It now seems hard to believe that there was a time when America’s corporate leaders gave a damn about the welfare of the nation. Yes, it was true that their market was overwhelmingly domestic back then. But there was also a genuine patriotism mixed in with the drive for profits, some of it attributable to the World War II generation who rose to top decision-making positions in their companies.
But you rarely hear the word “patriotic” in the comments of today’s corporate leaders. Their sole loyalty now seems to be their stockholders and the global marketplace, which they are milking for every available dollar. Nowadays they are far more likely to express their love of “free trade” than their love for America.
Thomas B. Edsall notes in his NYT Opinionator post that Alan Krueger, chairman of the Council of Economic Advisers says that “the uncritical worship of the free market in the 1980s allowed the nation’s corporate elite to abandon longstanding constraints in its treatment of labor, especially in shifting the rewards of rising productivity from employees to the owners of capital.” Worse, writes Edsall:
With the blessing of the new right, Krueger argues, corporate America has abandoned its commitment to the commonweal over the past three decades. It no longer honors norms of fairness and equality. To Krueger, it is in the economic sphere that American integrity has been eroded and its ideals corrupted.
Edsall then quotes Krueger directly:
In considering reasons for the growing wage gap between the top and everyone else, economists have tended to shy away from considerations of fairness and instead focus on market forces, mainly technological change and globalization. But given the compelling evidence that considerations of fairness matter for wage setting, I would argue that we need to devote more attention to the erosion of the norms, institutions and practices that maintain fairness in the job market. We also need to focus on the policies that can lead to more widely shared – and stronger – economic growth. It is natural to expect that market forces such as globalization would weaken norms and institutions that support fairness in wage setting. Yet I would argue that the erosion of the institutions and practices that support fairness has gone beyond market forces.
Krueger dismisses the routine explanation of many economists that increasing inequality and middle-class stagnation are caused by technology and globalization. Corporate profits are soaring, and coporate leaders could easily raise wages and salaries, without hurting their companies. He argues further that productivity has also suffered as a consequence:
Productivity growth has not accelerated over the past 30 years; in fact, except for the late 1990s (when inequality narrowed) productivity growth has slowed. If the rise in inequality had improved incentives, one would have expected productivity growth to rise even more quickly, not slow down. Indeed, it is hard to see what the macroeconomy has gained from the enormous shift in the income distribution.
Before the 1980s, C.E.O. pay used to adhere to “norms of fairness, so that the range of compensation between janitors and top executives was kept within limits.” Meanwhile, notes Krueger, other wealthy nations which have experienced economic downturns have escaped sharp hikes in inequality.
There has been a lot written about the decline of values in America and the rise in narcissism, with ample evidence all around us. But where it hurts most is in the values of the corporate decision-makers, who have the power to rebuild America, but who have instead replaced patriotism with geckoism.