Corporations, Capitalism and Christians

[Arthur Thompson]

This blog is primarily in answer to Phil from a discussion thread that apparently no longer exists. I have posted it here because I am way late in responding due to other demands on my time; yet I wanted to respond. As a side note, Phil, I have read The Servile State. Its application in the UK at the time may have been warranted, I don’t believe it has application today.

For the majority of my life I was an Objectivists in the Ayn Rand mold. I even adopted the fictional name John Galt as my online identity. Atlas Shrugged was instrumental in shaping my political and economic outlook and to a certain degree still does today. The problem I had with it, though I didn’t realize it at the time, was the built in Atheism of the Philosophy. Because of that I no longer subscribe to Objectivism as a Worldview but I believe that part of it, economically, that is Capitalism, is mans best model for social intercourse and economic prosperity. It is interesting though that both Rand and Piper identify Kant as a major villain in their worldviews.

Definitions:

Capitalism: the economic system, is the system in which the means of production are owned by private persons [as opposed to governments], and operated for profit and where investments, distribution, income, production and pricing of goods and services are predominantly determined through the operation of a free market. Capitalism is usually considered to involve the right of individuals and corporations to trade, using money, in goods, services (including finance), labor and land. Ideally, capitalist systems are governed by the free price system set by the law of supply and demand rather than government regulation, though this does not exclude government defining and enforcing the basic rules of the market. Classic unrestrained capitalism is currently confined to theory, as "all of the capitalistic societies of the West have mixed economies that temper capitalism" with interventionist government regulation and social programs.

Corporation: a legal personality usually used to conduct business. Corporations exist as a product of corporate law, and their rules balance the interests of the shareholders that invest their capital and the employees who contribute their labor. People work together in corporations to produce. In modern times, corporations have become an increasingly dominant part of economic life. People rely on corporations for employment, for their goods and services, for the value of the pensions, for economic growth and social development. (Wikipedia)

Employee: A person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed." Black's Law Dictionary page 471 (5th ed. 1979).

Choices, it’s all about choices. Man is a being of free will he can choose to think, drift, or evade -- but choose he must. In America today whatever state one finds himself in it is because of choices he made. Up until the 1960’s that was not true in the Black community. But since then it is true pretty much across the board. There is unlimited opportunity in America and if you apply yourself there is hardly anything that you can’t do or attain. The biggest problem is that most Americans don’t understand this early enough in life, make poor choices or they don’t believe it.

Nobody is starving to death in America. Even those that make the choice not to advance themselves are not starving in fact less than 2.5% of the population is undernourished. Nobody in America is going naked and few are going without shelter and those that are, are doing so by choice. The point is that basic subsistence in America in being met for 99.99% of the population.

Defining poverty is pretty much like trying to nail Jell-O to a wall. You can find just about any number you want for percentage of folks in poverty. The Orshansky model is what the government uses for statistical purposes but what you see, hear and read about in the MSM is “relative” poverty which is a whole another kettle of fish. Neither of these is really accurate because they are all based on pre-transfer dollars and based on median income of those considered not to be in poverty.

However, poverty is also a product of deindustrialization. As the U.S. shifts from a manufacturing, industrial society to a service-oriented, high-tech society, many of the blue-collar jobs that required little education but paid well are disappearing or being outsourced. Rural areas, such as Appalachia, suffer losses of mining jobs, and cities such as Detroit lose many manufacturing jobs to automation, overseas factories or factories that have moved to other states to escape excessive taxation and labor laws. Some people are unable to follow the jobs or commute to work; those are left in neighborhoods without employment or tax-basis to support needed social functions, such as schools, public transportation, police departments, etc. Others simply cannot find jobs because of the shift towards a service-based economy; in economic terms these people are structurally unemployed due to the changing skills needed.

This is very much like that which we experienced in the change from an agrarian society to an industrialized society. There are going to be people caught in the changeover; that is unavoidable. Companies go out of business, unavoidable. Personal financial planning can mitigate these problems and the economic safety net provided by the government, welfare, food stamps and faith based organizations should do the rest.

I spoke a moment ago about relative poverty and poverty in the US relative to say third world countries is not poverty at all.

I hear much talk about the “have’s” and “have not’s.” Well not everyone has a new 52” flat screen TV in home theater with Blu-Ray. But almost every home has a TV. Not everyone has XM Satellite Radio but anyone can own a radio. The “evil rich” have everything and the poor have nothing; not true, it is a matter of degree. The difference as I see it is that the rich have a better plan and make better choices. The secret to attaining wealth is not to labor harder but to labor smarter.

What does all this have to do with choices? Everything. You can make a choice to stay in school and get a college education or drop out of school. You can choose not to have children out of wedlock (preferably by abstinence.) You can be a fry cook at a local fast food restaurant or a Chef; you can work for a large retailer and take advantage of moving up in the company by making yourself valuable to that company thru education and enhancing your employers business that includes being available for relocation; one of the quickest ways to advance in today’s “big box” retail companies. Or you can find a need and fill it; be an entrepreneur. IF you sell yourself for $6 an hour that is what you will get. IF you sell yourself for $20 that is what you will get but you have to be worth the money you are seeking to be paid. I have seen way to many people who think they are worth $20 an hour just for showing up at work.

A major problem in American society today is instant gratification. Everything is moving at warp speed and shows no sign of slowing down. Everyone wants to be an instant millionaire with no thought or plan on how to achieve that status. Young people graduate from high school and expect to step into a high paying job and have all the luxuries their parents have not realizing what it took for their parents to attain those “luxuries.”

As to the “Evil Corporations” since gas prices are on everyone’s mind these days let’s take a look at Exxon.

Revenue (ttm): 429.28B
Revenue Per Share (ttm): 80.367
Qtrly Revenue Growth (yoy): 40.30%
Gross Profit (ttm): 171.70B
*EBITDA (ttm): 80.00B
*Earnings Before Interest, Taxes, Depreciation and Amortization
Qtrly Earnings Growth (yoy): 13.80%

Shares Outstanding: 5.19B
% Held by Insiders: 0.05%
% Held by Institutions: 52.90%

Corporate tax rate for 2008 is 38% so the 80B is now reduced to 49.62B so the 5.19B stock holders see a per share increase of $9.56 in their investment. Only ½ of 1% of the stock is held by “insiders” that is the people managing the corporation and over half the stock is held by “Institutions” which translates into retirement funds for all manner of workers outside of the industry.

Now the government is not a shareholder yet it shares in the profit of the company to the tune of 38% in this case 30.4B; over 61% of that paid to shareholders. So who is living off of the added value production of the worker? Is it the owners of the means of production? Well yes in the senses that share holders “own” the company. Are they the ones benefiting from the added value created by the difference between what labor is paid and his resulting production value? I would posit that the government is that which rides on the back of labor. This is even more glaring when you consider that the government taxes the share holder on his gains, in effect double taxation.

Phil said:

In short, I'm for free markets because of the very reasons you seem to advocate for the increasingly statist capitalism of America. Insurance companies, Military contractors, etc scare me...they don't care about me and mine.

Yes it is true that we don’t have a pure form of Capitalism, laissez-faire, but even in its present state it is far superior to any other system. I am looking at Capitalism not in the strict economic sense but in terms of an overall social system:

•Capitalism is the progressive ideal, because it is the only social system that that leaves man free to pursue -- and achieve -- his own happiness.
•Capitalism is the ethical ideal, because it is the only social system that leaves man free to be moral -- to live by the use of his own mind.
•Capitalism is the objective ideal -- because it is the only system that is true, both in philosophical theory and in economic practice.

Government's job is not to regulate corporations and manage their affairs, but to protect their rights, just as they would any other member of society. Government's job is to treat a corporation no different than any other citizen, granting it no special favors (corporate welfare is just as wrong as non-corporate welfare).

Corporations are not responsible or designed to “care about me and mine” any more than your neighbor is. You and your neighbor contribute to the community in whatever way you deem appropriate; donating to charities, tithing your church, community service, etc. Corporations do the same. Next time you are visit your local Wal-Mart check out their donations to the local community it is usually posted near the Customer Service area. Check your local Home Depot or Lowes to see what monies and services they have provided the community over and above that of providing jobs and increasing tax revenue. Here is a link to Corporate Charitable Donations. It is interesting to note in the chart that of the Top Ten corporate givers there are a Pharmaceutical, two Insurance companies and two “military-industrial” types.

Phil said:

I believe the whole capitalist mindset is too individualistic. It looks to wealth as the great motivator of mankind; As such it is idolatrous both in its anti-Trinitarian vision of humanity and in its replacement of true religion as the central controlling paradigm of humanity with money-making.

There is no doubt that the capitalist mindset is individualistic. I however see that as a good thing and it is why Leftist Progressives continually attack it. However, if we look back across the centuries what social-economic system has contributed the greatest good and greatest freedom? And conversely which have contributed the most grief and human suffering? Where has Christianity flourished and where has it been restrained.

Look at the men of the Bible who were deemed righteous in the eyes of God. Almost all of them would be considered “rich” in their time. They were not righteous because they were rich they were rich because they were righteous. God does not frown on those who earn money. The pursuit of money to the exclusion of God is the evil. “The evils of a desire to be rich, 1 Timothy 6:9,10; evils seen in the temptations to which it leads; the passions which it fosters; and the danger to religion itself. The duty of those who were rich-for it is supposed that some Christians will be rich, either by inheritance, or by prosperous business, 1 Timothy 6:17-19. They are:

•not to be proud;
•nor to trust in their riches so as to forget their dependence on God;
•to do good with their property; and
•to make their wealth the means of securing eternal life.”
—Barnes' Notes on the New Testament

In my opinion there is no sin in being as comfortable as you can in this world. However, you must know that it is only for a little time, that your eternal well being is dependent on Jesus Christ not “how many toys you die with.”

Art

[D. Iohan Fausten]

Interesting. I'll need to read this again later. But I've been a Randian Capitalist since my teens. I've come to a bit different perspective in the last year, but I'm still exploring it so I can't give up my Randian stance quite yet. The only thing I'll add is that capitalism as seen today and the capitalism under which Rand suggested that the US operates ideally are two different critters. We operate under a Corporatist state rather than a Capitalist state. There are huge differences in those approaches—the former being a degradation and perversion of the latter.

However, the church will never be a capitalist promoter (except as a lecherous maggot of society usually found in the form of "prosperity theology" that isn't about Christ but currency). It doesn't want the individualist approach to anything. Individualism tends to minimize the doctrines of both salvation and Christian community.

As an aside, it is completely possible to divorce all of Rand's theories from her atheism and still end up on the other side with a perfectly logical, objective, and rational philosophy. Not once in all my years studying her have I ever bought into her atheism.

[Ratatösk]

Thank you for such a thoughtful response, Arthur. I’m afraid I don’t have time to return the favor at the moment. I hope the brief comments that follow will be adequate for expressing the basic gist of my initial reaction.

Just to be clear: I don’t have a problem with profit per se. I don’t have a problem with comfort per se, and my reservations about capitalism aren’t pragmatic- that is , I’m not meaning to argue that our current system doesn't work very well for certain interests.

My concerns are ethical.

This gives rise to a number of thoughts regarding what you have written:

First, the standard must never be whether or not something works- especially when ‘works’ means ‘makes people wealthier and more comfortable.’ Our physical wealth and comfort aren’t the watermarks for human/societal/cultural progress.

I believe that our expectations for human beings and the societies they create ought to be informed by the God in whose image we are created. Individualism is immoral because it denies (as all idolatry does) the image of God. Specifically, it denies the revealed triune nature of the God who eternally exists in community.

We discover the true nature of persons by looking to our personal God, and there is simply no room for imagining an individualistic Christian God. To think of Father is to be thrown immediately to the Son, etc.

Individualism may be popular, efficient (for the strong), and self evident in our current Enlightenment-rooted rebellion against Xian revelation, but as such it is contrary to both the divine and human reality that the Xian gospel affirms.

So yes, contra the assertion of the first murderer, we are our brothers keepers.

The dehumanizing mammon-serving mindset that our capitalistic society assumes, encourages and cultivates is reason enough to question its true profitability.

What does it mean to be human? How would one decide? Does our capitalistic commodification of life encourage the attainment of this goal??

Secondly, plunder is immoral. Both socialism and modern Corporationalism are founded upon the intervention of Governments. That is, they both rely on force. They both restrict choices. This has been understood since at least the time of Adam Smith, as he was an opponent of Corporations.

In socialism a government confiscates money from the rich and redistributes it to the poor. Conversely, Corporations rely upon governmental theft that redistributes the plunder into the pockets of the rich.

Both involve theft, but with socialism the poorest profit at the expense of the wealthiest. With corporations, the reverse is true. It seems to me that a casual perusal of the Old Testament prophets ought to reveal which smells worse to God.

A third concern: Corporations (like state governments) ought to be feared because people are sinners. Any concentration of power into the hands of a few ought to be a rallying point for Xians.

Selfish exploitation is inevitable. It will simply not do to say that this may have been the case in the United Kingdom, but it will never happen here. It is happening here through billions of dollars in subsidies, artificially created monopolies, and a corrupt lobbying system- among other things- and all for the benefit of ‘persons’ who are in reality legal fictions. Their very existence is upheld by the force of the state’s sword alone.

The last thing that came to mind immediately is that you acknowledge that there was a time in this country where the lives of many people were radically shaped by other's choices. Obviously, it is possible. Now you somehow know that this isn’t true of anyone. Everyone lives the life they do because of their choices.

That strikes me as being more than a little presumptuous. It seems to me that the starting point for anyone who takes scripture seriously (and I know you do) is the realization that people use, abuse and oppress others for their own benefit. Why do you think Americans are exempt from original sin, and what is the source that’s revealed such a surprising state of affairs to you?

I'm having a few other thoughts, but I don't have time at the moment....