is not the case because productivity is about 30 times what it was when our nation was founded.[28] Just between 1965 and 2014, productivity grew by a factor of 2.5.[29] As a result, a much higher standard of living with reduced work-hours for the majority was possible. Instead, a small elite captured almost all the benefits.

From 1965 to 2014, the top 1%’s annual income rose by 202%,­ from $450,000 to $1,361,000 (in 2017 dollars)—an increase of $911,000, while the bottom 50%’s income increased by 25%, from $13,500 to $16,900—an increase of $3,400.[30] Furthermore, most Americans are working longer. From 1965 to 2011, average work hours for two-parent households rose by 16%.[31]

This book details economic and political system advancements that will end extreme and growing inequalities if instituted. My public policy solutions are not bound by orthodoxies that have narrowed the range of public discussion to one mainly determined by economic elites. Their control of mass media and influence on our educational institutions and political system has succeeded in maintaining systems allowing their massive extraction of resources at the expense of the rest of us.

[1] https://news.gallup.com/poll/390350/satisfaction-low-economic-concerns-remain-high.aspx American society and culture is in decline https://conventionofstates.com/nearly-80-percent-of-americans-believe-us-is-in-decline

[2] https://www.pewresearch.org/fact-tank/2022/01/25/americans-broadly-negative-about-the-state-of-the-nation-but-most-see-a-better-year-ahead/

[3] https://www.pewresearch.org/social-trends/2019/03/21/public-sees-an-america-in-decline-on-many-fronts/

[4] https://inequality.org/great-divide/updates-billionaire-pandemic/

[5] https://www.pewresearch.org/fact-tank/2020/01/09/70-of-americans-say-u-s-economic-system-unfairly-favors-the-powerful/

[6] https://www.pewresearch.org/global/2021/10/21/citizens-in-advanced-economies-want-significant-changes-to-their-political-systems/

[7] https://www.realclearpolitics.com/articles/2019/04/25/voters_rate_political_corruption_as_americas_biggest_crisis_140156.html

[8] https://drive.google.com/file/d/1mSZs1IZoMeu2KQHE9_maQmVUMVXqV7NN/view

[9] Testing Theories of American Politics:Elites, Interest Groups, and Average Citizens, Martin Gilens, Benjamin I. Page, Princeton University

[10] 100 Years Of Quantum Mysteries, Scientific American, Feb 2001, pg. 69 Max Tegmark and Archibald Wheeler

[11] http://cepr.net/blogs/beat-the-press/holiday-season-is-time-for-compassion-for-billionaires-the-case-of-jeff-bezos-and-amazon     $20.4 billion through 2014,  $704 million in 2015 http://www.civiceconomics.com/empty-storefronts.html

[12] Prime Numbers: Amazon and American Communities, April 2018, American Booksellers Association and Civic Economics

[13] https://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=1053&context=bblj

[14] http://fortune.com/2014/10/21/chairman-ceo/

[15] Originally stated by Lord Acton in a letter to Bishop Mandell Creighton in 1887

[16] The Second Industrial Revolution and Its Consequences, www.digitalhistory.uh.edu https://whorulesamerica.ucsc.edu/power/history_of_labor_unions.html

[17] https://en.wikipedia.org/wiki/List_of_worker_deaths_in_United_States_labor_disputes

[18] https://www.bls.gov/wsp/

[19] https://www.theguardian.com/commentisfree/2018/jul/29/us-economy-workers-paycheck-robert-reich

[20] Amazon’s Stranglehold: How the Company’s Tightening Grip Is Stifling Competition, Eroding Jobs, and Threatening Communities, Institute for Local Self-Reliance, pg. 38 Olivia LaVecchia, Stacy Mitchell, 11/16

[21] https://ir.aboutamazon.com/annual-reports-proxies-and-shareholder-letters/default.aspx Amazon’s 2000 annual report shows a loss of $1.4 billion, which I inflation adjusted to August 2020 for the $2.1 billion result.

[22] https://qz.com/1196256/it-took-amazon-amzn-14-years-to-make-as-much-net-profit-as-it-did-in-the-fourth-quarter-of-2017/

[23] https://www.marketwatch.com/story/amazons-run-of-record-earnings-comes-to-an-end-and-the-stock-is-falling-2019-07-25

[24]https://www.salon.com/2014/02/23/worse_than_wal_mart_amazons_sick_brutality_and_secret_history_of_ruthlessly_intimidating_workers/

[25] Federal Reserve, 2016 Survey of Consumer Finances, https://www.federalreserve.gov/econres/scfindex.htm Excel Extract File analysis

[26] Average CEO compensation, 2019, https://files.epi.org/pdf/204513.pdf, median personal income, 2019, https://fred.stlouisfed.org/series/MEPAINUSA672N

[27] Rising inequality ‘most important problem,’ St. Louis Post-Dispatch, Christoffersen, John, 10/14/13

[28] https://ourworldindata.org/economic-growth. In 1775, in the U.S. per-capita real GDP was $2,153 (2019 dollars) by 2019, it was 27 times that, $57,997. Worker hours per capita are lower now than in 1775, so the GDP/capita ratio is an underestimate of the productivity gains.  

[29] Federal Reserve Bank of St. Louis, Nonfarm Business Sector: Real Output Per Hour of All Persons, https://fred.stlouisfed.org/series/PRS85006092, excel file

[30] World inequality database, https://wid.world/data

[31] https://www.pewsocialtrends.org/2013/03/14/chapter-5-americans-time-at-paid-work-housework-child-care-1965-to-2011/

Late-Stage Capitalism

Ours is not the capitalism of our nation’s Founders and “The father of capitalism,” Adam Smith. They lived when free markets were viewed as a route to liberation and equality. Before then, in 17th and 18th century Britain, the state granted monopolies to big merchants, forcing small craftsmen to submit to their regulations. Aristocratic families enjoyed a monopoly on land they inherited in perpetuity, and the state barred the breakup and sale of any part of large estates. Farmers could rent their land from aristocrats only on short-term leases, which forced them to submit to their whims.[1]

Their conditions were unjust and dysfunctional, so eventually rose an influential advocate for radical reform. In the 18th century, Adam Smith described why monopolies and involuntary servitude should end to create a more just and egalitarian society and one more prosperous. His view was that when workers in free markets keep all the fruits of their labor, as they do when self-employed, they will work harder and more efficiently than if employed by a master, who takes a cut of what they produce.[2]

Smith and his contemporaries viewed America as realizing these hopes—although only for white men. From its inception, the destructiveness of capitalism’s private profit motive was revealed in the atrocities of slavery. Slavery existed before capitalism, but the number of enslaved people boomed after its advent; the slave trade was globalized, and the industrial revolution depended on expropriated land and enslaved labor in the U.S.[3]

For the first half of the 19th century, slavery established the United States’ position in the global economy. In the first six decades of the 19th century, more than half of the nation’s exports consisted of raw cotton, almost all grown by enslaved African Americans. In 1850, 72% of the cotton consumed in Britain was grown in the United States, with similar proportions for other European countries.[4] Industrialization in the United States began with a focus on cotton manufacturing. So, northern industrialists and much of world “capitalism” depended on the products of enslaved Black people.[5]

In 1861, when Union General John C. Frémont emancipated enslaved people in Missouri, The Economist magazine wrote that such a “fearful measure” might spread to other states with enslaved labor, “inflict[ing] utter ruin and universal desolation on those fertile territories.” The Economist also warned that emancipating enslaved people from the “fertile territories” will inflict “utter ruin” on the merchants of Boston and New York, “whose prosperity … has always been derived” to a large extent from those territories.[6]

The opposite of the capitalist ideals of private-property rights, lean government, and the rule of law: state intervention in the form of confiscation of vast land areas and appalling lawlessness extending to atrocities for profit are at the foundation of our nation’s economic supremacy.

But among white men, capitalism played an essential role in creating the prosperity and egalitarianism that Smith envisaged because most of them were self-employed as either yeoman farmers, independent artisans, or merchants.[7] In Smith’s time (1723-1790), the economy functioned (outside of the plantations worked by enslaved people) with enterprises composed of one or a few individuals because economies of scale were unimportant for the production of most goods.[8] The typical business establishment before the 1870s was financed by a single person or by several people in a partnership. As late as 1880, the average factory had less than $1,800 in investment. Other than the plantations of the south, almost all businesses were owned and worked by the same people.[9] In 1854, Lincoln wrote:

 

There is no permanent class of hired laborers amongst us… The hired laborer of yesterday, labors on his own account today; and will hire others to labor for him tomorrow. Advancement — improvement in condition — is the order of things in a society of equals.[10]

 

As business capital requirements grew over the decades since the industrial revolution, so did corporations’ share of our economy. The process transformed society in a kind of slow-moving revolution. Now, most actions that directly contribute to our “gross domestic product” are performed by a large majority based on a small minority of people’s dictates.

In the U.S., the peak percentage of the population enslaved was about 18%, in the late 18th century.[11] Today, over 90% of American workers have a “boss” who tells them what to do and decides how much of the value they produce they can keep.[12]

Our bosses’ power and dedication to maximizing profits commonly result in worker abuse. I describe some in Amazon and other private dictatorships. However, about half of American workers were in a sufficiently benevolent dictatorship to claim they were satisfied with their role in it.[13] They have been indoctrinated into accepting workplaces without the economic, social, and psychological advantages of sharing in their ownership and control. We have advanced from slavery but far from sufficiently. And like in the 18th century, economic elites will tell us incorrectly that the advancements we need, and that I describe in this book, will lead to economic ruin.

Defenders of our private dictatorships-based economic system claim they are not dictatorships because workers are under no force of violence to come to their workplace and are not imprisoned in it—they freely choose it. However, workers often have no good options. Without an immediate replacement, quitting a job involves income loss and loss of access to health care when health insurance is tied to workplaces, which it is for 58.4% of Americans under age 65.[14] And most workers are only “free” to choose a work environment where a “boss” tells them what to do, and much of the value they create top managers take for themselves and company owners.

Among the forces tethering many employees to their workplaces are non-compete agreements. Bezos requires his employees to agree to not “directly or indirectly” support any good or service that competes with those they helped support at Amazon for a year and a half after leaving the company.[15] Since Amazon is appropriately dubbed “The Everything Store,” its non-compete agreement could be interpreted to mean its workers cannot be involved with a large part of the global economy if they leave Amazon.

Thirty million U.S. workers have their freedom to leave their jobs restricted by non-compete agreements, but even without one, as the following examples show, they are not really free. If they were, they would choose a workplace where they are better compensated and respected.[16]  

  • Due to the rampant violations of workers’ rights by our largest private dictatorship, Walmart, the U.S. government issued over 60 complaints against it at the National Labor Relations Board just between 1995 and 2003. Walmart’s labor law violations have included requiring its employees to work after their shift and during their state-mandated break time with no pay, threats and intimidation of employees, sexual discrimination, unlawful surveillance, and illegally firing workers who attempt to organize a union.[17] So it doesn’t have to pay for their health care under the Affordable Care Act mandate, Walmart (along with Home Depot, Trader Joes, Forever 21, and other large retailers) cut many workers’ hours to under 30 per week. Walmart’s health care plans fail to cover hundreds of thousands of its workers.[18] Walmart workers are required to work when needed, which results in irregular numbers of work hours and work times.[19] Despite these facts, far more people apply for work at Walmart than it has jobs. At a new Walmart in Washington DC, just 2.6% of the applicants got a job. (Applicants for these Walmart jobs faced far worse odds than the people who apply to Harvard University, which accepts 6.1% of applicants.)[20] Those who have succeeded in getting a Walmart job had the privilege of working to generate the $225 billion in wealth of the Walmart heirs—people who need not do, and mostly don’t do, any work.[21]
  • Poultry workers wear diapers to work because they are denied bathroom breaks, and they restrict their intake of liquids to dangerous levels to minimize their need to urinate.[22] This worker abuse is like that existing in the Amazon warehouses where workers “pee in bottles” because they fear the time walking to a bathroom will cause them to miss Amazon’s production targets and be fired.[23] And for the same reason, Amazon delivery drivers commonly pee in bottles and defecate in bags.[24]

Sweatshop conditions overseas more dramatically demonstrate how extreme the power disparity can be between employer and employee and employees’ lack of freedom, which U.S. corporations exploit. For example, Apple outsources iPhone assembly to a Foxconn plant in China where, in just one year, 14 workers committed suicide by throwing themselves off tall company buildings because of work conditions inside.[25] These private dictatorship victims had what some people call “freedom” to leave their workplace without leaving the world.

Corporations are even empowered to limit worker freedom off the job; if a worker disobeys, he or she can be fired. Workers have been fired for smoking, political actions, and failure to exercise and diet on their “free time” off the job.[26]

Private dictators also extend their power outside their corporation by essentially buying the election of favored candidates for public office and, after their election, lobbying them to get what they want. Large corporations have the resources to most effectively lobby for policies that advantage them and impose costs on society far more significant than those voluntarily accepted by their customers. Part 1 describes ways Amazon has done so; other examples are in Part 3.

Some private dictators influence our political system by having their workers do it for them. Corporate managers have the legal right to mandate worker attendance at a political rally for a favored candidate—and fire or punish workers who decline to participate. In one poll, 13% of workers reported employer contacts about specific issues or political candidates. Managers have reported that mobilization of workers for political purposes was about as effective in changing public policy as hiring lobbyists and was even more effective than contributing to political action committees and buying campaign ads.[27] Investments in political system control through all these means are extraordinarily profitable.

Advances in technology have facilitated employee mobilization for employers’ political goals. Companies email workers messages to pass on to their representatives and check if they opened them, clicked through to websites with additional information, and acted on their requests. Employers can legally use tracking information to reward workers who help promote their preferred public policies and punish those who don’t.[28]

In a political system previously dominated by profit-maximizing private dictatorships (PMPDs)[29], the Supreme Court’s Citizens United (2010) and Mccutcheon (2014) decisions further enabled their economic power to translate into socially harmful political power. Since the larger the corporation, the more resources it has to corrupt our politics, and monopoly and semi-monopoly power further increase those resources, we have not enforced preexisting antitrust laws and not responded to a new gilded age with appropriate new laws. Antitrust laws are essential tools of democracy, and they have not been wielded appropriately for a reason they exist: concentrated economic power inevitably results in dominating political power.

One study found in over half of the 26 industries analyzed, two PMPDs now control over half the market. In many industries, the top two firms gained over 20% of their market from the early 2000s to 2018.[30] Over the last two decades, over 75% of U.S. industries have experienced an increase in concentration, while United States public markets have lost almost 50% of their publicly traded firms.[31] The Fortune 500 corporations captured 73% of our economy in 2013.[32]

Instead of consolidation resulting in lower prices, they increased profits and upper management pay.[33] Corporate profits after tax increased by 680% over the last 30 years.[34] And CEO compensation has grown 940% since 1978.[35]

Social harm from large size can increase in a quantum leap, and the next financial crisis might trigger it. Historically, financial crises are associated with the rise of authoritarian right-wing parties in alliance with concentrated economic power.[36]

After a financial crisis, monopolies and cartels in a mutually supportive relationship with Hitler enabled his and Nazism’s rise. The alliance allowed the monopolies’ to avoid democratic accountability, and Hitler benefited from the loyalty and some of the resources of powerful allies. After World War ll, the Allies broke up the major Nazi monopolies so that they could not be “used by Germany as instruments of political or economic aggression,” in the words of the law used to do so—and we instituted laws to limit the size of U.S. corporations.[37] We also instituted highly progressive tax rates that, as a significant part of our social decline trends, no longer exist.

 

[1] How bosses are (literally) like dictators, Americans think they live in a democracy. But their workplaces are small tyrannies, Elizabeth Anderson, 9/3/17, https://www.vox.com/the-big-idea/2017/7/17/15973478/bosses-dictators-workplace-rights-free-markets-unions

[2] Ibid.

[3] https://www.chronicle.com/article/slavery-and-capitalism/

[4] Ibid.

[5] Ibid.

[6] Ibid.

[7] https://www.vox.com/the-big-idea/2017/7/17/15973478/bosses-dictators-workplace-rights-free-markets-unions

[8] Private Government, Elizabeth Anderson, 2017, pg. 22

[9] The Second Industrial Revolution and Its Consequences, www.digitalhistory.uh.edu

[10] Abraham Lincoln and His Books, William Eleazar Barton, pg. 54

[11] https://commons.wikimedia.org/wiki/File:US-SlaveryPercentbyState1790-1860.png

[12] 10 facts about American workers, Pew Research Center, Drew Desilver, 9/1/16. The 10% self-employed statistic in the referenced report includes independent contractors of corporations who, although they have more freedom, are constrained by corporate power to varying degrees. For example, Uber drivers are “self-employed.”

[13] https://www.conference-board.org/press/pressdetail.cfm?pressid=7528

[14] https://www.kff.org/health-reform/press-release/coverage-at-work-the-share-of-nonelderly-americans-with-employer-based-insurance-rose-modestly-in-recent-years-but-has-declined-markedly-over-the-long-term/

[15] https://www.theverge.com/2015/3/26/8280309/amazon-warehouse-jobs-exclusive-noncompete-contracts

[16] https://www.epi.org/blog/white-house-issues-call-to-action-on-non-compete-clauses/ /

[17] Everyday Low Wages: The Hidden Price We All Pay For Wal-Mart, A Report By The Democratic Staff Of The Committee On Education And The Workforce, U.S. House Of Representatives, Representative George Miller (D-Ca), 2/16/04, https://www.alternet.org/2015/01/ugly-walmart-truth-some-managers-treat-workers-dirt/

[18]https://www.philly.com/philly/business/20141216_Pa__Supreme_Court_affirms__151M_wages_ruling_against_Wal-Mart.html https://corpwatch.org/article/us-house-audit-says-wal-mart-violated-labor-lawshttps://www.forbes.com/sites/clareoconnor/2014/01/22/target-joins-home-depot-walmart-others-in-dropping-health-care-for-part-timers-citing-obamacare/#7739841516a8, http://changewalmart.org/issues/healthcare/

[19] https://populardemocracy.org/sites/default/files/HourbyHour_final_0.pdf, The Ugly Walmart Truth: Some Managers Treat Workers Like Dirt, Alyssa Figueroa, AlterNet, 1/29/15, & Private Government, Elizabeth Anderson, 2017, pg.137

[20] https://www.businessinsider.com/wal-mart-receives-23000-applications-2013-11

[21] Wealth of the Walmart heirs, July 2020 https://en.wikipedia.org/wiki/Walton_family#cite_note-6

[22] https://www.citizen.org/our-work/health-and-safety/poultry-workers-denied-bathroom-breaks

[23] https://www.theverge.com/2018/4/16/17243026/amazon-warehouse-jobs-worker-conditions-bathroom-breaks

[24] https://theintercept.com/2021/03/25/amazon-drivers-pee-bottles-union/

[25] https://etd.ohiolink.edu/!etd.send_file?accession=kent1461505241&disposition=inline

[26] How bosses are (literally) like dictators, Americans think they live in a democracy. But their workplaces are small tyrannies, Elizabeth Anderson, 9/3/17

[27] Employer Political Coercion: A Growing Threat, Alexander Hertel-Fernandez, The American Prospect magazine, 9/23/15

[28] Ibid.

[29]  Profit-maximizing private dictatorship is a more descriptive so better term for the business enterprises dominating our society than corporation, except for its length, so I will often use the PMPD acronym instead of the word “corporation.”

[30] https://nonprofitquarterly.org/nonprofit-study-charts-rising-us-corporate-concentration/

[31] Be Afraid of Economic ‘Bigness.’ Be Very Afraid. Wu, Tim, New York Times, 11/14/18

[32] https://fivethirtyeight.com/features/big-business-is-getting-bigger/

[33] https://www.economist.com/briefing/2016/03/26/too-much-of-a-good-thing

[34] https://fred.stlouisfed.org/series/CP

[35] https://www.epi.org/publication/ceo-compensation-2018/

[36] Politics in the Slump: Polarization and Extremism after Financial Crises, 1870-2014 Manuel Funke, Moritz Schularick, Christoph Trebesch, 9/23/15 Free University of Berlin, John F. Kennedy Institute, University of Bonn, University of Munich.

[37] Be Afraid of Economic ‘Bigness.’ Be Very Afraid. Wu, Tim, New York Times, 11/14/18

Ways Out of Our Dark Times

If instituted, the systemic reforms detailed in this book will end massively concentrated economic power. Part 2’s public policies will end Amazon’s monopolization of book sales and e-commerce and its socially harmful consequences described in Part 1. I base the policies on what should be a widely accepted proposition: Infrastructure over which we transact commerce is best publicly supplied and available to any product seller with no or low user fees (as we do with roads). So, I propose replacing Amazon’s e-commerce platform with a publicly produced one. And I detail how we can use this platform in a system that will support a local retail store renaissance. The resulting social benefits will be immense. Communities where locally owned businesses have a larger share of total commerce have a larger middle class and more civic participation and social ties.[1]

For book sales, the platform is integrated with a radically reformed book distribution system. Our current distribution system’s warehousing, shipping, and other costs will be eliminated by a system that distributes book files to book printing equipment in bookstores and libraries. My system also has the significant advantages of enabling ordered books to be available in minutes and lowering the environmental costs of supplying printed books. Bookstores returned over 410 million pounds of books in 2018, which wasted paper, shipping, and at least 20% of bookstore labor costs. Publishers now also waste a substantial amount of paper and money printing books they never ship. (My proposal solves the problems of a prior attempt for widespread local on-demand book printing.) The system will benefit bookstores, libraries, authors, consumers, and publishers.

Part 4 describes other advancements to our economy’s private and public sectors that will reduce our nation’s massively concentrated economic power, which is incompatible with democracy. Regarding the private sector, a policy agenda I detail will, if instituted, result in community-integrated, worker-owned and controlled businesses creating most of our nation’s GDP at the end of a 20-year transition period. (This group of proposals adds to and summarizes those I detail in my prior book, The New Enlightenment.)   Loans, grants, tax benefits, subsidies, and education assistance within several programs will accomplish this. Extending democratic practices into the workplace and business capital ownership to the workforce will end extreme income and wealth inequality and other destructive consequences of elite-owned business enterprises structured as private dictatorships.

Furthermore, worker-owned and controlled businesses will enhance prosperity for the reason Adam Smith knew: workers in a workplace they own and control will work harder and more efficiently than if they are employed by a master, who takes a cut of what they produce. Worker ownership and democratic control will also increase job and life satisfaction and improve democratic functioning outside the workplace. Before my detailed, practical public policy proposals for the widespread establishment of worker-owned and controlled businesses in the U.S., none existed to accomplish this immense economic and social advancement.

However, the public sector is crucial and should play a larger role in our economy. To support this view, I dispel the “the private sector is always more dynamic and productive than the public sector” myth with several comparisons.

My housing crisis solution will demonstrate the public sector’s superiority in this vitally important sector of our economy. If instituted, it will have lower than the average per household cost of HUD’s “Section 8” program, and it will serve low-income households far better. It will also well serve middle-income households. With preexisting and over a million new public housing units per year, residents will accumulate some of the asset value of their apartment with their monthly payments. If instituted, my policy proposal will solve the housing crisis and reduce massive wealth inequality. It is easily supported by eliminating the income tax deduction of mortgage interest. Also, my proposed wealth and land value taxes will generate hundreds of billions of dollars per year for other crucial public purposes.

More public sector involvement can also fundamentally advance our pharmaceutical research and supply system. The patent system we now use to motivate pharmaceutical R & D distorts research priorities, drug trials, drug marketing, and drug regulation against the public interest. Primarily due to it, hundreds of thousands of lives have been harmed or destroyed by the industry’s drugs and their exorbitant prices. My publicly funded system will end the industry’s harmful practices and accelerate the development of effective and safe medicines. Furthermore, prescription medicines will be free for patients and have no net cost for the government due to a substantial decrease in Medicare and Medicaid drug expenditures.

 

[1] https://ilsr.org/key-studies-why-local-matters/

Since Amazon’s chairman and founder has about $200 billion in personal wealth, and Amazon is among the highest valued companies in the world (with a February 2022 market capitalization of $1.6 trillion), and most of its workers are treated like peons, it provides a particularly instructive case study on the inequality generating capacity of businesses organized as private dictatorships. Amazon also displays how private tyrannies’ exclusive focus on increasing market share and profits leads to other socially destructive outcomes. The company is widely admired because many relevant facts are little known. I will describe them, and they are important to know because Amazon continues to advance toward its goal of being the private dictatorship gatekeeper between all of us and everything we buy.

So, before we take a broader look at our PMPD-based economic system with other manifestations of it and solutions to the system’s flaws, let’s take a close look at an extraordinarily influential company, Amazon. A company that acted on the “move fast and break things” motto of Facebook CEO Mark Zuckerberg before and after he expressed it.

Amazon as Metaphor manuscript excerpt

A Shocking Perspective on Our Nation’s Wealth Inequality

In the 1920s, we also had extreme concentrations of wealth in a small elite, and the “Roaring Twenties” rich lived famously extravagant lifestyles. The New Deal’s response to the 1929 to 1939 Great Depression and the legacy of the New Deal’s cultural effects resulted in reduced economic disparities and relatively stable economic growth for decades.

The top 1% in 1928 took an even larger share of national wealth than the top 1% of modern times. However, our top 1% have an average wealth far larger because we are now a much wealthier country. The average wealth of a top 1% member was $3.46 million in 1928 (inflation-adjusted) and $13.30 million in 2019. The total of the excess that 2019’s top 1% had above what they would have had if they had the same average wealth as the top 1% of 1928 was $32.3 trillion. If the $32.3 trillion were distributed to all households having an annual income less than $128,000 (79% of households), on average, each would have received enough to buy a median value home ($318,400) in 2019. If the $32.3 trillion were distributed to all households in the 99%, on average, each household would have received $254,000.

Top 1% per Capita (Person) Wealth, 1928 and 2019 (Inflation Adjusted)

Amazon as Metaphor manuscript excerpt

A Dramatic Expression of Our Income Inequality Problem

Our nation has unprecedented wealth because productivity has advanced for centuries. All workers, including people who do unpaid labor, play a role in creating our wealth, but as we have seen, workers are are not getting their fair share of the historically large amounts of value they are creating.

Many decades ago, we were sufficiently productive to eliminate poverty. But in 1973, for example, we had a poverty rate of 11.1%. In 2017, the poverty rate was 12.3%, and 39.7 million Americans lived in poverty, despite productivity and GDP per capita more than doubling between 1973 and 2017.[1] Low-income Americans have seen little or no benefits from the great advances in productivity, while almost all have gone to the top.

In America’s Roaring Twenties, we also had historic concentrations of income in a small elite. A plutocracy with some democratic forms existed in the United States then and now. Their enormous inequalities played an essential role in creating the 1929-1939 Great Depression. And we had our massive inequality-related Great Recession at the end of 2007, one of the worse financial crises in U.S. history. Extreme inequality creates severe financial crises because debt in the middle and lower economic classes increases with inequality, and debt bubbles eventually burst. Also, financial speculation increases in the upper-classes because some of their massive wealth they can spend on little else, and speculative bubbles burst.

Income concentration in terms of percent is similar today as in the 1920s, but like national wealth, national income is far larger now. And so is the income of our “plutocrats” (which I’ll define as top 1%).

If the average plutocrat of 2018 had limited himself to the same amount of income (inflation-adjusted) as the plutocrat of 1928, and the total of the excess above this amount that they received were distributed to the rest of the nation, 99% of Americans would have had $2.93 trillion more in income.[2]

The total tuition paid by non-profit private and public four-year college students was $135.4 billion in the 2016 academic year.[3] Let’s assume this cost and the excess income in our top 1% remain the same, and the insignificant portion of our plutocrats’ excess $2.93 trillion in income needed to make college tuition-free is used for that purpose. After subtracting everyone’s tuition, $2.79 trillion would remain. If $2.79 trillion were progressively distributed within households in the bottom 80% in income, on average, each would have $27,062 more income, but the poorest could receive double this amount.

Consider the following to understand the significance of an additional income of $27,062 :

The U.S. Bureau of Labor Statistics’ 2017 Consumer Expenditure Survey shows that the average per household cost per year for food was $7,729; health care, $4,928; transportation, $9,576; and apparel and services, $1,833. These costs for basic needs, excluding shelter, total $24,066—$2,996 less than the $27,062.

I excluded the cost of shelter because all households could have received funds to buy their own house based on the prior redistribution. Of course, house prices would rise if the number of people seeking to buy one rose to this degree. However, if the redistribution were gradually phased in over about a dozen years, supply could meet the additional demand, so prices may rise little.

If households in the bottom 80% had $28,370 more income and about $300,000 more wealth, on average, and students did not accumulate another $85 billion in debt—which, as noted earlier, totals $1.5 trillion— substantially more services and goods would have purchased. So the labor force participation rate and GDP would have been much higher. And it would have empowered many tens of millions of people to better support children and save for retirement.

I do not recommend redistribution in amounts this large because the wealthy would not tolerate it, so the social disruption involved would be destructive. Extreme inequality requires redistribution, though, for economic, political, and moral reasons. And the need for public policies that more robustly redistribute the benefits of our society’s productive capacity continues to grow with the excesses of modern-day plutocrats.

Since the wealth and income of our top 1% would not exist if they did not live in a society with well-functioning public systems, a vast, commonly inherited knowledge base, and an educated workforce capable of using this base, it is not just up to them to decide on how far their enormous income and wealth should be above that of the plutocrats of the 1920s. Systemic issues that affect everyone’s lives we all should decide on democratically. A central systemic issue is how the wealth created by people collectively in our extensive and complex economic system is most beneficially distributed. We cannot achieve an optimum, but a functioning democracy would correct gross maldistribution.

[1]Poverty statistics: https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-people.html.  Productivity statistics: https://fred.stlouisfed.org, Real gross domestic product per capita, Chained 2012 Dollars, Quarterly, Seasonally Adjusted Annual Rate, productivity growth,  fred.stlouisfed.org/series/MPU4910063

[2] National income, FED data Q2 2018; UC Berkeley, Piketty-Saez-Zucman, 2017, Appendix II: Detailed distributional series, Last update: November 9, 2017, and 2016  Appendix I: Aggregate income, wealth, returns, and saving Last update: December 16, 2016

[3]National Center for Education Statistics, Enrollment and Employees in Postsecondary Institutions, Fall 2016; and Financial Statistics and Academic Libraries, Fiscal Year 2016

Amazon as Metaphor manuscript excerpt

The Decline Of Corporate Taxes and its Significance

Also resulting from large corporations’ political system influence, the statutory corporate tax rate has gradually been reduced from over 50% in the 1950s to its current 21%, contrary to the preferences of most Americans. Polls have consistently shown that about two-thirds of Americans think corporations should pay higher taxes.[i] In 2017, despite hundreds of billions of dollars in federal deficits and trillions in debt, and the need for trillions more spending on infrastructure and other urgent public needs, the corporate tax rate dropped from 35% to 21%. The massive Trump corporate tax cuts boomed stock buybacks, dividends, and stock prices for shareholders. But the reduction of public resources harm everyone, including the rich, because they also have to live in the resulting decaying and declining society.

The statutory tax rate did not decline sufficiently for many large corporations, so they reduce theirs further with tax avoidance schemes, disadvantaging small businesses. Small local companies cannot stash profits in a shell company or undertake a foreign “inversion,” but large corporations exploit these and other tax loopholes. As I noted earlier, small businesses pay higher effective tax rates, on average, than big companies do. In 2018, 27 large corporations made $53.7 billion in profits, but not only avoided all taxes, they received $2.5 billion in federal tax rebates.

An international race to the bottom in corporate tax rates is ongoing, and 40% of multinational corporations’ profits are shifted to tax havens.[1]

In the 2010s, when corporate tax rates were relatively low, the U.S.’s 2.1% average GDP growth rate was less than half the 4.5% rate of the 1950s, when corporate taxes were high.  Many factors are involved in economic growth, and correlation does not prove causation. However, the higher top tax rates supported public policies that caused the higher growth rates, such as high funding levels for infrastructure, R & D, and education. Elite domination of our mass media causes many Americans to incorrectly believe that high economic growth rates are incompatible with high top personal and corporate income tax rates.

The total tax revenue since 1951 that would have been collected if corporate tax revenues stayed as the same share of GDP  as it was in 1951 is $31.2 trillion. This massive amount of money well spent on infrastructure improvements; K-12 education, including higher teacher pay and facilities improvements; free college tuition; R & D, and reducing inequality could have resulted in a far superior society. For readers familiar with excel, here is the file  with the simple calculation that includes the data sources resulting in the $31.2 trillion excess tax revenue estimate.

[1] The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay, Emmanuel Saez, Gabriel Zucman, 2019, pg. 76

Amazon as Metaphor manuscript excerpt on the personality characteristic tendencies in a corporate elite, 7,110 words.

(Link to the next subject, Are Dominance Hierarchies Inevitable In Human Societies?

Considerations on the Personality Characteristics of the Top 0.1%

About two-thirds of the U.S.’s top 0.1% in income are top managers of corporations, and researchers have studied their personality characteristics tendencies, so I will focus on them, a highly influential group.[1] Top corporate managers can exert life-altering power over many people in their employment and elsewhere through their control of massive corporate and personal financial resources. They are empowered to create extraordinary degrees of social benefit or harm, including through our dysfunctional, elite-dominated political system.

Top managers’ institutional role is suggestive of their character, a role that requires an exclusive focus on increasing corporate profits and market share. Pursuing these imperatives requires a psychology undeterred by social harm considerations except when actions based on them lead to higher profits.

Among CEOs’ most significant acts in pursuit of maximum profits are those that minimize workers’ wages and other costs to employ them, diminishing people’s well-being from whose work they are benefiting. Top managers’ have very “successfully” profit maximized for their corporations and themselves. Corporate profits, and so their compensation, are at historic highs, while 40% of Americans have difficulty meeting their basic needs.[2] The vast inequalities generated by corporate managers have significantly harmed tens of millions of Americans, our economy, and society.

Abigail Disney, a wealthy heiress of the Disney corporation fortune, gave us an inside look at the psychology of the wealthy class. Having a large fortune is “an empathy killer,” Abigail Disney admitted.”[3] But she later revealed a more important truth: empathy needs to be absent to rise to the top of the corporate hierarchy. “The only way a middle manager can demonstrate that he is the guy who needs to be elevated is by pushing and pushing and pushing his workers to the extreme.”[4] And she could have added but didn’t, “while paying them as little as possible.”

[1] Capital In The Twenty First Century, Thomas Piketty pg. 302   

[2] https://www.urban.org/sites/default/files/publication/98918/material_hardship_among_nonelderly_adults_and_their_families_in_2017.pdf

[3] https://www.wbur.org/hereandnow/2019/09/24/abigail-disney

[4] Abigail Disney Interview on Seat at the Table, 1/29/20, Vice TV

More Details on the Personality Characteristics of the Corporate Elite

I will divide human capacities into three categories—intellectual, physical, and moral for a more detailed analysis of top managers’ personality characteristic tendencies and their consequences.

Above-average intelligence will increase the likelihood of getting to the top of the corporate hierarchy, and being able to work longer and harder than competitors is advantageous. Unfortunately, as the required behavior and Ms. Disney’s statement on the effect of a large fortune suggest, a negative correlation exists between corporate status and moral capacity. This is highly significant for society because employing the powerful combination of high intelligence, energy, and massive resources with no or little moral boundaries has made corporate managers extraordinarily socially harmful. The imperative to maximize profits combined with top managers’ character has them dominating both our economic and political systems in ways that are primarily responsible for our social problems.

Ruthlessness, exploitativeness, narcissism, lack of empathy, selfishness, manipulativeness, greed, a desire for power, and egotism qualify people for the immoral category, and most of these personality characteristics advantage them in their rise to top corporate positions when they exist with intelligence and excellent political skills.[1] And it is not uncommon for an extraordinary degree of both immorality and political skills to coexist. One study found that people low on measures of honesty and humility were more likely to have high political skills.[2]

At the top of the corporate hierarchy, immoral people’s harmfulness is magnified by “Gresham’s dynamic,” where managers of other corporations are compelled to behave similarly. George Akerlof, Nobel Laureate in Economics in 2001, summarized Gresham’s dynamic phenomenon this way:

“[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.” To survive in a market where participants profit from dishonest or immoral acts, other businesses must behave similarly, which sinks an industry’s managers to the lowest among them. It’s not just dishonesty that spreads like a disease, any antisocial act that increases profits is similarly contagious.

A famous non-economist described Gresham’s dynamic centuries before Akerlof. In 1726, Jonathan Swift wrote in Gulliver’s Travels:

“They [The Lilliputians] look upon fraud as a greater crime than theft… For, they allege, that care and vigilance, with a very common understanding, may preserve a man’s goods from thieves; but honesty hath no fence against superior cunning… [W]here fraud is permitted or connived at, or hath no law to punish it, the honest dealer is always undone, and the knave gets the advantage.”[3]

CEOs and their financial executives are financially incentivized to commit accounting and other kinds of fraud, so with little moral barriers, a weak regulatory environment, and Gresham’s dynamic, fraud is common.[4] They can profit massively when the stock price jumps after a higher than expected earnings report. As I noted earlier, at least eight CEOs have enough company stock to gain over a billion dollars within days of a surprisingly positive quarterly earnings report. Then the executives who know the firm’s reported income or revenue was inflated commonly commit the additional crime of insider trading; they sell their stock before the public learns of the inflated income.[5]

A race to a criminal bottom in the financial industry was largely responsible for the 2008 financial crisis, with incompetent law enforcement playing an important role. Before the crisis, regulators took no effective action to stop the bank fraud involved, even in response to the FBI warning that there was an epidemic of it. SEC investigations also revealed common fraud in advance of the crisis.[6] So we need better law enforcement, better laws, but, more importantly, systems that don’t motivate immoral and criminal acts by normally moral people.

The legal way CEOs have been serving themselves at the expense of other stakeholders of corporations by taking massive compensations while depressing worker wages also harms their corporation and our nation’s economy. Distributing corporate income among managers and workers more equitably would increase productivity both by creating a perception of fairness among the workers and increasing their appreciation of the corporation for supporting an improved lifestyle. CEOs depress workers’ wages and rig their compensation system to their benefit regardless of its destructive effects. The “successful” ones are skilled at deceiving other stakeholders’ that they are dedicated to serving everyone’s interests, which makes their immorality and greed acceptable.

The standard practice in large corporations is the CEO hires someone who specializes in negotiating great compensation deals for CEOs. The corporation typically pays this person. Massive compensations result because the CEO will also determine the pay of the person with whom his advocate negotiates. Further rigging the process is the CEO’s influence on the corporation’s compensation committee that hires outside “compensation specialists” who are incentivized to recommend massive compensation because it’s the only way they get work.[7]

The dysfunction of the system then advances through setting performance pay based on short-term corporate earnings. It’s relatively easy for CEOs to rig the short-term reported earnings. Even when fraud is not involved, CEO’s focus on short-term earnings rather than the long term prosperity or even survival of the corporation is detrimental to both the corporation and the economy.[8]

Among the ways unethical CEOs rig short term profits that create long-term shareholder and societal harm are by reducing expenditures on worker safety, environmental protection, and R & D. The resulting increased risks to medium and long-term profits helps them win a bigger “jackpot” when their company’s stock price jumps when they show the higher short-term profits. As noted earlier, large firms’ CEOs compensation is mostly stock-based.

For example, for several years before the Deepwater Horizon disaster in the Gulf of Mexico, the British Petroleum (BP) CEO ignored safety issues to keep expenses down and short-term profits up to increase BP’s share price and pay large dividends. He and other shareholders benefited until the disaster, which not only killed 11 and injured 115 oil rig crew members (some seriously), it devastated life in the Gulf, the livelihood and quality of life of people in the vicinity, and the business of other oil companies operating in the Gulf. It also caused major harm to shareholders. The CEO’s immorality was like a weapon of mass destruction that also victimized him.[9]

The disaster cost BP $61.6 billion, which was larger than the market capitalization of either of the next two biggest integrated U.S. oil companies and was greater than the value of Ford, Honda, or General Motors.[10]

About 171 million gallons of oil leaked into the highly productive and biodiverse Gulf of Mexico over 87 days. And 1.8 million gallons of toxic chemical dispersants were used in response efforts. The oil spill contaminated over 1,100 miles of coastline with 22,000 tons of oil. It also contaminated at least 1,200 square miles of the deep ocean floor and 68,000 square miles of surface water, about the size of Oklahoma. We are still learning the full extent of the environmental damage, but federal agencies have estimated the harm will last for generations.[11]

Among the effects on the Gulf ecosystem was the killing of about 1 million seabirds, 5,000 marine mammals, and over 1,000 sea turtles. The unique and highly diverse seaweed habitats harboring deep-sea shrimp, crab, and lobsters suffered a dramatic die-off, reducing diversity by over 85 percent. Coral colonies and bottom-dwelling organisms were devastated. Some impacted coral communities include corals that are over 600 years old, and these corals’ slow growth rates will make recovery slow.[12]

 Oil spill environmental devastation is routine by BP and other oil companies in the Niger Delta. The companies have far more of a free hand there to maximize profits regardless of the destruction they cause to human and other life and the environment because the people there are relatively powerless. Their powerlessness also allows our mass media to ignore them, which is why few Americans know of oil company created disasters in the Niger Delta. Likely, racism is also involved in the abuse and media neglect. BP has blocked regulatory laws there, so for decades oil companies have destroyed the livelihoods, water supply, and health of entire communities with near impunity. In 2006 alone, 458 million gallons of oil were spilled, about three times the amount spilled in the Gulf. More than 7,000 spills occurred between 1970 and 2000, and there are 2,000 official major spillages sites, many going back decades.[13]

[1] http://coreresearch.rice.edu/2018/04/04/dark-personalities-in-workplaces-and-why-they-become-your-boss/

[2] https://www.psychologytoday.com/intl/blog/fulfillment-any-age/201803/why-toxic-people-get-ahead?amp

[3] https://www.econlib.org/archives/2013/10/lilliputian_com.html

[4] https://neweconomicperspectives.org/2014/11/ceo-compensation-cheaters-prosper.html, https://therealnews.com/stories/is-it-cynical-to-believe-the-system-is-corrupt

[5] Ibid.

[6] https://ritholtz.com/2011/08/the-real-reason-the-sec-has-been-shredding-documents-for-decades/

[7] https://therealnews.com/stories/is-it-cynical-to-believe-the-system-is-corrupt

[8] Ibid.

[9] USA Today, BP’s Deepwater Horizon costs total $62B, Nathan Bomey, 7/14/16

[10] Ibid.

[11] Summary of Information concerning the Ecological and Economic Impacts of the BP Deepwater Horizon Oil Spill Disaster, NRDC, 6/15

[12] Ibid.

[13] Nigeria’s agony dwarfs the Gulf oil spill. The US and Europe ignore it, The Guardian, John Vidal, 5/29/10

♦♦♦

As we have seen, some top managers in their efforts to profit maximize: corrupt our political system to gain advantage; abuse monopoly power; collude with other semi-monopolists on abusive prices and wages; market deceptively; destroy of the livelihood of millions of Americans by sending their jobs to low wage, low regulation countries; disregard the health and safety of their fellow citizens; commit fraud and other crimes. And they commonly profit-maximize personally by abusing their power to take a grotesquely extreme portion of corporate income for themselves. Much of the dysfunction and injustices in our society directly or indirectly results from corporate managers’ actions.

The motives to be at the top of the corporate hierarchy, the process of getting there, and the requirements on being there result in a higher than average concentration of immoral people at the top. Unfortunately, studies have revealed this to be true, including at the most troubling end of the moral spectrum occupied by psychopaths.

Corporate Psychopaths

Media reports create the prevailing view that psychopaths are violent criminals. However, psychopaths are not necessarily violent or criminals. A psychopath is a person who lacks a conscience and the ability to empathize, is deceitful, manipulative, feels no remorse, and acts only in his self-interest without regard for the effect of his actions on others. Superficial charm often accompanies these traits, which allows the psychopath to mask his moral vacuity. Of these traits, lack of empathy is the most fundamental, and it has a biological basis.

Neurotransmitters, hormones, “mirror neurons,”  and other physical characteristics of 13 regions of the brain, are involved in creating the capacity to feel empathy.[1] Researchers have shown that disorders involving these factors can make people unable to feel empathy without diminishing other abilities. Although these disorders have degrees, in some cases, the degree is sufficient to eliminate the empathy capacity.

A standard diagnostic tool for psychopathy is the Psychopathy Checklist-Revised (PCL-R), which rates a subject for 20 traits in a checklist where each is given a score of 0 to 2 depending on how strongly it applies.[2] So, the most extreme psychopath would score 40.[3] Corporate psychopaths tend to score high on the first eight items on the PCL-R checklist, which are termed “factor 1” or “primary” psychopathology criteria. They include callousness and lack of empathy, glibness and superficial charm, grandiose sense of self-worth, pathological lying, cunning or manipulativeness, lack of remorse or guilt, emotional shallowness or superficial emotional responsiveness, unwillingness to accept responsibility for actions. A PCL-R score of 30 is typically used as the cutoff for the psychopathology diagnosis, but it can be lower if high scores in primary criteria exist.[4]

Criticisms of the PCL-R include that many of the checklist items are difficult to measure or are subjective and that some should not be considered pathological. And the PCL-R has been used unjustly by our criminal “justice” system, as a tool in sentencing decisions as if PCL-R scores predict antisocial behavior with certainty, which it does not.[5] Also, tests resulting in the psychopath label have permanently stigmatized people as untreatably dangerous.[6] However, the PCL-R is widely used because specific brain abnormalities and future antisocial behavior are associated with its scores.[7]

Some experts in the field believe that psychopaths are untreatable, which is likely correct for some psychopaths since there is a physical basis for the disorder.[8] The mind can change the brain only within limits, and no drug has proven useful.[9] However, people diagnosed with psychopathology have been successfully treated, and cognitive behavior therapy has proven most efficacious.[10] Also, neurofeedback therapy has shown some promise as a treatment modality.[11] The physical basis of this disorder can be altered to some degree by improvements in a person’s psychology because psychological characteristics have physiological correlates.[12]

Many studies exist using the PCL-R on the important role of psychopathy among the incarcerated. But it is difficult to get the cooperation of corporations for research on the extent of psychopathy in corporations and its implications. Corporations are understandably reluctant to be identified as employing people with serious psychological problems, and executives are particularly unlikely to cooperate if for no other reason than they are busy. However, some studies have confirmed the expected based on the prior considerations. The PCL-R factors—callousness and lack of empathy, grandiose sense of self-worth, cunning or manipulativeness, lack of remorse or guilt, pathological lying, unwillingness to accept responsibility for actions, glibness, and superficial charm are significantly more common in corporate managers than the general population.

Seven companies participated in one study, ranging in size from 150 to over 40,000 people worldwide.[13] Four were global, but only their U.S. branches were included. Two hundred three managers and executives participated. 77.8% had a four-year degree, 21.2% a Ph.D., J.D., or M.D., and 1% possessed a two-year degree. The average age was 45.8. Forty-one were corporate directors, 51 vice presidents, and 21 were CEO or president of a division.

Nine of the participants (4.4%) had a score of 25 or higher, eight (3.9%) had a score of 30 or higher, the typical threshold for psychopathy, which exists in 1% of the general population.[14] Two had a score of 33, and one had a score of 34. The average in the general population is less than five.[15] Of the nine participants who had a score of 25 or higher, four were of very high rank in their organization: two were vice presidents, and two directors.

Another commonly used and related measure of psychopathy is the PCL:SV. A PCL:SV score of 13 is the widely used lower limit as an indicator of psychopathy. The study authors found 5.9% of the participants had a 13 or higher PCL:SV, compared with 1.2% in the general population. 3.9% of the participants in the corporate sample had a PCL:SV score of greater than 18, compared with only 0.2% in the general population.[16]

Performance appraisals were part of the study, which found that several psychopathology traits are adaptive to the corporate environment. PCL-R and PCL:SV scores positively correlated with communication skills, strategic thinking, and creativity. But on the performance measures of being a “team player” or quality of “management style,” the study authors found a negative correlation.

But even bad performance reviews or evaluations from subordinates and peers often do not significantly alter decision-makers’ judgment that a psychopathic individual has “future leader” potential.[17] Those who hire senior managers tend to avoid admitting errors in their evaluations by rationalizing behavior on the job that is contrary to their expectations. Even when they witness explosions of temper and other expressions of aggression, they tend to view it positively, as evidence of ambition and drive. For example, a researcher found that when fraud by a psychopathic senior manager was reported to the board of directors, it was met with denial and disbelief, and those reporting him were initially seen as acting out of jealousy. Later they discovered the senior manager committed serious fraud and issued death threats.[18]

Psychopaths are adept at analyzing a person’s expectations and desires and then reflecting them in a false persona so convincing the person bonds with him or her. The charm they display to those determining their status is persuasive and is seen as beneficial traits of a charismatic leader. However, psychopaths use their charm and persuasiveness for self-serving manipulation.

One commonly reported technique of corporate psychopaths for their ruthless rise in the organizational hierarchy is to create conflict among rivals or between rivals and other workers. Their rise to power often involves creating emotional turmoil in rivals through various routes.[19]

Another study on the personality characteristics of senior business managers and chief executives included 39 from leading British companies. It compared their psychological profile with 1,085 current and former male hospitalized psychiatric patients, most of whom were hospitalized as a result of criminal charges or convictions; all had received the British legal classification of either Psychopathic Disorder or Mental Illness. They found several psychopathic traits more common in business leaders than in the patient groups, including the criminals, traits that also characterize histrionic psychiatric disorder—superficial charm, insincerity, egocentricity, or manipulativeness. And the two groups were equally likely to have traits associated with narcissistic psychiatric disorder, defined as an exaggerated sense of self-importance, a sense of entitlement, a need for constant admiration, grandiosity, lack of empathy, exploitativeness, behaving in an arrogant or haughty manner. And they were equally likely to have obsessive-compulsive psychiatric disorder traits: rigidity, stubbornness, and dictatorial tendencies, perfectionism, excessive devotion to work. The main difference between the groups was in the criminals’ higher lawbreaking, physical aggression, and impulsivity.[20]

A study of 261 senior managers in the United States found that 21% had clinically significant levels of psychopathic traits, 21 times the estimated rate in the general population.[21]

Several studies have linked CEO narcissism, lack of empathy, or remorselessness with fraud and insider trading.[22] These traits led to the massive fraud largely responsible for the financial crisis’s dramatic and devastating social harm.

Citigroup CEO’s fraud and the criminal culture he created and allowed to flourish significantly contributed to the financial crisis. In July 2014, Citigroup reached a $7 billion settlement for financial crisis related mortgage fraud. Then attorney general Eric Holder said Citigroup’s “activities contributed mightily to the financial crisis that devastated our economy in 2008… The bank’s misconduct was egregious. As a result of their assurances that toxic financial products were sound, Citigroup was able to expand its market share and increase profits.”

Richard Bowen, a former Citigroup executive turned whistle-blower, added, “In July of 2008, I gave the SEC a thousand pages documenting fraud and the false representations given to investors in many securitizations… In light of the huge losses this behavior caused our country, it is outrageous that, six years later, a settlement of only civil fraud charges would be announced, with no individuals being held accountable and no real admission of wrongdoing or true penalties assessed.”

Bill Black, Ph.D., the former director of the Institute for Fraud Prevention, now professor of economics and law at the University of Missouri, Kansas City, said the financial company, JP Morgan, committed frauds “epic in scale, unprecedented in world history. . . $23 billion we’re talking about, these are frauds that made Jamie Dimon [the CEO] and other senior officers incredibly wealthy by creating fictional income that led to very real bonuses.” (Dimon considered a run for the presidency in 2020.[23]) Lehman Brothers (a major U.S. investment bank destroyed in the crisis) executives committed the fraud of moving billions of dollars of liabilities off the bank’s books at the end of each quarter, then replacing them at the beginning of the next quarter to hide the firm’s financial weakness.[24]

Several other financial companies’ top executives committed massive fraud. Instead of going to prison, they walked away hugely more wealthy and with what seemed to be a clean conscience. They presented themselves as unbothered by the surrounding chaos, unconcerned about those who have lost their jobs, savings, homes, and investments, and as lacking any regrets about what they had done. The executives lied about their involvement and were very persuasive in blaming others for their crimes and other misbehavior that resulted in economic and social disaster. They expressed no doubts about their own continued worth and value. So, these executives displayed several characteristics of psychopaths: lack of empathy, grandiosity; a need for stimulation; lying, conning and manipulating people; a lack of remorse; and failure to accept responsibility for one’s own actions.  Likely, some of them are clinically psychopathological.

Bank of America, Goldman Sachs, Wells Fargo, Morgan Stanley, and HSBC have settled for many billions of dollars in fines for fraud, among other crimes that included: money laundering, currency manipulation, bribery, conspiracy, and rate tampering. In April 2011, Wachovia (since acquired by Wells Fargo) was fined for laundering billions of dollars in illegal drug money. The federal prosecutor said, “Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations.” Its fine was less than 2% of the bank’s $12.3 billion profit in 2009. In July 2016, JPMorgan Chase paid $200 million to settle criminal and civil charges related to bribing foreign officials.[25]

One would expect the financial industry executives who committed the crimes mainly responsible for the financial crisis that nearly destroyed the world economy to feel overwhelming relief after not being prosecuted and thrown in prison. Instead, they received millions of dollars of personal compensation.  These executives must have felt very fortunate.

However, this did not cause them to “lie low” to not attract any additional attention from law enforcement. Instead, some of them proceeded to blatantly violate fundamental human rights, committing additional fraud in the process. They instituted corporate policies that threw homeowners by the millions out of their homes, many thousands of which were based on false foreclosure affidavits. All these fraudulent court filings were felonies. Five major banks settled for $26 billion in fines to the U.S. government for their illegal foreclosures.[26] We gave these institutions a total of $156 billion in public bailout money, so essentially, they did not pay any penalty at the time. Eventually, though, they paid the $156 billion back with interest.[27]

Financial company executives are indeed required to maximize profits, but their repeated criminal activity in the process indicates personality disorders and a dysfunctional economic system and political system corrupted by them and their allies.

Intelligent, educated psychopaths would be strongly attracted to the financial industry, where the grotesque size of the financial rewards at the top often exceeds that of other industries. Furthermore, top managers in this industry control vastly larger amounts of financial resources than managers of other industries. (In 2014, just the five biggest banks controlled $6.7 trillion, 44% of the $15.3 trillion in assets held by U.S. banks and 38% of our nation’s 2014 GDP.) And they have extraordinary power over other people based on their massive investment’s effects. And their focus on maximizing profits is likely most exclusive. The above characteristics would attract extraordinarily selfish, greedy, power-hungry, egotistic, remorseless, and narcissistic people.

Investment banks have hired people with the above traits rejected from other industries. One of the biggest of them used psychometric testing to seek out people with psychopathic traits because these traits suited them to senior corporate finance positions.[28]

Many commentators have identified the former CEO of the defunct Lehman Brothers, who played a significant contributory role in the global financial crisis, as a potentially psychopathic personality. Consistent with this view, he, in a video to company employees, expressed his displeasure at those who were selling Lehman’s stock short (a transaction which essentially bets on the stock price going down) by saying that he wanted to “rip out their hearts and eat them before they died.”[29]

Although the financial industry may be most attractive, intelligent, educated people with psychopathic traits would pursue top management positions in any industry for similar reasons. Instead of excluding them from positions of power, we have systems that facilitate their rise.

The destructiveness of hierarchical, profit-maximizing business enterprises is magnified by the tendency for psychopaths or people with similar personality disorders to rise to their top. The tendency is another unfortunate design consequence. And at the top of large corporations, they have immense power to abuse. With personal and massive corporate wealth they control, they have created a government of the 1% by the 1% and for the 1% to advance their power’s growth. Our corporate structure is making our society unstable and unjust for as long as it lasts.

Psychopaths in powerful corporate positions have been growing more prevalent, resulting primarily from the increasingly rapid personnel turnover over the last few decades. Before the last third of the twentieth century, large corporations were relatively stable, slow to change, and people commonly had a job for life, where they gradually rose through the corporate ranks until they reached a position beyond which they were not qualified. In such a slowly changing environment, employees would get to know each other very well. Corporate psychopaths would more likely be identified, so they were less likely to be promoted to management positions.

A growing focus on short-term profit maximization, globalization, and a rapidly changing technological environment made corporate takeovers and mergers more common, so the corporate environment became more unstable. Jobs for life disappeared, and employees’ commitment to their employers lessened accordingly. Job switching first became acceptable and then common. Employees increasingly found themselves working with other people they did not know in unfamiliar organizations.

More frequent management personnel changes made it increasingly difficult to identify corporate success with any particular manager. Successes could be claimed by those who had nothing to do with them, often those with the most assertive, charismatic, manipulative personality, or the best political skills. Corporate psychopaths have these skills and use them efficiently and ruthlessly. Also, sometimes failures were not noticed until the responsible managers moved on to better positions elsewhere.

A culture of greed unfettered by conscience developed in corporations, ideally suited for psychopaths to rise. Once at the top, they pay themselves massive compensations; in the case of the financial industry executives, huge bonuses amid financial hardship they created for many millions of people. Corporate deregulation added to the problem where the whole corporate and employment environment changed from the relatively stable one that would more likely hold corporate psychopaths in check to one where they could flourish and advance relatively easily. The more unstable modern corporate environment is more likely to seek out the dominant and charismatic leadership style of corporate psychopaths.  

Research also shows that in times of turmoil and uncertainty in society, people are more inclined to back confident, extroverted, assertive, dominant, and narcissistic leaders in government who would be seen as unacceptably authoritarian in more normal times.[30] So, psychopaths or people with a significant degree of psychopathological traits in the financial industry that created chaos in society resulted in an environment for people with similar characteristics to be more likely to rise in politics. A potentially devastating consequence is the rise of charismatic psychopathological leaders of right-wing political parties.

German researchers’ analysis of a dataset covering 20 advanced economies and over 800 general elections revealed that, on average, extreme right-wing parties increase their vote share by 30% after a financial crisis.[31] They state: “Importantly, we do not observe similar political dynamics … after severe macroeconomic shocks that are not financial in nature.” The rise of Donald Trump to the presidency and his capture of the Republican Party is additional evidence of this phenomenon.”[32]

Below are a few more examples of extremely unethical behavior by top managers that caused significant social harm. The following CEOs’ extraordinary power to express their depths of depravity indicates serious systemic problems.

Former CEO Al “Chainsaw” Dunlap was often praised for ruthlessly downsizing companies and making them more profitable. In 1994, he was hired to downsize the Scott Paper Corporation. He fired 35% of employees, 11,000 people, in a restructuring that raised the stock price by 225%.[33] Dunlap had a reputation for enjoying firing people. He published a book about his methods called “Mean Business: How I Save Bad Companies and Make Good Companies Great.”

In 1996, he moved on to the CEO position of Sunbeam, where a few months after being hired, he announced that half of Sunbeam’s 12,000 employees would be fired. This was in percentage terms the largest workforce reduction of its kind ever.[34]

In 1998, the Securities and Exchange Commission charged Dunlap with massive accounting fraud at Sunbeam. At least $60 million of its apparently $189 million earnings for 1997 were, the SEC said, the result of fraudulent accounting. Dunlap denied the charges and demanded from Sunbeam, and was given, $1.4 million to cover legal fees, adding to the $100 million he was paid in his twenty months at the company. In 2002, Dunlap’s legal troubles ended when he agreed to pay $15.5 million to settle various lawsuits and agreed to never again serve as an officer or director of a public company. [35] In 2001, Sunbeam filed for bankruptcy.

Some of Dunlap’s other indicators of a serious personality disorder: his first wife charged in her divorce papers that he threatened her with a knife while saying he always wondered what human flesh tasted like, and he skipped his parents’ funerals.[36]

Another example of a profoundly immoral CEO is Martin Shkreli. In September 2015, as CEO of Turing Pharmaceuticals, he obtained the manufacturing license for the antiparasitic drug Daraprim, primarily used to treat life-threatening parasitic infections in newborns and HIV patients. He raised its price by 5,500% (from $13.50 to $750 per pill), creating a media firestorm.[37] Shkreli didn’t shrink from the attention but instead seemed to relish it. In his media appearances, he came across as friendly and charming. He claimed with apparent sincerity his company made no profits on the original price, the new price did not result in exorbitant profits, and that the profits were needed to develop a better antiparasitic drug than Daraprim.

Let’s give Shkreli the benefit of the doubt on the original price allowing no profit—it was sold at cost. Then the new price results in a 5,400% profit. It is highly unlikely he devoted much of these profits to R & D, considering the veracity of his claim on its size. But even if he spent all the profits on R & D, he sees no problem with most or all of his R & D funding coming from people seriously ill, or at least the ones who can afford his price. And he ignored those who couldn’t, some of whose lives his price hike cut short.

Shkreli’s “charisma” eventually failed him. In 2017, he was found guilty of criminal fraud and sentenced to seven years in prison.[38]

For more examples of corporate managers’ depraved behavior in the pharmaceutical industry, see the sections in Part 3 and 4 on the industry (and Part 4’s proposal for its reform).

Before the corporate failures of the global financial crisis dwarfed it, Enron’s collapse was the most spectacular corporate failure in USA history. It was also based on criminal fraud. The same ruthlessness, greed, and lack of conscience were evident among the top three managers at Enron. Jeffrey Skilling and Andrew Fastow omitted huge losses and debts from the balance sheets. In addition to fraud, Enron’s top managers committed the crime of inside trading by selling their stocks at a high price before rumors about Enron’s credibility arose. Skilling was reported to be manipulative, bullying, egocentric, lying, glib, and lacking in regret, remorse, or concern for others. The top three managers at Enron, Fastow, Lay, and Skilling, had several psychopathological traits.[39]

Enron was one of the most admired corporations in the U.S. before its accounting malpractices were exposed. It had a corporate board ostensibly of the highest quality. Its directors had a wide range of business, finance, accounting, and government experience, and its audit committee had a model charter and was chaired by a former Dean of the Stanford Graduate School of Business. All members of the compensation, nomination, and audit committees were unaffiliated with management. [40]

The Enron collapse demonstrates that it is difficult to limit the destructiveness of profoundly immoral people in top management positions of a powerful organization. Enron’s top managers’ crimes destroyed it along with about $74 billion in shareholder wealth and $40 billion in creditor wealth. The crimes also eliminated the jobs of its about 20,000 workers and $2 billion of their pensions.[41]

In 1996, the National White Collar Crime Center estimated the costs of white-collar crime may reach $1.7 trillion per year in the United States.[42] Likely,  a more recent estimate would be significantly higher er, but we will never know exactly how high because up to 90% of white-collar crimes go unreported.[43] Robert Hare, Ph.D., one of the world’s leading experts on psychopathology and the creator of the PCL-R diagnostic tool, stated: “Serial killer psychopaths ruin families. Corporate and political and religious psychopaths ruin economies. They ruin societies.”[44]

Profoundly immoral individuals controlling billions of dollars are also empowered to target great harm on individuals and families. And their power to do so is particularly extreme in societies where they can access a huge reservoir of people under severe economic stress to act as their criminal operatives since they are more vulnerable to corrupting influences than they otherwise would be. Societies such as the US, where vast inequalities exist, have such a reservoir. Ninety-six million American adults can’t come up with $400 for an emergency without selling something or borrowing money.[45] A significant percentage of them—likely all of the more than 1% psychopathological—would do almost anything for $20,000. People are more likely to accept payment for unethical and criminal acts the more economic stress they feel.

Twenty cents have more significance to you if you are a person of average income and wealth than $20,000 has to the super-wealthy. They likely can enlist any of over a million people to commit even the most horrific acts for this insignificant expenditure. (Just the psychopathological 1% of the ninety-six million adults is 960,000.)  To understand how little $20,000 is to the super-wealthy, consider: Since billionaires typically have returns on their investments of about 6% per year, those with “just” $1 billion watch $60 million come in each year, which averages $165,000 per day, without doing anything. Six hundred seven people have over a billion dollars in the US, and their average wealth is $14.3 billion.[46] So, on average, each watches $858 million per year or $2.36 million per day come in, doing nothing. Having $20,000 less would be insignificant. $20,000 is 0.00014% of $14.3 billion, 20 cents is a 17% higher share of the median household’s wealth. Of course, $1,000 would be even less significant for a super-wealthy person, and many economically stressed people would crimes, even felonies, for this amount.

Research has unveiled a sub-group of white-collar offenders who are violent either personally or through hired third parties. These “red-collar criminals” tend to commit violent crimes of the “instrumental” kind—goal-oriented, with no evidence of an immediate emotional or situational provocation. In contrast, reactive violence is committed with a high level of spontaneity and no apparent goal other than to harm the victim immediately following a provocation. Typically, the motive for the violence of those red-collar criminals studied has been to prevent the detection or disclosure of their fraud schemes.[47]

The traits common among psychopaths—a sense of entitlement, a propensity to deceive, cheat, and manipulate, a lack of empathy and remorse, viewing others merely as resources to be exploited—can result in corporate psychopaths’ fraud. But for some corporate psychopaths, likely more than we know, fraud is the least significant of their crimes.[48]

The “grandiose sense of self-worth” and other traits that narcissism and psychopathology have in common are particularly strong risk factors for violence, including murder. When criticism wounds a corporate psychopath’s inflated view of self, or someone interferes with their high priority plans, they commonly target the offender, and likely more often than we know, violently. After violent acts, psychopaths experience gratification by fulfilling their desire for dominance and control.

Although corporate psychopaths’ intelligence may make resorting to violence to achieve their ends uncommon, we do not know how uncommon. Since top-level corporate psychopaths tend to be highly intelligent and resourceful, likely, only a small percentage of their atrocities committed against targeted individuals, including murders, have been attributed to them. Likely, most of their crimes are contracted, and probably their murders are made to appear as accidents, suicides, or deaths from natural causes.

Regarding the prevalence of serious red collar crime, one researcher stated, “Lots of people are getting away with murder.”[49] It is a dangerous misconception among both law enforcement personnel and the general public that white-collar criminals are non-violent.[50] We give profoundly immoral people the power to commit atrocities, so we should not be surprised if some are, in many forms.

Be forewarned: If you get in the way of or anger a super-wealthy person, not only does he have the power to dispose of you easily, he is much more likely than the average person to attach the significance to it that you do to disposing of a piece of paper. And technological advances creating abilities to track and bug you wherever you go combined with their unprecedented financial resources make wealthy psychopathological members of society more dangerous than ever in history. Also, the numbers of people with access to astronomical amounts of dollars are unprecedented. Based on the above facts, it is certain there are many massive monsters in our society lurking in the shadows performing stealth strikes at will.   

A society with systems that concentrate profoundly immoral people with an incapacity for empathy in its most powerful positions is not a sane one. Our economic system based on enterprises with a top-down authoritarian management structure dedicated to profit maximization is intrinsically socially destructive partly because of the tendency for psychopaths or those with similar personality disorders to take control of them.

Although the prevalence of psychopathy in corporate elites as measured by researchers is alarming, they likely substantially underestimate it because the diagnostic process partially depends on an interview.[51] Since corporate psychopaths tend to be highly intelligent, most would perceive the best way to behave in the interview and respond to interview questions to create the impression they would like to create. Intelligent psychopaths’ manipulative skills would bias responses toward minimizing the possibility they are judged to have a personality disorder, especially psychopathology. 

Furthermore, PCL-R scores are an insufficient measure of antisocial personality disorders that should disqualify people from powerful positions because the destructiveness of the afflicted persons is proportional to their power. For example, although 90% of criminals classified by the PCL-R as psychopathic are diagnosable with “antisocial personality disorder” (ASPD), only 30% with ASPD qualify as psychopathic.[52]

 

For some people, including many without diagnosable psychopathology or ASPD, the drive for increasingly massive amounts of money continues far beyond the point where they can spend it on improving their lifestyle, based on a kind of pathological addiction. To some, money is like a powerful, addictive drug. They need larger dosages to maintain the same level of ‘‘high’’ (state of euphoria). The more these people get, the farther they get from enough. This insatiable greed and the resulting massive wealth and extravagant lifestyle motivate corruption, including of our political system, and a sense of entitlement in what has become our ruling class/kleptocracy.

Our ruling class’s wealth is of historic proportions, and with it comes a corresponding amount of power. And as we have all heard, “Power tends to corrupt, and absolute power corrupts absolutely.”[53] For this reason, we should not allow even the most ethical among us the wealth or power of our ruling class. But, as we have seen, many of them were far from ethical before acquiring the massive amounts of money that further corrupted their character.

This elite is setting the agenda for humanity’s future through their dominant roles in our economy and political system. And they influence all of us through mass media and educational institutions. Their agenda serves their interests at the expense of everyone else.

Corporations of a form that advantages immoral people and that motivates creating harmful externalities even by moral people that rise to their top threaten humanity’s survival.

Here is an easy to remember aphorism summarizing most of the facts in this section to help you keep the alarm ringing:

“The most competent of the lowest are at the highest with the most.”

So, we are in an emergency. And since they also live in the world they are descending into hell, among the reasons we need to fix the systems that sent them so high is to save them from themselves.

 

[1] The neurobiology of antisocial personality disorder: The quest for rehabilitation

and treatment, Jack Pemment (2012), http://dx.doi.org/10.1016/j.avb.2012.10.004, and The ‘antisocial’ person: an insight in to biology, classification and current evidence on treatment, Rodrigo et al.

 Annals of General Psychiatry 2010, 9:31

[2] The list in full is: callousness and lack of empathy, glibness and superficial charm, grandiose sense of self-worth, pathological lying, cunning or manipulativeness, lack of remorse or guilt, emotional shallowness or superficial emotional responsiveness, unwillingness to accept responsibility for actions, a tendency to boredom, a parasitic lifestyle, a lack of realistic long-term goals, impulsivity, irresponsibility, lack of behavioral control, behavioral problems in early life, juvenile delinquency, criminal versatility, a history of “revocation of conditional release” (i.e. broken parole), multiple marriages, and promiscuous sexual behavior

[3] https://www.telegraph.co.uk/books/non-fiction/spot-psychopath/

[4] Ibid.

[5] For more information on the PCL-R, criticisms of it, and psychopathology see; J Bus Econ (2017) 87:1193–1227: The influence of psychopathic traits on the acceptance of white-collar crime: do corporate psychopaths cook the books and misuse the news? Volker Lingnau, etal.,

Criminal Behaviour and Mental Health 26: 124–135, 2016, Risk assessments and recidivism among a population-based group of Swedish offenders sentenced to life in prison.

Validity of Factors of the Psychopathy Checklist–Revised in Female Prisoners: Discriminant Relations With Antisocial Behavior, Substance Abuse, and Personality Patrick J. Kennealy, University of California, Irvine, etal., PubMed 2007 December; 14(4): 323–340

Psychopathy An Evolving and Controversial Construct, Russ Scott, Forensic Psychiatrist, Brisbane, Queensland, Australia, Psychiatry, Psychology and Law, 2014 Vol. 21, No. 5, 687-715, http://dx.doi.org/10.1080/13218719.2014.911056

The Criminal Psychopath: History, Neuroscience, Treatment, and Economics, Kent A. Kiehl and Morris B. Hoffman, Jurimetrics. 2011 ; 51: 355–397

[6] The Problem with Robert Hare’s Psychopathy Checklist: Incorrect Conclusions, High Risk Of Misuse, And Lack Of Reliability, Willem H. J. Martens, Med Law (2008) 27:449-462

[7] A comprehensive neuroimaging review of PCL-R defined psychopathy, Stephanie Y. Griffiths, Jarkko V. Jalavaa, Aggression and Violent Behavior 36 (2017) 60–75, The usefulness of psychopathy in explaining and predicting violence: Discussing the utility of competing perspectives, Henriette Bergstrøma, etal., Aggression and Violent Behavior 42 (2018) 84–95, The predictive quality of the Psychopathy Checklist-Revised (PCL-R) for violent and sex offenders in Switzerland. A validation study. Fortschr Neurol Psychiatr. 2007 Mar;75(3):155-9.

[8] https://modlab.yale.edu/news/can-psychopaths-be-cured

[9] For information on brain changes with psychotherapy: psychiatrictimes.com/psychotherapy/how-psychotherapy-changes-brain

[10] The Problem with Robert Hare’s Psychopathy Checklist: Incorrect Conclusions, High Risk Of Misuse, And Lack Of Reliability, Willem H. J. Martens, Med Law (2008) 27:449-462

[11] QEEG Guided Neurofeedback Therapy in Personality Disorders: 13 Case Studies. Surmeli, Tanju; Ertem, Ayben. Clinical EEG and Neuroscience; Wheaton Vol. 40, Iss. 1, Jan 2009: 5-10.

[12] Frontiers in Psychology, Psychotherapy and brain plasticity, Daniel Collerton Published online 12/6/13 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3764373/

[13] Corporate Psychopathy: Talking the Walk Paul Babiak, Ph.D., Craig S. Neumann, Ph.D., Robert D. Hare, Ph.D. Behavioral Sciences and the Law, 28: 174–193 (2010) Published online 6 April 2010 in Wiley InterScience

[14] The Criminal Psychopath: History, Neuroscience, Treatment, and Economics, Kent A. Kiehl, Morris B. Hoffman, Jurimetrics. 2011 Summer; 51: 355–397.

[15] Into the Mind of a Psychopath, Danielle Egan, Discover Magazine, 4/16/19

[16] Ibid.

[17] Ibid.

[18] Psychopathy screening for public leadership, Clive Roland Boddy, Department of Leadership, Work and Organisations, Middlesex University, London, U.K.

[19] See Snakes In Suits, Robert Hare

[20] Psychology, Crime & Law, Volume 11, 2005 – Issue 1, Disordered personalities at work, , Belinda Jane Board Katarina Fritzon, Pages 17-32, published online 1/31/07

[21] Corporate psychopaths common and can wreak havoc in business, 9/13/16  https://www.psychology.org.au/news/media_releases/13September2016/Brooks/ 

[22] The Irrational Actor in the CEO Suite: Implications for Corporate Governance, Renee M. Jones, Boston College Law School, 6/1/17, Journal of Business Economics, The influence of psychopathic traits on the acceptance of white-collar crime: do corporate psychopaths cook the books and misuse the news? Volker Lingnau, Florian Fuchs, Till E. Dehne-Niemann, published online: 5/12/17

[23] https://www.rollingstone.com/politics/politics-news/jamie-dimon-trump-723236/

[24] Saving Capitalism, Robert Reich, pg.77

[25] Our Revolution, Bernie Sanders, 2016, pg. 303-305

[26] https://www.marketwatch.com/story/banks-states-reach-26-billion-settlement-2012-02-09

[27] https://projects.propublica.org/bailout/list

[28] Psychopathy screening for public leadership, Clive Roland Boddy, Department of Leadership, Work and Organisations, Middlesex University, London, U.K.

[29] Psychopathy screening for public leadership, Clive Roland Boddy, International Journal of Public

Leadership, Vol. 12 No. 4

[30] https://www.pnas.org/content/114/26/6734

[31] https://ec.europa.eu/economy_finance/events/2015/20151001_post_crisis_slump/documents/c._trebesch.pdf

[32] Politics in the Slump: Polarization and Extremism after Financial Crises, 1870-2014 Manuel Funke, Moritz Schularick, Christoph Trebesch, 9/23/15 Free University of Berlin, John F. Kennedy Institute, University of Bonn, University of Munich. (To accurately evaluate the items in the PCL-R checklist requires training and a detailed evaluation that includes interviews and non-public records.  However, you may find these peoples’ judgements on Trump based on the public record of his statements and behavior interesting. Mike Taylor, https://reprog.wordpress.com/2017/01/30/a-careful-and-objective-investigation-into-whether-trump-is-literally-a-psychopath/) determined a score of 31. Keith Olbermann, “Could Donald Trump Pass A Sanity Test?” 7/21/16 also found Trump surpassed the 30 threshold for psychopathology. More than 60,000 mental health professionals signed a petition, which states: “We, the undersigned mental health professionals, believe in our professional judgment that Donald Trump manifests a serious mental illness that renders him psychologically incapable of competently discharging the duties of President of the United States. And we respectfully request he be removed from office, according to article 4 of the 25th amendment to the Constitution. (https://www.psychologytoday.com/us/blog/the-time-cure/201709/the-dangerous-case-donald-trump)

[33] https://inequality.org/wp-content/uploads/2018/02/GreedGood-5-greedy-as-deserving.pdf

[34] Sunbeam to Halve Work Force Of 12,000 and Sell Some Units, New York Times, Glenn Collins, 11/13/96

[35] GQ Magazine, Your Boss Actually Is a Psycho, Jon Ronson, 12/18/15

[36] Ibid.

[37] Drug Goes From $13.50 a Tablet to $750, Overnight, Andrew Pollack, New York Times, 9/20/15

[38] https://www.nytimes.com/2018/03/09/business/martin-shkreli-sentenced.html

[39] Psychopathy screening for public leadership, Clive Roland Boddy, Department of Leadership, Work and Organisations, Middlesex University, London, UK

[40] https://en.wikipedia.org/wiki/Enron_scandal, https://www.deseret.com/2003/7/12/19734548/enron-reorganization-gives-creditors-little

[41] Ibid.

[42] https://www.ncjrs.gov/App/Publications/abstract.aspx?ID=167026 Data of publication available here: https://www.ncjrs.gov/App/Publications/abstract.aspx?ID=166244

[43] https://www.zippia.com/advice/white-collar-crime-statistics/#:~:text=It’s%20estimated%20that%20up%20to,white%2Dcollar%20crimes%20go%20unreported.

[44] The Independent, Beware corporate psychopaths – they are still occupying positions of power,

Brian Basham, 12/11/11

[45] https://www.federalreserve.gov/publications/files/2017-report-economic-well-being-us-households-201805.pdf

[46] https://www.usnews.com/news/best-states/slideshows/states-with-the-most-billionaires

[47] Red Collar Crime, Frank S. Perri, International Journal of Psychological Studies; Vol. 8, No. 1; 2016

[48] Ibid.

[49] The Atlantic, The Killer in the Cubicle, Rene Chun, October 2018, pg. 34

[50] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4235672/pdf/nihms-580797.pdf

[51] http://www.minddisorders.com/Flu-Inv/Hare-Psychopathy-Checklist.html

[52] Counselor magazine, Psychopathology, Part 1, 8/18, Norman Hoffman, etal.

[53] Originally stated by Lord Acton in a letter to Bishop Mandell Creighton in 1887

Amazon as Metaphor manuscript excerpt,
941 words.

Are Dominance Hierarchies Inevitable In Human Societies?

Like with primates and other animals today, there is evidence that our pre-human ancestors lived in groups where dominance hierarchies existed.[1] So it seems reasonable to believe we, too, have a competitive nature that seeks higher status and dominance, which will result in hierarchical human societies. However, intrinsic to the great leap forward in intelligence and social skills of humans was a highly significant advancement.

The large brains of biologically modern humans, homo sapiens, began their existence about 250,000 years ago.[2] Since the dawn of the intelligence and social skills associated with that brain to today, 95% of the time, we lived in egalitarian societies—and our superior intelligence and social skills were responsible for the social organizational advancement.

A study of over 100 anthropological accounts of 24 relatively recent hunter-gatherer societies, or the kind of societies in which all humans lived before about 12,000 years ago, found none where a dominance hierarchy existed. People in these societies shared food, even when it was scarce, according to need.[3]

Anthropologist Christopher Boehm has assembled the most comprehensive collection of accounts of hunter-gatherer societies. In addition to anthropologists’ reports, it has those of early explorers, missionaries, and colonial administrators. Boehm and other anthropologists agree that egalitarianism existed and was maintained in hunter-gatherer societies by “counter-dominance” strategies. When an individual became too domineering or tried to gain more than their fair share, they were strongly opposed.[4]

Opposing a dominator of other individuals was likely based mainly on enlightened self-interest. Group members could foresee that if they join together to oppose the dominator, they will protect themselves from being dominated in the future. Our higher intelligence or ability to foresee, and social skills, based on human language, resulted in our advancement to egalitarianism from the dominance hierarchies seen in other primates.

Counter-dominance strategies included criticism, ridicule, and public expressions of disapproval at the milder end, to ostracism, exclusion, and murder at the other end. Boehm found many accounts where communities went as far as killing a persistently domineering or unwilling to share group member.[5] This would create evolutionary pressures toward more pro-social humans, as would a preference for more public-spirited and better at mutual support individuals as sexual partners. Now, in possibly the terminal phase of human existence, we have removed the selective pressures for pro-social humans. The factors altering gene expression I described earlier is also moving the human race toward more antisocial personalities.

Hunter-gatherers’ egalitarian social order also resulted from working in cooperative groups, which was particularly important when hunting large game. Most of these groups were highly successful in meeting their needs. Hunter-gatherer societies have been dubbed “the original affluent societies.” They commonly satisfied their needs, including approximately one-third of their members too young or old to work, with 15 to 20 hours per week work. This “work” was more like play to them, and it involved skill levels that improved over years of learning and practice with other group members’ assistance.[6] Also, since they believed all were equal, they made decisions affecting the group by consensus.[7]

Although most aspects of hunter-gatherer material living standards were lower than the average American’s, diet quality was not one. Skeletal evidence shows that hunter-gatherers were often as tall as people in modern societies and that declines in height occurred with the beginning of agriculture. These declines have been attributed to nutrient deficiencies resulting from over-reliance on a single crop, seasonal hungers, and crop failures. Hunter-gatherers knew a very large number of edible species of plants and animals, so they could eat only their preferred species for a sufficient quantity of a wide variety of nutrients and use others as an emergency reserve.[8]

Even though basic needs standards are higher now, our immense productive capacity advancements enable us to easily provide them for everyone with work hours reduced to the levels we had as hunter-gatherers.[9] Reforming the consumer culture that makes most of us want much more than we need is also important, as is practicing more sustainable ways of production.

Innovative public policies can also advance (regress?) us toward another cultural condition of our hunter-gatherer days: an intolerance of a domineering elite capturing a disproportionate share of the value created in highly cooperative systems. However, in large societies, a limited, merit-based economic hierarchy is almost certainly socially beneficial. Associating compensation levels with years of training, skill level (including the ability to find and initiate processes that meet social needs), and the difficulty and dangerousness of the work benefits all of us. But as I have shown and will show more supporting facts below and in Part 4, our vast inequalities are far beyond a socially valuable degree and largely not based on merit.

Our extreme inequality diminishes national economic performance because the lowest income tens of millions of Americans can’t buy the services and goods they otherwise would if national income were more equally distributed. And it is detrimental to economic performance because financial incentives diminish the capacity for flexible problem-solving, inventiveness, or conceptual understanding through their destructive effect on intrinsic motivation.

We do not know the optimum degree of inequality, but as democratic control of business enterprises becomes widespread, we will approach it. The gap between the highest and lowest compensated workers will shrink in and outside these enterprises. We will advance closer to our long-term norm of egalitarianism that we have diverged from only relatively recently.  

The largest democratically owned and managed business is the Mondragon Corporation. Mondragon’s 85,000 workers have a top-to-bottom pay ratio 1% of what it is in similarly sized conventional corporations in the U.S. Information on Mondragon is in Part 4.

[1] Ibid., pgs. 128-129

[2]http://www.columbia.edu/itc/cerc/danoff-burg/invasion_bio/inv_spp_summ/homo_sapiens_sapiens.html

[3]The Inner Level, Richard Wilkinson, Kate Pickett, pg. 130

[4] Ibid., pg.131

[5] Ibid., pg.132

[6] Play Makes Us Human V: Why Hunter-Gatherers’ Work is Play, Peter Gray Ph.D, Psychology Today, 7/02/09

[7] Hunter-gatherers, Insights from a golden affluent age, pacific ecologist winter 2009, abridged extract from Stone-Age Economics by Marshall Sahlins, The Inner Level, Richard Wilkinson, Kate Pickett, pg. 233-4

[8] Ibid.

[9] I provide details on how we can reduce work hours and widely disperse prosperity with a redistributive policy in my prior book The New Enlightenment, pgs. 88-103.