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Recovering backpacker, Cornwallite at heart, political enthusiast, catalyst, writer, husband, father, community volunteer, unabashedly proud Canadian. Every hyperlink connects to something related directly or thematically to that which is highlighted.

Friday 24 January 2014

It's the Culture, Stupid: Corporate Welfare and Horatio Alger

The Horatio Alger myth is closely associated with The American Dream - the belief that with honesty, hope and hard work, anyone can rise from the ashes of poverty to the heights of power.

This notion of the ability to succeed despite an inequitable playing field has been co-opted by Objectivists and Libertarians on the Political Right; in their take, the villains have been replaced by governments.  If it weren't for oppressive, stifling regulation and burdensome taxation, they say, businesses would flourish and enterprising individuals would get ahead.

The problem, they will tell us, is that regulation and taxation stifles the ambitions of corporations large and small; the welfare state coddles individuals, oppressing their natural ability to rise up and succeed.  Get rid of the system, let the free market do its thing, and everyone will magically start behaving in a successfully selfish, go-get-'em way.

Individuals should look to the wealthy bankers, lawyers and country squires for inspiration - after all, if they could succeed, anyone can.  It's just a matter of the have-nots getting over themselves and doing what it takes to get ahead.

After all; if Horatio Alger could do it, anyone can.

Last night I had the privilege to attend the relaunch of Make Web Not War.  MWNW is a passionate community of tech enthusiasts primarily, but increasingly boasting representation from the world of communication, policy and community activism.  The goal of MWNW is to catalyze an Open Society, where people freely share information and work collaboratively for a better world through - you knew it was coming - honesty, hope and hard work and an actual sense of community (raise all ships, go far together).

The sponsor for MWNW is Microsoft, a corporate giant.  They have put a great deal of money into their open community initiative and are proactively engaging in other open society projects such as Open Data Day Toronto.  

That bears repeating - they make money by doing what they do well and are investing back into the community, despite whatever taxation and regulation impediments may be in their way.

Microsoft isn't alone in this; organizations like Bell Canada have invested heavily in Let's Talk, a suicide/crisis hotline.  Corus Canada invests in education initiatives.  There are countless examples of successful businesses that aren't sitting on their capital, but investing it back into their communities.  

They aren't waiting for regulatory or taxation changes - they're succeeding and contributing on the strength of their own drive, offerings and vision.

Then, take a look at a company like RIM.  RIM had a huge burst of success that actually declined as Canada/Ontario's regulatory and taxation burdens declined.  What government did had nothing to do with RIM's failure; they simply stopped being as innovative and trend-setting as they had been.  The became complacent and sought to beat existing trends, not set new courses.

And what of the car manufacturing industry?  Is it government's fault they aren't succeeding?  The Political Right has derided the provision of "corporate welfare" propping up failing industries in much the same way as they deride welfare for individuals.  Meanwhile, the Political Left gets mad seeing government dollars end up lining the pocket of increasingly wealthy CEOs.

Why on earth would CEOs be pocketing money that could be better used to incent productivity and innovation from their teams?  Is that, too, the fault of government?  If so, then how do you explain Make Web Not War or Bell Let's Talk or the private support for Open Data Day Toronto?

I've said it before and will keep repeating the same message (that's what they teach you in politics): what's good for the goose is good for the gander.

If the Political Right expects individuals to pull up their boot straps and find success, no matter what circumstances of poverty they find themselves in, then the same must hold true for corporations.  They don't need excessive tax breaks or the strip-mining of regulation; if so, then their successful, pro-social peers couldn't have succeeded either.

If it's the fault of Canada's unemployed and working poor that they're falling behind, then it's the fault of capital-hoarding companies that they aren't pushing envelopes, too.  

Of course, that's a simplistic assessment that misses the big picture.  We have crafted a culture of self-interest in Canada, one that largely fits the objectivist narrative of one Stephen Harper.  When you put your own wealth first, then that becomes your only goal.  You're not interested in helping others, or investing in others, but rather in reducing costs so that you can retain more income.  Which is what Right To Work is all about, too.

So here's a new spin on an old theme - it's the culture, stupid.  

We are encouraging people to be hewers of wood and haulers of water, profiting much from as little innovation and investment as possible.  It's true from the top to the bottom; we want sellers, not pioneers, and counter-intuitively are motivating the kind of behaviour that's holding us back.

Not that it should matter what policies are set from the top, nor the hurdles that lie on the path to social consciousness.  

If Microsoft can do it, Canadian CEOs, so can you, without waiting for some magical government vanishing act to make your lives easier.

So quit making excuses and get it done.


  1. You know, Craig, the thing is this, a society OWES every single member within an avenue for, at the very minimum, survival; a society which fails in this is dysfunctional. It has been scientifically demonstrated over and over that free-markets, even the psuedo-free-markets which exist in the G20, exhibit power-law distribution dynamics which is intuitively easy to understand. This leads directly to the "trickle-down" phenomenon seen in every "free-market" economy. Okay, fine, I always make the point that if the Reagan/Fox News crowd thinks "trickle-down" is so great then they shouldn't mind taking their ass to the bottom of the trickle and staying there but the damn Fox news freakazoids don't even want to leave the bottom of the trickle in place!

    Recently, the Houston Chronicle had a front page article featuring a picture of Martha Turner, owner of Martha Turner Properties, accompanied by the news that she had sold Martha Turner Properties to Sotheby's Real-estate International. The gist of the story was, "Isn't Houston grand, we have Sotheby's here just like New York, San Francisco, and Beverly Hills." As you probably know, the upscale housing market is booming and Martha Turner specialized in homes from $2 - $20 million. In the same paper, City and State section, was an article about an ordinance which had been introduced to Commissioners Court, aimed at pan-handlers, which would make solicitation along county roadways a class C misdemeaner. And this ordinance was modeled after the same type of ordinance passed in other states (a Federal court in, I believe, Massachusetts, declared the ordinance unconstitutional, a violation of free-speech). Just prior to this, the Fire Department went around and put locks on all of the fire hydrants to prevent the homeless from getting water!

    So the corporate practices of the folks on the top end of the trickle are polluting our waterways to the point one can't even eat the fish out of them, let alone drink the water, but the last thing the Sothesby's International crowd (the CEOs of said corporations) want to see, when they emerge from their single-family shopping mall to allow their $9,000 fancy poodle to take a dump, is some homeless guy, so let's lock up all of the potable water - and outlaw pan-handling, dumpster diving, scrapping, etc.! Conclusion, our society is dysfunctional.

    And you're absolutely right about the sellers; all they do on Wall Street nowadays is shuffle stuff around - they're nothing but bit-movers but they somehow make a fortune. And our culture loves em! Here in Texas, some African-American youngster, riding the crest of centuries of slavery and discrimination, gets busted a couple of times for flipping crack and looks at 25 years. Meanwhile, on the other side of the country, some Wall Streeter hustles who knows how many folks out of $120 million and spends it all frivolously, gets 3 years in the Feds, writes some book, "The Wolf of Wall Street," bragging about it all, and is featured on the front of USA Today standing on the red carpet, some blond bimbo on his arm, grinning ear to ear like he really pulled something. The sad fact is, he DID really pull something! How appropriate he was featured in USA Today . . .

  2. And it all comes back to our dysfunctional political system where money rules the day. I have an acquaintence from the commercial dive industry named Paul McKim. McKim is an old-school diver who used to hold a few deep water and sat records which means he has a formidable network in the gulf. In 2001 Paul started a deep water support company called Deep Marine Technologies (DMT). He secured exclusive rights to use an innovative, autonomous submarine (deep water of course) in the gulf and, with his knowledge and network, exploded onto the scene. In 2001 he grossed just under $600,000; by 2005 he grossed just under $60 million and was featured on the cover of Entrepeneur magazine. In order to accomodate that exponential growth he brought in an investor, some Iranian guy living in Minnesota.

    After Paul used his knowledge and network to get the company to that point, the rich investor manuevered in his own board and fired Paul from the company he started. Paul sued in State District Court claiming breach of fiduciary duty amoungst other things. In the lawsuit it came out that the rich investor had funneled $100,000 through DMT, through Hayes Insurance of Minnesota, back to Norm Coleman, a congressman from Minnesota. All of DMT's insurance needs were handled by Lloyds (most off-shore ventures are) but the rich investor created a paper trail showing DMT engaging Hayes for risk assessment work even though Hayes wasn't licensed to practice in Texas. Coleman's wife, a licensed insurance agent, worked as an independent contractor for Hayes and when the whole thing went down the Colemans were engaged in a $400,000 renovation of their single-family shopping mall. At the time Coleman was in a run-off with Al Franken, the comedian, which Coleman lost, but did he go to prison?

    When Paul's lawsuit hit the rich investor immediately took steps to put DMT into bankruptcy; it no longer exists today. Nobody went to prison over the ordeal and I'll give you one and only one guess as to where Coleman is now. That's correct, he's in Washington sitting on the board of a conservative policy think-tank; he's working as a lobbyist and congressional bobble-head for the free-market crew!

    Sorry to vent . . .

  3. Wes, we're all allowed to vent sometime! As per my latest post, people who are finance-centric just think they need to pay someone to listen

    I had a chat earlier today with a woman working in social housing about the same thing - white collar criminals and crack dealers are both hustlers who don't mind throwing someone under the bus for a win, it's just the format that's different.

    I disagree with you on the society owing people business - but only because I see society as a byproduct of people starting to work collaboratively. You're right - survival-of-the-fittest is the same on Wall Street as it is on the Savannah plan, but in an urban context, none of us survives alone. You can build as high a wall around your castle as you want, but you're eventually going to need something from the outside and, as history teaches us, force from the few will always be counter-balanced by force from the many over time.

    I'm a practical guy and I detest inefficiency, so for me it's about how to we establish the right parameters (society isn't going to disappear tomorrow) and the right goal (recognizing that, how do we make it sustainable). Altruism is selfishness that plans ahead - which is why we came up with society in the first place.