So let me summarize. I believe there's an evolved morality. I think morality is much more than what I've been talking about, but it would be impossible without these ingredients that we find in other primates, which are empathy and consolation, pro-social tendencies and reciprocity and a sense of fairness. And so we work on these particular issues to see if we can create a morality from the bottom up.This 2010 Guardian article by Will Hutton of Citizen Ethics argues that fairness is essential to the long-term success of capitalism:
[C]apitalism if it is run properly is a means for people to get [their due and proportional deserts]. If they are brilliant entrepreneurs or innovators then it is fair that they should get their proper due desert and make considerable if proportional profits. In fact, inventions are never the result of one individual light bulb moment but the consequence of a lot of social and public investment. Thus a proportion of the profit should go to the state as taxation, as its due desert for having collectively invested in the infrastructure and cumulative stock of knowledge from which invention draws – not least so it can repeat the exercise for the next generation. But the big point is that big rewards are justifiable if they are in proportion to big efforts – because big effort grows the economic pie for everyone. Profit is ethical to the extent it is proportionate to effort and not due to good luck or use of brute power. Taxation is ethical to the extent it is proportional to what the state has collectively provided.In The Week, Ryan Cooper takes a look at several studies contradicting the view that inequality helps drive economic growth:
That inequality is choking growth is the conclusion of the new issue of the Washington Monthly, including articles by Heather Boushey, Mike Konczal, Alan Blinder, and Joe Stiglitz. It comes on the heels of several other studies, even one from the IMF, traditionally a very orthodox institution, that reach the same conclusion.The Guardian's Angela Monaghan shares research from economists Emmanuel Saez and Gabriel Zucman shows that the the share of wealth owned by the wealthiest 0.1 percent of Americans now nearly the same as the bottom 90 percent: Meanwhile in the Huffington Post, Praxis Peace Institute's Georgia Kelly shares how Spain's Mondragón Cooperatives offer "an alternative to cutthroat capitalism":
There are various complex models for this, but the general explanation is fairly intuitive: Modern economies are built on a mass market. But if the great majority of people don't have much (or any) disposable income, then there is no mass market, and it's harder to start a business relying on any kind of mass sales. And with weak consumer spending, existing businesses have little reason to invest in growth, and instead disgorge their profits to shareholders, exacerbating the trend. In the end, you get a hollowed-out, bifurcated economy, where low-grade goods are sold to the broke masses on razor-thin margins, while incomprehensible sums slosh around weird luxury markets.
Today, with 120 businesses and nearly 100,000 workers, the Mondragón Cooperatives comprise the largest consortium of worker-owned businesses in the world. In 2007, the Mondragón Cooperatives had sales of 24 billion Euros. In 2009, when twenty-five percent of all businesses in Spain failed, less than one percent of businesses failed in the Mondragón Cooperatives. What's their secret? Based on a philosophy of human values, respect, and equality, the cooperatives are an inspiration in demonstrating what an evolved business environment looks like. The mission of the Mondragón Cooperatives Corporation (MCC) is to create wealth within society, to foster a people society instead of a capital society, to honor work with dignity, and to limit the number of work hours. Mikel Lezamiz, educational director at MCC, says, "People are the core, not capital. This is the main point. If capital has the power, then labor is simply its tool."
A formidable challenge? No kidding. More than a third of middle-class families aren't saving anything in a 401(k), IRA or other vehicle, the survey found. For those 50 to 59 years old, it's 41%. ... More cause for concern: For respondents aged 30 to 49, some 59% say they "plan to save later to make up retirement savings," and 27% are not currently contributing savings to a retirement plan or account. The idea that you can make up later what you fail to save today is, of course, a chimera. For one thing, saving doesn't typically get easier as you grow older; you may be bringing more in as you advance in a career, but you're shoveling out more, too -- child-rearing expenses, college tuition, possibly even support for aging parents. And the longer you put off launching a retirement fund, the less you benefit from the magic of compound interest or long-term investment growth.The Huffington Post's Ben Walsh highlighted the response to a new question that speaks to the fear of poverty: “22 percent of the middle class say they would rather ‘die early’ than not have enough money to live comfortably in retirement.” While the report says that nearly half of 50-something middle class Americans "will not have enough money to 'survive' on in retirement," the Atlantic's Bourree Lam explores another Wells Fargo report on why Millennials aren't saving either. Nearly half are spending half of their income paying off debts, including student loans, and "this is paired with the fact that Millennials are more skeptical than ever of banks—perhaps not surprising for a generation that came of age during the Great Recession and Occupy Wall Street." Meanwhile at Real Clear Policy, Elliot Schreur has a suggestion for how actually lowering the maximum 401(k) contribution could be part of a solution for helping American workers save for retirement:
All told, the top 5 percent of earners receive 40 percent of all the federal government's retirement subsidies. The bottom 60 percent get 7 percent. In 2015, the overall yearly cap on employer and employee contributions to retirement accounts, which includes the $18,000 contribution limit from employees, will be $53,000. To get a sense of how few taxpayers would be affected by lowering this amount, we can look at a proposal from the Urban Institute to reduce the overall cap by as much as 63 percent, to $20,000. It's estimated that reducing the overall cap by this much would increase taxes on just 3 percent of U.S. taxpayers in 2015. Sure, this is likely to be an unpopular proposition with this 3 percent, but the tax dollars recovered by eliminating this regressive government subsidy could be redirected to provide more effective saving supports to more workers who need the most help saving for retirement. $20,000 isn't much more than $15,080 -- so why not link tax-preferred savings for the wealthy to our minimum-wage-earning single mother's yearly income? This would have the dual benefit of cutting down government inefficiency and forcing policymakers to give some help to working families by raising the minimum wage if they really want to provide more subsidies to the rich.In the Nation, Michelle Chen looks at how some state and local governments are trying to build "a public nest egg" to combat elderly poverty.
Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing. Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as "massive criminal securities fraud" in the bank's mortgage operations... Six years after the crisis that cratered the global economy, it's not exactly news that the country's biggest banks stole on a grand scale. That's why the more important part of Fleischmann's story is in the pains Chase and the Justice Department took to silence her.Jesse Eisinger at ProPublica says that at the recent Securities Enforcement Forum of bank regulators and white-collar legal defense attorneys, where a key panel included several of the latter who were all former heads of enforcement at the S.E.C., "The conference turned into a free-for-all of high-powered and influential white-collar defense lawyers hammering regulators on how unfair they have been to their clients, some of America's largest financial companies." Meanwhile Buzzfeed's Matthew Zeitlin discusses (with a mixture of cynicism and enthusiasm) Bank of America's "charm offensive" of donations to charity and participation in social impact bonds/partnerships:
Changing the conversation about the bank is a clear reason why Bank of America is doing these kind of deals, and already there are signs it is succeeding in convincing some in the community. “I have nothing but wonderful things to say about Bank of America,” said Lara Metcalf, the managing director of Social Finance, which helped arrange the Bank of America deal with the Center for Employment Opportunities. “While there is lots of talk about social impact investing, there are not lots of investment banks willing to dedicate time, energy, due diligence, and their marketing prowess to support the creation of these types of specific investments.” Over the long run, should the model of the social impact bond succeed and go mainstream, the impact on charitable causes could be enormous. Wall Street could “unlock private capital and investor capital for social services that heretofore has been unavailable,” said Kibby Joseph, an associate director at The Rockefeller Foundation, at a recent forum in New York. “Philanthropy is funding $300 to $350 billion of nonprofit a year,” he said. “When you look at how big the private wealth investment market is — trillions of dollars — even a couple of percentage points of those assets is really meaningful and would quickly outstrip the philanthropic world’s investment.” ... Overall, the bank has paid out almost $80 billion in settlements with private investors, shareholders, regulators, and law enforcement stemming from its actions before and during the financial crisis. In context, the $13.5 million the bank has raised for the Center for Employment Opportunities is a drop in the bucket.