The Future of the American Dream
The third idea is that to lead the way for social values, the economy needs a new, reform-minded business organization--call it a social corporation--that competes with old-line corporations adhering to their narrower values that enforce the supremacy of profit over society. The social corporations could be chartered by government and given certain benefits. To pursue a different set of values, they may need some protections in their infancy and perhaps modest start-up subsidies, and exemptions from the usual rules, but most of them would be independent and privately owned. They would produce needed goods or services that the private sector won't provide and sell them at a price most people could afford. They might, for instance, fulfill the market for very cheap computers and other high-tech devices that are stripped of the bells and whistles that run up the prices. The social corporation would be a working model for how the social imperatives--environmental values and equitable relations with workers and communities--can be integrated into firms and efficient production processes. Business lore and economic dogma say this is impossible. Social corporations would set out to prove them wrong. The purpose of this competition is not to replace orthodox companies but to put real market pressures on them to change. Creating social enterprises, including nonprofit cooperatives, can liberate us from the political vetoes business interests exert over promising new ideas.
Another crucial objective is to limit the size of business organizations, including social corporations, in line with E.F. Schumacher's famous dictum "Small is beautiful." The bloated scale of America's leading corporations has become a major impediment to innovation and experimental reforms, not to mention a corrupting influence in politics. Americans are learning anew from the financial crisis why it is a mistake to let private firms concentrate more and more power under one management. The failure of megabanks that the government helped create threatens our general well-being, and then government bails them out with taxpayer money because they are "too big to fail." Revived antitrust laws could simply prohibit the concentration of economic power as a threat to social values as well as to healthy competition.
Economic power must be dispersed in this broad nation, especially in banking and finance. We need many more financial intermediaries to allocate capital and credit and demonstrate more respect for society's needs. That includes regional banks, which are naturally closer to the customers. It means supporting and protecting the small and adventurous financial firms founded on commitments to social responsibility. They put capital into companies that have embraced environmental concerns, have equitable dealings with workers and communities and practice high-road behavior. On many fronts one can see the gradual advance of "social responsibility" in US capitalism. The pace is too slow to attract much political respect, but the current crumbling of the old order will clear the way for more dramatic progress.
These ideas may seem distant from the usual chatter of policy thinkers, but they offer alternatives to an economic system that has abused rather than served American life. I know a lot of smart people across the country who are pursuing these ideas in different ways--they constitute the beginnings of formations of citizens that can disrupt inert politics and overcome the timidity of incumbent politicians. These agitators are engaging in action for the long run, and the fainthearted need not apply.