The Progressive Ensign

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Category: Common Good (Page 1 of 2)

We Have A Duty to Provide, Protect and Promote the Common Good

 

Image: Your Little Planet

Today’s discussion of the Common Good is focused on a point that arose this week from a court case where the parents of children in Detroit sued the city school district for better teachers, classroom conditions and funding.  The basis of the suit was that it was a ‘constitutional right’ that all children should have a fair and equal education regardless of income.

Unfortunately, as much as we would like to see education as a ‘right’ it is not mentioned in the U.S. Constitution or the Bill of Rights. The judge held that there was no ‘right’ to a quality education. The 14th Amendment does require states when they provide public education to offer equal access to all students – equal quality is not specifically defined.  We see education as Madison and Jefferson did as a key pillar of the government where a well-informed citizenry will make wise choices about who would lead their government.  We have outlined in an earlier post that we see Education as the Fifth Estate, after the Fourth Estate, The Press and the three main branches of federal government – The Executive, Congress and The Supreme Court.  Then, it follows that as a country we have a duty and responsibility to ensure that all children have a equal opportunity for a high quality education and access to learning institutions.

We do not really talk much in our society anymore about duty to country – or duty at all.  We are indoctrinated constantly about ‘my right’ to this and that.  While it is important that we have key rights ensured by our Constitution and courts, duties need to be in balance and in many ways ensure that rights can be sustained.

What do we ask of our young people graduating from high school in regard to supporting the freedoms and rights they enjoy?  Universal service for every 18 year old as they do in Switzerland, or universal military service as Israel requires?  What sacrifices do we expect our people to take on at any age?

In WWII, the Korean War, Vietnam War, and Middle East Wars, American men and women fought alongside each other to ensure the freedoms we enjoy and to protect the freedom and welfare of others.  The wealthy fought along with the poor as a team, to survive in a hostile environment against a common enemy. They shared this life changing experience, learned how to depend on each other to survive and discovered what they had in common. Today, young people serving in the armed forces are making sacrifices and sometimes putting their lives on the line, yet the vast majority of our forces are comprised of poor or working class men and women from rural regions of the country.  We are not all sharing the duty of defense across classes.

Everyday there are citizens across classes serving our country, as many people do volunteer work in all types of ‘duty’ based work at churches, non- profits and relief groups.  Some sacrifice themselves and time in environmental protection efforts that support good stewardship of the earth that we all live in and enjoy.

So, when we look to ‘get our rights’ in court, we may need to look to how to make duty more of a core value in our culture and in particular business culture.  As we have observed our country is essentially run by Corporate Nation States, they must change their attitude, behavior and operating practices focused on their duty to all the people not just their executives and customers. Everything a corporation does in some way impacts the Common Good. We are the people these corporations serve, and we should expect nothing less than socially responsible behavior from the executives running these huge Corporate Nation States.

Corporations Are Taking Worker Wages To Increase Profits

 

Image: csmonitor.com

Eight-three percent of all workers are ‘non-supervisory’ workers in the Federal Reserve classification of types of workers, yet they have not seen a fair cut of the profits since 2000.  Corporations have used financial engineering techniques like stock buybacks where funds are used to buy corporate stock and goose the price up. J.P. Morgan estimates that with dollars repatriated from the tax cut bill, that stock buybacks will hit a new record of $800 billion for 2018.  This $800 billion is absolutely wasted on driving stock prices up while not investing in employee wages, capital expenditures, research and development, instead stock buy backs increase executive compensation tied to stock price.

Source; Real Investment Advice – 6/29/18

Since before the Great Recession wages have been stagnant for working class people, the 80 % of the workforce that make corporations prosper.  The wages to profits ratio arc shows a continuing decline since the 1980s – interestingly when the GOP was telling us that ‘trickle down’ economics would bring economic prosperity to all.  Instead working class families are having to take two or three jobs and borrow on their credit cards just to keep their household finances afloat.

Next Steps:

The country is run by Corporate Nation States who make the contributions, fund the campaigns and essentially buy off the legislative influence that counts in the U.S.  Each year corporations spend hundreds of millions of dollars in Washington DC lobbying alone, i.e. Amazon has 94 lobbyists keeping DOJ anti-trust lawyers distracted, the FCC at bay on drones and lobby other interests to keep its juggernaut growing.

It is time we wake up to what is happening from Supreme Court decisions that favor American Express over merchants, to the GOP tax cut bill, to relaxing the Dodd-Frank rules on banking Corporate Nation States are running this country.  The basic economic trends in America are not going to change unless we have corporate reform.  Will this reform come in the form of legislation like Sen. Booker’s Dividend Reform Act or letters from investment banks to corporate CEOs like Blackrock CEO Larry Fink sent recently.  We are not sure, but we need to take a path that takes on the dominant power of Corporate Nation States or we are going to see the middle class wiped out and our economy with it. After all, as we pointed out in a recent post on the Common Good, when the working class has little money to spend the rich will lose too.  The working class has earned a fair share of the profits. Fair share means when profits go up by 5 % wages go up by at least 5 % otherwise the economy deteriorates like it is today deeply in public and corporate debt.

in the end the rich will need to see that it is in their interest to build the Common Good, by contributing to our institutions of government and common people or they will lose what they already have and probably a lot more.”

Building An Economy for the Common Good

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: Your Little Planet

In the past week, American Express won a gag order over merchants when the Supreme Court handed down a decision that allowed the huge financial services company to require all their merchants not to tell their consumers other cards had cheaper swipe fees.  Amazon announced the acquisition of Pill Pack a mail order pharmacy company, which sent financial shock waves through the drug store industry. So, it goes on, a Corporate Nation State (CNS) like American Express  or Amazon have their way limiting consumers choices to reduce costs and to take over the drug marketplace with no fair market rules in place.

Are these two companies focused on building the common good, fair play rules in the marketplace, doing what is right for consumers and taking social responsibility for the impact of their decisions?  No.  There is no countervailing power when Congress, The Supreme Court and the Executive branch are all doing the bidding of CNS organizations.

Corporations run our federal government by donating hundreds of millions of dollars (they have no campaign donation limits) each year to congressional campaigns through super PACs. Some CNS entities have large lobbying offices in Washington, like Amazon with 94 lobbyists knocking on Representative and Senator doors every day!  Do we have an army of lobbyists twisting arms for our interests?  No.

Where can we look for corporate reform to build the common good?  Larry Fink, the CEO of Blackrock, a $6.3 trillion institutional investment corporation, sent a letter to 1000 CEOs of companies they invest in telling them that beyond profits they would be evaluated on how well they are taking care of the environment, responding to climate change, having a diverse workforce, and fairness with their employees. We applaud Mr. Fink’s move, and look to more investors to call upon corporate management to be held accountable for their social responsibilities.

There are corporate accountability frameworks that have been receiving widespread acceptance and government support. In the European Union a group called the Economy for the Common Good (ECG), has over 2400 corporate endorsers and almost 10,000 individuals support their effort to require corporations report on a Common Good Balance Sheet their social responsibility activities. The EU has adopted a non-binding directive requiring companies of 500 employees and ‘public interest’ to report on human rights, diversity, labor rights, the environment, health and anti-corruption measures. The report is not included with the corporate annual report and is therefore not audited.

The Common Good Balance Sheet is divided into four key accountability areas: human dignity, solidarity and social justice, environmental sustainability, and transparency and co-determination:

Source: Economy for the Common Good – 6/29/18

The ECG is now working to make actual changes in corporate behavior by focusing on gaining support for these eight issues:

  • universal (all values and relevant issues)
  • legally binding
  • measurable and comparable (e. g. using points)
  • externally audited
  • generally understandable (for the public)
  • public (on all products, websites, shop doors)
  • developed in a participatory process
  • linked to legal incentives (taxes, tariffs, …)

The first phase has been completed of their initiative to gain EU nonbinding support next they look for a binding EU directive by 2020 followed by integration financial reporting.

We need to find corporate leaders in the US that see the vision of an Economy for the Common Good, embrace it and implement its ideas in their day to day operations – while measuring the results to show it is a better way to run a business.  A business can build an economy that works for all and still be a thriving profitable enterprise.

EPA Abdicates Common Good Responsibility to Ensure Clean Water

 

Photo: commonfloor.com

The Wall Street Journal yesterday disclosed that Scott Pruitt, EPA Director, is working to limit the veto power of the agency over large projects impacting water quality. The agency has used the veto power sparingly – only 13 times since it was given the authority in the Clean Water Act of 1972.

Pruit believes the veto authority has gone too far impeding economic development, “I am concerned that the mere potential of EPA’s use of its… authority before or after the permitting process could influence investment decisions and chill economic growth by short-circuiting the permitting process,”, in a 4 page memo to regional staff.

Why is this clean water common good responsibility so hard to execute?   If a person dumped all his waste water and sewage in the street in front of his neighbors’  house, the neighbor would be upset and rightfully so. So, why do we treat mines, real estate developments, or port development any differently?  Is it because they are trying to make a profit while desecrating the land so it is ok?

Chromium-6 a known carcinogen made famous in the movie ‘Erin Brockovich’ has been found in the drinking water of millions of Americans. The non-profit Environmental Working Group has been monitoring the status of chromium-6  found in 2017 the substance in the drinking water of over 200 million people.  So, there are dangerous substances that still need to be monitoring in our drinking water.

The EPA has not taken in its public stewardship responsibility to the level of other countries, there are thousands of chemicals that can cause pollution and possible health hazards – none have been added to the pollutants list since 2000.  The list is small only 90 are covered in the Clean Water Act out of about ten thousand.  In the European Union they closely track over 2,500 different chemicals.

While the EPA is not as diligent as it needs to be, President Trump a year ago weakened the Clean Water Act requirement that mining companies ensure that water dumped into streams be cleaned to safe water standards.  The policy shift impacts the drinking water of over 117 million people.

Source: Scientific American, – 3/10/17

The GOP Administration continues to undermine protections in place for 40 years to ensure clean water is available to all citizens.  The lead levels found in Flint, Michigan water show that in some areas around the country the job is not getting done. Weakening the Clean Water Act in regard to mining dross and limiting the use of EPA veto on projects are just two examples of an indifferent and dangerous attitude by the agency.

Next steps:

In a Gallup poll 57 %  of the people said they favor ensuring environmental quality over economic growth when a decision needs to be made.

Source: Gallup – 4/2/18

When are we going to get a government that represents the will of the people on issues of our very survival like the environment?  The EPA Director worked as attorney general in Oklahoma relaxing environmental laws and now he is plowing ahead not protecting the public and not steadfastly defending the common good. Congress needs to act to update the Clean Water Act from updates in the 1980s, give the EPA a clear message that protecting the public is the first priority over economic costs.

The Rich View Our Government as A Trusted Rule Keeper, The Common Man Not So Much

Image: Your Little Planet

Thomas Jefferson and James Madison saw the need to frame a government such that ‘forced compromises’ would push political leaders to focus on the Common Good.  The institutions that maintain our common good include the federal government three estates:  The Supreme Court, Congress and The Executive.  In addition, the Fourth Estate, a Free Press is crucial for our citizens to have access to fair and impartial reporting about the activity of government officials and their policies. We have spotlighted the key role Education, as the Fifth estate, plays in educating our people to make critical decisions and understand comprehensively the information they receive from a Free Press.

Trust in our federal government has been falling since the presidency of Lyndon Johnson in 1965.

Source: Pew Research Center – 12/14/17

We noted in our first post on the Common Good that there were two factors contributing to the decline in trust:

We see two major factors for the lack of trust.  One, is that economic inequality has been increasing over the last 60 years to the point where it is at the worst it has ever been since 1929.  Americans expect their government to be the rule keeper of a fair shot at economic opportunity not a bastion for the rich and powerful.  As wealthy donors have taken over control of both major parties, the influence of the average citizen has been reduced to nearly nothing except at the ballot box – but not in legislative policy.”

The second major factor is the change in information access and news viewing habits of our society.

In the 1950s and 1960s families gathered around the television set to watch Walter Cronkite or Huntley and Brinkley bring them the news for the day.  These news anchors had teams of trained journalists in how to gather news, provide airing of opposing views and investigation to reveal the facts of the story. As cable news programs became popular people drifted away from central network journalist supported news programs toward popular ‘viewpoint news’ programs like Fox News or CNN.  Then, from 1995 until today, the Internet was a catalyst for the growth of blogging, and ‘friend news’ on Facebook which had virtually no formally trained journalists and limited understanding of the difference between facts and opinions.  Opinions spread virally through the Internet often with no foundation in formal fact gathering or fact finding investigation techniques. Today, we even have presidential spokespersons talking about ‘alternative facts’ to justify their policies or opinions.

Trust gaps by income level are increasing around the world with many developed countries showing double digit gaps between the top income quartile and the bottom income quartile and the U.S. with the largest gap:

In the U.S. incomes for the lower 80 % have been largely stagnant for the past three decades since the Reagan years, higher education costs rising to levels never seen before with student loan debt at $1.5 trillion dollars. In short, lower and middle income parents expect their children to have fewer opportunities and to make less money over their lifetime. This growing sense of hopelessness is in part triggering the populist movements we see world-wide. The top quartile trust government institutions the most because they are getting the benefits, tax cuts, relaxed environmental policies to allow their businesses to make as much money as they can, and continued stock buy backs to make even more money instead of increasing worker wages.  Workers see their votes not making a difference as Congress is at the beck and call of Corporate Nation States who make multi-million dollar campaign contributions and the Executive Branch now run by billionaires.

Little wonder the Common Good is not embraced by all people, for the rich they are on top of the economic pyramid. The rich get the laws they want and aren’t interested in sharing their wealth or time to build the Common Good.

Here is what will likely happen, in the end the rich will need to see that it is in their interest to build the Common Good, by contributing to our institutions of government and common people or they will lose what they already have and probably a lot more.

AT & T Wins Time-Warner – Americans Lose Free Press

 

Photo: Free Press

A federal court judge approved the $85 billion bid by AT &T of Time – Warner, creating a huge vertically integrated media giant.  The judge found no need for the kind of conditions placed on the Comcast acquisition of NBC Universal in 2011, or ensuring a free press.  Though both cases are quite similar in that AT & T and Comcast are both major media companies acquiring content providers and news organizations (NBC, and CNN).  In approving the Comcast – NBC bid, the judge laid out detailed conditions to protect consumers, requiring adherence to net neutrality for Internet supported content providers and assistance for low income users. Since the Comcast – NBC merger Comcast has violated several provisions of the agreement as outlined by former FCC commissioner Mignon Clyburn and Senator Richard Blumenthal including: not adhering to network neutrality in providing channels to consumers, slow implementation of low income Internet assistance programs, not providing smaller cable channels with fair rates to access regional sports networks and discriminated against Bloomberg Television (a competitor of CNBC).   Clyburn and Blumenthal in their op-ed piece pose three key questions to be answered in every major merger (our answer):

  1. How will consumers be affected? Negatively by lack of competition
  2. What will this do to competition in the industry? Reduce competition significantly
  3. What will it mean for small businesses? Small businesses will be squeezed out of the market

For some reason, the court in the AT & T – Time Warner case did not seem interested in answering these questions related to safeguarding consumers, businesses or freedom of the press. Federal regulators found in the Comcast – NBC bid the need for 150 conditions to be placed on the merged corporate organization.

Today, the court saw a need for no conditions?  Why? When we have a deregulation federal government policy wave rolling across the country today it is even more imperative that conditions be in place if these giant mergers are to be approved.

Next steps:

Our position is the merger juggernaut needs to be stopped now, and this merger not approved – later we will have to break it up anyway.  Mergers contribute to lack of jobs as well which hurt wage gains by workers.  Media concentration limits access to information and choices for media coverage. In 1983, 90 % of media, entertainment and distribution markets were controlled by 50 companies, today, there are 6 major players:

By approving the AT &T – Time-Warmer deal the court is giving a green light to deals now under review like the Disney bid (Comcast biding too) for 21st Century media which would create yet another huge conglomerate strangling competition and reducing the number of news sources. Other major Internet players are waiting in the wings like Apple, Google, Amazon and Facebook who are flush with cash and looking to control both the Internet, broadcast and film content and distribution.

We have said that deals like this need to be reviewed in supporting the common good ensured by freedom of the press.  This AT &T deal should not be approved on media concentration and press limitation grounds.  Jefferson and Madison observed correctly that a democracy can not long survive without a well-informed citizenry making decisions based on multiple points of view. Major corporations win in deals like the AT &T – Time Warner merger, the American citizen loses.

Funding Education to ‘Common Good’ Levels Will Increase Prosperity and Reduce Civil Conflict

 

Image: Your Little Planet

Last week, we noted that public education for all was viewed by founding fathers like Madison and Jefferson as essential to informing and building intellect of our citizens to make good decisions selecting our political leaders.  A well-educated citizenry would be able to separate the leader focused on the common good from the leader who would rule unjustly as a tyrant.  Madison and Jefferson proclaimed that a well-educated voter is the last bulwark to build majority moving away from a tyrannical faction.  Certainly, we need to shift from a tyrannical faction today – the oligarchy.

So, what role does funding play in public education performing its role as the Fifth Estate, alongside the three main branches: The Supreme Court, Congress, and The Executive with the Fourth Estate being the Press?

The key factor in how well education is building the common good across all income levels is funding.  Since 1975 funding by state and local governments for higher education has dropped from 60.3 % to to 34.1 % in 2010. The last eight years has seen this figure continue to drop close to 24 %. Public colleges and universities have coped with the unprecedented drop in state and local funding by raising tuition year after year to the point where students are now carrying the highest level of student loan debt ever at $1.5 trillion. Families can’t keep up with the tuition increases

Source: Center for Budget and Policy Priorities, 8/15/16

Because of this huge debt load millennials are not buying first homes at the rate of previous generations, and they are moving in with parents to live.  Plus, couples are now postponing starting families as the birthrate has dropped to the lowest level in 30-years way below the needed replacement level. In regard total education US federal funding accounts for only 14 % of education spending vs OECD countries where national general funding is allocated across regions at 54 %.  The property tax maybe the way Madison recommended where local communities wanted local control. Yet, to make the quantum leap in education for all to build the common good a new source of funding must be found at the federal level to balance the funding between poor versus wealthy districts.

When as a country we don’t make the financial commitment it says that for all the platitudes about the importance of public education, regardless of private schools and for profit colleges, we need to ensure that all citizens receive a good high quality education that create lifelong opportunities for them to contribute to our society.

Ironically, funding for public education has continued to decline since the 1980s and steeply recently since the Great Recession.  As Corporate Nation States and the Elite continue cutting funding to federal, state and local government these common good building institutions and the people they serve suffer. The mantra of ‘my kids are taken care of’ I don’t need to worry about yours with my tax dollars has held up and politicians keep getting elected and putting pro profit and private educators in key positions like the Secretary of Education today, who has zero interest in rebuilding public education but is instead working hard to dismantle it. The way change in building the common good is going to happen is when voters realize they have been sold an education equality myth for decades. Only when we set a top priority on public education funding at ‘common good building levels’ of the 1970s will our democracy work for the middle class, ending income equality and create an enduring prosperity.  Someday Corporation Nation State executives and the wealthy who own them, will figure out that having a whole generation in debt, not building households, not buying goods and services at growing economic levels and not bringing new babies into the world is going to cause great loss in wealth for them!  If they aren’t concerned about losing wealth, they need to heed the point that  the democracy that provides the framework for their wealth will fall if the common good is not continuously built.

Our Founding Leaders Believed Public Education Builds the Common Good

Image: Your Little Planet

Public education’s rightful role is as the Fifth Estate next to the Fourth Estate, the Press, as pillars of our government.  The judiciary, legislative and executive being the other three Estates. Thomas Jefferson and James Madison in their writings on education knew it was crucial for the success of the country that all citizens (then it was white males) be well educated to use their knowledge to check the power of tyrants.

James Madison had tremendous vision, and steadfast hope that knowledge would triumph over ignorance when he said in a letter to W. T. Barry about a bill for Kentucky public education in 1822, “Knowledge will forever govern ignorance”.  Today, we are finding out if his vision can be held up as true or will demagogues and tyranny rule the day through ignorance.  Madison focused on the means of acquiring knowledge as proving the power to overcome tyranny. “A popular Government, without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy; or, perhaps both.  He saw that the people must be armed with knowledge to have leverage over their rulers. “And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives.” Education provides the way for the intellectual development of all people to discern the truth from untruth, coming from any individual or the press. They gain the ability to lead themselves and to discern policies and leaders that are basing their ideas and plans on truth rather than fiction.

Thomas Jefferson sponsored a bill for public education in the Virginia legislature when he was Governor and wrote the following preamble to the law:

“Whereas it appeareth that however certain forms of government are better calculated than others to protect individuals in the free exercise of their natural rights, and are at the same time themselves better guarded against degeneracy, yet experience hath shewn, that even under the best forms, those entrusted with power have, in time, and by slow operations, perverted it into tyranny; and it is believed that the most effectual means of preventing this would be, to illuminate, as far as practicable, the minds of the people at large, and more especially to give them knowledge of those facts, which history exhibiteth, that, possessed thereby of the experience of other ages and countries, they may be enabled to know ambition under all its shapes, and prompt to exert their natural powers to defeat its purposes.” (Underlining is ours).

 The law, The Act to Establish Public Schools, was presented to the House of Delegates in 1778 and 1780 but was not passed until 1796, when Jefferson was serving as US ambassador to France, with continuous lobbying by his friend James Madison.

Jefferson was adamant that education was the antidote to tyranny when he wrote George Wythe on August 13, 1786 (the bill still had not passed, and would not for 10 more years), “I think by far the most important bill in our whole code is that for the diffusion of knowledge among the people. no other sure foundation can be devised for the preservation of freedom, and happiness.”

The relationship of freedom and learning was a closely held view by Madison as well when in 1822 in his letter to W.T. Barry he said, “What spectacle can be more edifying or more seasonable, than that of Liberty & Learning, each leaning on the other for their mutual & surest support?”

Madison continued in his letter to Barry that the poor should be in public school as well paid by the rich, “Whilst those who are without property, or with but little, must be peculiarly interested in a System which unites with the more Learned Institutions, a provision for diffusing through the entire Society the education needed for the common purposes of life…that it is better for the poorer classes to have the aid of the richer by a general tax on property, than that every parent should provide at his own expense for the education of his children, it is certain that every Class is interested in establishments which give to the human mind its highest improvements.”  He advocates that the property of the rich be taxed to support public education for all. Yet, in Europe education today is primarily funded by national governments. It is likely that Madison after experiencing the tyranny of the King of England did not want the national government as the source of funding for educating people on how to discern the truth from untruth expressed by national leaders.

To create a sense of the common good is to understand the views of immigrants he astutely observes, “An acquaintance with foreign Countries in this mode (learning institutions), has a kindred effect with that of seeing them as travellers, which never fails, in uncorrupted minds, to weaken local prejudices, and enlarge the sphere of benevolent feelings.”

Two hundred and twenty years ago since passing the Virginia public education act our country has changed the focus to educating, women, minority groups, and all members of society to be better informed, discern the truth and select democratic leaders.

Yet, how well has public education performed in its role to create the common good?  Next week, we will look at measuring public education achievements and failures in building a more democratic society.

Maybe We Do Make Choices for the Common Good – More Than We Think

 

Image: Your Little Planet

James Madison was concerned that the basic character of man was self-interest and he would not act if in a power position for the common good.  While, this self-interest aspect of people is turbo charged in capitalist nations, it may not be the choice many of us make when we see the light of the common good and make choices that benefit all of us. Certainly, Madison put great faith in a diverse, well informed citizenry making good choices for their representatives who would act with ‘enlightened interest in the public good’.  Our government of checks and balances provides a way for the this enlightened good idea to be discovered from free speech and forcing self-interested people to recognize they had gone too far and needed to see the needs of all the people.

Our media has taken the negative perspective (it sells advertising and gains attention) that there is a tragedy of the commons, which Prof Garrett Hardin popularized in 1968, that people have a tendency to always go for the self–interest choice, i.e. overgrazing a plot of land to make more money from the ever increasing number of livestock that a herder wants to graze causing overgrazing and killing the life support ability of the land.  There are countless examples of over farming from large regions like the Midwest in the 1930s causing huge dust storms and forcing migration of farmers to California and the West.  Today, we see self-interest to the max in stock buy backs where corporations purchase their own stock to reduce the number of shares and drive the price up, so executives and shareholders would make more money – at the expense of employees not receiving raises, investments in research to increase productivity and reduce product prices or increasing investments in employee training and development.

Yet, maybe we do make the choice for the common good when offered.  Lecturer, Dylan Selterman, at the University of Maryland, asked his students an extra credit question if they would like to have 2 or 6 extra credit points to your final grade, but if 10 % of the students asked for 6 extra points none would receive them.  Class after class would go over the 10 % limit, until he provided a third choice – altruistic – you can select zero points.  After offering the third choice enough selected the zero point or two-point option so that would be under the 10 percent limit. The classes learned if they were not too greedy with their extra credit point choice they all could win.

So, how does choice and information play a role in developing and implementing common good policy?  A 2008 classic study by consumer researchers found that if hotel guests were provided a message that said ‘the majority of guest reuse their towels’ then towel recycling would increase dramatically. While, today we are used to recycling towels there were two elements:  one – providing information that towel recycling would reduce water usage and two – you have a choice to reuse or not reuse your towel.

Source: Journal of Consumer Research – 2008

The common good dilemma in regulating industry is more challenging because of the profit motive and personal benefit in making more money by increasing profits and reducing costs.  For chemical factories, installing scrubbers and extra equipment to return cleaner air to the sky is a cost, while just using the air for their factory and workers is free. Yet, all people beyond the factory are hurt from air pollution.  Generally, penalties for violating air pollution standards, or court cases have been the only way to stop polluting behavior.  But is there another way; getting an industry sector to work together, see that in their own interests if they all reduce air pollution they will benefit because they all breathe cleaner air – and they all have the similar costs if they all install equipment or even share technology and air pollution equipment in a group purchase.  Maybe when everyone is taking action, it is seen as the right choice and reduce costs for all with the benefit that everyone will enjoy clean air. Plus, if everyone is making the same investment, the costs will be similar across the industry and no single company is hurt financially or by Wall Street analysts.

Representative Government Handles Damaging Factions Best

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: Your Little Planet

Today, we see with the populist movement across our country in cross currents both right and left factions seeking to take control of the major parties.  In one case, the GOP populists were successful in taking control of the Republican Party in 2016.

James Madison saw the issue of how to deal with factions who may override the needs of the people for the public good.  In Federalist Paper No. 10, Madison said;

“By a faction, I understand a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.”

Certainly, his observation of what happens when factions move against the common good is true today, as we see the oligarchy faction taking control of the populists by making huge donations to our representatives in Congress.  Madison saw that taking away the liberty of the faction was like taking away the air we breathe and keeps people engaged in their government.  Plus, he saw issues in making laws to constantly set limits which would change around the effects of the factious movement.  So, what might the answer be?

He knew that he was dealing with the inherent nature of man:

“The latent causes of faction are thus sown in the nature of man, and we see them everywhere brought into different degrees of activity…”  Thus this factious, tribal nature of man unfortunately is coming forth with ever increasing strength and lack of civility.

We see partisanship growing to new heights of conflict.  Our Congress has very few Senators willing to cross party lines as this chart illustrates so well:

Chart: Reddit.com – 113th Congress – 5/11/14

Only two senators Sen. Susan Collins – R – Maine, and Sen. Lisa Murkowski – R – Alaska seem to be the only ones willing to cross the isle.  Sen. John McCain – R – AZ cast the deciding no vote last summer on repealing the Affordable Care Act.  How can this total lack of vision in the public interest be? An act of Congress effecting every American and we cannot create a common vision of what the future of health services for all?  Creating that common vision, building consensus and moving the country ahead together is the responsibility of our elected leaders – clearly they are not doing their job.

The common good is certainly missing. Madison thought a pure democracy of citizens voting in a public forum to decide major matters would not work in a large geographically dispersed area and that a faction could easily overtake the democratic vote.  He advocated as structured in the Constitution a republic of representatives of the people who could see the damage possibly done to the republic by the faction.  Sen. Mc Cain invoked the need to strengthen the common good when he said his no vote was due to lack of ‘common order’ and process in the creation and rushed partisan vote taken without hearings from experts, citizens and consideration of amendments.  In McCain’s no vote on ACA repeal, Madison’s vision worked, of ‘a body of citizens, whose wisdom may discern the best interest of the country, and whose patriotism and love of justice will be least likely to sacrifice it to temporary or partisan considerations.’ However, in so many other pressing issues for our country the elected leaders financially bound to their donor’s will are not solving urgent issues confronting the citizens and their public interest.

Where do we go from here to build the common good aligned to the public interest? We will look at various proposals to build the common good in this series of posts beginning next Friday.

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