I agree with Keith's comments (and others) that trans-governmental agencies will rise in authority and popularity along common interests, especially as technology allows people to transcend traditional borders and mental parameters (such as FW, environmental, human rights, science and finance). This is the great task of the information age, isn't it, learning to include a much larger class of entrants while not becoming completely swallowed up by the whole mass of it? However, concurrent to Environmental groups networking across oceans, global corporations acting in their own self-interests and the scientific and educational communities capitalizing on their multicultural denominations, there will always be the need and necessity for something local and personally relevant. Here, not just please my cousin Ray, is where the Arts become a transcending force in maintaining human creativity against the onslaught of conflicting and overwhelming information; the human spirit needs knowledge and new data as much as the body does food and water, but the spirit must have air, horizons and light. Having briefly delved into linguistics, I am constantly struck with the cultural and language evolution we are creating. If not Star Trek, what then? Karen
-----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of Keith Hudson Sent: Saturday, July 13, 2002 3:42 AM To: Dennis Paull Cc: [EMAIL PROTECTED] Subject: Quis custodiet . . . ? (was Re: Let's get rid of Capitalism Hi Dennis, I must say that it's a pleasant experience to receive a well-considered reply to one of my early morning ponderings. So, at a risk of putting off some FWers who complain about itsby-bitsy arguments, I'd like to pick my way through yours and comment on several points that you've made. At 15:58 12/07/02 -0700, you wrote: >Hi Keith et al, > >Keith does have a way with words. But the current discussion has less >to do with "capitalism" or its namesakes than it has to do with >the distribution of wealth and the political and economic power that >comes with wealth. > >There has been considerable discussion about the ratio of corporate >officer remuneration to lowest worker wages. I think this is a useful >topic since the current pay for executives seems out of line with the >benefit they bring to their organizations. > >Supposedly in Japan (in years past) the top paid employee on average, >took home about 30 (I think) times the lowest worker. In the US it was >more like 70. Nowadays, I have heard numbers like 140 to 500. > >If the lowest paid worker gets $8 US per hour or about $16,000 per year, >the top paid worker gets about $2.4 M. What does a person need to do >to be 'worth' that kind of money? And worth to whom? The stockholders, >his bankers, his employees, his customers, his kids, who? I agree that the salary differentials are outrageous, but it's highly likely that the current ratios (you mention numbers like 140-500) are probably a short-term phenomenon based upon a stock market bubble-upon-a-bubble of the last 10 years. The more recent of those bubbles (dotcom/telecomm) has collapsed, but there's still some way to go before the first one (that is, most companies' share prices which rose steeply from the early 90s) does so and CEO salaries drop down to more acceptable levels (whatever they may be considered to be). In a way, the huge salaries and stock options of CEO's have been a compliment to the growing power of shareholders and pension funds who have been increasingly seeking the best possible returns on their holdings. This means that shareholders' meetings in recent years have fallen over themselves in rapture whenever their CEOs report a particularly good run of good results (not always due to them, but more usually because of wider conditions, often luck and, more recently, fraudulent accounting). But it's very clear from my reading of the press that the above bodies (currently being joined by insurance companies, now in deep trouble, which also depend on share values ) are also becoming increasingly clamorous for reform. Without being complacent, I think we can reasonably expect that, as these different power centres readjust themselves in the coming years, CEO earnings (and certainly the crazy accounting of their share options) and also their fraudulent practices will decline substantially. (In a future period of madness -- say in 15 years' time -- CEOs will find new ways of boosting their earnings.) But really, who can say what CEO earnings should ultimately be? Their situation is rather like the earnings of sports and entertainment people whose audiences are huge and demand the very best performances. Those who are at the very top at any moment -- perhaps only 1% better than scores, perhaps hundreds, more performers just below them -- also have outrageous earnings. People don't complain so much about sports and film stars because the mechanism (their popularity and obvious economic "pulling" power) is more obvious. (DP) >There are many folks who would like to be a CEO, so the competition for >the job should be fierce. Now not everyone is smart enough to be a >CEO but there must be alot more that are able than hold that title. >When the CEO fails to come thru for the company, over some appropriate >time period like one to two years, he really ought to be replaced by >someone else to see if he/she could do better. But the Boards of most >large companies id controlled by friends of the CEO who are reluctant >to fire him. Pity! I often wonder how smart many CEOs are. I came across some IQ figures of English politicians a few year ago which put the average of them at about 120. The psychologists concerned in the trial surmised that this made sense because politicians have to liaise (that is, be able to find common language) between the general public (IQ100) and the top civil servants (IQ140 -- as probably that of most FWers). Personally, from what I read by way of interviews I'd judge that only a smallish proportion of CEOs are in the IQ140 range -- entrepreneurs like Land and Bransom, for example -- but most are only good at organisational politics and networking, and are pedestrian in the brains department. (DP) >Capitalism is all well and good, as Keith says. No, I've never said that capitalism is all well and good. I've said that capitalism is a misnomer for something more akin to "efficiencyism" (or "innovationism"), particularly with regard to enfolding increasing amounts of solar-derived energy within the products and services that man makes. The whole process (capitalism/efficiencyism) is "well and good" in the sense that man has a genetic urge to discover, and that we would be less than human if this process stopped. It may be that this will be the cause of man's downfall (as might be the intense male genetic urge for power) in due course. But there's nothing we can do about it except -- and this is a big "except" -- be very aware of our genetic urges and try to design institutions which specifically draw attention to this and plan safeguards. (I'm a great admirer of the American Constitution because it specifically points to the dangers of men's urge for power when in government.) (DP) But I think we need >to rethink the way that corporations are governed. One way would to >prevent ANY employee of the company from sitting on the Board unless >they hold a proportionate share of the stock. If the CEO owns 20% of >the stock and there are 5 board members, then OK, he gets one seat. Yes, I agree. The difficulty with formulae such as above, as with regulation, is that it is usually of temporary benefit only. This is why I would support such reforms, but still say that they are insufficient until we have complete transparency of the written data and communications of any business that has direct dealings with the public. The public ought to have a right to know all details of any product or service that they buy. In the words of professional economists there should be complete symmetry. After all, the business supplying the product has complete knowledge of the public's part of the transaction -- their cash. If all current business information were on public record then it would be available to any individual or any specialist agent of the individual. In the case of most products (say a domestic vacuum cleaner) a buyer wouldn't normally want any more information than he has now (the opinion of friends and neighbours) but in the case of, say, purchasing a pension, the buyer might well need to know what the strategy of the pension-provider was, how many kickbacks it was paying, how much share-churning was going on, and so forth. There should be no more secrecy in the case of any sophisticated service than, say, of the business down the road that bakes your bread and (presumably) would be quite happy to show you around their premises and show you everything that goes on in the process. (DP) >On the globalization topic, the problem is that corporations no longer >are the creatures of any one country. In general, corporations are >creatures of national governments. All the rules of corporate >governance were established by some national government. But now, >the majority of the business of the larger corporation is not with >any single country. Their employees are spread around the world as are >their customers. > >So who is to say whether a company is American, British, German, French, >Russian or Chinese? Or Bermudian? Companies are moving their HQs >around to gain maximum economic benefit without regard to those who >live nearby. Yes, the governance of businesses should quite rightly be subject to governments on behalf of the people. In recent decades, as tax schedules have become increasingly complicated and (in my view) too onerous, then corporations have got up to all sorts of legal tricks (such as off-shore operations) in order to reduce their taxation. But, without being too complacent about it, OECD and other inter-governmental bodies are gradually forcing tax havens to commonalise their operations. (DP) >Either we should make trans-national companies subservient to the UN >and pay corporate income taxes to that body or we should require that >they announce their national affiliation and obey all the laws of that >country and pay full taxes as established by that country. I am tired >of companies getting subsidies from our government when the benefits >go primarily to the citizens of other nations. > >My guess is that the Enron/WorldCom/Anderson fiascos would have occurred >whether they were transnationals or not. Still, the larger companies >have so much money to spend on lobbying or controlling national >legislators, and the incentive to do so, that they will be able to buy >'protection' of their income streams. It will take some massive changes >in election laws around the world to change this influence peddling. > >Of course, the matter is made worse by treaties that attempt to >homogenize world trade. Individual countries can no longer control >trade in their own economies nor is trade regulated by any democratic >body. So those who make those trade rules have free reign to line >their pockets. Somethings gotta change. The problem with control by a UN body (as with all governments that have over-arching power) is "Quis custodiet ipsos custodes?" -- Who will guard the guardians? What we need (and what is gradually happening, I suggest) is a more balanced set of institutions, each able to have a degree of control or power over others. If you like, this is form of democracy with knobs on. I've already mentioned the rise of the pension funds also the efforts of OECD (which is largely independent of governments) as just two examples of powerful forces arising against fraudulent corporations. All these efforts are mediated and amplified by increased transparency in the public media (and these are also becoming increasingly investigatory in their own right). I think we are also going to need a variety of different sorts of governments. In addition to nation-state type of governments (which are, however, retreating from attempts at economic control within their own boundaries) I think we are already seeing signs of the beginnings of new governments of different sizes and functions for specific purposes (e.g. armaments control, trade, pollution, potable water, fish stocks, rain forests, common accountancy standards, military crime, etc). Keith ---------------------------------------------------------------------------- ------------ Keith Hudson, General Editor, Handlo Music, http://www.handlo.com 6 Upper Camden Place, Bath BA1 5HX, England Tel: +44 1225 312622; Fax: +44 1225 447727; mailto:[EMAIL PROTECTED] ________________________________________________________________________
